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Algonquin Power & Utilities reported lower first-quarter 2026 earnings than a year earlier, while management said the company continued to make progress on its strategy to become a “premier pure-play regulated utility” through regulatory settlements, operational improvements and balance sheet actions.
Algonquin reported first-quarter GAAP net earnings of $83.1 million, compared with $92.8 million in the same period of 2025. Adjusted net earnings were $99.6 million, down from $109 million a year earlier.
Adjusted net earnings per share attributable to common shareholders were $0.13, down one cent from the prior-year quarter. Chief Financial Officer Rob Stefani said the decline reflected the non-recurrence of favorable depreciation and tax adjustments recorded in the first quarter of 2025, as well as slightly unfavorable weather compared with the prior-year period. He said those factors were “almost entirely offset” by a favorable retroactive adjustment tied to the resolution of the CalPeco Electric general rate case.
Stefani said CalPeco was the largest driver of year-over-year results. The California Public Utilities Commission approved a settlement that increased annualized rates by $48.6 million and included $60.7 million in retroactive revenues to Jan. 1, 2025.
The benefit was partially offset by $28.5 million in higher wildfire insurance expenses recovered in rates, including $22.7 million of retroactive insurance expenses to the first quarter of 2025.
Excluding the retroactive adjustment, Stefani said higher operating expenses were driven by $3.8 million in Gas Safety Excellence costs, along with higher labor, benefits and property taxes across Algonquin’s gas systems. Depreciation rose $12.9 million, mainly because two favorable depreciation deferrals recorded in the first quarter of 2025 did not recur. Tax expense increased $9 million, primarily due to the non-recurrence of a favorable 2025 tax adjustment related to the company’s hydro group following the January 2025 sale of its renewable energy business.
Chief Executive Officer Rod West highlighted regulatory developments during the quarter involving New England Gas, CalPeco Electric, The Empire District Electric Co. and ESSAL, the company’s Chilean water utility.
In Massachusetts, the Department of Public Utilities approved Algonquin’s New England Natural Gas settlement agreement on March 27, providing for a $45.3 million revenue adjustment.
In California, regulators approved the CalPeco Electric settlement on March 19. West said one change related to a proposed adjustment to the fixed charge for residential customers, which will remain unchanged.
For Empire Electric Missouri, West said the company is awaiting commission review of customer performance data. Under an approved settlement, Algonquin must demonstrate three consecutive months of customer metric performance before implementing $97 million in annualized revenues.
West said the company has submitted three monthly filings and identified “limited deviations” in each month, which he said were consistent with the settlement provisions. He added that Algonquin expects the commission to rule by midyear.
West said the company is also working with stakeholders on a potential additional $13 million of annual revenues tied to further performance requirements beginning in the second half of 2026.
Other pending matters include a settlement agreement and formula rate plan decision at Liberty Utilities’ Litchfield Park Water & Sewer business in Arizona, where Algonquin has requested a decision by August.
In California, the company continues to pursue recovery of approximately $77 million in wildfire-related costs through its WEMA proceeding, primarily related to claim settlements above insurance coverage, legal costs and financing costs from the 2020 Mountain View Fire.
Algonquin also has pending matters at Park Water and Apple Valley in California and a Kansas rate case at Empire Electric seeking a $15.8 million base rate change. West said ESSAL reached an agreement with Chilean regulators that includes a $4 million rate adjustment expected in the second half of the year.
West said Algonquin has begun rolling out updated procedures and training materials for damage prevention and leak response in its gas operations. The company also implemented independent quality assurance and quality control reviews of line locating activities.
On the customer side, West said Algonquin improved billing accuracy in Missouri versus prior periods and improved communications to customers “in the moments that matter to them.”
He said the company’s regulatory strategy centers on earlier engagement with stakeholders, more pragmatic filings and improved accuracy. “We’re getting back to regulatory basics to earn our rights to grow,” West said.
Stefani said Algonquin’s balance sheet remains in “a position of strength,” noting that Fitch recently reaffirmed the company’s credit ratings in the BBB range. Algonquin is also rated BBB by S&P and Baa2 by Moody’s.
The company expects to refinance senior unsecured notes due in June by raising approximately $1.15 billion at LUCO through a 144A bond issuance. Stefani said Algonquin also put in place a $1.15 billion delayed-draw credit facility to support the refinancing if needed.
West said Algonquin continues to explore tax optimization strategies, including a potential redomicile, but no definitive decision has been made. He said any move would require approval from the board, shareholders and other stakeholders. The company has requested a private letter ruling from the Internal Revenue Service to confirm tax treatment, a process West said typically takes six to nine months.
Stefani said the company is asking the IRS to assess the tax implications of legally redomiciling into the United States, including potential tax consequences.
During the question-and-answer session, RBC Capital Markets analyst Nelson Ng asked about CalPeco Electric’s future power supply, citing reports that NV Energy would no longer supply electricity to CalPeco starting in May 2027.
Stefani said Algonquin is launching a competitive search for new energy partners and has filed a request with the CPUC to begin that process. He said formal bidding is expected to begin later this summer, with preferred selection in the winter of 2026-2027 and new power supply agreements expected by spring 2027, subject to CPUC approval.
Asked whether CalPeco may add generation of its own, Stefani said the company is focused on the competitive search for energy supply partners.
Ng also asked about first-quarter capital expenditures of approximately $88 million compared with full-year guidance of about $800 million. West said the timing reflected seasonality and project timing, and that Algonquin still expects to meet its capital plan.
West said the company had extended its 2025 momentum into the first quarter and remains confident in its plan.
Algonquin Power & Utilities Corp (NYSE: AQN) is a diversified generation, transmission and distribution utility company headquartered in Oakville, Ontario. Established in 1988, the company operates through two primary business segments: Regulated Utilities and Renewable Energy.
The Regulated Utilities segment includes electric, natural gas and water distribution networks serving residential, commercial and industrial customers across North America. The Renewable Energy portfolio includes hydroelectric, solar, wind and thermal generation facilities.
The company’s renewable energy assets span multiple jurisdictions in Canada and the United States.
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