Algonquin Power & Utilities Corp. (AQN): Business Model Canvas [Dec-2025 Updated]

You've seen the headlines about Algonquin Power & Utilities Corp.'s big move-that massive 2025 divestiture really changed the game. Honestly, after all that shuffling, what you're looking at now is a much cleaner, pure-play regulated utility focused squarely on boring, reliable returns. We're talking about managing essential services for about 1.27 million customer connections across four countries while funding a $2.5 billion capital plan through 2027 to modernize the grid. If you want to see exactly how they plan to lock in those stable earnings and manage regulatory risk now that the renewable growth engine is gone, dive into the full Business Model Canvas below; it maps out the entire new playbook.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Key Partnerships

You're analyzing Algonquin Power & Utilities Corp. (AQN) as it solidifies its transformation into a pure-play regulated utility following major divestitures. The partnerships here are critical for regulatory stability and financial health post-restructuring.

Regulatory commissions (FERC, state/provincial) for rate approvals

Algonquin Power & Utilities Corp. relies heavily on state and provincial commissions to approve the rates that govern its utility operations, which now account for approximately 97% of its consolidated EBITDA following asset sales. The company is actively managing a docket of regulatory proceedings to ensure cost recovery and support its regulated growth plan.

• As of the third quarter of 2025, AQN was advancing proceedings at key entities including EnergyNorth Gas, CalPeco Electric, and Empire Electric.
• In Q3 2025, an approved settlement agreement was noted at EnergyNorth Gas.
• The Missouri Commission requested amendments to a stipulation agreement reached at Empire Electric during Q3 2025.
• The Arizona Corporation Commission approved a settlement in Q2 2025, resulting in a $4.2 million revenue adjustment for its water and wastewater facilities, effective July 1.
• As of January 30, 2025, AQN had 10 pending rate cases, requesting a total of approximately $200 million.
• The Federal Energy Regulatory Commission (FERC) approved the sale of the renewable energy business to LS Power in December 2024.

LS Power, buyer of the non-hydro renewable energy business for $2.1 billion

The divestiture of the non-regulated renewable energy business to a subsidiary of LS Power was a pivotal partnership that redefined AQN's structure. This transaction officially closed on January 8, 2025.

The net proceeds were intended to pay down existing debt and strengthen the balance sheet. This sale excluded AQN's hydro fleet.

Financial institutions for maintaining the target BBB credit rating

Maintaining a BBB investment grade credit rating is a stated financial objective for Algonquin Power & Utilities Corp.. Rating agencies like S&P Global Ratings and Morningstar DBRS partner with the company by providing ongoing assessments that guide financial discipline.

• Morningstar DBRS confirmed the Issuer Rating at BBB and revised the trend to Positive from Stable on January 30, 2025.
• S&P Global Ratings affirmed its 'BBB' issuer credit rating with a stable outlook on January 30, 2025.
• AQN expects to maintain BBB investment grade ratings through 2027.

This rating focus supports the expectation that no equity issuance will be needed through 2027.

Equipment and service vendors for grid modernization projects

As AQN pivots to a pure-play regulated utility, its capital focus shifts to its regulated assets, including significant investment in the grid. The 'Back to Basics' plan prioritizes capital investment in grid modernization.

The utility capital expenditures expected for the 2025 - 2027 period are approximately $2.5 billion. You'd expect vendors providing smart grid technology, distribution automation, and essential maintenance services to be key partners here, though specific vendor names aren't detailed in the latest public outlooks.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Key Activities

Algonquin Power & Utilities Corp. (AQN) focuses on operating electric, gas, and water utility systems across a defined international footprint. The Regulated Services Group manages a portfolio of these systems in the United States, Canada, Bermuda, and Chile. As of September 30, 2025, the Regulated Services Group served approximately 1,269,000 customer connections. For the trailing twelve months ending Q3 2025, the company's total revenue stood at approximately $2.37 Billion.

A core activity is executing the 'Back to Basics' utility customer-centric capital plan, which is designed to improve customer experience and drive operational efficiencies. This plan centers on focused utility execution and capital discipline over the near term. The company is targeting utility capital expenditures of approximately $2.5 billion for the period spanning 2025 - 2027. You can see the key financial targets tied to this plan here:

The company has explicitly stated there is no need for equity issuance expected through 2027 to fund this capital plan. For the third quarter of 2025, Algonquin Power & Utilities Corp. reported an Adjusted EPS of $0.09, beating analyst forecasts of $0.06.

Filing and managing regulatory rate cases is a crucial activity to secure revenue increases and support infrastructure investment. In the first quarter of 2025, the company secured authorized revenue increases totaling approximately $22.3 million in aggregate from conclusive orders in four rate cases. Furthermore, during the second quarter of 2025, Algonquin Power & Utilities Corp. filed general rate cases in Massachusetts and Arizona, seeking a combined rate request increase of $73.6 million. The filing for the Litchfield Park Water and Sewer System in Arizona specifically targeted a 9.55% allowed return on equity (ROE).

Generating hydroelectric power from Canadian facilities is a key component of the remaining asset portfolio, managed under the Hydro Group, as the non-hydro renewable business was sold in January 2025. The Hydro Group's assets are located in Canada and include facilities in several provinces. The performance of this segment has been strong:

• Hydro Group net earnings soared 176% year-over-year in Q2 2025.
• The Hydro Group saw a 343% year-to-date increase in net earnings for the first half of 2025.
• The combined gross generating capacity of the hydroelectric facilities is approximately 112 MW.
• The net generating capacity for the Canadian hydroelectric fleet is approximately 104 MW.
• The facilities are located across the Canadian provinces of Alberta, Ontario, New Brunswick, and Quebec.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Key Resources

You're looking at the core assets that power Algonquin Power & Utilities Corp.'s stability, which is now heavily weighted toward its regulated utility operations following the strategic pivot completed in early 2025. These resources are what allow the company to generate the steady, predictable returns management is targeting.

The foundation of the business is its Regulated utility infrastructure (pipes, wires, plants). This includes the physical assets managed by the Regulated Services Group across the United States, Canada, Bermuda, and Chile. As of September 30, 2025, this group's regulated electric, gas, water, and wastewater systems serve a vast customer base. Furthermore, the Regulated Services Group holds significant generating assets, owning and operating approximately 2.0 GW gross capacity and holding investments in assets with approximately 0.3 GW of net generation capacity.

The scale of the regulated footprint is best seen through the customer count. Algonquin Power & Utilities Corp. holds utility franchises and licenses across its service territories, which, as of September 30, 2025, covered approximately 1,269,000 customer connections. This is right in line with the stated goal of serving around 1.27 million connections.

The company's dedicated Hydroelectric generation facilities in Canada form a distinct, stable asset base within the Hydro Group. This group operates 14 hydroelectric generating facilities across the Canadian provinces of Alberta, Ontario, New Brunswick, and Quebec. As of late 2025, these facilities have a combined gross generating capacity of approximately 112 MW and a net generating capacity of approximately 104 MW.

To maintain and grow this regulated base, Algonquin Power & Utilities Corp. has a clear financial commitment. The company has outlined $2.5 billion in planned utility capital expenditures (2025-2027), focused on organic investment, grid modernization, and customer-centric infrastructure improvements. Honestly, the fact they expect no need for equity issuance through 2027 while funding this capex is a key signal of capital discipline.

Underpinning all of this is the Experienced management team focused on regulatory alignment. The 'Back to Basics' strategy explicitly prioritizes achieving constructive regulatory outcomes. This focus is translating into tangible financial targets:

• Expected improvement in Earned Return on Equity (ROE) by approximately 300bps to reach approximately 8.5% by 2027.
• Operating expenses as a percent of revenue are targeted to improve by 5-7% by the end of 2027.
• Recent regulatory wins, like filing rate cases in Massachusetts and Arizona, aim to secure approximately $73.6 million in rate increases.

Here's a quick look at the capital plan and related targets:

The management team is clearly banking on operational excellence within the regulated sphere to drive value; they are targeting Adjusted Net Earnings per share in the range of $0.30 - $0.32 for 2025. Finance needs to track the progress on those rate case filings-that's where the near-term upside to the ROE target is locked in.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Value Propositions

You're looking at the core promises Algonquin Power & Utilities Corp. (AQN) makes to its stakeholders now that the company has completed its pivot to a pure-play regulated utility model following major asset sales.

Safe, secure, and reliable delivery of essential utility services

Algonquin Power & Utilities Corp. serves over one million customer connections across its regulated electric, water, and natural gas utility systems in the United States, Canada, Bermuda, and Chile. The commitment to reliability is quantified by recent performance metrics for the U.S. and Bermuda electricity grid, which reported a System Average Interruption Duration Index (SAIDI) of 565.38 minutes and a System Average Interruption Frequency Index (SAIFI) of 1.77 rate for fiscal year 2024.

• Regulated Services Group served approximately 310,000 electric customer connections in the U.S. and Bermuda as of September 30, 2025.
• Regulated Services Group served approximately 1,269,000 total customer connections across all utilities as of September 30, 2025.

Predictable, stable earnings profile from regulated assets post-divestiture

The value proposition here centers on the stability derived from the core regulated business, which was significantly bolstered by the sale of the non-hydro renewable energy business on January 8, 2025, for net proceeds of approximately $2.1 billion. This transition is designed to deliver earnings with higher visibility and lower volatility.

Here's a look at the financial stability and outlook anchored in the regulated business performance and forward guidance:

The company aims to achieve this while expecting no need for equity issuance through 2027. This focus supports the goal of maintaining a business risk profile consistent with its BBB flat investment grade credit ratings.

Cost-effective energy and water solutions for customers

Algonquin Power & Utilities Corp. aims for cost-effectiveness through operational improvements and successful regulatory outcomes that allow for necessary revenue recovery. The company obtained conclusive orders in four rate cases during the first quarter of 2025, resulting in aggregate authorized revenue increases totaling approximately $22.3 million. Furthermore, forward-looking targets point to efficiency gains.

• Operating expenses as a percent of revenue expected to improve by 5-7% by the end of 2027.
• One analysis suggests $21.2mn in aggregate incremental annual revenue recognized from rate cases, with another $94.3mn in new applications pending as of July 2025.
• Water provided was 150,459 thousand m3 in 2024.

Commitment to sustainability through continued hydro operations

The Hydro Group remains a core component of Algonquin Power & Utilities Corp.'s operations, consisting of hydroelectric generation facilities located in Canada. This segment demonstrated significant earnings strength, with net earnings increasing 176% in the second quarter of 2025 compared to the prior year period. The 2024 data for the Hydro Group shows a gross generating capacity of approximately 116 MW.

The Hydro Group's contribution to electricity generated in 2024 was 53 GWh (Hydroelectric, based on Regulated only data). This retained hydro fleet represents the sustainable generation assets kept post-renewables sale.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Customer Relationships

You're looking at how Algonquin Power & Utilities Corp. (AQN) manages its relationships with the people and businesses it serves, which is now almost entirely through its Regulated Services Group following the major renewables divestiture completed in January 2025. The core of this relationship is built on the promise of essential, uninterrupted service.

Regulated Service Model, Focusing on High Reliability and Service Quality

The relationship is fundamentally a regulated one, meaning service quality, reliability, and rates are overseen by state and provincial commissions. Algonquin Power & Utilities Corp. is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions. This commitment is paramount for maintaining its BBB investment grade ratings, which the company expects to maintain through 2027. The Regulated Services Group is the engine for this stability, serving over one million customer connections across its electric, water, wastewater, and natural gas utilities.

Here's a look at the scale of the customer base as of late 2025:

For electricity customers in the U.S. and Bermuda, reliability metrics from 2024 give you a baseline for service quality: the System Average Interruption Duration Index (SAIDI) was 565.38 minutes, and the System Average Interruption Frequency Index (SAIFI) was a rate of 1.77. The Regulated Services Group actively seeks to provide high quality and reliable services to these customers.

Customer-Centric Focus as Part of the New Back to Basics Strategy

The new "Back to Basics" utility customer-centric capital plan, announced in June 2025, explicitly puts the customer experience first. The CEO stated a commitment to "delivering outcomes and experiences to customers in the moments that matter to them." This isn't just talk; it's tied to capital deployment. Algonquin Power & Utilities Corp. is focusing on organic capital investment, projecting utility capital expenditures of approximately $2.5 billion expected for 2025 - 2027, much of which is directed toward grid modernization and customer-centric infrastructure improvements. The goal is to intertwine operational excellence and stakeholder engagement into the Company's DNA.

Direct Customer Service and Billing for Utility Connections

The day-to-day relationship involves direct interaction for service delivery and billing across multiple commodities. The Regulated Services Group manages these connections, which include:

• Regulated electrical distribution utility systems.
• Water distribution and wastewater collection systems.
• Natural gas utility systems.
• Transmission operations.

Growth in the Regulated Services Group's net earnings, which were up approximately 43% year-over-year for Q1 2025, was partly driven by the implementation of new rates across several of its electric, water, and gas utilities. For instance, Q3 2025 net earnings for the group were fueled by growth from approved rate adjustments across gas and water utilities.

Public and Regulatory Engagement to Justify Rate Increases

Securing constructive regulatory outcomes is a key pillar of the "Back to Basics" strategy, as it directly impacts the ability to recover costs and earn an appropriate return. You see this engagement in active rate case filings across their service territories. The company understands that any rate adjustments are challenging for some customers, and affordability is taken seriously, but they frame these requests as necessary for modernizing infrastructure and meeting reliability standards.

Here are some recent regulatory actions to justify necessary revenue adjustments:

• Q1 2025: Authorized revenue increases totaling approximately $22.3 million from conclusive orders in four rate cases.
• Q2 2025: Filed general rate cases seeking a combined $73.6 million in rate increases across New England Natural Gas and Litchfield Park Water.
• Arizona Rate Case: Targeting a 9.55% allowed return on equity (ROE).
• Empire Electric (Missouri): Refiled seeking a net operating revenue increase of $92.1 million, though the MPSC suspended tariff sheets until January 2, 2026.

The company is actively working to align specific metrics and milestones with regulatory commissions to demonstrate improved and predictable customer service, as seen in the feedback received from the commission regarding the Empire Electric system in Q3 2025.

Finance: draft 13-week cash view by Friday.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Channels

The delivery of services for Algonquin Power & Utilities Corp. (AQN), primarily through its Regulated Services Group and the Liberty brand operating companies, relies on an extensive physical infrastructure network and localized service points.

Physical transmission and distribution networks (wires and pipes)

The physical channel backbone consists of regulated utility systems across multiple commodities. As of September 30, 2025, the Regulated Services Group served approximately 1,269,000 customer connections across the United States, Canada, Bermuda, and Chile. This infrastructure includes the physical wires for electric distribution and the pipes for water, wastewater, and natural gas delivery. For instance, the Liberty New York Water operations alone include approximately 1,270 miles of water mains and distribution lines. The company has a forward-looking utility capital expenditure plan of approximately $2.5 billion expected for 2025 - 2027, which supports the maintenance and expansion of these physical channels.

Liberty brand operating company subsidiaries

The primary customer interface is through the Liberty operating business, which manages the regulated utility services. These subsidiaries deliver services across a diversified portfolio of commodities and geographies. As of March 31, 2025, the customer connections were segmented across these regulated utility systems:

• Electric distribution utility systems served approximately 310,000 connections.
• Natural gas distribution utility systems served approximately 378,000 connections.
• Water distribution and wastewater collection utility systems served the remaining connections.

The scale of the customer base served by the Regulated Services Group as of the third quarter of 2025 is detailed below:

The company is committed to providing these services in 13 U.S states, 1 Canadian province, Bermuda, and Chile.

Direct customer billing and online service portals

Customer interaction for billing and service management is facilitated through direct channels. Algonquin Power & Utilities Corp. is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions. The company maintains online service portals for customer transactions, supporting the over one million customer connections. This digital channel supports the overall service delivery to the customer base across the various Liberty entities.

Utility service centers in local operating regions

Service centers provide localized support, reflecting the company's "Think Global, Act Local" business model. These centers are situated within the specific operating regions of the Liberty Utilities subsidiaries across the service territories. The regulated utility systems are located in U.S. states including Arkansas, California, Kansas, Missouri, Nevada, New Hampshire, and Oklahoma for electric service, and Georgia, Illinois, Iowa, Massachusetts, New Hampshire, and Missouri for natural gas service. The physical presence of these centers is integral to delivering local utility management, service, and support to small and mid-sized communities.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Customer Segments

You're looking at the core base of Algonquin Power & Utilities Corp. (AQN) as they transition to a pure-play regulated utility. The customer base is defined by the regulated utility systems under the Regulated Services Group.

The total number of ratepayers served is quantified by the customer connections. As of September 30, 2025, Algonquin Power & Utilities Corp. served approximately 1,269,000 customer connections. This figure translates to approximately 3,170,000 customers using an average of 2.5 customers per connection.

The regulated utility connections span several jurisdictions. Algonquin Power & Utilities Corp. operates a diversified portfolio across the United States, Canada, Bermuda, and Chile. The company is committed to providing services to over one million customer connections, largely concentrated in the United States and Canada.

While the specific breakdown between Residential and Commercial and Industrial utility customers isn't explicitly detailed in the latest reports, the customer base is served through electric, natural gas, and water/wastewater utility systems. The commodity breakdown as of late 2025 provides the necessary detail on the service types provided to these end-users.

Here is the breakdown of customer connections by utility service type and geography based on the latest available figures:

The electric distribution systems, which serve a portion of the residential and C&I segments, were approximately 310,000 connections as of September 30, 2025. The natural gas distribution systems served about 378,000 connections as of the same date. The water and wastewater utility systems, which also serve these customer types, reported approximately 578,000 connections as of March 31, 2025.

The customer base is served by utility systems that are rate-regulated, meaning their revenue requirements and rates are approved by regulatory authorities in their respective operating jurisdictions. Algonquin Power & Utilities Corp. is focused on delivering outcomes and experiences to these customers as part of its 'Back to Basics' plan.

• Regulated electrical distribution utility systems are in US states including Arkansas, California, Kansas, Missouri, Nevada, New Hampshire, and Oklahoma, plus Bermuda.
• Regulated natural gas distribution utility systems are in US states including Georgia, Illinois, Iowa, Massachusetts, Missouri, New Hampshire, and New York, plus the Canadian Province of New Brunswick.
• Regulated water and wastewater distribution systems are in US states including Arizona, Arkansas, California, Illinois, Missouri, New York, and Texas, plus Chile.

Finance: confirm the exact breakdown of the 1,269,000 connections into Residential vs. Commercial/Industrial by next Tuesday.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Cost Structure

You're looking at the core costs Algonquin Power & Utilities Corp. faces as it pivots to a pure-play regulated utility, which means a heavy reliance on infrastructure spending and debt management. The cost structure is dominated by the physical assets required to run the utility business.

High fixed costs for utility infrastructure maintenance and operations are a given for Algonquin Power & Utilities Corp. These costs are tied to keeping the lights on and water flowing for over one million customer connections. For context on the scale, in the period ending December 31, 2024, reported Operating expenses were $879,950 thousand in one period and $823,914 thousand in the prior period. The company is actively targeting better cost control, forecasting that operating expenses as a percentage of revenue will improve by 5-7% by the end of 2027. In the third quarter of 2025, Algonquin Power & Utilities Corp. reported an operating expense reduction of $11 million year-over-year, attributed to efficiency gains. Still, some of those savings were timing-related, with an expected partial unwind in Q4.

The next major cost component is significant capital expenditures for grid modernization. Algonquin Power & Utilities Corp. has a disciplined capital plan focused on its utility assets. The company has planned utility capital expenditures totaling approximately $2.5 billion for the period spanning 2025 to 2027. This investment is central to the "Back to Basics" strategy, aiming to improve operational efficiency and customer-centric infrastructure.

You can see how these costs stack up against the backdrop of the balance sheet, especially regarding debt. Interest expense on corporate debt has been a significant drag, but deleveraging efforts are meant to ease this. For the year ended December 31, 2024, the reported Interest expense was ($363,576 thousand), compared to ($308,440 thousand) the year before. The company has been actively reducing debt, notably through the sale of its renewable energy business, which is intended to improve financial flexibility and support a BBB credit rating.

Finally, there are the costs associated with operating in a regulated environment, namely regulatory compliance and legal costs for rate case filings. Algonquin Power & Utilities Corp. had its most active rate case schedule in history during 2024, with plans to file cases across several utility systems. The company is focused on reducing regulatory lag, which is the delay between investing capital and recovering those costs through customer rates. As of the third quarter of 2025, they secured approvals for rate increases in Massachusetts and Arizona totaling $73.6 million. Furthermore, three rate cases alone represent over $700 million of capital already invested but not yet reflected in rates. Litigation expenses are also noted as an item excluded when calculating Adjusted EBITDA, indicating these costs are present.

Here's a quick look at some of the key financial figures impacting the cost structure:

Finance: draft 13-week cash view by Friday.

Algonquin Power & Utilities Corp. (AQN) - Canvas Business Model: Revenue Streams

The revenue streams for Algonquin Power & Utilities Corp. (AQN) are fundamentally anchored in two distinct operational segments: the regulated utility business and the remaining hydroelectric power generation assets.

Regulated utility tariffs and rates for electric, gas, and water services form the bedrock of predictable cash flow. These revenues are derived from the rates approved by various regulatory bodies across the United States, Canada, Bermuda, and Chile, covering electric, water distribution, wastewater systems, and natural gas utility services. The company serves approximately 1,269,000 customer connections as at September 30, 2025. Progress in regulatory proceedings, such as the approved settlement agreement at EnergyNorth Gas and a proposed settlement at CalPeco Electric during Q3 2025, directly impacts future revenue stability.

The Revenue from the Regulated Services Group is a key metric for assessing the core business performance. For the three months ended September 30, 2025, the Regulated Services Group recorded revenue of $582.70 million. This segment saw a year-over-year increase in net earnings of 61% for the same quarter, reaching $104.1 million, driven by the implementation of approved rates.

Contracted power sales from the Hydro Group assets represent the second component. While the renewable energy business (excluding hydro) was sold in January 2025, the remaining Hydro Group consists of hydroelectric generation facilities in Canada. Net earnings for the Hydro Group in Q3 2025 were $3.30 million.

The Allowed return on equity (ROE) on invested capital base is crucial for the regulated segment. While the realized ROE for Q3 2025 is not explicitly stated, the forward-looking outlook suggests an expected improvement in Earned ROE to approximately 8.5% by 2027. In specific rate cases, such as the one at Empire Electric in Missouri, the demanded ROE was noted at 10% on an equity ratio of 53.1%.

Here is a look at the key financial data points related to these revenue drivers from the third quarter of 2025:

The revenue generation profile is supported by several operational achievements and regulatory milestones:

• Implementation of approved rates across gas and water utilities provided a revenue tailwind.
• Slightly favourable weather at the Empire Electric System contributed to Q3 2025 results.
• The Regulated Services Group serves approximately 310,000 electric customer connections as of September 30, 2025.
• The company expects utility capital expenditures of approximately $2.5 billion for the 2025 - 2027 period.
• The expected Adjusted Net Earnings per share for 2025 is within a range of $0.30 - $0.32.