Fortis, Inc. Q3 FY2024 earnings call

• Capital Expenditures: Through September, $3.6 billion invested in energy systems, full-year capex expected at $5.2 billion, new 5-year capital plan of $26 billion supporting 6.5% average annual rate base growth through 2029.
• Dividend: Board declared 4% increase in Q4 dividend, extended 4%-6% annual dividend growth guidance to 2029.
• Regulatory and Projects: MISO released final map of tranche 2.1 LRTP projects, ITC's Big Cedar load expansion project in Iowa received approval, progress in Arizona with TEP's IRP and data center opportunities.
• Financial Results: YTD EPS $2.45, $0.08 higher than last year, driven by new rates and rate base growth across utilities.

For the third quarter, the U.S. electric and gas utilities contributed a $0.05 EPS increase quarter-over-quarter, driven by UNS Energy (new customer rates, higher production tax credits, and increased investment market value, moderated by labor inflation). Central Hudson's EPS contribution was comparable to Q3 2023, with rate base growth and higher ROE offset by operating cost timing. ITC had a $0.02 EPS increase due to rate base growth, partially offset by higher finance costs. The Western Canadian Utilities segment had a $0.04 lower EPS for the quarter, with FortisAlberta showing growth but offset by other factors. The Corporate and Other segment reflected a $0.02 EPS decrease due to disposition of Aitken Creek timing and higher finance costs.

• Full-year capital expenditures expected at $5.2 billion, new 5-year capital plan at $26 billion.
• Extended dividend growth guidance to 2029 at 4%-6% annual.
• Expect more visibility on Arizona load growth negotiations in the next few quarters.

• FERC order lowering MISO ROE, potential refunds of approximately USD 26 million for ITC.
• Regulatory uncertainties in Arizona regarding new retail load tariffs and required protections for existing customers.
• Impact of political landscape on BC gas distribution growth prospects.

Q: Talk about potential upside levers on the capital plan, funding.

A: Jocelyn Perry states they're committed to maintaining balance sheet, have ATM available for flexibility but don't need it immediately.

Q: Elaboration on TEP and ITC.

A: David Hutchens discusses big potential in data center opportunities at TEP and growth in ITC's projects like Big Cedar load expansion.

Q: Thoughts on BC election impact on gas distribution growth.

A: Roger Dall’Antonia says NDP still has majority, no major change expected in gas infrastructure opportunities.

Q: Timelines for Arizona retail load clarity.

A: David Hutchens says 2025 is a reasonable period for clarity, expecting regulatory process but supportive regulators.