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Executives Alison Holditch – Manager of Investor Relations Ian Robertson – Chief Executive Officer David Bronicheski – Chief Financial Officer Analysts Rupert Merer – National Bank Paul Lechem – CIBC Nelson Ng – RBC Capital Markets Matthew Akman – Scotiabank Ben Pham – BMO Sean Steuart – TD Securities Algonquin Power & Utilities Corp ( OTCPK:AQUNF ) Q2 2015 Results Earnings Conference August 13, 2015 10:00 AM ET Operator Good day and welcome to the Alqonquin Power & Utilities Corp Q2 2015 Analyst and Investor Call Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Alison Holditch, Manager Investor Relations. Please go ahead. Alison Holditch Thank you. Good morning everyone. Thanks for joining us on our 2015 Second Quarter Conference Call. My name is Alison Holditch, Manager of our Investor Relations function. Joining me on the call today are Ian Robertson, our Chief Executive Officer and David Bronicheski, our Chief Financial Officer. For your reference, additional information on the results is available for download from our web site at AlgonquinPowerandUtilities.com. I would like to note that on this call, we will provide information that relates to future events and expected financial position that should be considered forward-looking. We will provide additional details at the end of the call and I direct you to review our full disclosure on forward-looking information and non-GAAP financial measures in our results published yesterday which are available on the quarterly results page of the investor center on our web site. This morning, Ian will discuss the highlights for the quarter, David will follow with a review of the financial results and then we will open the lines for questions. I would ask that you restrict your questions to two and then requeue if you have any additional questions to allow others the opportunity to participate. Now I would like to turn things to Ian to review the quarter’s results. Ian Robertson Thanks Allison and thanks to everyone for joining us for our Q2 results call from [indiscernible] I would point out that it rained last night but it is sunny and windy today which is kind of the tri-sector for an organization which is in the hydro, solar and wind power business. So anyway, in summary for the second quarter, we were pleased to see the continuation of increased year-over-year financial results. During the second quarter, we realized a 22% increase in our adjusted EBITDA with $81.1 million generated versus the $66.4 million we reported at the same period a year ago. This growth is the result of incremental contribution from both our generation and distribution business groups and it is highlighted in the second quarter with two renewable energy facilities having achieved commercial operations is favorable rate case settlements in our regulated utilities. Within the generation business group, the company’s eighth generating facility, the 23 megawatt Morse Project in Saskatchewan and the company’s second solar facility, the 20 megawatt Bakersfield I Solar Project located in California. Both achieved commercial operations in April, these facilities operate under 20 year power purchase agreements with large investment grade electric utilities effectively extending our average power purchase agreement. While the resource levels of wind, solar and hydro naturally fluctuate from quarter-to-quarter, we were pleased that the diversification strategies on which our portfolio is constructed were to effectively to mitigate the lower than average resources experienced in the Generation Business Group. As a note, regarding further reductions in our already competitive cost of capital in their reaffirmation of the General Business Group DBRS changed their outlook commentary to positive obviously such trend will change is consistent with our view of the credit positive activities within this business group. Moving on, the Distribution Business group had a good quarter with a 9% overall increase in net utility sales and a 27% increase in operating profit. Growth in net utilities sales is driven primarily by successful rate case outcomes specifically the EnergyNorth asset and received final order on its spending rate case request approving a US$12.4 million revenue increase. And lastly, APUC’s Transmission Business group announced last November that its participation in the joint development of Kinder Morgan’s NorthEast energy direct natural gas pipeline transmission project in the North East US. We were pleased that in July that Kinder Morgan Board of Director approved proceeding with the project development, this opportunity now adds more than US$300 million to our growth pipeline. Before I turn things over to David, I like to provide a quick update on our continuing strong relationship with our larger shareholder in Emera. By way of background, open in Emera entered into a strategic investment agreement or SIAS we call it five years ago, which crafted a collaborative commercial relationship between our respective organizations. Without a doubt our [indiscernible] enjoyed benefit from our close relationship with the Emera through their endorsement of our growth strategies, their continuing financial commitments would just help drive down our comp to capital and last but not least the continuing contributions of Chris Huskilson, Emera‘s CEO as a member of our Board. Over the intervening five years, Algonquin has undergone profound growth and evaluation to put that in perspective in 2010, Algonquin was $980 million organization focused primarily on independent power development. In pretty start contrast today’s Algonquin is a $4.5 billion organization competing across the entire generation distribution and transmission utility value spectrum serving over 0.5 million electric natural gas utility customers owning over 1,100 megawatts of electric generation and driving growth through our $2.6 billion pipeline of identified opportunities. It might be important to note that is just Emera or Algonquin who is just growing and changing in addition to Algonquin’s broadening strategic interest over the past five year Emera has also continued to evolve it’s business focus with a recently stated interest in natural gas utilities. In recognition of these natural evaluations in our respective organizations over the past five years, Emera and ourselves jointly concluded that our strategic investment agreement or SIA would benefit from an update to its terms. And therefore, we’re now in the process of updating this agreement to serve us better for the next five years while the final document is an active work in progress. There are three main areas of which the changes are focused. First, we are seeking to reflect the pursuit of larger transactions by Algonquin giving the reduced size differential between our respective companies. Second, the amended SIA needs to acknowledge the evolving sectorial and geographic areas of interest of both organizations. And lastly, we will remove the existing share ownership restrictions, which would potentially allow Emera to increase its interest in Algonquin beyond the current 25%. In summary, we believe and I’d hope that Emera would also agree that the relationship embodied in the SIA has served us well for the past five years, delivering significant benefits to both of us and we look forward to continuing to create mutual value with Emera for the years to come. With that, I’ll turn things over to David to speak to the Q2 results, David? David Bronicheski Thanks, Ian. And good morning, everyone. We’re pleased to be reporting yet another solid quarter of earnings. The benefits of the diversification of our portfolio are evident in our results, as well as the benefits from having 80% of our operations in the US given the recent strength of the US dollar. As an example should the current exchange rate of a US$1.30 hold to the end of the year, we would expect this contribute over and above everything else we are doing, and additional $0.40 per share relative to the $1.10 exchange rate that we experienced in 2014. Adjusted EBITDA in the second quarter totaled $81.1 million, a 22% increase over the amount reported a year ago, which was primarily due to rate case settlements of full three months of production that are Morse and Bakersfield solar facilities and of course, as I mentioned a stronger US dollar. Adjusted EBITDA for the six months came in at $195.6 million, a 19% increase over what was reported in the first six months of 2014. Taking that close to look at some of the numbers are just a net earnings came in at $22.2 million compared to $16.6 million a year ago for the quarter and on a six-month basis, our adjusted net earnings were $64.6 million compared to $53.6 million last year. So now I let’s move into a little bit more detail about our operating subsidiaries beginning with the generation group. For the first six months of 2015, the Generation Groups renewable energy division generated electricity equal to 88% of long-term average resources compared to a 100% during the first six months of 2014. For the second quarter of this year, the combined operating profit of the Generation Group that will $45.9 million as compared to the $43.3 million during the same period in 2014. Moving on to our distribution group in the second quarter of 2015, the distribution group reported an operating profit of $35.4 million compared to the $27.9 million reported in the same quarter a year ago. The increase in the operating profit is primarily due to the impact of rate case settlements. In the first six months of 2015, the distribution group reported an operating profit of $98.3 million compared to $86.1 million for the six months of last year. And a little bit more detail, the electricity division within the distribution group had net utility, electricity sales totaling $17.4 million compared to $18.1 million last year. For the first six months of 2015 net utility electricity sales totaled $36.1 million which adjusting for the retroactive recognition of $2.5 million for new revenues granted under the granted state electric system rate case implemented in the first quarter of last year or consistent basically year-over-year. Moving on to the natural gas division. In the second quarter of 2015 net utility natural gas sales and distribution revenue was $34.7 million compared to the $29.9 million for the same period a year ago. We have been quite successful in our rate cases and that accounts for most of that increase. Moving on to the water division in the second quarter of 2015 revenue from water distribution and waste water treatment totaled $15.6 million compared to $15.1 million during the same period in 2014. Again, rate increases and our successful prosecution there up was a main contributing factor as was the acquisition of White Hall Water System. Now I want to update on recent financing activities at April 30, 2015 the distribution group completed a private placement of the U.S. issuing $160 million of senior unsecured 30 year notes bearing the coupon of 4.13% this was the first time the utility group issued 30 year notes and we were very pleased with the offering. The proceeds of the financing would be used to partially financing our pending part water system acquisition, which is expected to occur later this year and some of that for general corporate purposes. This offering a very attractive rates and long tender clearly demonstrates the strong currencies that are elaborating utilities on platform has in the U.S. private placement market. I’m also pleased to report as Ian had mentioned DBRS is also changed the rating trend to positive on a generation business, which we view as a quite positive and reflective of the strengthening credit of our generation business. I’ll now hand things back to over Ian. Ian Robertson Thanks, David. Before we open the line up for question as usual, I would like to provide a quick update on our growth initiatives. Within the generation business group construction work at our 200 megawatt, Odell Wind project in Minnesota commenced in May of this quarter and I can report that all of the access rows and foundation [indiscernible] has now been completed. We’re started on the collection and introduction facilities for approximately three quarters of transmission line haven’t been installed. With the California Bakersfiled, one solar facility now completed. The generation business groups team has begin work on the adjacent 10-megawatt Bakersfiled 2 expansion project. During the quarter, the final permit complaints binders were submitted to the county, engineering designer facility as well underway in procurement of long lead-time electrical equipment in solar panels has begin. Within the distribution business group applications now have been filed seeking a total of $26.2 million in revenue increases collectively for the CalPeco electric system in California, the Black Mountain Sewer system in Arizona, Dracut system in Massachusetts and the Missouri natural gas system final decisions on all for rate proceedings are expected within the next 12 months. Regarding the acquisition of the Park Water company, which David spoke, approval from both the California Public Utilities Commission and the Montana Public Service Commissions are required. An approval application was filed in November 2014 with the CPUC seeking approval to acquire the two water utilities, which are located in California. In this regard, a joint settlement agreement has now been executed with the office at the ratepayer advocate and a joint motion to approve settlement was filed with the CPUC in May. The settlement agreement is currently before the administrative law judge and the decision is expected in the fourth quarter of this year. In Montana, an approval application was filed in December last year with the Montana Public Service Commission seeking approval to acquire the Montana Utility Mountain Water Company. I would say notwithstanding the ongoing twist and turns in the condemnation proceeding with the city in Missoula are regulated – a regulatory hearing with the State of Montana is now scheduled for October 19 of this year with the decision on the Montana application expected before the end of the year. Within the transmission business group permitting work on the Northeast Energy Direct continued with the Environmental Review being filed with the FERC in June and the filing of the formal FERC certificate application planned for October of this year. Construction is currently forecast to begin in January 2017 with the commercial operation targeted for late 2018. In closing, we trust the shareholders were pleased with the dividend increase that we announced early in Q2. I will point out that this represents the fifth consecutive year of dividend increases bringing our current five-year dividend CAGR in Canadian dollars to over 15%. APAC has confirmed its expectations for double-digit earnings in cash flow growth to support future targeted dividend increases. And lastly, before we go to questions, I would like to offer the commentary that we believe that our current dividend yield is not fully reflected of the fundamental value of our business. In particular, we speculate that perhaps it’s not fully appreciated that the material growth in our annualized dividend is more than $0.48 Canadian per share to our normal course increases together with appreciation of the U.S. dollar is actually supported by increased Canadian equivalent earnings coming from 80% of our operations, which are located in the U.S. We’re confident that as we continue to communicate their hedging and deliver on the promised earnings cash flow and dividend growth from our clearly identified $2.6 billion growth pipeline this will ultimately reflect in a continued rise in our share price for the balance of 2015. So with that, let’s open the line for the question-and-answer session. Question-and-Answer Session Operator Thank you. [Operator Instructions] Your first question will come from the line of Rupert Merer with National Bank. Please go ahead. Rupert Merer Good morning everyone. Ian Robertson Good morning, Rupert. David Bronicheski Good morning, Rupert. Rupert Merer So on growth and M&A with your updated agreement with [indiscernible] it sounds like you could cast your net a little wider for growth, can you talk about how your focus could change and then what are you seeing on transaction multiples recently, maybe a little color on how prices vary between asset types and what you could see in broader geographies? David Bronicheski Sure, I’m not so sure that in broader geographies we clearly obviously have been, I won’t say home bodies because we have a North American focus and I think of your question would we consider regulated utilities outside of North America and I don’t think it would be unreasonable for us to think that there is – there maybe opportunities for us in OECD countries obviously outside of our current focus. In terms of the multiples, I think it’s not – they remain strong and robust, the interest rates are continued to be low though I think we are cautiously optimistic that I think there is an interesting dynamic developing between Canada and the U.S. as you read every day in the newspaper with continued slide in the oil and gas prices, the prospect for increases in Canadian interest rates is somewhat muted whereas in the U.S. I think the prospect of interest rate increases is probably if not a foregone conclusion. It’s certainly a probability. I think that’s creating an interesting dynamic that would improve the competitiveness of Canadian organizations in the M&A space as we think about US. So perhaps think about it this way, improving PDEs in Canada versus falling PDEs in the US and so I think we are cautiously optimistic Rupert that our competitive advantage generated by the differential between the Canadian environment in the US market will create some very interesting opportunities over the next 12 to 18 months. Rupert Merer Great. And then a follow-up on growth talking about Kinder Morgan pipeline, it looks like our COD target November 2018, and I believe you mentioned potentially starting construction January 2017. Talk about what the milestones look like for that project leading up to construction what you are going to need to see to be sure you are moving forward that’s’ and what the returns look like compared to some of your other investment opportunities. Ian Robertson Sure. Well, I think we all in this business obtaining the FERC Certificate is a huge gaiting item right now but the first FERC is expected to be filed in October of this year so October 2015 I think a year worth of prosecution of that application is probably are reasonable so therefore October 2016 is a reasonable period to expect that FERC certificate. Our construction start of January 2017 really kind of falls on the expected receipt of that certificate late fall next year. I will say that, what is ongoing and I think Algonquin Liberty can play an important role in it is all of the outreach programs that are going on certainly across New Hampshire. We are thinking an active role in demonstrating the benefits that this pipeline can bring to the existing customers of liberty utilities, but also potential new customers that pipeline is going through a sections of the state which are underserved by natural gas as I sort of joke. They don’t call the Hampshire the granted state for non and that the installation of pipelines is quite expensive and so I think we are taking a lead role and trying to show the talent and communities that will now be within economic distance of the pipeline, the opportunity to participate in what is undeniably a convenient and cost effective field. So I think that the next year is going to be busy for us in terms of supporting Kinder’s prosecution of the FERC and our own continued outreach in New Hampshire. You asked the question about returns, I think we are confident that the returns of the Kinder Morgan pipeline are going to meet or exceed the returns that we see from our other utility investments and frankly depending how the capacity of the pipeline has increased to incremental compression to get at it, the returns could significantly exceed the regulated returns on our distribution utilities. I hope that’s helpful, Rupert. Rupert Merer Yes. That’s helpful. Thanks very much. Ian Robertson Thanks, David Bronicheski Thanks, Operator Your next question will come from Paul Lechem with CIBC. Please go ahead. Paul Lechem Thank you. Good morning. Ian Robertson Good morning, Paul. Paul Lechem Good morning. And just continuing the question on Northeast Energy Direct, you have an option to increase your ownership from 2.5% to 10% so I just wondering under what circumstances would you exercise that, are you looking, are you waiting out through the FERC process, for you do so, is that something else you are waiting for. Ian Robertson No our auction is continuing until the FERC certificates in hand and frankly when we negotiated it with Kinder, the fault was, where is the FERC certificates in hand, it’s pretty clear what the future is going to look like and so I’m not sure there is really practically any value in exercising the options since it’s at book value if you want to think of it that way before that date. So October 2016 will be called on to make a decision, it’s hard to frankly to imagine a circumstance as we look at the project today to say that you wouldn’t be exercising that option. I think the project is an attractive opportunity to commit as I said close to US$300 million to other opportunity, which will generate returns, which are kind of consistent with our expertise of our regulated utilities and so with the approval of Kinder Morgan’s board of directors of the project. I think from my perspective and you’d I have spoken and historically I have always characterized the Northeast energy direct opportunity really more I asked people to characterized it more as an additional of the entrepreneurial spirit alive and well within our [indiscernible] to be able to set out this kind of an opportunity but I think now with the approval in hand and the commitment from Kinder Morgan that we start to think about this being added to the do this rather than that perhaps the spec of that nature that might had before. Paul Lechem Okay, thanks and then back on the [indiscernible] agreement given your expanding geographic and scope of the acquisitions you’d look at how do you avoid complex between the two companies when you go after these new expanded opportunities access, of the areas where you still delineates which company will go after what’s or is that potential now for you both to start looking at similar kind of opportunities? Ian Robertson Well I think I’ll start by saying is that, is this has been an incredibly collaborative relationship over the past five years and well we certainly we evolved and Emera’s evolved and I’m highly confident that reasonable people can come to a reasonable understanding in terms of what’s best for both of us and I think that there is, there remains obviously a size differential I think they would probably agreed or the very, very focused on the North East, U.S. in terms of and Eastern, in terms of their focus and so I think there, I see way more opportunities for mutual support then for competition if you want to think of that way and but I think it is important if we just recognized that what was five years to go probably requires a update this and so we’re going into this, I don’t say positive and enthuse and you have to ask Chris but I would probably say the same from his perspective, it’s been a great run and we obviously wanted to continue. Paul Lechem Okay, thanks again. Ian Robertson Thanks Paul. Operator Your next question will come from Nelson Ng with RBC Capital Markets. Please go ahead. Nelson Ng Great, thanks good morning everyone. Ian Robertson Good morning Nelson. Nelson Ng Just two follow up on that Emera arrangements would there any projects where over the last year so we’re you actually wanted to pursue but based on your current arrangement with Emera you current per sale. Ian Robertson Yes, no, that I mean that it’s not about should have not being able to pursue and then just saying no or asked the say no clearly it’s a much more as I said collaborative relationship with that I think if you read the SIA that existed five years ago there were some sort of size though limits in there that probably don’t make as much sense any more we are clearly with the NED have got foot in the natural gas pipeline business which is with never contemplated before I think Chris acknowledged on his call that I think their interest per utility they’re spending to include natural gas a distribution utilities that was in contemplate. So I think we just need to. I think we just need to, I think it’s all about are just recognizing that the companies look different today but I think their remains the commitment to create mutual value as they said its worked really well and we’re filled with the relationship I don’t what more I can add because we’re obviously in the discussions for right now but we’re – we strive can kind of provide transparency in terms of these sort of ongoing relationships that’s kind what we are talking about it. Nelson Ng And could you just remind us when you expect to have that agreement revised or completed. Ian Robertson Its, discussions is going on right now, I think but there is couple of things that we’ve certainly have committed to and I kind of outline them in the agreement and one of them is obviously the agreement made reference to restrictions to – interest in Algonquin [indiscernible] totally appropriate any more given the size of Algonquin and so its underway right now, it’s in active working progress Nelson. Nelson Ng Okay. Got it. And then I guess somewhat related in terms of pursuing M&A or development opportunities, I guess there is a lot of activity in Mexico and I was just wondering whether you would look at doing transmission or pipeline or power opportunities there? Ian Robertson We actually have looked at some solar projects down in Mexico, obviously whatever other thing is a big step for us to be thinking about introducing country risk and potentially currency risk depending on how the PPA or is denominated but Mexico is not too far certain Dallas, Arizona utility and so I think there would definitely be a comfort there and I think what are the things that maybe just getting back to my prepared remarks is broadening its horizon on that one and as we look forward to the next five years, I think there are opportunities that we need be at least cognizant of that – that would be considered international as we think about U.S. and Canada today but I might provide reasonable growth and value opportunities for our shareholders. So I’ll give you, the short answer to your question Nelson is yes I mean I think we are interested in looking there. Nelson Ng Okay, got it. And then just one last question in terms of the Park Water acquisition on the Missoula condemnation process, I believe there was a ruling in favor of the city and can you provide us with an update on the process going forward, presuming you are appealing the decision and how long will that take and when do you think that will be final decision on that? Ian Robertson Sure. Well maybe the best way to quote the answer to your question is to quote the Montana Commission when they were petitioned by the City to dismiss our approval – transfer approval application in the commission basically said back to the City, when you are a long way away from actually owning this utility and some check is written, we are going to continue on, it’s a long road as you point out Nelson, we are in early innings that as you suggest the ruling on necessity which is only half of the process has been appealed by us the next part of the process is the valuation section of a condemnation and that is crafted to make sure that under the fifth amendment of the U.S. constitution we [indiscernible] just consideration. And I would point out that the value application, the valuation that is being submitted by Park Water in respect of that valuation process is close to $200 million and we’re just as I said this is a twist and turns kind of road, but we are looking for to completing the acquisition that we signed up for with Carlyle and we will continue to prosecute the condemnation part of this – the condemnation proceeding in the way we would do in any other of our jurisdictions and it’s certainly a process that we’ve been familiar with, you may recall we kind of bumped into this in Texas and so I see them as two completely independent and parallel processes now. So we’re looking forward to completing the acquisition of the whole [indiscernible] late this year. Nelson Ng Okay, great. Thanks for the clarification. Ian Robertson Thanks Phil, thank you. Operator Your next question will come from Matthew Akman with Scotiabank. Please go ahead. Matthew Akman Thank you. Good morning. Ian Robertson Good morning, Matthew. Matthew Akman My question is just follow up on the agreement with – one thing I’m not sure if you mentioned was whether you would consider doing development with [indiscernible] in line with possibly doing larger acquisitions? Ian Robertson That’s an interesting thought, until now historically as you’re aware – development has really kind of focused on development within the regulated utility footprint and joint ventures with other developers. And it is I guess I got to be frank and say that that is something that we would need to explore to see whether that is of interest with Emera I think one of the things I think this is where the heart of your question is that the development, I will call it again but the development process for power projects is becoming should have not again for Mom’s and Pop’s as you know Odell project is a third of US$1 billion. We’ve looked at other projects which are significantly larger and so there may well be an opportunity for a collaboration between Emera ourselves and some of these larger projects up to now we’ve been pretty comfortable with the things that we’ve been able to announce Emera has obliviously implicitly supported our initiatives by stepping up to the plate with continued commitments of equity capital and there has obviously been a history of us working together, you will recall the CalPeco acquisition was done in direct partnership with Emera and ultimately they rolled their direct interest into us to create an indirect one. So I think it’s a great thought and certainly something that will be on the table as we’re sort of continuing discussions over the coming weeks. Matthew Akman Okay. Thank you. And just one other question is with the Obama administration announcing that they will be putting in place more incentives for clean energy in the US, I’m wondering if you have started to give any thought to opportunities around your existing US footprints that might arise from that. Ian Robertson I think you are making reference to the whole rule, Section I 11D of that clean power plant. We think that’s a real shot in the arm for a positive shot in the arm for the renewable sector and so for sure I think as we contrast the activity that’s taking place in Canada versus the US, there is no doubt about it, our development teams are keeping their Canadian passports in good stead because there is tons of opportunity down there and frankly, to be frank we actually don’t bump into as many certainly in Canadian competitors who are comfortable with the US tax equity landscape and the US electricity markets and so for sure I think the recent announcements and you might continue, you might phrase it as Obama is continuing war on coal, I think is a really good things as positive implications for an organization with our focus. Matthew Akman Okay. Thank very much. Those are my questions. Ian Robertson Thank you. David Bronicheski Thanks, Matthew. Operator Your next question will come from Ben Pham with BMO. Please go ahead. Ben Pham Hi, thanks, good morning everybody. Ian Robertson Hi, Ben. Ben Pham I just wanted to go back and then maybe if you can quantify the size of the [indiscernible] opportunity for you in terms of acquisitions when you consider your EBTIDA mix and just where you want to go, geographically going forward. Ian Robertson Sure. I think in terms of our, I mean I will start with the question about EBITDA mix. Currently we are about 50-50, we are completely comfortable with 50-50 though I will say we are not wedded to 50-50 and acquisitions such as the Odell project, or Park Water, they tend to be lumpy, we don’t add our EBITDA $1 in time. So we acknowledge that, that split could temporarily move in one direction or the other. I think we are mindful of the fact that our credit rating is primmest on the organization as a whole, which is obviously reflect of significant portion of our earnings on regulated utilities and so we are mindful of that. In terms of our sweet spot for transaction, I think we were obviously comfortable with the Odell project, a third of a US$1 billion. And so arguably maybe our sweet spot has certainly increased as the organization is headed for $5 billion in total size but the good news is projects tend to be getting larger in size and the scale as well and so we are tending to find those larger projects. In terms of M&A, acquisitions, I don’t think it’s a reasonable rule of some to say that quite comfortably an organization could probably do M&A equal to about one-third of its size without creating huge [indiscernible] in the marketplace and so as we head for $5 billion we’re definitely north of $1.5 billion in terms of the acquisition that we can do on our own. But just a follow on, I know that was Matthew’s question but one of the benefits of the relationship of the Emera is allowing us to punch way above our weight in terms of that scale and scope of M&A activity I mentioned our California experience which Amherst took a direct interest in the utility, the allowing us to as definitely hunt in a size range that would be north of that $1.5 billion which would be our left or own devices kind of threshold and so I think it’s just been another example of how we benefited from that opportunity of the [indiscernible] relationship to be able to explore opportunities which have a very wide dynamic range Ben Pham And you mentioned about the CalPeco JV and years back when you first starting you guys thinking that’s one own with the utility side of things when you think about that doing from our side and thinking about the nears comments about the OTC gas, I remain are you having more discussions about bringing back that JV structure going forward with Amherst? Ian Robertson Well, I think it would, I think it’s obviously circumstantial dependent, we have, when do you we gone at on our own I think that the short answer is we’ve identified utility acquisitions and growth opportunities that obviously to seem to make sense to fit into our portfolio perk water in examples that’s hard to imagine how JV with the [indiscernible] on that would have been strategically aligned for them but obviously right on the fair away from our perspective but I think as we think about some of the larger opportunities and I think we’re thrilled that [indiscernible] has an interest in gas LDCs because now all the sudden there is a possibility to collaborate on some of the larger LDC sales where – would say yeah, we are interested in a direct opportunity up till now to be frank I think it would been reasonable to a thought that those JV opportunities would have been pretty much limited to electrical distribution company because that’s where [indiscernible] focus was so I think it actually just expand the potential scope for in terms of modality and in terms of geography for collaborating with – so I think it’s all good. Ben Pham Okay, got it. That’s all I have. David Bronicheski Thanks Ben. Operator Your next question will come from Sean Steuart with TD Securities. Please go ahead. Sean Steuart Thanks good morning guys. Ian Robertson Hi Sean. David Bronicheski Good morning. Sean Steuart Thanks for all the general commentary on I guess broader growth ambitions I just have a couple of projects specific questions. On Odell you guys have an option to take full ownership there, can you give us a little bit of context of you’re thinking on when that actually happens? Ian Robertson Sure and I think it’s important as we think about managing our balance sheet through the development cycle and those we think about all of the metrics by which we’re elevated that joint venture structure is a good way to address what is the very short term part of the overall life of a generating station and so when you think that once the generated station hit COD you’ll got 30, 40 years of life in front of you but the development pace is 12 months long. And so we were comfortable putting that development structure in place during the construction phase but would have to rethink whether we would prefer to own a 100% of that come to COD of the project and we’ve obviously crafted an option to do that and so I think may be so just to be so to be specific in responses to your question we would probably a evaluate whether we want to 100% of that project at the end of the development phase once we got through the COD and that’s where we probably be thinking about it. Sean Steuart Okay, understood and on Amherst you guys give a little bit of commentary in the MD&A about some recent progress there any inside on what we might be looking at for construction beginning and expected appeals from locals any general update on Amherst? Ian Robertson Sure and obviously we kind of give up, given specific dates for how we think this process will but broadly and that the which is the renewable energy approval and we’re thinking end of summer the appealed process which is you aware is called the Environmental Review Tribunal ERT at the six month process and so it sounds like as we have been managing our construction timing and contracting that next year we jumped heavily into that construction process at the end of the ERT which kind of sounds early 2016. Sean Steuart Okay. Thanks very much Ian. Ian Robertson All right. Thanks, Sean. End of Q&A Operator [Operator Instructions] There are no further questions at this time, please continue. Ian Robertson Well again, thanks everyone for joining us on our Q2 investor call and we appreciate all the questions and interest that you’ve demonstrated. So with, I would ask everyone to remain on the line for a review of our disclaimer. Alison. Alison Holditch Certain written and oral statements contained in this call are forward-looking within the meaning of certain securities laws and reflect the views of Algonquin Power & Utilities with respect to future events based upon assumptions relating to among others, the performance of the company’s assets and business financial and regulatory climates in which it operates. These forward-looking statements include among others statements with respect to the expected performance of the company, its future plans, and its dividends to shareholders. These forward-looking statements relate to future events and conditions by their very nature and require us to make assumptions and involvements here and uncertainties. We caution that although we believe our assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that our actual results may differ materially from the expectations set out in the forward-looking statements. Material risk factors include those presented in the company’s most recent annual financial results, the annual information found in most recent quarterly management discussion and analysis. Given these risks, undue reliance should not be placed on any forward-looking statements. In addition, such statements are made based on information available and expectations as of the date of this call and such expectations may change after this date. APUCs reviews materials, forward-looking information that is presented not less frequently than on a quarterly basis. APUC is not obligated to nor does it intend to update or revise any forward-looking statements whether as a result of new information, future developments, or otherwise except as required by law. With respect to non-GAAP financial measures, the terms adjusted net earnings, adjusted earnings before interest tax and depreciation and amortization, or adjusted EBITDA, adjusted funds from operations, per share cash provided by adjusted funds from operations, per share cash provided by operating activities, net energy sales, and net utility sales collectively the financial measures are used on this call and throughout the company’s financial disclosures. The financial measures are not recognized measures under generally accepted accounting principles or GAAP. There is no standardized measure of these financial measures, consequently APUC’s method of calculating these measures may differ from methods used by other companies and therefore may not be comparable to similar measures presented by other companies. Our calculation and analysis of the financial measures and a description of the use of non-GAAP financial measures can be found in the most recent and published management discussion and analysis available on the company’s website and cedar.com. Per share cash provided by operating activities is not a substitute measure of performance or earnings per share. Amounts represented by per share cash provided by operating activities do not represent amounts available for distribution to shareholders and should be considered in light of various charges and clearance against APUC. Operator Ladies and gentlemen, this does conclude the conference call for today. Thank you for participating. You may now disconnect your lines.