Capital Power (CPX) investor relations material

Strategic direction and market outlook

• Focus remains on natural gas-fired generation, with 90% of current capacity and a clear commitment to this technology as the foundation for North American grid reliability and growth.

• Anticipates a surge in electricity demand driven by AI infrastructure and grid reliability needs, forecasting at least 100 GW of new demand from AI alone in the U.S. by 2030.

• Natural gas is positioned as the lowest-cost, fastest-to-market solution, with existing assets operating at only 33% capacity factor, offering significant untapped value.

• Strategy is to acquire and optimize existing natural gas assets, particularly in the U.S., leveraging operational, commercial, and trading expertise.

• Renewables and storage remain a supporting focus, with an 80/20 capital allocation target between natural gas and renewables/storage.

Strategic growth initiatives

• Targeting a 50% cumulative increase in U.S. capacity (~3.5 GW) by 2030, driven by acquisitions and partnerships.

• Signed a binding MOU for a 250 MW, 10+ year electricity supply agreement with an investment-grade data centre developer in Alberta, starting in 2028.

• Focused on leveraging operating expertise to enhance asset performance and returns.

• Balanced Energy Solutions targets hyperscale data centers and AI loads, with 3,000+ MW of potential data center load actively marketed.

• Growth is underpinned by internal asset upgrades, expansions, and commercial optimization, with half of cash flow growth over five years expected from existing fleet opportunities.

Financial guidance and growth targets

• Targets 8%-10% annual cash flow growth and 13%-15% total shareholder return (TSR) through 2030, raising TSR guidance by 100 basis points from the previous year.

• 2026 guidance: Adjusted EBITDA of CAD 1.565–1.765 billion, AFFO of CAD 890 million–1.01 billion, and a 2% dividend increase, with 75% of 2026 cash flows secured under long-term contracts or hedges.

• Dividend growth rate reaffirmed at 2%-4% through 2030, with a payout ratio target of 30%-50% AFFO.

• Maintains investment-grade credit ratings and prudent leverage, targeting FFO/debt above 20% and debt/EBITDA in the mid-three range.

• Guidance reflects full-year contribution from recent PJM asset acquisitions and increased sustaining capital to extend asset life.