Algonquin Power & Utilities (NYSE:AQN) said its second-quarter results kept it on track to meet its adjusted earnings-per-share forecast for 2026 and 2027, as the company advanced rate cases, refinanced debt and outlined plans to move its corporate domicile to the United States.
Chief Executive Officer Rod West said the company’s strategy remains focused on becoming a “premier pure-play regulated utility” through execution, regulatory engagement and financial discipline. He said the second quarter extended progress made during the prior year and first quarter, though the company still has work to do across several regulatory proceedings.
Second-Quarter Earnings Decline, Adjusted EPS Flat
Adjusted net earnings per share were $0.04, unchanged from the second quarter of 2025. Chief Financial Officer Rob Stefani said higher approved rates at CalPeco and increased revenue at several water utilities were offset by higher financing costs, operating expenses and favorable items that occurred in the prior-year quarter.
The company recorded a $17.2 million write-down of a regulatory asset tied to a proposed decision in its California wildfire expense memorandum account, or WEMA, proceeding. The proposed decision authorized recovery of approximately 75% of recorded costs related to the 2020 Mountain View fire. Algonquin excluded the impact of that decision from adjusted earnings.
For the first half of 2026, GAAP net earnings were $88 million, compared with $107.6 million in the first half of 2025. Adjusted net earnings totaled $128.8 million, down from $142.6 million a year earlier, while adjusted EPS was $0.17 compared with $0.19.
Stefani noted that first-half 2025 included $25.7 million of non-recurring favorable items, including a tax-basis step-up recovery related to Hydro, pension adjustments at Empire, and depreciation deferrals and rate-proceeding items in New Hampshire and Arizona. Excluding those items, he said year-over-year EPS was $0.01 favorable.
- CalPeco approved rates, net of wildfire insurance expense, added $38.7 million year to date.
- New rates in New York, Arizona, Chile and Peach State improved year-to-date net revenue by $11 million.
- Operating expenses increased on gas safety and excellence costs, along with higher labor, maintenance and property tax expenses.
- Unfavorable weather reduced year-to-date results by $9.9 million versus the prior year.
Rate-Case Progress Across Multiple Jurisdictions
West highlighted several regulatory developments during the quarter. In Missouri, the Public Service Commission determined that the company had met customer-service and billing metrics required to implement a previously approved Empire Electric settlement. The July 15 order allowed $97 million in annualized revenue adjustments to take effect Aug. 3.
In Kansas, regulators approved a settlement that includes an $8.8 million revenue adjustment and a provision for 50% of wind revenues in the first year. In California, the Public Utilities Commission issued a proposed decision authorizing $58.1 million of wildfire-cost recovery in the WEMA proceeding.
The California commission also approved an alternate proposed decision involving the Apple Valley and Park Water utilities. The decision included a combined $2.7 million revenue reduction and a retroactive adjustment to July 2025 totaling $3.1 million.
Algonquin also cited new rate filings at New York Water, Empire Electric Arkansas and EnergyNorth Gas. New York Water requested a $38.1 million revenue adjustment based on a 10% return on equity and a 48% equity ratio. Empire Electric Arkansas requested $8.4 million, based on a 10% return on equity and a 53.4% capital structure. EnergyNorth filed for a $35.8 million adjustment based on a 10.25% return on equity and a 52% capital structure.
The company continues to await a final decision in its Litchfield Park Water and Sewer case in Arizona. It also expects to complete filings by year-end for Granite State Electric, Empire Electric Oklahoma and a Missouri large-load tariff.
On the infrastructure front, West said Algonquin received a Missouri certificate of convenience and necessity for a project deploying 250 megawatts of new gas-fired generation. The project will use a construction-work-in-progress recovery mechanism under Missouri Senate Bill 4.
U.S. Re-Domicile Plan Targets Tax and Capital-Market Benefits
Algonquin intends to re-domicile to Delaware through a court-approved plan of arrangement under the Canada Business Corporations Act. West said more than 80% of the company’s operations are in the United States, while less than 5% are in Canada.
The company expects to establish its headquarters in Chicago, where the senior executive leadership team would be based, while retaining a significant presence in Oakville, Ontario. West said the proposed move would not alter how the company operates utilities, serves customers or fulfills regulatory obligations.
Algonquin expects to seek shareholder approval in the first half of 2027, subject to required shareholder and regulatory approvals and customary conditions. Stefani said the company began discussions with the Internal Revenue Service earlier this year and expects a decision on its private-letter ruling request in the second half of 2026.
Stefani said the move could eliminate a roughly 5% tax on funds sent to the parent company to support dividends, as well as a base erosion and anti-abuse tax, or BEAT tax, of about 10% on funds used to service holding-company debt. Based on the company’s current dividend and debt-service levels, he estimated a recurring impact of roughly $0.02 to $0.025 per share, potentially slightly higher, on a run-rate basis.
He said the re-domicile could also support inclusion in certain U.S. equity indices and funds, although the company did not quantify that potential benefit. Algonquin is evaluating one-time transaction and tax costs, including potential foreign investment in real property tax considerations, but did not disclose a range while it continues to confirm methodology with the IRS.
Debt Refinancing and Outlook
During the quarter, Liberty Utilities Company raised approximately $1.15 billion through a private placement of senior unsecured notes. The proceeds were used to repay $1.15 billion of Algonquin notes that matured June 15.
Stefani said Algonquin does not expect to issue equity through 2027. The parent company remains rated BBB by S&P and Fitch, while Liberty Utilities is rated Baa2 by Moody’s and BBB by Fitch and S&P.
The company reiterated its adjusted EPS forecast for 2026 and 2027. Stefani said Algonquin expects to remain above S&P’s FFO-to-debt downgrade threshold, aided by the implementation of new rates in Missouri and California and expected regulatory outcomes in other jurisdictions.
About Algonquin Power & Utilities (NYSE:AQN)
Algonquin Power & Utilities Corp (NYSE: AQN) is a diversified generation, transmission and distribution utility company headquartered in Oakville, Ontario. Established in 1988, the firm operates through two primary business segments: Regulated Utilities and Renewable Energy. Its Regulated Utilities segment comprises electric, natural gas and water distribution networks serving residential, commercial and industrial customers across North America, while its 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, reflecting its strategy to expand clean power capacity in regions with supportive regulatory frameworks.
