Good afternoon. My name is Dina Bartolacci Seely, Manager of Corporate Communications at Emera. Thank you for joining us for Emera's 2023 Annual Meeting of Shareholders, which is being held in a virtual format. Please note, certain statements made in today's presentations and during the question and answer session afterward may be forward-looking or may include non-GAAP financial measures and should be received with caution.
Any such forward-looking statements are made pursuant to safe harbor provisions contained in applicable securities laws. Actual results and financial performance could differ materially from historical results or any conclusions, forecasts, or projections in the forward-looking statements. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections as reflected in the forward-looking statements.
Additional information about the material factors that could cause actual financial performance to differ materially from the conclusions, forecasts, or projections in the forward-looking statements can be found in Emera's latest MD&A and financial statements, which are available on SEDAR. Thank you. I will now turn the meeting over to Jackie Sheppard, Chair of the Emera Board of Directors.
Thanks, Dina. Good afternoon, everyone. Welcome to Emera's 2023 Annual Meeting of Shareholders. This year's meeting is fully virtual through live webcast. I am on location with management at Emera's head office in Halifax, which is located in Mi'kma'ki, the ancestral and unceded territory of the Mi'kmaq people. Emera seeks to build deep and meaningful relationships with indigenous peoples and organizations across Mi'kma'ki and in all other regions where we operate. Employees at Emera begin every meeting with a safety moment.
Our annual meeting is no different. There's no doubt you've heard us say this before. It's something we can't say often enough. The safety of our teams, our customers, and our communities is our number one priority. One of the ways we demonstrate this is by marking Safety Week across Emera's operations each year.
The week features festivities, activities, and information sessions for employees, all with the goal of preventing injuries and illness and in the workplace, at home, and in the community. Safety Week is among the many ways we live our safety culture as we continue our work to create an Emera where no one gets hurt. I'd like to thank employees from across the Emera team who attended or helped to organize this year's events.
Now to the business of today's meeting. We invited shareholders to vote in advance by proxy, and many of you took advantage of this option. There will also be an opportunity to vote virtually during the meeting through the online platform, and I will provide instructions when we get to the voting process. You must remain connected to the Internet at all times during the meeting in order to vote when voting commences.
Thank you for exercising your voting rights through whichever method you have chosen. Joining me today are Scott Balfour, our President and Chief Executive Officer, Greg Blunden, our Chief Financial Officer, and Stephen Aftanas, Emera's Corporate Secretary. I'd like to introduce our director nominees in addition to Scott and myself. Biographies of each nominee can be found in our information circular.
The director nominees are Jim Bertram, Calgary, Alberta, Henry Demone, Lunenburg, Nova Scotia, Paula Gold-Williams, San Antonio, Texas, Kent Harvey, New York, New York, Lynn Loewen, Westmount, Quebec, Ian Robertson, Oakville, Ontario, Andrea Rosen, Toronto, Ontario, Karen Sheriff, Picton, Ontario, Jochen Tilk, Toronto, Ontario.
Thank you to all the director nominees for your ongoing contribution and commitment to Emera. At this time, I would like to acknowledge Rick Sergel, who is stepping down from the Emera board this year. Rick joined the Emera board in September 2010.
His deep experience in the U.S. electricity sector, along with his extensive regulatory background, have been of great benefit to Emera over the years. On behalf of the entire team, thank you, Rick, for your tremendous contributions. We wish you the very best. For nearly two decades, the Emera team has been working to advance our strategy of safely delivering cleaner, reliable energy in a manner that best manages the impacts on customer costs.
With increasing global focus on the critical transition to cleaner energy, it is safe to say this work has never been more important. Scott will highlight the company's progress and last year's financial results later in the meeting. Over the past 10 years, Emera has achieved an 8.8% annualized total shareholder return.
While our share price performance fell short of our expectations in 2022, we are well-positioned, focused, and committed to delivering superior returns for shareholders. Through 2025, we plan to spend CAD 8 billion-CAD 9 billion, with more than 60% of this investment focused on cleaner energy and reliability.
Our approach to ESG is guided by a fully independent risk and sustainability committee of the board, which brings additional focus and rigor to our management of ESG. In 2022, we appointed a chief risk and sustainability officer and established a new Emera Enterprise Sustainability team made up of leaders from across the business.
I extend my sincere thanks to every employee for your continuing commitment and extraordinary work on behalf of our customers, communities, and shareholders. I'd also like to thank the management team and my colleagues on the board for your leadership and many other contributions to Emera's success.
Thank you all. I will now call the meeting to order. In accordance with the company's articles, I will chair the meeting. Stephen Aftanas will act as Secretary. Representatives of TSX Trust Company, the company's registrar and transfer agent, will act as scrutineers, report on shareholder participation, and count the votes. The scrutineers have reported that a quorum is present.
The Secretary has confirmed that proper notice of the meeting has been given, and that the materials for the meeting were provided to common shareholders, including the financial statements for 2022, which are hereby presented to the meeting, a copy of which the Secretary shall keep with a record of this meeting.
With that, I now declare the meeting duly called and properly constituted for the transaction of business. We have received the scrutineer's report on the number of shares represented at this meeting. Mr. Secretary, could you please read the report?
Madam Chair, the scrutineers have provided their preliminary report. There are present at the meeting or represented by proxy, more than 127 million shares of the company. This represents over 46% of the outstanding shares. The final report will be kept on file with the record of this meeting.
Thank you, Mr. Secretary. We will now move to the items requiring shareholder approval, and I will explain the voting procedure. The mail out to shareholders provided notice that five items would be placed before this meeting for approval. Most shareholders submitted their votes by proxy in advance of this meeting.
As mentioned, this meeting is fully virtual and registered shareholders and duly appointed proxy holders can vote online. If you have already voted by proxy, your vote has been received by the scrutineers and there is no need to vote online during the meeting. You can vote online by making your selection from the options shown on your screen. Confirmation of your voting choice will appear on the screen. You can change your votes until the end of the voting period by selecting another choice.
If you are a registered shareholder or a proxy holder and you have a question on the motions for shareholder approval, please submit it online via the Lumi platform. If your question relates to a matter other than the motions for approval, please wait until the time provided for shareholder questions following the formal business of the meeting.
As I mentioned, there are five items for approval at today's meeting. I will ask the Secretary and Chief Financial Officer to move and second the motions. The five items for approval will appear on your screen. They are the election of directors, the appointment of auditors, authorization for the directors to establish the auditors' fees, an advisory vote on executive compensation, and an amendment to the company's Senior Management Stock Option Plan. I now declare the polls open on all items.
I would ask the Secretary to make motions regarding these five items. Mr. Secretary.
Madam Chair, I am a shareholder, and I move that, one, each of the nominees, as set out on pages 17 to 27 of the information circular, be elected as directors of the company to hold office until the next annual meeting or until their successor is elected or appointed.
Two, Ernst & Young LLP Chartered Accountants be appointed auditors of the company to hold office until the close of the next annual meeting of shareholders or until their successors are appointed. Three, the directors of the company be authorized to establish the auditors' fee for the current year in such amounts as they may, in their discretion, determine. Four, the resolution as set out on page 15 of the information circular regarding the company's approach to executive compensation is approved.
Five, the resolution set forth in Appendix B of the information circular regarding approval of an amendment to the company's Senior Management Stock Option Plan is approved.
Thank you, Steve. I would now ask Greg Blunden, our Chief Financial Officer, to second these five motions.
Madam Chair, I am a shareholder, and I second all five motions.
Thank you, Greg. Are there any questions from registered shareholders or proxy holders relating to these motions? I remind everyone this is not the general question-and-answer period. That session will follow the formal business of the meeting and Scott's remarks.
Madam Chair, there are no questions related to the motions.
Thank you, Dina. As a reminder, voting is open and the motions and voting options are displayed. If you are voting online, please remember to scroll down the page to ensure you vote on all the motions. We will take a short pause to allow for the voting, and I will announce when the polls are closed. Thank you. The polls are now closed. While the scrutineers are tabulating the votes, Emera's President and Chief Executive Officer, Scott Balfour, will provide some remarks.
Thank you, Madam Chair. On behalf of the entire Emera team, thank you to everyone joining us for today. As Jackie said, our focus continues to be on leading a responsible and balanced energy transition across our operations.
We're making the investments needed to reduce the carbon intensity of the energy we deliver, and doing so in a way that ensures the continued reliability and resiliency of the grid. We know that energy must always be available when customers need it, and that the transition must be paced and planned in a way that is mindful of the impact of costs for customers. In doing this, we naturally continue working towards achieving our climate commitment goals and our vision of a net zero by 2050.
We're on track to achieve our next goal, a 55% reduction in CO₂ emissions across Emera by 2025 compared to 2005 levels. In 2022, we achieved a 41% overall reduction in CO₂ emissions compared to 2005 levels. At the same time, renewable energy increased from 4%-16% of the generation mix across our portfolio.
This progress is largely due to investments we've made in cleaner energy, including solar in Florida and the Maritime Link in Nova Scotia. We're proud of our role as leaders in the energy transition and of our progress to date. We also know there is much more work to do. Government climate policy in many of our jurisdictions is ambitious, Utilities across North America, including those we own, must work to achieve these ambitious targets in very short time frames.
Of course, none of what we're achieving on our journey to clean energy would be possible without our teams. In 2022, the Tampa Electric team completed the Big Bend modernization project safely, on time and under budget. This project has reduced emissions by accelerating the retirement and replacement of coal-based generating facilities, enabling us to deliver cleaner energy to customers and saving $700 million in energy costs over its 30-year lifespan.
Tampa Electric also saw a significant milestone in their solar program. We now have more than 1,000 megawatts of solar in service in Florida, with plans to install another 239 MW by the end of the year. Since acquiring Tampa Electric, we've increased the amount of solar within the company's generation capacity from effectively zero to an anticipated 22% by the end of this year.
In Florida, the team at Peoples Gas recently announced the completion of their renewable natural gas facility at Alliance Dairies. The project is part of our commitment to reducing emissions within our regulated gas utilities and is expected to produce enough renewable gas to serve over 4,000 homes annually. In Nova Scotia, more than 1 million MWh of clean, cost-effective hydro energy from Newfoundland and Labrador have been delivered across the Maritime Link so far, displacing around 150,000 tons of coal. I'm pleased to say, with increased and stable flows across the link this year, that 40% of Nova Scotia's electricity has come from renewable sources year to date in 2023.
We intend to keep building on our progress across Emera with our $8 billion-$9 billion capital plan through 2025, focusing on cleaner energy and reliability initiatives for the direct benefit of customers. Innovation and new technologies will play an important role in our ability to achieve carbon reduction targets.
We're exploring a variety of emerging technologies, including battery storage, smart chargers, carbon capture, and microgrids. We're continuing to test and enhance our BlockEnergy microgrid solution through residential pilot projects and a test facility, with a second pilot expected to be completed later this year. Across our operations, we're pleased to see federal government policies designed to accelerate the clean energy transition while helping to reduce cost impacts for customers.
Our teams are looking at opportunities to leverage these policies, such as the Inflation Reduction Act in the U.S. and Canada's Clean Electricity Investment Tax Credit, for the benefit of our customers. At Emera, we've been making strategic investments along our clean energy journey for over two decades. These investments, centered on delivering value for our customers, have also created value for our shareholders.
Last year, we successfully executed a CAD 2.6 billion capital plan focused on cleaner and more reliable energy. We reported CAD 850 million in adjusted net income and adjusted earnings per share of CAD 3.20. Excluding the impact of a litigation award received in the fourth quarter, our adjusted annual earnings per share in 2022 were up 8% over 2021.
In 2022, we also raised our dividend by 4%, and we're committed on to delivering on our 4%-5% dividend growth target through 2025. This is a continuation of the solid dividend growth we've provided over the long term, with 16 successive years of dividend increases, with an average annual increase of 5.4% since the year 2000. 2023 is off to a strong start.
Earlier this month, we released our first quarter results for 2023 with $0.99 of adjusted earnings per share, an 8% increase year-over-year, as well as a 36% year-over-year increase in operating cash flow before working capital. Our 2022 sustainability report has just been released and is now available on our website.
Our commitments to making the environment cleaner, supporting our teams and communities, and running our business well are foundational to who we are. They're integrated into our operations and our culture. Creating and maintaining a strong, diverse, and inclusive team is an essential part of guiding the complex transition to a clean energy future. We continue to advance initiatives to foster diversity, equity, and inclusion across Emera, including findin
g ways to support our communities as they become more inclusive. In 2022 alone, we invested more than CAD 2 million through Emera's Diversity, Equity and Inclusion Fund, part of a total CAD 18 million invested in community-based initiatives across our operations last year. Our teams are deeply committed to fostering a strong safety culture as we work towards an Emera where no one gets hurt.
We're doing this by speaking up, by building programs focused on preventing serious injuries and fatalities, by continuously improving our safety programs, and by innovating to find better ways to protect our teams, customers, and communities.
In closing, I want to extend my sincere thanks to everyone on the Emera team, now more than 7,100 employees strong, including 2,400 right here in Nova Scotia. I also want to thank Emera's Board of Directors for your dedication, your guidance, and your insight. Thank you to you, Jackie, as Chair, and to all the directors. Finally, to our shareholders, thank you for your continuing confidence in Emera.
Scott, the Secretary advises me that the preliminary voting results have been received. Mr. Secretary.
Madam Chair, the scrutineers report that all five items voted upon at the meeting have received more than the number of votes required, and therefore all items are passed. The final voting results will be posted online at www.sedar.com.
Thank you, Mr. Secretary. With these voting results, I now declare all five motions approved. With the formal business of the meeting now complete, with the consent of the meeting, I now declare the meeting terminated. We will proceed to the general question and answer period and take questions from registered shareholders and proxy holders.
That as many questions as possible can be answered, please be brief and concise and address only one topic per question. Questions on the same topic or otherwise related may be grouped or summarized and answered together. Dina, do we have any questions?
We do, Madam Chair. We've received the following question from a shareholder. It reads, "How optimistic are you feeling about the clean transition and the 2030 timeline?
Scott, over to you.
Thank you. This is a big question. First, let me say that we're really proud of our track record to date. The targets are getting harder and the timeline is not getting longer. The timelines are getting shorter. 2030 is only 6 and a half years away. Achieving these targets, like really, truly being able to achieve them, requires honest and informed conversations and plans to chart the best path forward in the most cost-effective way for customers.
The fact is that the cost of the energy transition is significant. It's also important to ensure that we do it in a way that doesn't sacrifice the reliability of the energy system along the way. That's important and a challenge. This is gonna involve embracing existing technologies, embracing emerging technologies.
Certainly, that's part of the solution. It also requires collaboration amongst all stakeholders, and it requires support of public policy, requires support of regulatory frameworks, and it requires the ability to attract capital. Needless to say, it's a challenge, but it's an area that we remain very focused on.
Thank you, Scott. Dina, other questions?
Yes, Madam Chair. We've received a question from a shareholder that reads, "Why are there so many outages in Nova Scotia?
Well, first, you know, I wanna be crystal clear that the team at Nova Scotia Power is all over this, is all over reliability. I could share all kinds of stats with you, the CAD 100 million a year that Nova Scotia Power spends on reliability, including CAD 25 million a year just on tree trimming alone.
The fact that Nova Scotia Power actually has the second-best reliability record in the region. What I wanna make sure that I leave you with is that we know our customers expect safe and reliable energy, and that the team is very committed to delivering on that.
Thanks, Scott. Other questions?
Madam Chair, we've received a number of questions expressing concern about the impact of power rate increases on customers, specifically rate increases at Tampa Electric.
Thank you for the question. This is an important question. We know that increases in power rates in energy costs is hard. It's not welcome news for anyone, especially in the kind of environment that we've been in for the last year and a half, when the cost of living is continuing to rise. Certainly in Tampa, specifically, the impact of the rising cost of global fuel prices has definitely had an impact.
You know, the team at Tampa, the teams across Emera work hard to mitigate bill impacts for customers, including at Tampa Electric, extending the traditional period of time to recover the extraordinary increase in fuel costs that were experienced in 2022.
You know, the challenge of pacing the energy transition, making the investments needed in the energy transition, making the investments needed in reliability, addressing fuel cost recoveries, addressing storm cost recoveries, all doing this in a way and at a pace that minimizes the cost impacts for customers is something the team spent a lot of time thinking about.
You know, we've been pleased recently, as we've seen, as I referenced in my remarks, the U.S. and Canadian government policies and programs that are being announced to help accelerate the shift to cleaner energy, but also buffering the cost impacts to customers. I think that's really important. We also know that some customers are struggling, and there are several support programs that exist across Emera, including at Tampa Electric, to support customers that may be struggling.
I'd encourage any customer that is struggling to address their energy costs to reach out to the local team to their utility for assistance. Those teams would be pleased to assist.
Thank you, Scott. Other questions?
Madam Chair, we've received several questions about Emera's use of coal in Florida and specifically retirement plans for Big Bend and why the company isn't lowering emissions more quickly.
Thank you for the question. You know, as we think about Big Bend retirement, I can say we're actually, we're making really good progress. Since Emera acquired TECO in 2016, we've effectively reduced the coal generation at Tampa Electric by 87% just since 2016. It's also important to remember that it isn't just as simple as closing a coal plant and building renewable energy.
Renewable energy is intermittent, whereas those coal units were able to generate electricity whenever it was needed, where renewable energy is only able to deliver energy when the sun is shining in the case of Florida or when the wind is blowing. We need to think about system reliability as we work to retire coal plants.
When we purchased TECO, I think Tampa Electric was effectively at 0% renewable energy. As I mentioned in my remarks, by the end of the year, the generating capacity at Tampa Electric will be approximately 22% renewable solar, with almost 1,250 megawatts of solar in service by then.
Thanks, Scott. other questions, Dina?
Yes, Madam Chair. We've received a question from a shareholder related to the impact of intermittent renewables on reliability. In summary, the question says, "The only way to provide energy on demand is via the burning of fossil fuels or through nuclear power. How exactly does Emera expect to provide this necessary energy as needed by customers and still provide value to shareholders?
Thank you for the question. You're right, this is part of the challenge. As we continue to add more and more intermittent renewables like wind and like solar onto the system, we need to make sure that we've got forms of storage or other generation capacity that can address the important energy needs of our customers when the wind isn't blowing and the sun isn't shining.
Yes, you know, nuclear can be part of that solution. There's no nuclear energy as part of the Emera companies in the mix. We do rely upon natural gas, but using that differently than we used to in order to backstop those renewable sources.
Hydro energy is also an important enabler of incorporating more renewable resources into the system. Emerging technologies as battery technology continues to advance and get more cost-effective, that also can be part of the solution.
The solution set ahead of us is all of the above. These are all important components of being able to ensure that we can adopt more renewables, but at the same time, ensure that we can maintain the reliability of the system. This is the challenge that the team across Emera has been working on for a number of years and continues to be very much in focus as we chart our clean energy journey ahead.
Okay, thanks. Any other questions, Dina?
Madam Chair, there are no further questions, but of note, we've received a number of comments from shareholders.
Thank you. For those who have submitted comments, thank you for taking the time to provide your thoughts. We'll review them after today's meeting. Scott and our management team will follow up with you directly.
Thank you all for your participation in today's meeting and for your continued support of Emera. If you do have follow-up questions or comments, we encourage you to reach out to us by email, phone, or mail. You'll find our contact information in the information circular you received in advance of today's meeting or on our website. Thank you all for attending.