On August 7, Algonquin Power & Utilities (NYSE:AQN) held its second-quarter earnings call, and the story split cleanly in two. Management touted regulatory wins and a headline-grabbing plan to redomicile to the US, even as profits fell short of last year's numbers. Algonquin's case for progress rests on a string of state-level outcomes.
On July 15, the Missouri Public Service Commission approved $97 million in annualized revenue adjustments, effective August 3, after Algonquin met customer service and billing metrics tied to its Empire Electric Missouri settlement. Kansas regulators approved an $8.8 million revenue adjustment tied to a settlement that also grants the company 50% of wind revenues in year one. On June 17, Algonquin secured a Certificate of Convenience and Necessity from Missouri for a 250-megawatt gas-fired generation project, its first under Missouri Senate Bill 4, which allows construction costs to be recovered while the project is still being built rather than after completion.
The company also filed new rate cases at New York Water, Empire Electric Arkansas and EnergyNorth Gas, seeking $38.1 million, $8.4 million and $35.8 million respectively, with new rates expected to take effect between spring and summer of 2027. Separately, the Department of Energy approved reimbursement of $5 million tied to an AMI grant reinstated earlier in the year. The bigger headline was Algonquin's plan to redomicile from Canada to Delaware, with a new headquarters in Chicago while keeping a presence in Oakville, Ontario.
Management noted over 80% of operations already sit in the United States versus less than 5% in Canada, and framed the move as a way to cut cross-border tax inefficiencies and open the door to inclusion in US equity indexes. Shareholder approval is expected in the first half of 2027. On the balance sheet, Liberty Utilities Company raised roughly $1.15 billion through a private placement of senior unsecured notes, using the proceeds to retire $1.15 billion of Algonquin notes that matured June 15, and the company does not expect to issue equity through 2027.
The quarter's numbers told a less flattering story. GAAP net earnings fell to $4.9 million from $14.8 million a year earlier, while adjusted net earnings dropped to $29.2 million from $33.6 million. Year-to-date, adjusted net earnings came in at $128.8 million versus $142.6 million in the same period of 2025, and adjusted net EPS slipped to $0.17 from $0.19.
Management attributed part of that gap to $25.7 million in favorable items in 2025 that didn't repeat this year, including a tax basis step-up recovery. The quarter also absorbed a $17.2 million write-down tied to a proposed decision in Algonquin's California WEMA wildfire cost proceeding, which authorized recovery of about 75% of requested costs rather than the full amount. Interest expense climbed $9.3 million on new debt and higher commercial paper usage, while operating expenses rose on higher gas safety and compliance costs.
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