Good afternoon, ladies and gentlemen. If I could all ask that you take a seat. It's 3:30, and it's time to start this meeting. Good afternoon again, ladies and gentlemen. I'm Pentti Karkkainen, the Chair of the Board of AltaGas, and on behalf of the directors, it's my pleasure to welcome you to AltaGas' 2019 Annual and Special Meeting of Shareholders. The board and management very much appreciate your attendance here today. I would also like to welcome those listening in on webcast. Today's meeting is being audio webcast and transcribed and will be available publicly on the AltaGas website shortly following the event. As a courtesy to your fellow shareholders and guests, please take a moment to turn off or mute your cellphone if you have not already done so. Thank you.
Before we begin, I would like to acknowledge that today's meeting is being held on the traditional territories of the people of the Treaty 7 region in Southern Alberta. The City of Calgary is also home to the Metis Nation of Alberta, Region III. I'd now like to welcome David Anderson, AltaGas' Senior Vice President of Environment, Health, and Safety, to the podium to provide our safety briefing. David?
Thank you, Pentti. Good afternoon. There are no drills planned for today. If the alarm goes off, please remain seated and wait for instructions from the Metropolitan Health and Safety Group. They'll do that via intercom. In the event if an evacuation is necessary, please calmly exit the same way you entered the ballroom today. Then proceed through the lobby and through the front doors and muster on the Fourth Avenue sidewalk. If, for any reason, the lobby is impassable, please exit to the right and through the doors and onto the Fifth Avenue sidewalk. Thank you. I'll pass the mic back to Pentti.
Thank you, David. There will be three parts to today's meeting. First, the formal proceedings, which I will administer, will include the matters to be voted upon today. Next, our President and Chief Executive Officer, Randy Crawford, will provide a brief presentation on some of our strategic and operational milestones from the past year as well as the course we are charting for the future. Third and finally, we will conclude with general question and answer period for our shareholders and proxy holders. Before we call the formal part of the meeting to order, I have two important acknowledgments to make. While it's my sincere honor to welcome you to AltaGas' Annual and Special Meeting as Chair of the Board, I wouldn't be standing here today were it not for the exceptional commitment and vision of our founder, David Cornhill.
As you know, in March, David announced his decision to step down from his role as Chairman of the Board. We are extremely fortunate that he has elected to remain a member of our board to ensure a smooth transition and continuity. As we celebrate AltaGas' 25th anniversary this year, we cannot help but reflect on the steady leadership and the innumerable achievements of this company under his guidance. Truly, what AltaGas has accomplished over the last quarter-century is remarkable. Depicted here are just some of the company's many achievements. David took a team of just 21 people hoping to build a Western Canadian midstream business and turned it into a premier provider of energy solutions across North America and soon to shores beyond, fueled by the ingenuity and dedication of nearly 3,000 employees across the continent.
The enduring trust and long-lasting relationships he has built with our stakeholders, including Indigenous peoples and our business partners domestically and overseas, have shaped and will continue to shape the future of AltaGas over the next 25 years. Although David couldn't be here with us today, on behalf of the entire board, I want to once again thank him for his strategic insight, his steadfast support of our company, and its new leadership. We are profoundly grateful for his total commitment to the organization. Please join me in a round of applause. I would also like to take a moment to acknowledge and thank Neil McCrank, who is not standing for re-election at today's meeting. After serving on our board for more than a decade, Neil will be retiring at the close of this meeting. Neil, I'll ask you to please rise so we can recognize your service.
There he is. Thank you, Neil. Neil has been a voice of reason and a pillar of strength for AltaGas. He has held various positions on our board, most recently serving as our Lead Director since 2016, and as our Chair of the Governance Committee. Neil, I know that I speak on behalf of the entire board when I say that we will miss your insight and wisdom. Thank you again for your contributions over the years. At this time, I would like to introduce the other members of the board, in addition to myself and Randy Crawford, that are here today and standing for re-election. I will ask that each director rise as they are introduced. Victoria Calvert, Daryl Gilbert, Allan Edgeworth, Robert Hodgins, Cynthia Johnston, Phillip Knoll, and Terry McCallister.
Catherine Best and David Cornhill will also be standing for re-election today and express their regrets for being unable to attend the meeting. Please join me in welcoming your current directors and nominees for the AltaGas board. Continuing with introductions, at the head table, you have Randy Crawford, AltaGas' President and Chief Executive Officer, and Shaheen Amirali, Senior Vice President and Corporate Secretary. I would also like to introduce the members of AltaGas's senior leadership team in attendance today. As I introduce them, I would ask them to please rise. Tim Watson, Executive Vice President and Chief Financial Officer. Brad Grant, Executive Vice President and Chief Legal Officer. Corine Bushfield, Executive Vice President and Chief Administrative Officer. Fred Dalena, Executive Vice President, Commercial Strategy and Business Development. Randy Toone, Executive Vice President and President of Midstream. Peter Ledig, Senior Vice President, Power.
With us today representing our auditors, EY, is our lead audit partner, Gord Graham. Gord, if you could please stand. Lastly, I would like to introduce Steven Budola and Terry Hills-Wilson, representatives of our registrar and transfer agent, Computershare Investor Services Inc, who will act as scrutineers for the meeting. We will now begin with the formal part of the proceedings. I will administer the meeting, and our corporate secretary, Shaheen Amirali, will serve as secretary. Once we have concluded, I will turn the podium over to Randy Crawford. Before we start with our first item of business, I would ask that Shaheen address a few housekeeping matters relating to the meeting.
Thank you, Pentti. As Pentti mentioned, my name is Shaheen Amirali. I'm AltaGas's corporate secretary, and I will be acting as secretary of this meeting. This meeting will be conducted in accordance with our rules of conduct. Please refer to the back of the registration card you would have received upon admittance into the meeting today. In accordance with these rules, guests who are not registered shareholders or proxy holders are welcome to observe, but we ask that they refrain from voting or addressing the meeting. Registered shareholders or proxy holders will have received a yellow registration card when they registered today. We ask that questions during the formal part of the meeting be kept brief and directly relate to the items of business being considered. Please reserve any other questions you may have for the Q&A session at the end of the meeting.
For the benefit of those present and tuning in by webcast, we have set up two microphones in the middle of the room so that questions can be clearly heard. If you wish to ask a question, we ask that you please step to the microphone to speak. If that is not possible, please raise your hand and the microphone will be brought to you. Once you are recognized by the chair, please begin by stating your name and confirming your status as a registered shareholder or proxy holder with your yellow card in hand. This will assist us in correctly recording the minutes of this meeting. All items on today's agenda for shareholder approval, other than the closing of the meeting, will be voted on by ballot, all of which are contained on one ballot.
Votes shall be recorded for each item of business. Totals in favor or against or withheld, as the case may be, will be tallied by the scrutineers. For shareholders who have previously voted by submitting a proxy, your shares will automatically be included in the final count. There's no need for you to complete a ballot provided today. If you're a shareholder or proxy holder entitled to vote, you should have been provided with a yellow ballot when you registered with Computershare prior to the meeting. If you need a ballot, please raise your hand now so that representatives from Computershare can provide you with the ballot. The completed ballot will be picked up after all items for shareholder approval have been voted on. For meeting efficiency, we have asked certain employee shareholders to make the relevant motions at the appropriate time.
This is not intended to preclude shareholder discussion in any way, but only to assist with the progress of this meeting. With the housekeeping matters now taken care of, I will turn the meeting back over to Pentti.
Thank you, Shaheen. I will now call the formal part of the meeting to order. The agenda for the business of the meeting is as set forth in the notice of meeting, on this slide being presentation of the financial statements, appointment of auditors, election of directors, non-binding advisory vote on executive compensation, vote to approve unallocated options under AltaGas's share option plan, vote to reduce the stated capital of the common shares. Following the completion of such formal items of business, we will then consider such other business as may be properly brought before the meeting. I have been advised by the corporate secretary that notice of meeting, the management information circular, form of proxy, and annual report were properly delivered and a quorum is present. Thank you, Shaheen.
Shaheen, I ask that you file the affidavit of mailing and scrutineer's report confirming this, along with the minutes of the meeting. Accordingly, I declare that the meeting has been duly called and properly constituted for the transaction of business. Let's begin with the first item of business, which is the presentation of the financial statements. The annual report consists of the unconsolidated financial statements of AltaGas, the auditors' report, and management's discussion and analysis for the fiscal year ended December 31st, 2018. AltaGas's annual report was mailed to shareholders of record as of March 21st, 2019, in advance of this meeting, and there are extra copies available outside this room by the registration table. Shareholders are not required to approve the financial statements that have been placed before the meeting. However, registered shareholders and proxy holders may ask questions or comment on AltaGas's financial statements.
Are there any questions or comments? With there being no need for discussion, I will proceed with the next item on the agenda, appointment of auditors. The next item of business is to vote on the reappointment of Ernst & Young LLP as auditors of AltaGas until the next annual meeting and authorize the directors of AltaGas to fix their remuneration. Could I please have a motion in that regard?
Mr. Chair, my name is Eric von Engelbrechten. I am the holder of a valid proxy for this meeting. I move that Ernst & Young LLP be appointed as the auditors of AltaGas until the next annual meeting of shareholders or until a successor is appointed, that their remuneration be fixed by the directors of AltaGas.
Mr. Chair, my name is Jillian Fan. I am also the holder of a valid proxy for this meeting. I second the motion.
Thank you, Eric. Thank you, Jillian. You have heard the motion. The motion is now open for discussion. Please.
Good afternoon, ladies and gentlemen. My name is Marieka Knipscher. I am the proxy holder for my company and their shares. This is the first time I've attended an AltaGas meeting, although I have attended a multitude of other meetings, so it's not like I'm a newbie, as many other people here may know. I look in your information circular, on page eight, I see that our auditors have been the auditors for the company since 1997. If my math is right, that tells me it's 22 years. I don't even know what to say. It's beyond reason to have the same auditor for that many years. That's like giving the bookkeeper the keys to the safe. I'm sorry. It's way too long. There's not enough oversight. We need a change so that we're sure that things really are on track.
I know that there's people that come and go at Ernst & Young, but the fact is that they probably have the same procedures that just sort of roll down the track, and they do it the same way every year. 22 years is way too long. Industry practice, from what I'm told, is five years is a good time to change over and get some new eyes on the financials. It is for that reason that I can totally not go along with having them be our auditors again. It is absolutely wrong that the board has not changed this.
Ms. Knipscher, and I should note,
I cannot hear my father. I am confused.
Yes. Thank you very much for the correction. I was going to point out that I hope I got the pronunciation of your name correctly. I, for one, am very sensitive to that. But thank you for your question, and thank you for your attendance here today. You can be assured that the board examines and reviews the independence of E&Y every year. We also examine, and we have E&Y attest to their independence every year. As you know, every seven years, the lead auditor from E&Y has to rotate. Our lead auditor, who is Gord Graham, who's been identified here in this room and would be pleased to talk to you about this issue, is rotating at the end of this year, so we will have a new individual in 2020.
We hear your comments, we respect your comments, and we thank you again for participating in today's meeting. There being no further discussion, we will proceed with a vote by ballot. Each person entitled to vote will have received a yellow ballot, which includes a space to vote on all resolutions being considered today. If you are a registered shareholder or proxy holder who has not previously voted by proxy and you did not receive a ballot, again, please raise your hand. If you have not already done so, please mark the ballot indicating whether or not you are in favor of the resolution. The scrutineers will collect your completed ballots for tabulation once all voting matters are addressed, and I will report on whether each motion has been passed before the end of the meeting.
The next item of business is to consider the nominees standing for election as directors of AltaGas. The board of directors of AltaGas has fixed the number of directors to be elected at the meeting at 11. I declare the meeting open for nominations for the persons to be elected as directors of AltaGas and ask that the names of the persons nominated be placed before the meeting.
Mr. Chair, my name is Brandy Eichhorn, and I am the holder of a valid proxy for this meeting.
There you are.
I nominate Catherine Best, Victoria Calvert, David Cornhill, Randall Crawford, Allan Edgeworth, Daryl Gilbert, Robert Hodgins, Cynthia Johnston, Pentti Karkkainen, Phillip Knoll, and Terry McCallister.
Mr. Chair, my name is Evan Christensen, and I'm also the holder of a valid proxy for this meeting. I second the nominations.
Thank you, Brandy. Thank you, Evan. Each of the nominees has consented to act as a director of AltaGas. As no additional nominees were received prior to the meeting in accordance with our advance notice bylaw, I now declare the nominations closed. Could I please have a motion to elect the individuals nominated as directors of AltaGas to hold office until the next annual meeting of shareholders, or until they cease to be a director by operation of law, or until their resignation becomes effective?
Mr. Chair, my name is Paul Selway, and I am the holder of a valid proxy for this meeting. I make that motion.
Mr. Chair, my name is Stacey Norman, and I'm a holder of a valid proxy for this meeting. I second the motion.
Thank you, Paul. Thank you, Stacey. You have heard the motion. The motion is now open for discussion. Please.
Mr. Chairman, you're going to have to get used to this if I'm going to continue being a chairman. I'm usually the only one that stands up because I think I'm the only one that has the balls to do it. Let's take a look at some of these people. Ms. Best, number 1, she's not even here, yet we're paying her. She has 3 other companies that she is a director of, per the information circular. Perhaps that's why she's not here. Maybe she has another reason. Whatever reason is, it's not valid. We are paying directors good money to be here. If they can't even face the music at a shareholder meeting, I can assure you, we don't need them, no matter how good they may be in the field that they're serving.
I also noticed that when she became a member of the board, she still doesn't have any shares. That's appalling. We are paying this woman. She still doesn't have any shares. I realize that they have time to buy them. We are shoveling our money into their pockets as directors. You would think that they could at least, or she could at least purchase some shares. It's appalling. I, for one, would not have her around. Number 2, I take a look at. I did have a lovely conversation with this gentleman and quite respect him. However, when I see that we have Mr. Gilbert on 4 other boards, we are paying for full-time work. What it's telling me is that what we're paying people, if it's CAD 176,000 a year, all we're getting is part-time work.
That is highly paid for part-time work where you can have time for 4 other boards. I don't believe we should allow our board members to sit on that many other boards. 1, in my mind, is greed enough to be elsewhere. I also take a look at Mr. Hodgins. Likewise, the comments go. Further to that, I note from the circular that Mr. Hodgins was a director of a company that went into receivership. Is that the kind of leadership we need? People who've gotten other companies into receivership? My answer would be no. I would say the same thing for Mr. Gilbert, who was on 2 boards of 2 companies that went into receivership, according to the circular. I have a great deal of problem with a number of these people on the board.
Furthermore, I was informed, because I couldn't find it anywhere, I believe you have something of either a 12 or a 15-year turnaround time that board members can only be on the board. I find that that may be a little bit past the best due performance date. I realize we need experience, we also need new ideas and fresh ideas. I would like to put a motion forth that it be eight years before directors must step down, I'd like to have a seconder for that so that we could have a discussion on it. Does anybody have balls enough to-
Ms. Knipscher, as a shareholder or a registered proxy holder, you have been given the right and the opportunity to speak before this meeting. I applaud you for standing up and making comments. That right comes with a certain obligation, which is respect to the decorum of this meeting, I would ask you to do so. I would also suggest that I would be very happy to speak to you about this matter and the other issues that you have with you at some other time. We do have to carry on with the business of this meeting. As discussion on this matter has continued for a significant period of time, your viewpoints for and against have clearly been stated. Thank you.
Yes.
I'm of the opinion that all proper inquiries have been fairly-
There's one extra point which is on the directors, which I would like to make. I would like to also move that in future, that all the directors, instead of facing you, that they have respect for the rest of the shareholders and that their chairs are facing towards the audience so that we can look them in the eye.
Thank you for your comments. You have heard the motion. The motion is now open for discussion. There being no further discussion, we will now proceed with the vote by ballot. If you have not already done so, please mark the ballot indicating whether or not you are in favor of the election of each of the directors. The next item of business is the consideration of the non-binding advisory vote on executive compensation. Could I please have a motion that on an advisory basis, and not to diminish the roles and responsibilities of the board of directors of AltaGas, the shareholders accept the approach to executive compensation disclosed in AltaGas's Management Information Circular dated March 21st, 2019?
Mr. Chair, my name is Jillian Fan. I make that motion.
Mr. Chair, my name is Eric Von Engelbrechten. I second the motion.
Thank you, Jillian. Thank you, Eric. You've heard the motion. The motion is now open for discussion. Please.
I take a look at the compensation, I see that our John O'Brien has, from last year to this year, received a 19.716 increase in compensation. Right now, we've got many people walking in Calgary without even a job, let alone even a 1% increase in compensation. We have given this gentleman 19% increase on top of last year, where he received 49.9% increase. That, to me, seems quite outrageous. I know the usual answer is we have to follow the crowd. We all have to jump off the train trestle and do the same as every other company. That's not responsible. Other companies may want to jump off the train trestle smoking pot. I don't believe we need to do that. That's way too much of an increase.
When you take a look at the compensation as a total, we have a total compensation of CAD 16 million for four people. I've got to say, holy cow, that's the politest version that I can say. Nobody needs to be earning that kind of money. On top of which, when you take a look in the last two years as shareholders, our share price has not gone up. In fact, last year it went down to 28.617%. The year before, it went down 18.43%. Share price has gone down, yet you're increasing compensation. What on earth is going on with your heads? Really, it's beyond me. On top of which, we take a look at the termination policies. That if any of these people are asked to leave, good God, CAD 8 million, CAD 2 million, it's on and on to giving them extra money.
If they're not earning enough money as we're already paying them, they shouldn't be here in the first place. We don't need to give termination and special extra exit pay. Thank you.
Thank you, Ms. Knipscher. You've heard the motion. The motion is now open for discussion. There being no further discussion, we will now proceed with a vote by ballot. If you have not already done so, please mark the ballot indicating whether or not you are in favor of the resolution. The next item of business is the consideration of the approval of unallocated options under AltaGas's option plan. Unless there are any objections, I will dispense with the reading of the resolution set out in the management information circular. Could I please have a motion that the resolution, as set out on page 11 of AltaGas's management information circular dated March 21st, 2019, approving all unallocated share options entitled to be granted under AltaGas's option plan and authorizing the issuance of the same until May 2nd, 2022, be approved by shareholders?
Mr. Chair, my name is Evan Christensen. I make that motion.
Mr. Chair, my name is Brandy Eichhorn. I second the motion.
Thank you, Evan. Thank you, Brandy. You've heard the motion. The motion is now open for discussion. There being no discussion, we will now proceed with a vote by ballot. If you have not already done so, please mark the ballot indicating whether or not you are in favor of the resolution. The next item of business is the proposed reduction to the stated capital of AltaGas's common shares. This special resolution must be approved by not less than two-thirds of the votes cast. Unless there are any objections, I will dispense with reading of the special resolution set out in the management information circular.
Could I please have a motion that the resolutions, as set out on page 12 of AltaGas's management information circular dated March 21st, 2019, approving the reduction to the stated capital account of the common shares of AltaGas to an amount equal to CAD 1 per share, be approved by shareholders?
Mr. Chair, my name is Paul Selway. I make that motion.
Thank you.
Mr. Chair, my name is Stacey Norman. I second the motion.
Thank you, Paul. Thank you, Stacey. You've heard the motion. The motion is now open for discussion. There being no discussion, we will now proceed with a vote by ballot. If you have not already done so, please mark the ballot indicating whether or not you are in favor of the resolution. Please raise your hand when you are done completing your ballot so that the scrutineers can pick up your completed ballot for tabulation. While the scrutineers finish tabulating the votes, I'd like to draw your attention to a brief video that celebrates just a few of the many milestones AltaGas has achieved over its 25 years. Please, again, if you've completed your ballots, please raise your hand and the scrutineers will pick those up. Thank you. We'll pause for about five minutes while we await the vote.
Indeed, a remarkable 25 years, and Randy's going to give you a bit of a hint on the next 25 years in a few minutes. Shaheen, can you confirm that each of the resolutions has passed by the requisite majority?
Based on the results of the scrutineer's report before me, I confirm.
On that basis, I am pleased to advise that all the motions have passed. Details of the voting results with respect to these voting matters will be published on SEDAR following the meeting. Having concluded the itemized matters of formal business at the meeting, is there any further business to come before this meeting? As there is no further business, I would like to call for a motion terminating the meeting.
My name is Eric von Engelbrechten, and I move that the meeting be terminated.
My name is Jillian Fan. I second the motion.
Thank you, Eric. Thank you, Jillian. This motion shall be conducted by a show of hands where each person present and entitled to vote shall have one vote. All those in favor of the motion, please raise your hand. Opposed, if any. I declare the motion carried and the formal part of the meeting at an end. Now, the more interesting part begins. With the conclusion of the formal part of the meeting, I will now turn it over to Randy Crawford, our President and Chief Executive Officer. Randy has assumed leadership of our company at a truly transformational time, a time in which we have decisively repositioned our company for enhanced profitability and growth by optimizing our asset base and strengthening our financial footing so that we can capitalize on the many growth opportunities in our midstream and utilities businesses.
He has an ideal blend of operational and financial expertise earned over a 30-year career in the midstream and utilities sector, which is truly invaluable as we position AltaGas for further growth in these two strategic segments. Randy is also a true champion for a strong corporate culture and understands the intrinsic value of our people and their impact as a differentiator for successful companies. He has already made a significant mark on the company, and we are excited for the years ahead with Randy at the helm. Please join me in welcoming Randy Crawford.
Thank you, Pentti. Good afternoon, everyone. It's my pleasure to speak to you today. During my presentation, I'd like to focus on two things. I'll do my best to keep my remarks brief so that we can turn the floor over to all of you. First, I'll reflect on 2018 and the steps we've taken to position our company for growth. I'll speak to the path forward in 2019 and beyond. I'll elaborate on our strategic focus and the opportunities available to us. Without question, 2018 was a transformational year for AltaGas. Although it wasn't without its challenges, I firmly believe the steps we took to reset our financial position and to reshape our asset base, while at times difficult, have laid the foundation for enhanced profitability and have created a stable platform to support organic growth in the years ahead.
Given the many challenges our company had last year, some of our considerable achievements may have been overlooked. First, most notably, in July, we successfully completed the acquisition of WGL Holdings, effectively repositioning ourselves as a low-risk, high-growth utilities and midstream company. With the acquisition completed, we have a utilities business with a rate base of CAD 3.7 billion in five jurisdictions, Alaska, Michigan, Maryland, and Washington, D.C. In each jurisdiction, we have identified opportunities to unlock embedded organic growth, such as increasing construction activities to connect new customers, improving system reliability, and upgrading aging infrastructure. We implemented new base rates at WGL in Maryland and Virginia, and at SEMCO in Michigan, we began our Marquette Connector Pipeline, which is scheduled for completion by year-end 2019, which I'll come back to later in my remarks.
Finally, we are also striving for more timely recovery of our investments by maximizing the use of accelerated rate recovery mechanisms. In four of our five jurisdictions, in our operating jurisdictions, we have accelerated replacement programs that allow us to renew aging pipeline with capital investments of approximately U.S. $1 billion spread over five years, and that will earn immediate returns. There are several benefits to these accelerated programs. They incent us to replace aging infrastructure above the traditional benchmark of depreciation, which improves the overall integrity of the system. Replacing aging pipelines helps eliminate leaks and ultimately drives down maintenance costs, which is a benefit to all of our stakeholders. By increasing the amount of capital deployed into accelerated programs, we benefit from rate-based growth and more timely returns on our investments while reducing the need for future rate cases.
In our midstream business, we significantly leveraged and extended our integrated service offering. In August, we entered into definitive agreements with Kelt Exploration to provide energy infrastructure in support of their development in Northeastern B.C. These agreements underpin the expansion of our Townsend complex, which includes the addition of 198 million cubic feet per day of processing capacity. In September, we expanded our liquids handling capabilities with the acquisition of 50% interest in Black Swan Energy, Aitken Creek processing facilities. With the combined commitments from the Black Swan and Kelt, we have committed to expand our North Pine fractionator from 10,000 barrels per day to an already permitted 20,000 barrels. We've also achieved a 25% increase in our gas processing volumes through our core Montney assets, primarily driven by our Townsend expansion.
Of course, we've continued to significantly advance our Ridley Island Propane Export Terminal, or RIPET, which I'll talk about in a few minutes. Finally, we've monetized CAD 3.8 billion in non-core assets since mid-2018, which has allowed us to reduce our debt and sharpen our focus on our midstream and utility segments. As a result of determined efforts like these, among many others, we've achieved solid financial results for the year. We delivered normalized EBITDA of CAD 1 billion, a growth rate of 27% year-over-year, and normalized funds from operations of CAD 657 million for the year, representing an increase of approximately 7%. In sum, the steps we took allowed us to enter 2019 with a strong, experienced team and outstanding commercial assets within segments that are complementary to one another. Our focus is now on unlocking growth potential of these assets on your behalf.
To do that, our strategy is simple. Leverage our expertise along the energy value chain to connect customers with premier energy solutions, from well sites of upstream producers to doorsteps of homes and businesses in the new markets around the world. There is no shortage of opportunities for strong and organic growth available to us. We have identified CAD 1.3 billion in high-quality projects in 2019 alone, which comprise our capital program for this year. With respect to this year, we've already begun to make some exciting progress. Earlier today, we released our Q1 results, and I'm pleased to say that we've begun 2019 with a great deal of momentum. Our first quarter results provide a strong and stable platform for growth, and they reinforce to me that our strategy to transform our company to a low-risk, high-growth utility and midstream company is progressing as planned.
We are executing on restoring our financial strength and aggressively positioning our company to capitalize on significant growth opportunities within our businesses. We delivered normalized EBITDA of CAD 466 million, a 109% increase over the first quarter of 2018, and normalized FFO of CAD 376 million, an increase of approximately 122%. Normalized net income for the first quarter 2019 was CAD 202 million, while normalized net income per share was CAD 0.73. With the proceeds from the sale of our remaining interest in Northwest Hydro and other non-core assets in Canada, and consistent with our focus on de-leveraging the balance sheet, our net debt decreased by approximately CAD 1.7 billion in this first quarter. Thank you. I appreciate that.
In addition, we also announced that we have entered into an agreement to sell 30% interest in our Stonewall gathering system in the Marcellus region of West Virginia for approximately U.S. $275 million or CAD 365 million to DTE Energy. Monetizing these non-core assets allows us to de-lever and fund our capital program, and as importantly, allows us to redeploy funds into higher returning opportunity-rich businesses, starting with our Midstream segment. Altogether, the results we deliver in the first quarter reflect not only the strength of our asset base, but also our determined focus on executing on the priorities we established last year. Through the remainder of 2019 and beyond, we are focused on executing on the strategies we've designed for each segment and delivering on the balanced funding plan we unveiled in December.
In our Midstream business, our strategy focus is on optimizing and growing our footprint, enhancing our service offerings, and connecting producers to new markets abroad. Our Midstream strategy is firmly anchored along Canada's west coast by RIPET. Delivering this project on time and on budget was unequivocally the top priority for our Midstream business. To help you get a sense of the remarkable work our people have been doing over the past two years, I'd like to show you a brief time-lapse video of the project's construction. It's truly incredible to watch. I am so very proud of everyone who's been involved in this game-changing project. RIPET is the first energy export terminal for propane off the West Coast of Canada, and it will make a significant contribution to international trade and support long-term production growth and prosperity in Northern B.C. and Alberta.
I'm pleased to report that we began the process of introducing propane feedstock to the LPG tank in mid-April, an important and exciting moment for everyone at AltaGas, along with our joint venture partner, Vopak, our customers in Western Canada's upstream gas producers. We look forward to welcoming the first LPG export vessel, aptly known as very large gas carriers, at the terminal in mid-May, which will mark the official in-service date for the facility, as well as Canada's emergence as a truly global LPG supplier. We are very proud of the relationships we have built while developing RIPET. The project is the culmination of strong partnerships fostered amongst numerous levels of government, the local communities, Indigenous peoples, and our customers, and is a testament to the importance of collaboration and trust when developing new energy infrastructure.
We are especially appreciative of our Indigenous partners and stakeholders for their continued support of our project. The increasing demand for cleaner energy in overseas Asian markets positions our RIPET asset as a high-value option for Canadian producers. The resulting growth opportunities along our integrated value chain are expected to deliver strong cash flows and returns. The integrated nature of our midstream footprint, which spans the Western Canadian Sedimentary Basin and provides upstream producers with access to premium export markets overseas, is a significant competitive advantage for our company, one that is difficult for our competitors to replicate. RIPET and the ability to export propane is the catalyst for further investment and in growth in our midstream complex. This unique capability will provide us the opportunity to handle a molecule through our gathering, processing, fractionation, and storage assets, thereby leveraging our entire value chain and increasing overall returns.
For our midstream segment, in the near term, our new assets in service drive EBITDA growth by 30%-40% in 2019. This is only a partial year for RIPET. The Townsend expansion and the Nig Creek gas plant. We see even more growth in the coming years as the assets like the second train at North Pine come into service. In our utility segment, our strategy is driven by intensifying our focus on operational excellence, which means operating a safe and reliable system, enhancing efficiencies, providing exceptional service to our customers we serve, and capturing our allowed returns in a timely manner. Our utilities are an integral part of our business as they balance our portfolio with low risk, growing cash flows. We expect to see significant growth in the future, reflecting exposure to higher growth markets with capital expenditures to support customer additions and accelerated replacement programs.
Moving forward, we see opportunity to work with regulatory commissions in the jurisdictions in which we operate to propose new and innovative mechanisms for rate recovery outside of base rate cases. We also have healthy customer growth and system reliability projects that provide investment opportunities to serve new customers and drive steady rate base growth. Take, for example, our Marquette Connector Pipeline, which, as I mentioned earlier, is now under construction in Michigan. With this project, we are putting approximately $142 million of capital to work in 2019 to improve the long-term reliability of our pipeline system and to connect new customers. Timely recovery of this investment is expected to begin in the first quarter of 2020.
With that, I would like to extend my thanks to you, our shareholders, for supporting AltaGas, particularly over the last 18 months as we worked hard to reposition the business in order to restore your confidence and for taking the time to join us here today. Of course, none of the milestones we've achieved to date, nor those we are sure to achieve in the future, would be possible without a very talented and hardworking team. Every day, the people of our company are committed to delivering value to our customers and our shareholders. I want to thank all of them for their efforts and dedication. To close, truly, AltaGas has all the ingredients it needs to succeed. I look forward to the exciting future of this company. Now I'll open the floor to any questions.
I would ask that you please be mindful of others by keeping your questions brief and asking only one question at a time. If you have a second question, please step back in line before asking. Appreciate that. Thank you.
Thanks for your presentation. I found it rather ironic you were talking about August, and we had pictures of snow of the 2 locations up, but I guess we didn't get around to getting those pictures in the summertime. We've all heard that. On your presentation, I also saw a slide where we are making a donation to certain places, so I'd like to ask about that. We've all heard now with the new government that we are open for business again in Alberta. Thanks to Jason, who I've known for almost 25 years, and also his energy minister, Sonya, who I've also known for about 20 years. They're going to be a good team to get the oil and gas industry going again, folks. I know that.
In regard to that, I'd like to ask, does this company have any wish or want to donating funds to our federal cause? We have to get our boy child, who's made a mess of the oil and gas industry, our boy child out in Ottawa. We've got to kick his little butt out because he's smoked enough pot, I think, already to ruin Canada as it is. Are we planning on making any donation to get that person's ASS kicked out?
Thank you for the question. I've moved to Calgary and I enjoyed it. I have to say with respect to snow, they tell me it can snow in August occasionally. I haven't been here, so I don't know that. Look, I appreciate your question and obviously, as I've mentioned in my comments, we're building facilities and moving energy to Asia and the growing markets, and really driving economic growth and prosperity for everyone here in Canada. I truly believe that. We want to work effectively and diligently to get our message out. Every chance I get and every opportunity, I'd certainly advocate the fact that what we're doing in order to bring and encourage more growth in our energy business, because I truly believe that it drives prosperity for everyone, and that we have a tremendous opportunity ahead of us.
To the extent that I can have a discussion with the Prime Minister, I would welcome it and to explain that. Thank you for your question. I appreciate it.
Anybody else?
Hello, my name is Rebecca.
Hi, Rebecca.
I'm the holder of a valid proxy for this meeting. I have somewhat of a question, but it's more information that I'd like to bring to the shareholders of AltaGas. Some of you may remember me. I attended last year's AGM as a shareholder in AltaGas to express my extreme dismay with one of the company's holdings, the Alton Gas Project. I'm here as a representative of the grandmothers of Sipekne'katik district of the Mi'kmaw Nation, to tell you that the Alton Gas Project will never be completed and that this is a bad investment. I would like to start with a message from one of the grandmothers to Alton Gas investors. This is unceded Mi'kmaw territory that Alton Gas is still trying to dig salt caverns in and channel the brine into the river, and have at every attempt, not been deemed successful in their endeavors.
Their science is flawed, they are basically wasting your time and money. The site where the caverns are is a fault line, and the brine that they want to push out into the river does not meet standards. The National Energy Board just raised the regulations so the brine will meet standards. Us, as indigenous Mi'kmaw people, did not give free, prior, and informed consent on the project. Three grandmothers were arrested protecting the river against this corporation. Canada, the corporation, does not have legal jurisdiction over these lands or rivers. We do as a sovereign indigenous Mi'kmaw Nation. I, Madonna Bernard, was one of the grandmothers that were arrested, and I am the great great granddaughter of the late Grand Chief Gabriel Sylliboy, who just so happened to be pardoned in the Supreme Court using the Treaty of 1752 on October 1st, 2016.
The Supreme Court admitted they wrongfully accused him back in 1928, the courts affirmed the treaty rights of the Mi'kmaw people. I would like you to know that my colonial name is Madonna Bernard. My real name in my language is Just a brief technical overview. Alton Gas is a natural gas storage project that would require creating enormous underground caverns in salt deposits to store natural gas at extremely high pressures. These salt deposits are surrounded by faults, and the geology is contested, so the potential for leaks is high. Further, to create the caverns, your company plans to dump tens of thousands of tons of salt brine down the sacred Shubenacadie River for years on end. The project has been roundly rejected by the Mi'kmaw people and their supporters.
As we've seen with numerous pieces of energy infrastructure, this kind of opposition does not go quietly and usually results in huge losses for companies like AltaGas. Alton Gas has been rejected by the Mi'kmaw Nation since grassroots people were informed of its existence, which was about the time that construction started. There is no free, prior, and informed consent, there was no opportunity to give it prior to the project starting. Alton Gas has also been mired in a Supreme Court case regarding insufficient indigenous consultation since 2016. The court turned consultation back to the province, the government of Nova Scotia recently declared that consultation was sufficient, only to have that declaration immediately appealed in court by Millbrook First Nation. This court case could carry on and hinder the Alton Gas project for several more years.
Furthermore, the traditional government of matriarchs of the Mi'kmaw Nation recently launched a land claim process in the Shubenacadie River watershed, where your investment lies. Land claim processes are lengthy and tend to eventually fall in favor of indigenous claims to title. This process could delay your project for another decade or more, and in the end, you will likely find that the land claim will be successful for you, and you will not be able to proceed with your project anyway. Alton Gas does not even live up to the meager environmental laws of Nova Scotia or Canada. While the project has been given permits over the years, these permits come with conditions, of which Alton Gas has met very few.
There is talk of making a substantial change to the project in response to the intense concerns for the health of the river. This substantial change will require a new set of permits to be issued and a new round of public engagement. History shows that Alton Gas' public relations game is not strong. It is unlikely that opening up to greater public scrutiny would go well. Lastly, on a technical note, much of the equipment needed to discharge the salt brine into the river is literally buried in mud, as it has been since 2016. Recently released documents show that your company has no substantial plan to dig out the equipment, nor to prevent it from being buried in sediment from the river again in the future.
This is an unusual way for assets to become stranded, but they are stranded nonetheless. Your money is invested in a failing project. The AltaGas project is already nine years delayed from its original 2010 start date. AltaGas has opened office and then closed up, has hired security, and then abandoned the work site for over a year. AltaGas has tried to buy support from the local community and tried to lobby governments to bend the rules in your favor. None of these approaches have worked. The project is not operational. We will use every tool available to us to ensure that it stays that way. Strictly economically, the argument for this gas storage project is dwindling. Initially, your company argued that gas was cheap in the summer and expensive in the winter. If you could store it, you could buy low and sell high, turning a profit.
However, economic projections are based on data from 13 years ago. The business argument includes the expectation of a steady supply of natural gas from the Sable Offshore project, a high price of natural gas, and a large gap between the summer and winter prices of gas in Nova Scotia. All three of these assumptions have evaporated. Sable Offshore is gone. Gas is cheaper than ever. The summer-winter price differences on the East Coast is shrinking. I am here representing water protectors working hard to uphold their treaty rights and responsibilities to protect the land from destructive projects like this. We can speak your language, too. Stop throwing money into the black hole that is AltaGas. We will make sure this project never becomes operational. We have a successful track record so far. Stop investing in AltaGas now.
I and many others stand in solidarity with the grandmothers of Sipekne'katik district of the Mi'kmaw Nation. While your company is breaking treaty law and disregarding the fact that you're operating on unceded Mi'kmaw territory without consent, you're also wasting CAD tens of millions of dollars on a project that is clearly failing. The systematic uncertainty of the AltaGas project and the profound lack of transparency about its difficulties should be very troubling for shareholders. Do you really want to continue supporting a project that is losing money while committing treaty and human rights violations? Whether your logic is based in economics or in respect for treaty rights and the planet, I hope your answer is no. I urge the shareholders to pull their support from the AltaGas project. Thank you.
Thank you for your comment. I'll make a brief comment. The fact that AltaGas is consistently complies with the laws and is attempting in every way to work with all of our stakeholders, as we have done throughout all of our projects, and will continue to do so.
Thank you. During the business portion of the meeting, I was politely asked to maybe not carry on for as long as I did. I would hope that in the future, you would do the same with those who are giving us sermons that are much longer than what I ever carried on with. Anyway, the next question I have is, our premier has said he is willing to turn the taps off. I'm just wondering how that could or will impact AltaGas if that were to come about.
Certainly, I think the premier has also said that he wants to work with all stakeholders, I think that at the end of the day, I think that's the best course of action, that we work with all stakeholders. With respect to your question, obviously, a lot of our operations are in Northeast B.C. as well as Alberta, we want to work with the premier to encourage a continued expansion of the energy business because, as I've said earlier, we believe that to be in the best interest of all Canadians, ultimately. We'll continue to work with the premier, and look forward to having a dialogue. We're obviously close to all of those discussions, and are aligned to continue to allow all Canadians to prosper with our energy industry. Thank you for the question. Yes, sir.
My name is Bernie Bashard. You didn't touch on electricity production during the presentation. You covered pretty much the propane and the movement of gas. Could you give us an overview of your electricity production? I'm not familiar very much with Washington Gas Light Company, and I'm sure other people aren't here either.
Yeah.
Do you produce coal-fired, solar, wind, hydroelectric? What's the composition of your electricity production, and what % would that entail of your earnings? Thank you.
Thank you for the question. With respect to our power business, I have defined that at this point as more of a non-core business. It's a smaller aspect of our business. To your specific question, with Washington Gas Light, we have a large business that's a residential solar business, both residential and commercial in the U.S. We also have gas-fired power plants in California and battery storage assets. From a financial perspective, it is about 12% of our overall cash or EBITDA and has been declining over the last few years. As a decision, as your CEO, looking at where we deploy capital most effectively and most profitably going forward, as I said, we've transitioned this company to focus on our midstream business as well as our gas utility business.
While we certainly have some solid assets in power, from my perspective, we're focusing in on those businesses. From a shareholder's perspective, that's the best area for us to deploy our money and provide real value for our shareholders going forward. Thank you for your question. Please.
Thank you for the last two answers, although they were very diplomatic, they didn't really answer the question. I think you were sort of waltzing around the answers. The following question, I hope you have a more direct answer. I'd like to get some insight into our safety record for the workers and the contractors. Can you give us some insight into that?
Sure. In fact, each board meeting, we start off with all of our safety metrics, our days away from work, our DART rates, our LTA rates. We track them against key performance indicators going forward. Both the health and safety of our employees are critical, the environmental aspect and sustainability of our business. We continue to evolve. In terms of the statistics, I don't have the rates in front of me. We focus on that each and every day to ensure that each day that we're providing the resources to provide a healthful environment to our workplace and to our environment. We're setting out key principles, if you look at our statements, in terms of what's important.
I will tell you that from a CEO, I have made each discussion with all of our employees that we will not jeopardize the safety of employees to gain a business advantage, point one. We will consistently provide improved and continuous improvement to improve our safety records and to continue to monitor going forward. I want to answer you directly. I don't have all the statistics. I assure you as your CEO, that is the right thing morally. It's right business-wise.
Who among your team would have those statistics, sir?
David Anderson, who introduced David, is our Senior Vice President of EHS, and he can provide you all of the data.
Thank you.
You're welcome. If there are no further questions, we will draw today's meetings to a close. Once again, thank you all for taking the time to join us today. We have refreshments in the lobby, so please help yourself. I look forward to seeing you all again next year. Thank you again.