Good day, ladies and gentlemen. Thank you for standing by and welcome to the Ameresco Inc.'s Second Quarter 2022 Earnings Conference Call. At this time, all participants are on a listen-only mode. Later, we'll conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I will now turn the conference over to your host, Ms. Leila Dillon, Vice President of Marketing Communications. Ms. Dillon, you may begin. Thank you, Valerie, and good afternoon, everyone. We appreciate you joining us for today's call. Joining me here are George Sakellaris, Ameresco's Chairman, President, and Chief Executive Officer. Doran Hole, Executive Vice President and Chief Financial Officer, and Mark Chiplock, Senior Vice President and Chief Accounting Officer. Before I turn the call over to George, I would like to make a brief statement regarding forward-looking remarks. Today's earnings materials contain forward-looking statements, including statements regarding our expectations. All forward-looking statements are subject to risks and uncertainties. Please refer to today's earnings materials, the safe harbor language on slide two, and our SEC filings for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included a reconciliation to these measures in our supplemental financial information. I will now turn the call over to George. George? Thank you, Leila, and good afternoon, everyone. I am very pleased to report that Q2 was another record quarter for Ameresco, both in our financial results and in our team's tremendous execution. We achieved growth across all four of our business lines and drove a substantial increase in profitability. This outstanding performance demonstrates the strength of our people, the fortitude of our business model, the expanding market opportunities, and the operational diversity and flexibility that is part of our entrepreneurial culture. These corporate characteristics also enable Ameresco to better navigate the industry-wide inflationary and supply chain pressures being experienced in the market. I wish to thank the entire Ameresco team, along with our valued customers, partners, suppliers, and subcontractors who have worked together with us to mitigate these challenges. Before we discuss the strong quarter, I do like to provide an update on our Southern California Edison battery projects. During the second quarter, we made substantial progress on the projects, achieving a number of key milestones despite COVID, supply chain, and permitting challenges. Just last week, I walked all three sites and our team is doing an excellent job executing. I am pleased with the progress that they are making at each project site. Approximately two-thirds of the batteries for the projects are on-site and the balance in transit. We now expect 200-300 MW of capacity to be in service in September and continue to expect completion by the end of this year. I'm also very pleased by the extraordinary efforts of both the Ameresco and the Southern California Edison teams in working around the clock to deliver these battery storage projects this year. This is a true example of a partnership and together I know we will succeed in providing critical resiliency and reliability to the California grid. Turning back to our Q2 highlights. Our robust revenue growth was led by our projects business. We continued to not only execute on the Southern California Edison projects, but also were able to execute more quickly on other large projects due to earlier than expected customer approvals. While we had the benefit of great results, we also continued our new business momentum this quarter. We added $223 million of new awards to our project backlog. What I am particularly excited about is that our proposal activity was at multi-year highs in the second quarter, more than double the level of previous years. This clearly demonstrates that customers are seeking solutions to address their increasing energy costs, resiliency needs, and carbon reduction goals. For example, we have seen a total of seven comprehensive federal requests for proposals in the first half of this year, compared to only five for all of 2021. Our proposal activity was not just limited to federal. We are developing and delivering many exciting advanced technologies, renewable energy, battery storage, and traditional energy efficiency projects across all customer segments and all of our geographies. We also have exciting news from the energy asset side of the business. We signed our largest ever combined PV solar and battery deal, the Kapono Solar, LLC asset. We are thrilled to be partnering on this with Bright Canyon Energy, a wholly-owned subsidiary of Pinnacle West Capital Corporation. Bright Canyon will also be an equity owner in this asset, marking our first energy asset equity partnership. The asset is designed to include 42 MW of solar energy and 42 MW/168 MWh battery storage system. It will be installed on Joint Base Pearl Harbor-Hickam under a 37-year enhanced use lease with the Department of the Navy. Upon its expected completion in early 2024, it will operate under a 20-year power purchase agreement with Hawaiian Electric and will provide clean and resilient energy to the island of Oahu. We look forward to executing on this and working on other future opportunities with Bright Canyon Energy. I will now turn over the call to Doran to provide some comments on our financial performance. Doran? Thank you, George, and good afternoon, everyone. For additional financial information, please refer to the press release and supplemental slides that were posted to our website after the market closed today. As George noted, the Ameresco team delivered excellent second quarter results. While our projects business led to very impressive top-line growth, it's important to note that all four of our lines of business grew nicely during the quarter. In addition, the combination of total project backlog and expected future revenues from our contracted energy asset and O&M businesses remains over $5 billion, giving us excellent long-term visibility and predictability during these uncertain economic times. The robust year-on-year top-line growth was led by our projects business, driven not only from continued execution on the SCE projects, but also from acceleration in other projects that mobilized faster than anticipated. As we have stated in the past, executing on the SoCal Edge projects has and will continue to impact our near-term cash flows due to the temporary increases in our working capital needs, particularly in accounts receivable and unbilled revenues. This increase in working capital was expected from the onset and is one of the reasons why we amended our senior credit facility early in the year. Subsequent to the end of the second quarter, we collected another $33 million from SoCal Edison, which we had previously invoiced. Unbilled revenues, which are labeled on our balance sheet as costs and estimated earnings in excess of billings, convert to accounts receivable when invoiced under contract terms, which usually considers passage of time or completion of contractual milestones. On the other hand, revenue is recognized under the percentage of completion method, which does not consider contractual milestones. Therefore, the timing of invoicing typically does not match up with the timing of revenue recognition, which explains why the SoCal Edison project has resulted in a temporary increase in unbilled revenues. We expect all components of working capital to return to more normalized levels for our business with the completion of the SoCal Edison contract and the collection of the remaining amounts owed. Moving on to energy assets, I want to highlight our discipline as it pertains to the underwriting of new assets. Our funnel of early-stage assets and development continues to show strong growth with an incredible pace of proposal and award activity. However, recent increases in inflation and interest rates have impacted overall market returns on assets. We've therefore been particularly prudent in our capital commitments over the past couple of quarters, ensuring that our assets and development continue to align with our hurdle rates. We're also increasing focus on executing on our nearly 500-MW portfolio of assets in development. You'll also note a new disclosure in our supplemental slides with respect to our assets in development this quarter. Given the partnership with Bright Canyon Energy that we announced in Q2, we're now reporting both the total assets in development as well as a pro- forma MW total after adjusting for our partner's equity interest. This should help investors better understand the positive impact these assets are expected to have on our future financial performance. For those who are newer to the Ameresco story, I wanted to provide a bit of background on how we approach our exposure to the various environmental attributes we generate in our energy assets business. Renewable identification numbers, or RINs, are generated as part of our RNG business. When we build a new RNG asset, we generally sell forward approximately half of the expected RINs under a 3-5 year fixed price offtake contract to support our project financing. We then will look to dynamically hedge the majority of the remaining RINs during the year in which they are generated using forward sales of large blocks. This helps to mitigate the effects of daily RIN price volatility on our financial results. Near the end of the second quarter, RIN pricing began to experience a pullback after multiyear increases. However, we're not expecting this to materially impact our 2022 results because we are already over 90% hedged on our 2022 risks. Renewable energy certificates or RECs that we monetize are generated from our renewable electricity assets, primarily in solar, and are concentrated in a few select northeastern markets which have government-mandated renewable portfolio standards. The vast majority of these assets generate RECs under legacy Massachusetts SREC one and SREC two programs where there are effective price floors. This has helped to minimize the impact of any REC volatility to our results. While we do have some exposure to RIN and REC price volatility, Ameresco proactively manages those risks. Back to the P&L, we achieved impressive year-over-year adjusted EBITDA growth as a result of our strong operating leverage, again, demonstrating our ability to add gross profit dollars without adding direct incremental operating expenses. Execution on contracts remained strong as we converted contracted backlog into revenue with the continued progression of the SCE projects. Business development remained equally as robust as we backfilled with new awards. Total project backlog was a healthy $2.8 billion at the end of the quarter. As George noted, we are seeing and participating in exceptional proposal activity in the market. We expect this will lead to further growth in awards in the coming quarters. There's been ongoing discussion around inflation, interest rates, and energy prices. Our customer value proposition is based on energy savings. Higher costs of materials and higher interest rates tend to work against us, while higher energy prices work in our favor. At this stage, the year-on-year increase in energy prices has far outpaced the year-on-year increase in Ameresco's all-in project delivery costs. This has actually enabled even more projects to pencil and is driving interest and engagement in our innovative demand reduction solutions. Our excellent year-to-date performance, as well as our visibility across all of our business lines, has enabled us to reaffirm our 2022 annual guidance despite the delays we have experienced in the SCE projects. As to the quarterly cadence, we expect Q3 revenue to be slightly greater than Q4. We expect gross margins to start moving back to normalized levels of approximately 18% for the third and fourth quarters. Now I'd like to turn the call back over to George for closing comments. Thank you, Doran. The need and demand for Ameresco's comprehensive portfolio of clean energy solutions has never been greater as the world faces numerous geopolitical, climate, and budgetary concerns. We are very excited at the heightened level of customer engagement at this time. Given the growing market opportunities, our leadership in the market, and our portfolio of comprehensive clean tech solutions, we believe we will experience robust growth for years to come. In closing, I want to once again take a moment to thank the entire Ameresco team for their dedication and outstanding execution. We also want to recognize the ongoing support of our customers and long-term stockholders. Operator, I would now like to open the floor to questions. Thanks. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one one on your touchtone telephone. Again, if you would like to ask a question, please press star one one. We do ask that you please limit yourself to one question and a follow-up. One moment, please. Our first question comes from Julien Dumoulin-Smith of Bank of America. Your line is open. Hey, good afternoon. Thanks, team, for the time here. I appreciate it. Maybe just to jump right in. I'd love to hear a little bit more on the IRA and your thoughts about the opportunities that this would unleash for your business. Specifically, you know, Doran, I heard your comments about RINs here, but you know, as you think about the RNG business here, you know, what kind of opportunity exists, as it pertains to the tax credit that might open up for you, both in terms of projects that you've already originated and are actively in development, as well as for the opportunities that this might enable? Again, I know I'm focused on RNG, but would love to hear, as you know, where else you see the opportunity emerging for you guys. Sure. Go ahead. Yeah, sure, Julien. First and foremost, I would say that the expansion of the credits, the extension of the credits certainly is gonna work in favor of the industry overall. We're continuing to analyze the provisions that relate to the qualified biogas property. We've been assessing the way that the law is written. We have to see what happens between now and when it passes to see how much clarity there is for how that might apply to the particular types of renewable natural gas facilities that we produce and where we focus. Importantly, as with anything in our business, we're technology agnostic. We're looking at all sorts of technologies across the spectrum and that includes RNG. Now moving on to the others, clearly battery storage, solar, the extension of solar, and then, in a couple of years when the technology neutral provisions kick in, you know, that matches quite well with our business and we're very excited about it. Furthermore, I think Ameresco. As opposed to, you know, many others, I think, in the industry, we are quite familiar with the elements of the law that will provide the uplift of the credit from 6%- 30%. Correct. Namely prevailing wage, union, domestic content, those things. This is an area that we're quite used to working in in terms of our space. We think we can work with those provisions and really carry out the intent of the legislation that Manchin and Schumer have put in front of us. Again, back to it's not signed yet, it's not passed yet. We're still working to analyze it. If it does get signed, no question about it, there's tremendous upside potential. Yeah For the company, whether it's solar, battery storage or RNG. Especially in the RNG sector, you know, we have over 18 projects that will be built over the next three or four years. We're working on quite a few others. It would be tremendous uplift for the company. George, just to clarify capture the tax credit conceivably on everything already that's underway, even if it wasn't contemplated, right? Again, I think that's a key nuance here. No, that's right. If it hasn't been built yet. Yeah You know, it's all gonna be new assets that we put in service after the effective dates. Yep. Excellent. Sorry, one more clarification if I can here. Obviously, you know, good stuff on getting some clarity and line of sight with SCE here. Just with respect to that progress, can you talk a little bit about any incremental cost to you all as it pertains to the slight shifts here? I mean, how are those conversations evolving, if you can characterize those at all? I mean, obviously it's dynamic. Obviously, you guys are coming to some degree of resolution here. It's not too meaningful in terms of delays, but just you know, the incremental cost and defraying that, et cetera. On the incremental cost, you know, that's one of the good things about the battery supplier. It held its price. That's one of the advantages actually that Southern California have because we executed that contract basically before we signed the contract with Southern Cal. The delay, though, right after we announced the quarter last time, about late that week, they came back, and they gave us an updated schedule, which basically we lost four weeks on the battery delivery. The good thing about it now is that we have about two-thirds of the batteries on the site and the balance is on ships. We feel much better than we felt before that we have control now of that and as well as all of the rest of the materials associated with that particular project. That's why we feel pretty confident that they will be done this year. It actually, what happened this last quarter and especially the last six weeks, I would say it increased our own confidence of delivering the project this year. Yeah. Julien, the only thing I'll add is there's been no change in the nature of the dialogue and the relationship we have with Southern Cal as far as finishing these projects. Yeah. The focus is on finishing the projects, compressing time schedules- Yeah doing it in a safe manner. Got it. All right, fair enough. I'll leave it there. Thank you, guys. Thank you, Julien. Thank you. Our next question comes from Stephen Gengaro of Stifel. Your line is open. Thanks, good afternoon, everybody. Good afternoon. Two things for me. One is just on the number of energy assets that were put into service in the quarter, and sort of the outlook or the cadence for energy assets in the back half of next year. It just seemed it was a little below our expectations in the actual quarter. I was curious if there was anything going on there or just timing of projects coming in. Yeah, it's more of a timing issue and some projects, you know, they get delayed because of the interconnection or whatever the case might be. As far as we're concerned, we did say to the street that we will install between 60-80 MW of assets this year. We maintain that guidance. The only thing that has become, you know, a big issue is the utility interconnections. I mean, we have some projects already finished, but we haven't been able to interconnect them because they have schedules. There's so much demand for them to do work that it has become a big bottleneck. Great. Thank you. Then just as a follow-up, and I know, Doran, you probably don't want to go into a ton of detail here, but the gross margin guidance that you suggested for the back half of the year, it seems to indicate that you recognized a larger chunk of the SCE revenue already than maybe we had expected or modeled. Is that accurate? I don't think a larger amount, no. I think it's on pace. I think it's within our expectations. Yeah That's why we really changed that. That second half just reflects the kind of the mix moving back toward the normal business, but not different than what we were expecting. Okay. Yeah. It's the mix of the other projects are getting a little bit greater percentage. Yeah. And, uh... Great. Thank you. That's helpful. Thank you. You're welcome. Our next question comes from Noah Kaye of Oppenheimer. Your line is open. Questions. Wanna pick up on your comments around these record levels of bidding proposal activity. I know you highlighted the federal, but it'd be helpful to get a sense of more broadly where this demand is showing up what incrementally seem to be sort of the focus areas. I think critically how to think about the contracting and sales cycle for these. You know, we might think of federal projects as having a longer conversion cycle, for example, than you know other types of customers. As we look at the award and backlog trends, you know, how can we be kind of mindful of that going forward? Yeah. Well, you know, the normal cycle is between 12-18 months once we make the proposal to get the award, but especially when the federal government. The federal government, tremendous activity. We're not gonna see that pick up most likely till next year as far as showing up in the awards and the contracted. Some of the C&Is that we see, they have a shorter turnaround time, maybe six months or so, and sometimes even less. We see very high activity on that level. I mean, the Canadian group, tremendous activity, and especially on the C&I market. One of the activities that we're picking up a lot is from the utilities or the cooperatives, some of the battery storage projects that we have become a known entity now into the marketplace, so we are proposing quite a bit proposals now that associated with battery storage. I would say, no, probably you will see it 6-12 months down the road that the award and the executed contracts will show very healthy increase. Yeah, great. It will come slowly, but the activity level that we feel. I'm very excited about it. I mean, the activity level is much better than we had encountered. The other thing going with it, though, we have net added about 100 people during this year in order to keep up with this kind of activity level. Yep. How much of this activity you mentioned federal, Canada, how much of it could be in Europe? I mean, we're heading into a potential winter energy crisis for the EU. It seems like the door has never been wider open for your value proposition. What are you seeing there, and you know, can it be material in terms of business wins and adding to the backlog? I mean, many, many customers, you know, they are concerned about their carbon footprint. Look at Bristol City. You know, it's becoming more of a blueprint. Now I think last quarter, we're talking to one, now we're talking to three potential new cities going down that direction. The energy costs being as high as they are, it has become a catalyst. Many people, especially the C&I or even the other, whether it's the federal government or institutions, they are concerned about the high energy costs. As Doran pointed out, even though we have seen probably around 10%-12% increase on the project costs and somewhat increase in the interest costs, the energy prices on the average is over 40% up, so the value proposition has increased. Yep. Thanks so much for the color. Mm-hmm. Thank you. Our next question comes from Eric Stine of Craig-Hallum. Your line is open. for taking the questions. So back at the Investor Day in March, you gave a 2024 outlook, I believe $300 million+ in EBITDA. You know, just would love to take your temperature on confidence in those goals and maybe thoughts on how you get there. I mean, do you need another large storage contract, or is the momentum and pickup in both new awards and proposal activity kind of what you were assuming to get to a step up in 2023 and then ultimately to your 2024 goal? Yeah. I will address this first, and then Doran might want to add some more color to it. We're still very confident about the $300 million EBITDA by 2024. As far as getting another big contract associated with the battery storage like the Southern Cal, no. That is not in the plan as it was back then or as it is right now. I think the development of our assets, whether it's the renewable natural gas or the solar plants, the increase of the O&M, and what I would call the normal line of contracts that you have seen us in the past, we feel pretty good that it's gonna get there, will get us there. Of course, energy prices being escalated the way they are, it's helping our cause better than what it did way back when we did that particular plan. The only concern is the supply chain issues, and as soon as those things go away, we get over them, we will be in a better position to execute. We're still feel very confident about it. Okay. No, that's great. That is helpful. Maybe just following up on commentary from your prepared remarks, but you mentioned what the award or the first project, kind of partnered project in energy assets with Bright Canyon. Maybe you could just talk a little bit about the pipeline there and how you see that developing over time. You know, that particular one, it's interesting the way it evolved. You know, we got the award to do the enhanced use lease for the Navy in Hawaii. Bright Canyon Energy, they had the PPA with already, and won through the, for the Hawaiian Electric. It was a perfect relationship. They said to us, and actually the base, they said, "You know, guys, you won the contract for the lease, but these guys have been working with us for a long time, and they won the contract, the PPA. Why don't you guys team up?" We team up with them, and they are great partners working together so far. We are looking at some other deals that we could potentially work together with them. It's an excellent relationship so far. Look, sometimes we haven't done it too much in the past, we have some general partners out there. I think it's gonna help us and accelerate the business down the road. I mean, we did get a partner, you know, to do a couple projects in Greece, and the relationship has worked excellent. That's what going back to what Noah asked the question, we see great activity in Europe, and we have great traction in the U.K. and also in some other parts of Europe that we're not ready to talk about yet. Don't be surprised that we will have some good news to report down the road coming up. Okay, thanks for the color. You're welcome. Thank you. Our next question comes from Tim Mulrooney of William Blair. Your line is open. Yeah. Thanks for taking my questions. Two quick ones. George, I wanna make sure I heard your comments correctly earlier in the Q&A. You said you were talking to a few more cities about signing the type of contract that you've signed with Bristol City. Are those all isolated to European cities, or are you also having some of these kind of conversations with U.S. cities as well? No, actually, no, that's a good question. One is another European and two others, they are American. Okay. That's good to know. Thank you. It's good to know it's on this side of the pond as well. You know, just one more probably for Doran or Mark. You know, it sounds like there's some noise in cash flows this year, primarily due to the SCE project. After we see normalization, so I'm looking out a year or two here, you know, what is the right range for cash flow conversion rate you think this business can support as we look out into those future years? Well, I think, you know, we've looked at working capital. When we talk about normalized level of working capital, without SCE, we've been running between 10% and 15% more on an annualized revenue basis. You know, we haven't really seen a whole lot of volatility there. You know, I think we'd expect to get back to those levels. From a cash flow perspective, I think we're trying to provide some more metrics to help with the free cash flow calculation. Again, we've been showing some pretty consistent positive free cash flow on a trailing twelve-month basis. You know, I think when we get on the other side of Southern California Edison, we'd expect to, you know, to get back to that and continue that, you know, going forward. Okay. Thanks very much. Sure. Thank you. Our next question comes from Kashy Harrison of Piper Sandler. Your line is open. Good evening, everyone. Thanks for taking the questions and congrats on the results. My first question relates to the backlog. It's become kind of difficult to evaluate it just given the impact of the SCE project. I was hoping you could help us quantify how much of that current backlog is associated with the SCE contract, and then I have a follow-up. We don't break it out. You know, the only thing I will say that the overall backlog of what we contemplate and sign in this quarter and next quarter, it's gonna put us in a great position to have another great year next year. Yeah. I think the way you can look at that is, you know, taking a look at the revenue estimates and the recognition of the revenue during the quarter as well as prior quarters, on the SCE contract versus the total contract size. Yeah. That's, you know, we haven't gotten into the discussion of what would it look like, you know, ex the SCE contract, I think primarily because the SCE contract did happen. We're continuing to add awards, and we're continuing to backfill as we burn off that revenue. You see sequential and year-on-year increases in the awarded and contracted or the total project backlog, I think that just kind of supports the fact that we're maintaining our visibility and able to backfill the backlog with awards that you see the actual revenue from SCE are kind of burning off. Again, this backlog still remains the $2.8 billion represents something between two and five years worth of revenue, right? Yeah. That hasn't changed. That's helpful. Thank you. My follow-up question. I wanted to maybe dig in a little bit to the RNG business. You know, in early June, the EPA reduced the RVO for D3. You know, as you mentioned, that impacted prices temporarily. However, prices have since they've since begun to recover. I was just curious what you're hearing from counterparties in terms of RNG industry supply growth. Is it underperforming expectations? Maybe part and parcel with that, do you have any market insights on how the EPA might set the RVO as we think about 2023? Thank you. Sure, Kat, I mean, the latter, I think the answer is kind of gonna be no. I don't think we're gonna express our opinions on what we think they might do. The market overall, I think that we have been, as you might expect, internally focused on the 18 projects that we've got in development and construction, right? The way that the supply works, you know, the supply chain has slowed things in terms of implementation for many of the folks on the street that are developing and building RNG projects. I think that that's something that we face, and we continue to see. I mean, I hate to call them competitors because it's not like we're actually chasing after the same exact assets, right? I mean. Yep. You know, what I think you'll probably see is trend-wise, we're continuing to see an increased focus by parties on voluntary purchases of renewable natural gas. I think that trend is actually looking positive for the industry overall. It certainly could be for us. I mean, I outlined our RIN monetization strategy pretty clearly this time in the script. I think that we feel very good about what the economics look like on the assets that we have in development and then what we're planning on putting in the ground over the next several years. Yeah. I mean, if I may add, we continue to be very bullish in that segment despite some of the drop on the prices on the RINs and so on. It's even when I pointed out on the inflation point of view, still the economics spells a lot very good for those assets. The only issue is with getting the equipment and getting there on time and executing and getting the permits. Mm-hmm. Thank you. Our next question comes from George Gianarikas of Canaccord Genuity. Your line is open. Thanks so much for taking my question. Just quickly to dig in a little bit into the momentum in Europe, can you just expand a little bit there and tell us which technologies are gaining traction? Second, do you feel like you have the assets on the ground to take advantage of the momentum you're seeing? Should you expand it through additional sales offices or through acquisition? Just if you could highlight to us what you're thinking about there. Thank you. We're looking all of the above. Basically, we are looking for acquisitions, we are looking to add more assets. Actually, we have hired a couple of headhunters to help us out to build our infrastructure, the assets people. But some of the projects that we are seeing, they're getting to be more sophisticated, similar to what we see over here, comprehensive. I mean, I visited one of the jobs that we did at South University of London, and they had geothermal heat pumps. We pretty much across the board, solar, microgrids, battery storage, lights, everything else that we are doing over in the United States, they are doing it there and more. One of the things that they had done on the solar, they also had the solar panels, but also, they provided the water heating for the dorms. The energy prices being what they are in Europe, I know we're trying to on the southern part of Greece, to do some solar installations. I asked the government there, "What do you think the likelihood is of them happening?" They said, "We desperately need every kW or kWh we can generate." But we need help in building up our infrastructure there, and we are working on it. Can I ask one follow-up just on supply chain? You've mentioned pain points there several times during the call. Can you kind of help us dig in as to what exactly those pain points are? It sounds like battery cells may have improved a little bit. Is it more labor related? What sorts of equipment are you still having a hard time getting your hands on? And thank you. Well, on the batteries, as far as we're talking about the projects that we have right now in delivery, we have them. Sometimes getting some other equipment, especially with the RNG plants, it has become a little bit more difficult to get in there. Transformers, for example. We're lucky we have the transformers for the Southern Cal projects, but for some other installations that we are looking at, that has become a bottleneck. Basically, what happens now, it extends the implementation of new projects. Mm-hmm. The timelines are the key issue. Yeah. Right? It's all about delivery timelines. Yeah. You know, luckily, we work in a market where in public procurement we can lay out realistic timelines from the get-go when we're talking in terms of proposals so that we kind of factor in the expectations and if timelines compress, then we can deliver early, right? But we're not expecting timelines to compress until we actually see it start to happen. So we're trying to be realistic about that. Then at the same time, look, to be honest, we've continued to expand the number of suppliers that we have in any category of equipment. So we are ensuring that not only are those folks having to compete on price, they're competing on, you know, customer service, delivery timelines, and quality, right, across the board. We're certainly investing resources in additional, you know, what I'll call procurement management practices within the company. Thank you. Thank you. Our next question comes from Chip Moore of EF Hutton. Your line is open. Thanks for taking the question. Sure. Wanted to follow up on European activity specifically, you know, obviously, Vattenfall played a pretty big role in Bristol. Can you maybe just talk about the types of discussions you're having with some of these in-country partners for some of these larger potential projects? You know, have those been picking up since you've gained a little more notoriety? We've got a few jurisdictions outside of the U.K. where this is happening. Certainly the U.K., while Vattenfall was a big partner there, you know, by and large, a lot of the efficiency business and a lot of the proposal activity that we're seeing over there, we're going on our own, much like we do here. Yeah. Right? You know, as Ameresco continues to push itself as a one-stop shop, we tend to propose these things on our own. However, when you go into other European countries, oftentimes it makes a lot of sense to have a local partner to work with in order to secure additional business. With the uptick in the energy prices, we're starting to see that, and we're starting to see those opportunities. You know, technology speaking, George mentioned solar. Wind is certainly relevant. Street lighting is certainly relevant. But we also believe the broader energy efficiency that we're seeing in the U.K. will equally be showing up in some of these other countries. I think that we, yeah, we're pretty bullish on the opportunity over there. Go ahead, George. No, that basically and some of them, for example, they might have some solar assets they are developing, and they need financial partners and to bring them over the hump or wind farms and so on. We get all kinds of different proposals you might call it, of potential partnerships and so on. That might accelerate our development there since we do not have enough legs on the ground. Got it. Understood. That's helpful. All right. Thank you. Thank you. Thank you. Yeah. Our next question comes from Chris Souther of B. Riley. Your line is open. For the 2024 and how things are shaping, it sounded like things are still pretty on track here. I just wanted to get a sense, when do you think we'll have like, you know, visibility of kind of the energy asset portfolio, you know, can give you confidence like, hey, it's, you know, 80%, 100%, you know, based on kind of the backlog of projects and, you know, the energy asset portfolio. Like, what would be the timing where we could, you know, expect you guys to say, hey, this is when we should have it kind of in the bag, so to speak? You go ahead, Doran Hole. That's a question for you. Yeah, that's, you know, I'll open by saying not today. Yeah. As you might expect, we just talked about Europe, and we've talked about, you know, the potential for additional asset expansion over there, as well as here in the U.S. and in Canada. The market and the type of assets and the energy as a service category still evolving. We're building it up. As we stand today, I don't think that there is a plan of any sort to alter the cadence in the way we provide guidance going forward. We would expect that when we report full year this year, for 2022, we will be giving full year guidance for 2023. Yep. In 2023, you know, once we provide full year there, we'll talk about 2024. To the extent that we, you know, feel like we've got some level of confidence, you know, we can revisit your question at some point in advance of the 2024 guidance, to see whether you know, see whether we wanna talk about that or maybe, you know, maybe we decide to do another investor day, you know, we'll let you know. But at this point, I think we're gonna probably be sticking to our cadence that we've done in the past. Yep. Okay. Makes sense. Hey, on the SCE project, can you maybe just provide a bit more clarity? I know you called out you got a $33 million cash paid post the Q, which is good to see. I'm just curious, can you provide, like, you know, the total to-date cash collection on the project? And then, you know, on the accounts receivable or the accounts payable, excuse me, can you talk about any impact on the SCE that's also related to these as well? When we file the Q, you can take a look and see what you can see there in terms of disclosures about cash collections. Mark, do you have anything to add? Yeah. I mean, what I would say, Chris, is that we've continued to collect, you know, timely from SoCal, right, as we've invoiced them, right? We really haven't disclosed how much is in AR, although we have disclosed kind of subsequent receipts. You know, they're paying like clockwork. You know, that I think that's the positive there. You know, we're invoicing as quickly as the contractual milestones allow us to, and they're paying us within terms. That's, you know, I think that's, you know, the positive direction that we're heading in, and that's pretty much all I think we can say on that. Yeah. I mean, I think as we said before, we expect the normalcy to return once everything's kind of flowed through in that contract. You know, 10%-15% of around 12-month revenue, that's our working capital. Okay. Got it. That makes sense. Then just a last one here on the Inflation Reduction Act, Doran Hole. It may be too early to tell, but it seems like there's some new ways for nonprofits that could potentially utilize the investment tax credit more directly. I'm curious how you might think that might change the mix of those customers preferring, you know, owning the projects versus, you know, leasing PPA approach. You know, can you give any breakdown of either your current energy asset portfolio or the pipeline that's, you know, nonprofit versus kind of C&I type customers? I think at this stage it's premature to provide any kind of breakdown in terms of how that would look. I would tell you that numerous customer conversations are ongoing with respect to those specific provisions. Yeah. Regarding the limited direct pay that they put in the bill. As I said before, we need to see how this bill turns out. Right. We need to see what happens to that between now and when it actually gets signed. As you may expect, these things tend to move around as people start to make noise. Nevertheless, if it were to pass in its current form, that provision will be very relevant to us. Yeah. As I think we've talked about and we've said in our disclosures, 70% or so of our revenue comes from government-type entities. We do a lot of business with municipalities, not-for-profits, schools, hospitals, and we'll be evaluating the way that those projects, in particular solar and other energy qualifying energy projects are financed, given the fact that direct pay alternative will allow us to pursue projects without employing tax equity, right? Of course, we're looking at it very closely, and we do think it will be relevant to the extent that it stays in there. Okay. Just on the labor piece, it sounded like, you know, that wouldn't be much of a lift for you guys to be baking in a lot of the, you know, ways that they kind of go around. I'm just curious, is that, you know, you know, 75% you think that you already are kind of hitting those types of milestones they would need to see today? Is it, you know, basically 100%? Like, how kind of in line with, like, how the business operates today with hitting those different targets, do you think? Well, you know, without throwing out any particular percentages, I think that we just have such a familiarity with what those requirements mean. I think the devil will be in the details when you get into the nuts and bolts of, you know, the apprenticeship requirement and et cetera. Nevertheless, that's just gonna simply turn into a you know, a contractor discussion. We, you know, we've got to consider what our subcontractors are doing. Mm-hmm. how they're actually considering union or non-union or prevailing wage, et cetera. Again, it's an area that we're quite familiar with. It's Most of our work it covers. You know, it's prevailing wage or unions. Got it. Okay. Thanks, guys. Thank you. Our next question comes from Joseph Osha, Guggenheim. Your line is open. Hello, everybody. Just a couple of questions. Starting again with the RNG business. You know, the way that business looks now with the relatively short contracts and the RINs and everything is kind of a function of where it is. Given the way the world looks, I'm wondering if we could imagine you potentially, you know, managing to do some RNG projects that would be maybe 15- or 20- years with sort of a utility-grade offtake, 'cause that would make that business look very different. Then I have a follow-up. Yeah. That's why one of the reasons right now we do not execute those long-term contracts because we are of the opinion that eventually utilities, and we're talking to some of them, of colleges, universities, where they have cogeneration plants. In order to get to carbon neutral, they will need long-term contracts. The price now, the discount that some of them, the 10- or 15-year contracts, it's not attractive. Down the road, I'm very confident that you will see long-term contracts, and we will execute some of them. It might be 10, 15, it might be 20 years. Which of course it will give us much better predictability to our numbers and so on. Better project financing. Exactly. We are very carefully monitoring that. We spend a lot of time. At the end of the day, we envision a day that we will be executing those long-term contracts at the right price. The issue right now is just that the ex-RIN pricing isn't there yet. Yeah. Look, I mean, the way that we've been working the market, I mean, you saw we are over 90% hedged for this year. Even though the prices went down, it didn't have any material impact on us. We have done great analysis. Right. The board asks those kind of questions looking forward, you know, what kind of discount we will get if we were to execute longer-term contracts and so on. We felt more comfortable using the strategy that we have right now. As prices go up, don't be surprised that you will see us that 50% maybe going to 60 or 65%. Because the price is. Thank you. for some of those contracts is shifting upwards. That makes sense. Second, this is, I guess kind of an interlocking question. Everything you've done so far in energy storage has been lithium-ion. Is there any potential that we could see you perhaps looking at, deploying, some other types of storage technology in particular? Because one wonders whether there may be, in addition to all the credits we've been talking about, potentially some DOE loan financing out there. I'm just wondering how you think about that. We think a lot about it. Yeah. We've got some kind of a central sort of repository of new technology review that goes on, and we're constantly looking at new technologies. We do have a project in Nova Scotia that we've disclosed, and that one, without talking about the specifics of the manufacturer or the chemistry type, is not lithium-ion. We are putting a battery in place as part of an installation. It's currently under construction right now. We do, and we will, provide that we feel good about the quality of the product, and we can stand behind the installation the same way we do with all of the rest of the products. If that, you know, if that results in, you know, a chemistry that is either more efficient, less costly, has better degradation tables, longer duration, whatever it might be, all that does is give us more options in terms of what our customer is looking for. Yeah. Then just on the DOE front, I'm curious whether you're thinking about whether the LPO could be a factor here for some newer technologies, whether that's relevant for you at all. It certainly could be, yes. For sure. I would say so. I think the call is working with them or something like that. Yeah. The LPO. Sorry, just to be clear, you know, like the way that they're approaching things, for the size and scale of the type of projects that we do, you know, it isn't glaringly obvious. However, especially given the direct relationship we have with the federal government in so many different places, it would be. We'd be remiss if we weren't in regular conversations with them. Right. about what they're doing, what they're doing it for, who they're doing it with, and where it fits within our business. Yes, those conversations go on. Thank you. Okay. Thank you. Okay. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day. Thanks.