Ladies and gentlemen, thank you for standing by, and welcome to the Emera Q1 2020 Analyst Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Scott Hastings, Senior Director Capital Markets. Thank you. Please go ahead, sir.

Thank you, Chris, and thank you all for joining us this morning for Emera's first quarter 2020 conference call and live webcast. The Emera first quarter earnings release was distributed this morning via Newswire and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our Web site, at emera.com. Joining me for this morning's call are Scott Balfour, Emera's President and Chief Executive Officer; Greg Blunden, Emera's Chief Financial Officer; and other members of the Emera management team. Before we begin, I'd like to take a moment to advise you that this morning's discussion will include forward-looking information which is subject to the cautionary statements contained on the supporting slide. Today's discussion and presentation will also include references to non-GAAP financial measures. You should refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. And now, I'll turn things over to Scott Balfour.

Thank you, Scott, and good morning everyone. I'd like to begin my remarks by taking a moment to reflect on not only the loss of lives due to COVID-19 but also to acknowledge two additional tragedies that had hit is here, in Nova Scotia. We were all incredibly shaken by the mass shootings, on April 18 and 19 that claimed 22 victims in our province; a senseless act of violence and an unimaginable loss of life. And then less than two weeks later, six members of Canada's Armed Forces were killed when their helicopter crashed off the coast of Greece, the single largest daily loss of life for our military in more than a decade. All six were based here in Nova Scotia, and three of the six were native Nova Scotians. As you can imagine, these tragedies are deeply affecting our close-knit community at an already difficult time when we cannot physically come together to support one another. On behalf of the entire Emera team we extend our heartfelt condolences to everyone impacted by these events. And I would ask you to join me in a moment of silence to honor those whose lives have been lost. Now, to the business of the call and turning to our quarterly updated. We are all facing the impacts of the global COVID-19 pandemic. At Emera we're very fortunate. We are only experiencing relatively modest short-term impacts to Emera's business, and our long-term outlook remains positive. Our response to COVID-19 has been grounded in our relentless focus on the health and safety of our employees, customers, and communities, while continuing to deliver the critical energy that our customers rely on, now more than ever. Our teams are committed to providing the reliable and affordable energy that the health systems, food suppliers, technology providers, businesses, governments, and every single customer within the regions we serve need for them themselves to continue to function, and which we are all ourselves relying up on during this pandemic. We understand that we truly are an essential service during this critical and challenging time. And so, we activated our integrated pandemic and business continuity plans, in early March, to ensure that we can continue to deliver our essential services to our customers regardless of the degree and the duration of this pandemic. I'm extremely proud of our team. Quite frankly, they're doing what they do best, adopting and delivering for our customers, demonstrating an incredible amount of resiliency, commitment, and professionalism. Employees that were able to work from home have been safely doing so since early March, but for many of our employees in critical roles in our generating facilities and field operations working from home is not an option. So we implemented new protocols and PPE standards. For example, we established health screening processes, and our control centers have been split between primary and backup locations. And we've been staggering shifts for our employees. We are taking every precaution to keep our people, our customer, and our community safe. And I'm very grateful that our efforts today are working. We are fortunate that the direct impacts to our team so far have been minimal, with only two employees and one contractor diagnosed with COVID-19 to date across our more than 7,000-person team in Canada, the U.S., and the Caribbean. And I'm pleased to say that they are all recovering well. While we plan for the next phase, where governments and health officials begin or continue to lift some restrictions across our jurisdictions, we will remain relentlessly focused on health and safety, and the reliable delivery of energy throughout this unprecedented period. We know that this pandemic is creating significant challenges for the most vulnerable in our communities. And we're committed to doing our part to help. Our utilities have taken steps to assist our customers during this difficult time. For those customers most hit by the pandemic we've been suspending disconnections, facilitating access to resources, providing financial support. And should it be necessary, willing to work directly with customers on flexible payment plans. At Tampa Electric, we've also accelerated a fuel refund, thus reducing monthly customer bills for the remainder of 2020. In addition, the Emera Group of Companies have donated approximately CAD4 million to various COVID relief programs to assist those most in need in our communities. And we continue to collaborate with community partners and government officials to identify emergent needs. We are grateful to be in a position to help our communities through this devastating time. As Greg will discuss in a minute, given the timing of COVID-19 and our customer profile, the pandemic had minimal impact to our Q1 financial results. While it's challenging to predict all the potential future impacts of COVID-19, as we look forward into the second quarter and beyond, we do know that Emera is well positioned to respond to the needs of all of our stakeholders. Emera's customer mix is heavily weighted towards residential customers. This means that not only a small portion of its fixed cost contribution comes from industrial and commercial customers. To date, most of our utilities have experienced reduction to weather-adjusted load in the range of 4% to 6%. However, the related earnings impact for the remainder of the year will be dependent on several factors, including the length of the pandemic, customer composition of the load, and the actual weather we experience going forward. The closing of the Emera Maine transaction has provided additional strength to our balance sheet and has bolstered our liquidity position. While these proceeds have sufficient -- with these proceeds we have sufficient liquidity to manage through the pandemic and beyond. Historically, Emera has been very successful working with customers during times of economic stress. During the 2008 and 2009 financial crisis Emera and TECO only experienced a small increase in uncollectable accounts. This was managed through the application of existing customer deposits, developing payment plans for customers, and facilitating financial aid from local, state, and national programs. In Emera, we understand the long-term value of our customer relationships, and we are committed to doing the right thing for our customers as they manage through this financially challenging time. Emera's capital program continues to advance with additional health and safety procedures in place where necessary, and we are pleased that our major projects continue without any significant supply disruptions or delays at this time. This includes both the Big Bend Modernization project and our solar developments in Florida. We remain committed to our capital program, which will contribute to the recovery of our local economies to employments and support for local businesses. In addition, many of Emera's capital projects will provide significant cost savings as we reduce the cost of fuel component of customer's bills. We're confident in our long-term value proposition to shareholders, because of the resiliency of our people and our strategy. Our proven strategy, which is rooted in customer affordability and the transition from higher to lower carbon energy, continues to be relevant despite the temporary impacts of the pandemic. At the core of our responses to COVID-19, has been our people, their unwavering commitment to keeping each other, our customers and our communities safe, while delivering the essential energy our customers need has been inspiring, and we know there are more challenges ahead as governments look towards economic recovery, and we remain committed to doing our part, not only to continuing to provide the cleaner, affordable, and reliable energy our customers and communities rely on, but to help with community support and the economic restarts in all of our jurisdictions. And with that, I'll turn it over to Greg to take you through our financial results for the quarter. Greg?

Thank you, Scott, and thank you all for joining us this morning. Earlier this morning, we reported first quarter adjusted earnings of $193 million and adjusted earnings per share of $0.79. Although the Q1 2020 results were lower than Q1 2019, it's important to remember that last year included earnings from our merchant gas plants and the gain on the sale of a Florida property. Collectively, these items totaled $34 million or $0.14 per share. When excluding these two items, the results for Q1 2020 are consistent with those of Q1 2019. While consolidated results are down compared to Q1 2019, the core of our business, our portfolio of regulated utilities remains strong and performed very well delivering adjusted earnings growth of 7% for the quarter. We're very pleased with this level of growth, which was primarily driven by strong earnings from Tampa Electric. Our regulated utilities are in premium jurisdictions with supportive regulatory relationships, and we continue to see the quality of our overall earnings improved. Now let's get into some details about the quarter. In the first quarter of 2019, we delivered adjusted earnings per share of $0.95 or $0.81 on a normalized basis. Growth from that normalized Q1 2019 base of $0.81 was largely driven by very strong performance by Tampa Electric. During the quarter, Tampa Electric contributed $79 million of earnings, an increase of $18 million over the first quarter of last year. Tampa Electric's growth was driven by higher base revenues as a result of favorable weather, customer growth and revenues related to our solar generation projects. First quarter earnings for Emera Energy's Marketing and Trading business were $9 million lower than Q1 2019 or $0.04 per share. This decrease was driven by less favorable marketing conditions quarter-over-quarter reflecting a very mild winter particularly in the Northeast. We also recorded two tax related adjustments in the quarter. The first was related to the reduction in the provincial corporate tax rate in Nova Scotia, a good development in the long run, but which necessitated a revaluation of our deferred tax balances, resulting in a one-time non-cash earnings impact of $14 million or $0.06 per share. Partially offsetting this was the reversal of the corporate income tax regulatory liability at Barbados Light & Power which increased earnings by $10 million or $0.04 per share. Collectively these two one-time items negatively impacted earnings by $4 million or $0.02 per share. Moving to adjusted EBITDA and cash flow quarter-over-quarter, the EBITDA that's earnings before interest, taxes, depreciation and amortization was lower decreasing by $46 million, or 7%. Most of the decline related to the sale of the gas plants in Q1 of 2019. Operating cash flow for Q1 2020 was up $84 million, or 20% compared to the first quarter of last year, the growth was led by Tampa Electric, which experienced an increase of $88 million, or 10% increase quarter-over-quarter. The increase in the regulated cash flows is a further signal of our improving cash flow quality which remains a priority for our team. Q1 2020 marked the completion of the sale of Emera Maine to ENMAX. The quality of this transaction we have transformed our portfolio while significantly improving our balance sheet and liquidity. This transaction was a critical component of our funding plan and the backbone of the asset sales program which we highlighted in 2018. 2018 asset sales program has now raised more than $2.2 billion that will be used to fund our future capital programs and to repay holding company debt. Now looking forward, we have the earnings contributions from Emera Maine which contributed $27 million in the last three quarters of last year. On behalf of Emera, I would like to extend my gratitude to the employees of Emera Maine and wish them and ENMAX all the best in the future. With the timing of the Emera Maine proceeds and our ongoing access to capital markets, our liquidity is very strong. At the end of the quarter, we had approximately $3.2 billion of available liquidity. We have no significant short-term debt maturities in 2020, and as of year-end, our pension plans are well funded with no significant short-term funding requirements. The liquidity position was further improved by the $300 million Nova Scotia Power issuance that was completed in April. This 30-year issuance had the lowest rate of any of Nova Scotia Power's outstanding debt instruments and is illustrative of our continued access to the capital markets. We continue to access the capital needs of our business and currently believe that there are no changes required to our previously communicated funding program. This includes equity needs being met through the existing dividend reinvestment plan and aftermarket programs, and the potential for a hybrid preferred share equity issuance over the forecast period. Emera continues to assess the potential impacts of COVID-19, but we are reassured by the strength of our business and the makeup of our customer profile. Emera's two largest utilities are primarily made up of residential customers with very low contributions from industrial customers. Emera expects the load profile of these two utilizes to change during the pandemic with increases in consumption by residential customers and reductions in industrial and commercial customers costs. And as shown on the slide, in 2019 residential customers made up the largest percentage contribution to the fixed cost recovery of use utilities. The increase in revenue from these residential customers will at least partially offset the COVID-19 related reductions in the commercial and industrial revenues. In addition to customer mix, the current foreign exchange environment creates a tailwind to help mitigate some of the potential impacts of COVID-19. When we are moving to Emera Maine from a 2019 results, approximately 68% of our earnings are reported in U.S. currency. Given the recent movements in Fx rates, we are taking advantage of some limited Fx hedges for 2020 and 2021. We will continue to review the foreign exchange environment to determine if incremental hedges are required to further reduce earnings volatility. We are also updating our Fx sensitivity. We reflect the sale of Maine and the Fx hedges put in place. A $0.01 change in U.S. Canada Fx rate would result in approximately $0.005 to $0.01 change in EPS, and it's important to note that this change in the Fx rate would have to hold for an entire 12-month period. In closing, Emera's 2020 got off solid start which is helpful as we faced the COVID-19 crisis. Emera's balance sheet and liquidity positions are strong, and this will allow the business to manage through COVID-19. Although the potential impacts of the pandemic are difficult to determine, our customer mix and exposure to the U.S. denominator earnings offer mitigating factors. And with that, I will turn the presentation back over to Scott.

Thank you, Greg. This concludes the presentation. We would now to like to open the call for questions from analysts.

[Operator Instructions] Your first question comes from Linda Ezergailis of TD Securities. Your line is open.

Thank you. I appreciate the update today, and glad to hear that the organization is doing well and your employees are safe. I am wondering with respect to your load profile shifting a little bit in terms of customer mix and everything, I am just wondering if it's possible that regulators in your key jurisdictions will be open to reassessing your revenue allocation across your customer classes in the event that the industrial load doesn't recover in certain jurisdictions very quickly, and maybe even shifting more of your bill component to a fixed not variable component, and I guess further to that, are you still -- your update indicated that some of your regulatory processes might be delayed, I am just wondering if you are still planning on filing your Tampa Electric General rate application for 2021, or might you do that sooner, and can you comment specifically on Tampa Electric and the potential to accelerate some of the rate filing applications potentially?

Linda, it's Scott. Thank you for the question. Let me take the first part of that, and then, I will let Nancy address the specific Tampa Electric question. So, look, I think we'd be fair to say that we're looking at our regulatory options in relation to the impacts of COVID-19. Of course we've been watching the approach that's been taken by many utilities in the sector, and also reflective of the progressive history I think we've had in working with regulators in all of our jurisdictions to address change of circumstances and issues and impacts that come up. And so I think it would be just, so most appropriate to say those are all things that we're looking at, and of course at a point in time where we decide to proceed with any particular regulatory approaches set, like those will obviously become matters that we could talk about more clearly then. Nancy, do you want to address the intentions around the -- in the plants that are re-filing in Tampa Electric?

Right, and yes, hi, Linda, good morning. Our intention is still to file, the timing of that would be in April of 2021. So we are moving ahead with that timeline, and expect that we would not delay that. That's our thought at this point. Linda, perhaps I'll also address the load and maybe specifically our focus here in Tampa Electric. So what we're seeing currently is that our -- because we are so heavily residential, we're seeing our residential load offset, essentially, the loss we've seeing from industrial. And so at this point and you can see from our revenues, although there certainly is some weather in there. And we can see from April, that we're not expecting a significant impact if things continue on as they did, say, in April. From a bad debt perspective, again looking back at what happened in 2008 and '09, we would not at this point expect the material impact to our earnings from that. Hard to tell this early, but we're seeing small uptick in that debt, but we're also seeing, just recently, an uptick in customers making payment arrangement. So at this point we are moving along cautiously and keeping our eyes on it. We are also accumulating any costs at this point related to COVID-19, and we haven't closed any doors in terms of the thought that we might ask for relief on some of that, but again, we're not seeing anything material at this point.

Thank you. And just to clarify a comment you made, Scott, about assessing options regarding regulatory levers for change of circumstances. Might be also, across all of your utilities, record accumulated costs, and potentially your estimate of the lost revenues and consider requesting one-time relief on losses incurred to date, not just prospective shifts in revenue allocation?

Yes, I think I'll just say, Linda, that we're continuing to assess the what the impacts are to the business, as Nancy says, just like in Tampa Electric, we're keeping -- recording the costs and the impacts that relate to the pandemic. And as the clarity of that continues to build with the passage of time we'll be in a better position then to make a determination as to what, if any, regulatory support or requests that we look to make, but at this point in time I'd say we're mostly just following -- there has been a joint filing that has been made in New Mexico that New Mexico Gas part of together with the other utilities in that space, but in other jurisdictions at this point we're just continuing to monitor and assessing our options.

Okay, and maybe just as a follow-up was well with respect to your financing plans being unchanged. I don't know if you're still in ongoing discussions with the rating agency, but at what point might you consider potentially additional asset sales to bolster your financial outlook. And what might you -- or when you expect, I guess, S&P to potentially revise your outlook for negative on your rating?

Greg, you want to tackle that one?

Yes, so the second part, S&P has done that. So they did a couple of things in April. They downgraded Emera, and went back to stable, but at the same time, and interestingly enough, they broke apart from the group rating methodology, and took all our operating utilities back to stable, which quite frankly was the more important change that they made of the two. On a broader perspective, Linda, I mean we're always in contact on a regular basis with all the rating agencies, and sensitive to what they're seeing, and making sure that dialogue remains open. As it specifically relates to asset sales, we had indentified as part of our funding plan some required asset sales. That piece of it is complete. So we are not in a position where we need to sell anything or nor are we in a position where we're planning to sell anything, but as we have always done, we'll continually look at their portfolio to determine whether there's certain components of our portfolio that might make sense to not hold over the long-term, but no plans to do anything at this point in time.

Thank you. I'll jump back in the queue.

Your next question comes from Rob Hope of Scotiabank. Your line is open.

Good morning, everyone. First question is just on your capital outlook for 2020. So we saw that you'd maintained the Florida number at around $1 billion. Just want to get a sense of whether or not you're seeing any supply chain delays in some of the larger items such as solar panels or items related to Big Bend which could push off some spend there and potentially add some delays.

Yes, Rob, it's Scott. I'll answer, but Nancy, if you have any additional color or a different perspective, please share it. No, at this point, Rob, as it relates to both those projects, in fact most of our -- well, all of the capital projects that I can think of, at this point we have not be negatively impacted as to schedule or cost for that matter as it relates to supply or other COVID-related matters in the progress and advancement of those projects.

All right, appreciate that. And then just talking a look at Muskrat Falls and the pause on construction there and further delay there, are you looking at some sort of relief from the regulator to allow to earn cash a little quicker or what avenues are you exploring there?

Greg, do you want to tackle that one as it relates to the cash impacts?

Yes, so Robert, we don't -- the arrangements that we had in front of us, which we don't think will change, is that we fully expect the cash, in particularly the depreciation in Muskrat Falls, to kind of flow as originally expected primarily because there's some debt service requirements starting to materialize at the end of this year. And the regulator is well aware that it's important to meet those as planned. So will we see maybe some slight delay by maybe a quarter or so from Labrador Island Link? Possibly, but we're not -- collectively between the two we're not seeing any material change based on the timing of their construction over there.

All right, thank you.

Thanks, Rob.

Your next question comes from Robert Kwan of RBC Capital Markets. Your line is open.

Good morning. Imagine just ask about what you're seeing, and you noted the 4% to 6% reduction load across the utilities. Are you able to provide EPS sensitivity to what a 1% in change is load is across the utilities, whether that's on an annualized basis or a monthly basis?

Greg?

Yes, I'll take that, Robert. I wish it was that simple, but unfortunately it's not. And the reason being is with stats, so many different utilities, so many different rate designs, so many different customer classes, and the contribution, it's quite frankly difficult to roll that up into a single thing and have it be at all meaningful. I can tell you, and Nancy reinforced it, that what we've seen to date, given our customer mix at our two electric utilities, that where the shift from commercial and industrial to residential customers and the contributions on a relative basis between those classes, and some weather that quite frankly it's continued through to the end of April. We haven't seen any kind of overall material impact, because gain not all load is equal. I'm happy to go through in more detail with you and an offer for all the analysts and investors that are on the phone to try to get through in a little bit more detail offline, but we just don't think it's meaningful to roll it up into a single percent across their entire business. We actually think that would be misleading from how our portfolio is laid out.

Okay. Are you able to if that 4% to 6% holds or just whatever -- can you talk about what your expectations, how long that might persist and maybe something that is more quantitative as you outlined your FX sensitivity. So I'm assuming the dollar stays where it is for the kind of the remaining three quarters of this year. I think that's probably about a $0.03 to $0.08 share tailwind. When you wrap that together with the COVID-19 impact, does FX just become a mitigating factor to your expected impact or is it close to a push or could it actually be a tailwind?

Yes, I think the increase in residential customers or usage by residential customers in a week Canadian dollar certainly helpful. I mean we just don't know is -- the 4% to 6% that we're experiencing to date, which again has been more than offset by the mix of sales as well as weather. How long will that continue for? We're fortunate enough that we're starting to see the jurisdictions that we're operating in and start to open up slowly, which I think is helpful, but it's -- I think it's just too early to speculate what the impacts could be if we have a second wave of this end and it's deeper than the first wave and last longer.

Okay. If I can just initial the question on NSPI and if you have to go out and purchase power to meet the RPS. Is there any exposure outside of the fam?

Scott, you want me to take that or…

Sure, only - because I wasn't sure about the question, so if did, then thanks. Sure.

Any incremental cost, Robert, would flow through the field, just in the mechanism.

Okay. That's perfect. Thank you.

Your next question comes from Ben Pham of BMO. Your line is open.

Thanks, good morning. On the U.S. dollar movement, and you mentioned a bit benefit on earnings and that as a mitigant. How should we think about that slowing to your CapEx budget and do you see more situation where at that CapEx budget just simply moves higher because of FX will be used as a way to trim and brew profile here and there, so your financing program is unchanged?

Yes, Ben, It's Greg. All things being equal, yes, if you took our capital program that's basing U.S. dollars and FX rate was higher than and stayed that way over the forecast period, then yes, you would see a higher capital profile. And in terms of kind of tweaking a re-profiling, we do that all the time just as a matter of normal course business, there's always things that pop up that require priorities or other things for whatever reason, resource requirements that moves that's I'd say there's probably 5% to 7% of our capital plan that's always kind of moving around anyway, just for normal business reasons. I wouldn't see any changes in foreign currency to be buzzing any different profiling of that than we would normally would.

Okay. So sort of it sounds like if you dropped a couple hundred knowing that you have the right balance sheet to drip, perhaps access to capital and things like that, the credit rating that you can absorb that?

Sure. Yes. And of course you also get with a significant amount of cash flow is coming to the U.S. they get translated at a higher value as well. So if you think from a pure hedging perspective, the cash component of it, meaning the cash regenerating in the U.S. and what we're reinvesting in the U.S. utilities, those are effectively moving in the same direction, whether weaker Canadian dollar.

Okay. That makes a lot of sense. And then maybe lastly, you mentioned some commentary I can't remember it was with you, Greg or Scott on improving cash flow quality. And is that just more reaffirming what you guys have been doing the last 12 months, getting to the 95% plus or is there messaging on more that go on getting it even higher?

I understand your question, Ben. Yes, certainly having more of the business regulated, which is a function of two things. It's very concerted effort to grow regulator utilities, and those are obviously growing at a pace faster than unregulated business. We've gotten rid of some unregulated businesses, in particular merchant gas plants over the last year. And obviously the cast contribution from Emera Energy has been a little bit softer, although it's probably not as material. So I think that is first part. And the second part is, regular utilities are performing really well and the cash flow coming on them is really strong. So, the earnings that you're seeing at Nova Scotia Power, Peoples Gas, New Mexico Gas, and Tampa Electric are our cash earnings they're not being driven by regulatory deferrals. We have virtually no regulatory deferrals, across any of those four utilities, which is not always the case with other utilities in our sector. So I think it's both the approach inside the utilities and then from an overall portfolio perspective.

Yes. I think just to add onto that, I think it's also -- if you think back to the industry data that we had in Florida and starting to talk about just the overall quality of the portfolio at two with between Florida and Atlanta, Canada with Scotia is roughly 80% of earnings and therefore cash flow profile and New Mexico into that list and well over 85% in total just amongst those jurisdictions. So just the quality of the predictability, of those businesses and therefore the cash flow profiles that they'd come from. Now all part, all wrapped up into -- your question, the answer to your question including everything Greg said.

Okay. That's great. Thank you.

Your next question comes from Mark Jarvi of CIBC Capital Markets. Your line is open.

Good morning everyone. I just wanted to maybe clarify in parts of some of the commentary on the Tampa electric results we've seen recently. So are you saying that residential has essentially offset the drop in C&I and then whether they were, whether had then pushed you above on load? Is that kind of what you're saying in those comments between Nancy and Greg?

Yes. That's what we're seeing.

So even with weather normalized, you think ready higher revenue rates and increased load there pick it off set that commercial drop.

We believe based on what we've seen the last couple of months, that the residential we're seeing the uptick in residential and, and increase obviously in commercial and industrial, but it seems to be offsetting. And so, with the benefit of some weather, as we saw at the end of March, we're going to, we've seen some benefit to the revenues.

Okay, great. And then, Greg, maybe a question on the cash profiled on the balance sheet, you repaid some of the TECO finance debt outstanding. What is the plan there going forward, do you pay more, or do you hold a bit of a higher cash balance given some of the uncertainty that we're facing right now?

Yes, we find yourselves, first of all, Mark, welcome back.

Thanks.

We find yourself in a situation where we probably have some cash that we would otherwise utilize to pay down some debt. The next significant maturity we have is not some June next year, although we have some a very modest term loan that we could pay off if we so choose, but at this point in time, just given all the uncertain deal, how we feel today is probably very different than how we felt three, four weeks ago. We just think it's prudent just to hang on to the cash for another quarter or so before we start to look at scenarios over redeployed.

Okay. And then, I know it's a small segment, but the Caribbean with a 4% to 6% load applied to that utilities as well, or are you seeing bigger drop given a drop in tourism?

So, as I think, we're really in two Caribbean islands, Grand Bahamas and Barbados. In Grand Bahamas, it's much more weighted to the industrial sector and that sector still been operating. So their load change hasn't been quite frankly that as material and we wouldn't expect that to change albeit that's a smaller part of our business. We're seeing that so far that kind of those levels, maybe at the high end of that range in Barbados, and it's difficult to see that not continuing for a period of time, it's difficult to see the tourism industry, rebounding anytime soon in 2019. So that's clearly one where we'll have some work to do over the balance of the year.

So your internal forecasts assume that sort of high single digit low decrease there?

Yes, that's correct.

Okay, thank you.

Your next question comes from David Quezada of Raymond James. Your line is open.

Thanks, good morning, everyone. My first question, maybe on the topic of kind of a longer-term question on storage in Florida, it sounds like some of your peers in the state have recently rolled out some fairly big plans there, wondering if you have any recent thoughts on that opportunity in the future?

Yes, I'd say, if I think about our two businesses in Florida combined, David we're looking at storage in that market, nothing specific to talk about today, but it's certainly an area that we're looking at.

Okay, fair enough. And then maybe just one quick confirmation, do you expect to see any effect to cash flow on the lower corporate tax rate in Nova Scotia?

Not in the short-term, the business that we have that is most impacted with the lower tax rate is no special power and it's on a cash tax basis. So over time, obviously the cash tax component of rates will change, but on the short-term, it won't have any impact at all.

Okay, fair enough. Thank you. That's it for me.

Thanks, David.

Your next question comes from Ryan Greenwald of Bank of America. Your line is open.

Good morning, guys.

Good morning.

So appreciate the disclosure around the 4% to 6% impact for mostly of the utilities so far. Could you just provide a little more color on what your internal assumptions are going forward the rest of the year?

Yes, Ryan, it's Greg. I'd say it's less of a deterministic forecast in that, we think we're on track to deliver what we otherwise would have expected. You will see in our disclosure that there's a couple of businesses like our marketing trading business because of market conditions in New England that probably will get to lower end, but we confirm that we expect to earn within our re-bands for Nova Scotia Power and Tampa Electric, just as two examples of that, and then we're kind of overlaying with that and it's still work in progress, what is the impacts of COVID-19 extend beyond, quite frankly it's not Q2 but beyond 2020 and that's still work in progress, and I think it's also important to know through all of this is, as we talk about mode changes and fixed cost contributions, these are all with the exception of Emera NG regulated utilities whether it's a long history of having in all jurisdictions and particularly in areas where there's always regulatory opportunities to manage these situations, so that utilities continue to earn kind of in and around there a bit.

Fair enough.

Sorry, I was just going to say, Ryan only to state the obvious but the difficult thing in this is really understanding what the duration of the restrictions imposed across all of our jurisdictions there and frankly, the answer to that is not going to be uniform across all the regions that we operate, obviously, Florida is starting to relax some of those now, that hasn't yet happened in some of the other jurisdictions. So that, that's the other question in all of this as well that makes it difficult to fully understand what the impacts are, but I think the important messages within how we're seeing within that environment. While many commercial customers and industrial customers obviously are challenged in terms of their operations, what we're seeing as it relates to the residential usage and how that impacts our businesses, one of the key mitigating factors.

Got it and then on the bad debt, can you just provide a little more color there, it seems like pretty modest optics so far, but any additional color there around your expectations, and as you've had initial conversations with the regulators and ultimate confidence around favorable treatment there?

Greg, you want to start with that?

Yes, I mean, we haven't really seen much of it change in bad debt at this point, obviously, we're seeing some, starting to see some weakness or further aging of our accounts receivable, not unexpected because we have made the decision not to disconnect customers for non-payment, so those that would otherwise have paid their bill for fear of disconnection are, but that's quite frankly, just a small portion of our customers. We would expect that bad debt will be higher this year than it was last year as a percent, but when we go back and look at the experience in 2008 and 2009, and it won't be the same whether it's better or worse, it remains to be seen, it's not a material amount of money, but it is something that we're keeping track of and that if we feel it's an appropriate amount of money to have the conversation with the regulators as they already have started in New Mexico, then we will do so.

Great, thanks for the time.

Your next question comes from Andrew Kuske of Credit Suisse. Your line is open.

Thank you. Good morning, given the COVID-19 related demand destruction across your footprint, does that allow you to phase out coal on a more accelerated basis across the portfolio? And then what kind of positive impact does that have on your carbon footprint?

Yes, Andrew it's Scott. So I mean really the important premise within the question is really what the demand destruction, how permanent is it? And so what you will gather from the answer so far is our load actually is not down meaningfully. And so really when you think about the decarbonization path that we're on, that's a path we're on regardless of short-term impacts or what we are hope to be short-term impacts from something like this pandemic, and obviously, that's been a core part of our strategy for a long-time, it continues to be, we're working through our plans around how we continue to decarbonize in particular in Tampa Electric and Nova Scotia Power, I would note during this period as the Tampa Electric team was working through with a major planned outage at one of their larger stations Big Bend Station for the last number of weeks, since it was originally commissioned, Big Bend has not been operating, has not been burning coal through that period while they have been doing some retrofit work, it is important generation unit. And that in fact help to assist in terms of a very complex set of work to be done while we're keeping the team safe and allowing that work to advance productively and efficiently and successfully, but I think, the bigger part to your important question is the decarbonization efforts, the efforts to eliminate coal generation within the next is very much a front center component of our strategy, and we don't see the short-term impacts relatively speaking of COVID is as challenging as they're for everyone. We really don't see that shaking up the path that that we're on in order to continue to drive towards the cleaner energy future that we all strive for and we know our customers want to.

I appreciate that color and context. And then maybe just an extension of that, I think in the MD&A you highlighted the gas utilities you expected to under earn given the pandemic situation we are in, I guess your fundamental confidence in that business on a longer-term basis is really enhanced as you transition towards solar and these greater natural gas usage across portions of your utility portfolio and your footprint.

Yes. I think that's right, and I think there's an element of those [LEC] [Ph] that have very efficient use of energy with direct at the need in terms of its overall efficiency. There is an enabling aspect of that that enables the continuity curve on the electric side. And so, we see those businesses continuing to play an important role in the decarbonization of the sector overall, and obviously, under earning an element of better use is also frankly reflective of the fact that those both businesses are in the process of securing rates in response to the fact that there has been investments made on behalf of customers that need some rates in order to support those advancements in both improving reliability and enhancing integrity -- sort of integrity related investments, but also system expansion particularly in Florida as people's gas continues to meet the need from a growing list of customers for natural gas, and so, both of utilities are in the process of rate filings or related rate request as we speak obviously.

That's great. That's all from me. Thank you.

Your next question comes from Patrick Kenny of National Bank Financial. Your line is open.

All right, good morning everybody. Just with respect to your industrial and I guess commercial customer base as well in both Nova Scotia and Tampa, are you seeing some of these customers being able to sustain a certain level of operating capacity, or perhaps pivot from one business line to another over the past couple of months? Just curious how meaningful this trend could be in potentially offsetting a certain portion of the initial demand destruction under normalized weather of course?

Yes. Patrick, it's Scott. What I will do is I let first Nancy and then Wayne give a little bit of color from the Tampa and Nova Scotia perspective respectively. Nancy?

Sure. From an industrial customer perspective, we have seen that continue on. Interesting here on our commercial sector, one of the things -- so in lot of restaurants and retail and that sort of thing, people still need to keep the air-conditioning on to protect the premise even if they are not operating. So, I think that's part of the reason why we haven't seen so much demand destruction, and we do believe that some of the increase in people calling and arranging payments is because the economy is starting to open up in a small way in our phase 1 as the governors called it. So, I think that's part of the lay of the land in terms of what we are seeing our revenues, if that's helpful.

Okay, great. Wayne O'Connor: And it is very, very detailed. I would only add that we are seeing a similar thing here in Nova Scotia where some of our industrial and commercial customers are closed or operating at lowers levels while others have adjusted their activities, and there are few here that have shifted their production to make things like surgical masks and that kind of activity. So, it's a mixed bag, but there are industries that are doing better and actually running more at this time. So, add all those into the overall load numbers that we would have given you in our MD&A.

Okay, perfect. Thanks for that. And then on the bad debt expenses, Nancy maybe you can just provide an overview on some of the financial aid programs for the residential customers down in Tampa and how meaningful these programs could be in mitigating some of your bad debt expense over the coming months without needing to rely on the regulatory mechanisms?

Sure. So, we have a variety of programs, some of the local charities as well as our own program that we call share that's administered through the Salvation Army here. There's federal programs as you know. So just to -- perhaps put it in perspective, year-to-date we've about 9,700 of our customers have received some kind of aid at about little over $200 on average, in terms of that aid. So that has certainly been helpful. We have done a lot of work in terms of assisting our customers and trying to help them get access to these programs. And so, that hard work by our staff in the contact center certainly helped. So, again when I say, "Small uptick," I do mean small uptick, currently in terms of our bad debt. So it's hard to see what's coming, but nothing alarming so far.

Okay, thank you. And maybe just a final cleanup question here for Greg on the FX hedges. You may have touched on that already, but the $200 million in place for 2020 is at the target zone on an annual basis, or do you expect to move that up further through the back-half of the year, and also maybe a comment on when you might look to move the 2021 hedges up as well?

Yes, Patrick, I don't think there's necessarily a target per se although probably 200 to 250 would probably feel about reasonable, and so, obviously if we want to do something additional in 2021, we could. We haven't -- over the last couple of weeks, the dollar has appeared to have stabilized although, at least personally I find it difficult to grasp the thesis where it's going to get stronger anytime soon or very quickly anyway. So, you could probably see us for 2021 kind of in a similar type of a hedge bubble in place that we have in for the current year, maybe slightly higher than that.

Okay, great. That's it for me. Thanks, guys.

Thanks, Patrick.

There are no further questions at this time. I will now turn the call to Mr. Hastings.

Thank you very much for your interest in Emera, and I hope you enjoy the rest of the day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.