Q2 2024 TC Energy Corp Earnings Call
Operator: Please wait while you are joined to the conference. © BF-WATCH TV 2021, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? [inaudible] , , , , , , , , , , , , , , Unknown Attendee, Tina Faraca, Annesley Wallace, Lee Thom, Rick Wilson, Tina Faraca, Unknown Attendee, Tina Faraca, Annesley Wallace, Lee Thom, Rick Wilson, Tina Faraca, Unknown Attendee, Tina Faraca, Annesley Wallace, Lee Thom, Rick Wilson, Tina Faraca, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? [inaudible] ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? , , , , , , , Unknown Executive, Unknown Attendee, Unknown Attendee, Unknown Attendee, Unknown Attendee, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? © BF-WATCH TV 2021 , , , , , , Thank you for standing by. This is the conference operator. Welcome to the TC Energy second quarter 2024 results conference call. Should you need assistance during the conference call, you may signal an operator by pressing star then zero.
Operator: Before Francois begins, I'd like to remind you that today's remarks may include forward-looking statements that are subject to important risks and uncertainties, including a successful shareholder vote on Southbow and reaching unanimous support from customers for a five-year settlement agreement on our NGTL system. We're proud to announce that it is an example of what's achievable when indigenous communities, governments, and industry come together. Never have I seen such strong prospects for North American natural gas demand growth. Second, we're seeing continued demand and reliability requirements from our utility customers. Third, power generation demand is expected to increase significantly.
Unknown Executive: Additionally, within 15 miles of our Columbia and ANR systems, we estimate approximately 9 gigawatts of coal-fired generation is set to retire by 2031. From a capacity project standpoint, progress on the offshore pipe installation, to address evolving needs, and the Incentive Mechanism from the Western Canadian Basin. The projects comprising the growth plan have targeted in service dates between 2027 and 2030, aligning with our net annual capital expenditure limit. Low-Cost Electricity in Ontario.
Unknown Executive: At our annual and special meetings in June, we received strong support from our shareholders to spin off the Liquids Pipelines business. The FX delta was driven by a peso that strengthened by 5% in the second quarter of 2023, which was an FX derivative gain for us. Income taxes decreased by $59 million in the quarter, in large part due to the peso FX delta I just mentioned.
Unknown Executive: This year's growth is driven by the full year impact of our 2023 project completion. Practically speaking, the most efficient closing date from an IT and financial reporting perspective would be the first day of the new fiscal quarter, which would be October 1st. Fixed income markets remain robust, particularly for investment grade companies.
Unknown Executive: The steady progress we're making against our 2024 priorities, combined with an exceptional outlook for our business. We've made significant progress towards achieving our 2024 deleveraging target. You know, our team is really laser-focused on getting the project placed in service on time and on budget as safely and efficiently as possible. And right now, we're in a really, really good position to do that.
Unknown Executive: We have had initial discussions around what would need to be true for early-in-service to take hold, but we haven't landed anything definitive just yet. So give us a little more time to finish up some of the outshore work, and those discussions; we'll get back to you thereafter.
Operator: Okay, perfect. The next question is from Jeremy Tonet with J.P. Morgan. Please go ahead.
Stan: Got it. Thank you for that. For the second one, I just want to ask, I guess, how you guys are progressing towards those productivity and cost-effectiveness initiatives you guys laid out within the last year. Great, thank you. ahead of plan are other franchises such that the percentage is lowered. But again, the backdrop, the macro backdrop around demand growth will present us with more investment opportunities in the future, albeit a bit smaller. And any meaningful cash inflows or outflows you're expecting as part of that. Yeah, this is Stan.
Stan: With respect to CGL, you know, we continue to work on the post-construction reclamation activities, which we should have completed by the end of this year. We did have one settlement with respect to cost recoveries. We're going to continue to pursue the other, and there is really no change in our guidance that at the end of the day, we expect to be in a net recovery position. Thank you for the leverage. We do not have an accrual for that, Rob, in our plan, you know, just based on confidence and legal review, Rob, but we'll know in the first quarter. Got it. And then, on a more positive note here, just given the...
Unknown Executive: Transcribed by https://otter.ai Okay, maybe I'm staying up there but pivoting to, On phase two of CGL, really no new updates. We've continued to progress work related to the project scope, the timeline, the engineering assessments, and to assess this expansion, including discussions about how we could further de-risk the project execution should it ultimately reach FID. Appreciate your time. Thanks.
Unknown Executive: So it really depends where the opportunity arises, but most of the power generation growth that we're seeing is along the Columbia and A&R systems. For the most part, there are isolated capacity pockets that we could use to incorporate into a project, but in many instances, it's going to require looping and or compression to capture these loads. The project is essentially that; it's an additional compressor station that's going to provide additional capacity going forward.
Unknown Executive: I think it's one station, three different units, if I'm not mistaken, five different ones. Ladies and gentlemen, this concludes the question and answer session. If there are any further questions, please contact Investor Relations at TC Energy. Go ahead, Mr. Wylie. transcript Emily Beynon