Margin Outlook
Q: Are you planning to rightsize the Electric Power business in Canada due to margin pressures?
A: Earl Austin explained that while there is some margin pressure in Canada, they believe they can maintain 10% to 10.5% margins in the Electric segment, with potential upside depending on storms and utilization. " By combining the Renewable and Electric segments, they expect to achieve double-digit margins in the future. "

Transmission Project Visibility
Q: How has visibility of high-voltage transmission projects improved?
A: Earl Austin stated that the nation's grid is underinvested in transmission, and significant investment is needed to support transitions like EV adoption and fuel switching. " They are beginning larger projects and seeing more opportunities, increasing their confidence in executing and winning these projects. "

Acquisitions in Industrial Solutions
Q: Can you discuss the recent acquisitions and your strategy in Industrial Solutions?
A: Earl Austin mentioned that they value the resilient industrial business in their UUI segment and see the Environmental Solutions they provide as enduring for decades. " The acquisitions enhance their customer base with minimal overlap and offer synergies that will show up in their numbers. "

Customer Outlook and Regulatory Impact
Q: How are customers thinking about projects amid potential regulatory changes?
A: Earl Austin observed that customers are not backing off projects; capital continues to grow with factors like data centers and load growth driving demand. " While EV penetration may stall, the need to electrify and secure the system remains, and any shift from distribution to transmission does not affect their portfolio or guidance. "

2024 Guidance and CapEx Increases
Q: How much of the increased utility CapEx is factored into your 2024 guidance?
A: Earl Austin indicated they've considered historical growth and prudently accounted for factors like storms and election years in their guidance. " They see opportunities to grow 15%, driven by the tech push on AI and data centers requiring clean power, boosting confidence in transmission system capital spending. "

SunZia Project Risks and Impact
Q: Can you address risks related to the SunZia project and quantify its impact?
A: Earl Austin is confident in their numbers and not concerned about risks with SunZia. " The project is starting and will ramp throughout the year, contributing to their guidance moving into the second half, with expectations for more awards to continue the ramp. "

Renewables Segment Growth and Margins
Q: How should we think about the 20% growth in the Renewables segment in 2024?
A: Earl Austin noted they've had phenomenal growth in Renewables in '22 and '23 and expect double-digit plus growth in '24 across legacy business and balance of plant. " As wind projects like SunZia come in, the mix shift and utilization of assets will help margins improve, and they believe the top line in the Renewables segment will increase. "

Portfolio Approach Benefits
Q: Where will the portfolio approach have the biggest impact in 2024?
A: Earl Austin expects the Distribution business to ramp up in the back half of '24, with Canada moving back into good markets. " They've rightsized the business, and as the portfolio matures geographically and across service lines, optimization will increase margins, aiming for double-digit EBITDA margins across the board. "

Resource Allocation and Labor Capacity
Q: How are you managing resource allocation amid high demand and potential labor constraints?
A: Earl Austin stated they are not near capacity and are not concerned with labor at this point. " They have a good 5-year outlook, working closely with clients, and see technology demands like data centers increasing the need for robust grid infrastructure, which aligns with their services. "