Q3 2025 Fortis Inc Earnings Call
Thank you for standing by. This is Betsy the conference operator.
Welcome to the Fortis Inc, third quarter, 2025 earnings and new 5-year Capitol Outlook conference call.
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I would now like to turn the conference over to Stephanie Amaimo, Vice President of Investor Relations. Please go ahead.
Thanks Betsy and good morning, everyone. Welcome to Fortis third quarter, 2025 results and new 5-year Capitol Outlook conference calls. I'm joined by David Hutchins, president and CEO Jocelyn Perry, executive VP, and CFO other members of the senior management team as well as CEOs from certain subsidiaries,
Before we begin today's call, I want to remind you that the discussion will include forward-looking information which is subject to the cautionary statement. Contained in the supporting slideshow,
Actual results can differ materially from the forecast, projections included in the forward-looking information. Presented, today non-gaap Financial measures reference in a prepared. Remarks are reconciled to the related US, gaap Financial measures and our third quarter 2025 mdna also, unless otherwise specified, all financial information references in Canadian dollars with that, I will turn the call over to David.
Thank you and good morning everyone.
Today, we are proud to announce another solid quarter marked by strong execution and momentum from our regulated growth strategy.
Operationally. We continue to deliver safe and reliable service to our customers. And through September, our utilities invested 4.2 billion in our systems. For the full year, we expect to invest approximately 5.6 billion
Financially, we delivered adjusted earnings per share for the third quarter of 87 cents.
In September, we completed the sale of Fordyce TCI.
The sales strengthens our balance sheet and reduces our risk profile.
including the non-regulated hydrogenation facilities to the government of biz
I'm happy to announce that the transition closed last Friday, and that foris is now comprised of 100% regulated assets.
We recognize these were long-held Assets in the Florida's family and we wish our best to the teams in Turks and Caicos, and Biz as they continue to serve their customers and communities.
And today, we are pleased to unveil our 5-year, Capital plan, and announce that our board of directors has declared a fourth quarter dividend, increase of approximately 4%.
Our new 28.8 billion 5 year Capital plan is up 2.8 billion compared to the prior plan.
This supports rate-based growth of 7% and annual dividend growth. Guidance of 4 to 6% through 2030.
This new plan was developed with a strong emphasis on maintaining customer affordability.
We prioritize Capital Investments, that provide cost savings that flow through to our customers.
This includes the call that to natural gas conversion at the Springville Generating Station in Arizona which is more economical compared to the new energy. Resources included in the prior plan.
Are utilities are also continuing to manage operating costs by finding efficiencies through Innovation and process improvements.
As you can see on the slide, the growth in our 5-year plan, is largely driven by higher transmission Investments.
At ITC. The 2 billion dollar increase was primarily driven by new interconnections including the Big Cedar load Expansion Project as well as the MSO long-range transmission plan and Baseline reliability projects.
At ins trans transmission and distribution Investments increase 1 billion dollars with furk. Regulated transmission, making up 700 million of the increase. This was largely attributed to a new transmission line at te
Generation Investments at ins were reduced by 900 million driven, primarily by the planed conversion of the Springerville Generating Station to natural gas, which I spoke to previously.
The remaining increases driven by growth at our other regulated utilities and a higher assumed foreign exchange rate.
The new plan is highly executable with approximately 77% directed towards transmission and and, and distribution Investments and critical infrastructure that drives stable predictable returns
The capital program is low-risk and anchored in 100% regulated projects and includes only 11 major capital projects representing 21% of the plan.
Consolidated rate, bases expected to increase by 16 billion from approximately 42 billion in 2025 to 58 billion. In 2030 supporting average annual rate based growth of 7%. This is up 50 basis points from the 6.5% in the prior plan,
Now, it'll take a few minutes to dig a little deeper into our larger utility Capital plans.
Itc's Capital plan of 9.8 billion is the largest in the company's history and support strong rate, based growth of 8% up. 100 basis points compared to the prior plan.
Key elements of itc's plan, includes Investments for base infrastructure, mso's long-range transmission Plan, customer connections and grid security.
Significant opportunities above and beyond the base plan existed ITC, including a proximately 3.3 to 3.8 us billion US Dollars. Post 2030 for tranche 2.1 projects assigned through rights of first refusal.
Work is also underway at ITC to evaluate projects within the Tron. 2.1, portfolio that our subject to the competitive bidding process. If any of these projects are awarded to ITC, would be incremental to itc's plan.
Other avenues of growth at ITC include customer, connections associated with associated, with over 8,000, megawatts of load growth for proposed data centers and economic development projects in various stages of development across their footprint. This is up 3,000 megawatts just in last quarter.
ITC may also realize future opportunities associated with the ongoing miso LRT. LRT process
All in all, it's a very exciting time at ITC with the significant transmission buildup.
Let's now turn to unseen energy. Their Capital plan of 5.6 billion supports average annual rate based growth of approximately 7%.
As a vertically integrated utility, investments are spread across the value chain. Notably, a third of the capital plan is concentrated in transmission, with the balance consisting of generation and distribution investments.
Called a natural gas. Conversion of 800 megawatts at the Springerville Generating Station which is aligned with teepees exit from coal by 2032, as well as the Black Mountain generation project at UNS Electric.
Well, there's no new generation reflected in the plan associated with data centers or other large load growth. A new era of demand is approaching with a significant interconnection queue.
As we discussed last quarter, TP reached an energy Supply agreement, to serve a demand of approximately 3, 300 megawatts that starts to ramp up in 2027 and will use existing and planned capacity.
the agreement awaits ACC approval as well as other contractual contingencies
Negotiations are actively ongoing for an incremental, 300, megawatts of capacity, to support a full buildout of 600. Megawatts at this initial site. TP is also an active negotiations for additional capacity to Second Sight in the range of 500 to 700 megawatts.
If Agreements are finalized for these subsequent phases, we estimate New Generation in the range of approximately 1.5 to 2 billion. US dollars through 2030 would be required as well as new transmission.
We expect to supply will include a mix of renewable energy, natural, gas, generation, and energy storage.
All agreements will be structured to maintain reliability and provide Financial protections for our customers and the company.
Other opportunities beyond the plan include new energy, resource Investments, required at TP and UNS electric. As part of their next integrated resource plans expected to be filed in 2026.
In British Columbia, our natural gas infrastructure is in Focus Florida species. Capital plan of 4.9 billion supports projects that ensure system, reliability and integrity as well as major capital projects for LNG and advanced metering infrastructure.
Beyond the base plan. We have several opportunities just last week, the bcuc approved the Tilbury LNG storage Expansion Project.
Given our Capital plan assumes a smaller storage tank. We now have potential upside of approximately 300 million
This project is contingent on an environmental assessment, which we anticipate next year.
Other opportunities include LNG expansion at Tilbury for marine bunkering as well as customer and load growth in the Okanagan electric service territory. Some of these opportunities have the potential to fall within the plan period.
This is a dynamic and promising time to be an energy delivery utility in North America. As we execute our base 5 year Capital plan, we are currently focused on unlocking growth opportunities above, and beyond the plan, across all our jurisdictions.
Turning now to our favorite slide.
Today we announced the Declaration by our board of directors of a fourth quarter, dividend of 64 cents, representing a 4.1.
Percent increase.
This brings us to 52 consecutive years of increase, in dividends paid a track record that speaks for itself.
With our strong dividend history and regulated. Growth strategy, we are extending our 4 to 6% annual dividend growth guidance through 2030.
Now, I will turn the call over to Jocelyn for an update. On our third quarter Financial results,
Thank you, David and good morning everyone. For the quarter reported earnings were 409 million or 81 cents per common share and on a year to date basis, reported earnings were 1.3 billion or $2.57 per common share, as you can see, on this slide reported earnings, including income taxes, and closing costs for approximately 6 cents per share associated, with the disposition of Fordyce TCI
Excluding this impact adjusted EPS for the quarter was 87, cents, per common, share up 2 cents compared to the third quarter of last year and year to date September. Adjusted EPS was $2.63 up, 18 cents, per common share compared to the same period last year.
Adjusted EPS growth to date in 2025, reflects strong performance, across all our regulated utilities.
On slide 14. You will see the adjusted EPS drivers for the quarter by segment. Our US Electric and Gas, Utilities delivered. A 3 Cent increase in EPS, higher earnings at ins reflected, an increase in transmission revenue and higher AFU DC associated with ongoing major capital projects.
As we discussed last quarter, earnings at ins are tempered by regulatory, lag driven, largely by over 700 million, US dollars of rate base, not reflected in rates.
And earnings at Central Hudson was due to rate based growth as well as a change. In the recognition of a regulatory deferral, for uncollectible accounts, effect of July, 1st 2025,
growth was moderated by a contribution to a customer benefit fund associated with The Joint settlement agreement, which concluded an ongoing enforcement proceeding
Together these regulatory items impacted adjusted EPS by 1 set.
Moving to ITC, continue Capital Investments and related rate base. Growth increased EPS by 2 cents. The increase was partially offset by higher stock, based compensation, and holding company Finance costs.
For a Western Canadian utilities EPS increased 1 set, largely driven by rate based growth including earnings associated with 4 to BC energies investment in the Eagle Mountain pipeline project.
The expiration of a PBR efficiency mechanism and a lower allowed Roe effective January 1st, 2025 at 4 to Alberta tempered earnings for this segment.
And while not shown on the slide at our other electric segment EPS was largely consistent with the third quarter of 2024 rate-based. Growth, was offset by the September 2nd disposition of Ford's TCI.
For the full year, we expect the sale of Fordyce TCI to have a 2-cent impact on adjusted eps.
Higher US dollar to Canadian exchange rate. Also contributed a 1 cent EPS increase for the quarter.
For the corporate and other segments. The 3 Cent decrease reflects higher holding company, Finance cost. I'm realized losses on Foreign Exchange contracts and lower unrealized gains on total return swaps.
And as David mentioned, we sold our Assets in Biz in October and do not expect the transaction to have a material impact to adjusted earnings going forward.
And finally higher weighted average shares impacted EPS by 2 cents, driven by shares issued under a dividend reinvestment plan.
While most of the factors discussed for the quarter are the same for the year to date period. The increase in earnings for the 9-month period also reflects growth of Central Hudson due to the rebasing of costs and a higher allowed. Roe effective July 1st 2024, as well as the timing of operating costs in 2025,
Earnings year to date. Also reflect lower margins on wholesale sales at Unseen energy and the timing of operating costs at Fortis Alberta
Through September, we raised over 2 billion of debt, including an inaugural corporate hybrid issuance of 750 million at 5.1%.
Proceeds from both the hybrid issuance and the sale of Fortis TCI during the quarter were used to repay our corporate credit facilities including the non-revolving term loan providing funding flexibility. As we focused on executing our Capital program.
As I just mentioned with the recent, hybrid issuance and asset dispositions, the growth in our Capital plan is expected to be funded, largely from cash from operations, utility debt, and our dividend reinvestment plan.
Our $500 million ATM program has not been utilized to date and remains available for funding flexibility as required.
Overall, our funding plan remains largely consistent with the previous plan and supports, average cash flow to debt metrics of over. 12%, through the period with ample cushion, in the latter part of the plan.
This balanced approach to funding supports. Both our growth objectives and strong credit profiles.
Turning now to recent regulatory activity with 1 item of note in August the New York State Public Service Commission approved, Central Hudson's 3-year plan with retroactive application to July 1st 2025 including the continuation of an allowed Roe of 9.5% and a common equity ratio of 48%.
That concludes my remarks. I'll now turn the call back to David.
Thank you, Jocelyn.
At our core we are utility bills on strong fundamentals and a clear. Disciplined regulated growth strategy with a long capex, Runway supported by FK regulated transmission and Retail load growth opportunities in Arizona.
For our customers, we remain committed to prioritizing safety reliability affordability and the delivery of cleaner energy.
For our shareholders, we offer a compelling low-risk return profile reinforced by our capital investment plan and dividend growth guidance through 2030.
That concludes my remarks. I will now turn the call back over to Stephanie.
Thank you, David, this concludes the presentation at this time, we'd like to open the call to address questions from the investment community.
Question and answer session.
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The first question today comes from Maurice Choy. With RBC Capital markets, please go ahead.
Thank you, and good morning everyone. Um, just first question is on the timing and likelihood of some of the opportunities over and above the base plan, but within this 5-year period plan, uh, specifically you mentioned earlier that there is about 1 and a half to 2 billion dollars US of incremental generation opportunities at t, uh, that this may be part through 2030 and also another 300 million, uh, dollars for the LG Tilbury storage expansion upside if my math is right, that's about 2 and a half to 3 billion dollars of incremental Investments or another. 100 basis points, addition to your rate based tagger. Uh, any reason why you think that these 2 items may not come through in the coming months such that we should, we probably could potentially put this as part of our base assessments.
I I like your optimism Maurice, um, but there's a lot of wood to chop between here and there, right? So we have to get uh, the agreements done with these counterparties. Um, we obviously have to have the ability to, to build the infrastructure that's needed in the timeline that they want. Um, so all those things are definitely possibilities. Um, but still um, getting the generation cited, getting things in the queue, all of those pieces. And, and, and most importantly, getting uh, these customers to sign up for all the protections that we want for us from a credit perspective. And for our customers from a rate perspective and then going through the regulatory process there, there's just a lot of steps between, uh, here and there specifically around the data centers. Uh, and then also, you know, in the, for the storage tank and, and BC, uh, still have to go through the EA process there. So, we, you know, we obviously, are are very, uh, excited and, and bullish, and after these projects is, is much as we can be. But as, as you know, we
We don't drop those things into our Capital plan, until we, you know, have signatures on the dotted line and we'll we'll keep you posted as those uh, negotiations go. And and once, uh, we reach agreements with some of those, uh, third parties.
Understood, uh, if I could finish off with the question on the funding plan on slide 17 uh where there was a mention about uh, the balance of equity funding to be satisfied from among others asset sales. Um, obviously you've sold a number of things here at Turks and cos as well as Forest Police and police electricity, and also a concrete gas storage in the past. So, uh, you're 100% regulated right now, as you mentioned, um, thoughts on what else uh, might be worth trimming optimizing. Uh, or do you feel like this is no longer an Avenue that's worth exploring?
Yeah, so we're we're focused mostly on executing that 5 year, Capital plan and that laundry list of additional opportunities above and beyond the plan that we just went through. Um, so there there is no, um, you know, know read through from the transactions that we just uh completed. Um, you know, our our portfolio is is a great portfolio and you know, we do have, you know, 100% of our uh assets being regulated now. Um so there's that's not when you when you read that um that sentence that was looking back not forward. So that's how we look at funding. Our Capital plan is clearly laid out uh, by that funding funding plan on the on the slide and and I'd reiterate that the, um, you know, the trip is the only source we don't have any discrete equity in there, so the drips, the only source of equity, we have the ATM and hot standby. But um, that's not needed in that in the current, um, you know, Capital plan.
Uh, process.
The next question comes from, Rob, hope with Scotia Bank, please go ahead.
Uh, morning everyone and good to see the update on the capital plan. Uh, maybe to follow up on the us, 1.5 to 2 billion dollars in New Generation in Arizona. Uh, can you maybe help us understand? Kind of the timing of when this Capital could be secured just understanding that. Uh, a lot of these items have relatively long lead times, uh, and when they could be in service,
But uh, obviously it takes time to to build data centers. It takes time for us to get the, the sighting and permitting and of course, uh, building additional Generation. Um, you're going to have to get in the Q4. Um, combustion turbines or combined Cycles with with whatever the the resource portfolio requires. Um, but it's also, you know, kind of not fully defined at this point where you can look at things that are available. Like, as I mentioned in my, uh, prepared remarks. We expect this to be a mix of different energy resources, including battery storage, which, which can happen pretty quick. Um, you know, Renewables of course, which, uh, can supply a good chunk of energy. And then you look at, uh, you know, what the best capacity resource whether that's a, a combustion turbine, um, or a combined cycle, depending on the, the, the load features. So that I, I, I still think that when you look at longer term, like the, the current timeline that we have with the project in Arizona for that the for for the first 300 megawatts is they're looking to be online in 20.
277 and ramping up over the next year or so after that. Um, so I, I would expect other timelines to, to be similar to that. But um, when we look at our plan that goes all the way to 2030, um, you know, depending on availability of say combustion turbines, which would probably be the, the, the critical lead, uh, uh, lead item on, on that. Um, we still think that that's
Doable to get that done. And that, uh, in that next 5 year time, period.
All right, great. Uh, and then maybe taking a look at ITC. So you mentioned that there's 8 gigawatts of potential low growth associated with data centers, uh and you have Big Cedar in hand. Can you maybe add a little bit of color on? You know, how many opportunities you're looking at for that 8? Gigs as well as you know, could we see some sanctioning in the next 12 months?
Yeah, I'll I'll I'll turn that over to Linda to give some some details but I I I will remind you know folks on the call that you know our 3 largest customers are DTE CMS and Alliance. So I'm sure you've you've seen some of the conversations in those earning calls as, as it relates to some of this development as well. So, uh, Linda, I'll turn it over to you.
Great. Thank you Dave, and thanks for the question Rob. Uh, yes, certainly, uh, the 8 gigawatts. That certainly we are, um, you know, we have sort of, um, insight into in terms of those conversations with customers, uh, you know, ongoing planning studies, uh, to accommodate them. You know, certainly we remain hopeful. Um, I would say there's a lot of activity, you know, we're working closely as as Dave mentioned with our, with our customers. I mean, we're really not in a position to, you know, really say or identify, you know, just sort of from a timeline perspective. Um, you know, I think what we can say is that we continue to see that, uh, that, you know, queue of those perspective, um, you know, data center or other Economic Development,
Projects continue to grow. Um so we remain hopeful and optimistic that um, you know, we will continue to see further announcements. Uh, but really at this point in time it's premature for us to uh speculate on which projects where or exactly when but uh, I would say the Q continues to, you know, get get uh larger and uh we remain optimistic.
Thank you, appreciate it.
The next question comes from Ben fam, with the m o, please. Go ahead.
Hi, thanks. Good morning. Um, could you update us on your thoughts? Uh, respect to uh, an EPS uh, Tigger
initiation of, of any
Uh, yeah, we still continue whether or not we want to um, you know, take that next step and give earnings guidance, but we have, uh, been pretty, um, happy with all the details that we and we hope our investors and analysts are happy with the details that we give on rate based growth and seeing, um, how how clear our uh, Capital plan and, and funding plan, um, tie together. Um, we give the dividend guidance as well. And, you know, we're we, we always evaluated, I think probably the last time I've had conversations with y'all, um, the, the kind of the 1 thing that we're waiting for because there is a lot of variability, uh, in earnings in Arizona to see uh, the outcome of the uh, Tucson Electric
Power rate case, uh, formula rates will provide a much steadier, um, earnings, um, outlook for us, which would allow us to give a a little bit more, um, visibility, uh, and detail. Uh, for for y'all. Uh, whether or not we, I'm not saying that if we get formula rates, we're going to give earnings guidance, but that's 1 thing that's keeping us from giving it now,
Okay. Understood. Um, and then maybe next on the
Side of things. Um,
maybe not to talk specifically on on Caribbean valuations, but, but could you, could you share the trends, you've you've seen with bar appetite for those assets? And it, it seems like you're you're willing to more do deals with new children, maybe slightly alluded.
And and just how do you think about cuc in the overall?
For this portfolio next today.
Yeah, I'd say the, you know, the interest, like in any Market waxes and wanes, I mean, we've seen that over many years is folks. Had approached us about, you know, the Caribbean assets, Etc. Um, but it it's there's no, like, you know, kind of consistency necessarily there and, of course, the buyer Universe, uh, changes, uh, you know, almost on a year-to-year basis. Um, so, but but again, just as, as far as cuc goes that this isn't, um, you know, a, a read through that, we're, you know, exiting the Caribbean. This, this, this is, uh, those are 2, uh, distinct and discrete transactions that we did and um, doesn't mean we're looking to do anything else.
I can't understand. Thank you.
Yep.
The next question comes from Mark jarvey with CI BC, please go ahead.
Good morning, everyone. Just wanted to come back to sort of like friction points on potentially higher spend. Um, as far as I can tell, it doesn't seem like customer affordability is 1 or balance sheet, so it really is it just equipment, availability and permitting Dave,
Yeah, so I'm glad you brought up affordability because when you when you think about these new large load, uh, customers that actually is it can and well should be if you if you design it. Rightly, if you, if you are correctly, um, you would, uh, get the new customer, the large data center, uh, to pay for, uh, the growth of that is needed in your infrastructure. This is the kind of growth pace for growth argument, so we definitely want to structure them that way. So that in the end, we have a positive impact on customer affordability. They either get um, improved reliability and don't pay any extra or, or you end up with, you know, the, the great reliability that we always, uh, provide and actually seeing some downward, uh, rate impact because of all the energy and infrastructure that those larger customers are now, uh, paying part of basically paying a bigger part of the, the P. So, um, don't now now that is, that is a very difficult. Um,
Conversation, not necessarily to say but to, but for folks, that hear and understand that, because there's a lot of mixed messages out there that are telling uh people in different markets that um, data centers, can you know, drive your your costs up. Well, and when you have the control over the full value chain, like you do in a vertically integrated utility, you can make sure that doesn't happen and your Regulators will make sure that doesn't happen. So that's, uh, that's the tact that we're taking, uh, in Arizona. And so, when it comes down to it, I mean, there's always additional things like making sure that you're that the community is supportive, um, that you, if you have, um, you know, whether its water cooled or air cooled that you, that you understand what that means for from a resource perspective, which is 1 of the reasons that in Arizona. They're all shifting into, uh, air cooled, um, uh, air cooling for the data centers, instead of water cooling, to to kind of take that out of the argument. So it is that is all of those things, uh, permitting sighting. They're great for, you know, Economic Development
Uh and jobs in the area tax base. I mean that it's a it's a great story to tell. Um but sometimes it's it's a bit of a hard story to make sure, everybody hears it all.
And you you brought up the shift to air cooling, just on that, 300 megawatts, the the initial site is that all moved ahead? Is there is there anything else I need to approval for that? 300 megawatts. And then in terms of other Municipal support or other approvals, what's required then to get to the sort of investment decision on the next 3 or megawatts of data center load.
Yeah, I'm gonna turn that over to to Susan. We do have the, as I mentioned, the energy Supply agreement has been filed with the corporation commission, which is the first thing we have to get um through. Um but I'll I'll turn it to Susan to talk about any of the other pieces that might uh uh need to happen.
All right. Good morning. Thanks. Mark for the question. Um, so yeah, as Dave mentioned, on our side, the the biggest approval that we need is that Corporation Commission approval, which we expect to get by the end of this year. Um,
but on the, on the data center side, I think the main um,
The main approval that they need is a permit to dig a well, which is a state permit. Um, this is on County Land.
And bathrooms kinds of things. So, that's for the first 300 megawatts. I would say anything beyond that, we're still negotiating contracts. And so, um,
you know, not really sure what the
types of approvals we would need. But certainly, um, anything beyond this first contract, we would need to build something new. In terms of an inter a generation resource
So that's going to, you know, be a more extended period of time as Dave talked about earlier. You know, all depends on the on the resource mix and um,
Certainly some of the generation resources can be built a lot more quickly than others.
So so the customer would like to push the timelines, but you need to do your own sort of analysis on generation, mix to come back to them with a solution.
Is that right? I would say, I would say we need to do the analysis on the overall grid impact and make sure that we have all the infrastructure in place to serve the new customers, as well as our existing customers is reliably and affordably as possible. Um, I I think in terms of what we would build the customer will have a huge influence on that, right? So if the customer wants to go, you know, primarily renewable, that would be their decision and, and based on what they're willing to pay, uh, in terms of, um, resource mix. So, you know, we're willing to build whatever, they need whatever they um, prefer. As long as the customers willing to pay for that incremental cost of um, you know,
Maybe in increasing the amount of renewable resources.
Understood and then Johnson a question for you, just in terms of the funding plan for the next 5 years, does it contemplate further hybrid issuances? And if yes, can you kind of outline? Roughly the quantum.
Yeah. Uh, thanks Mark. Yeah, no. We don't have any further hybrid included, but we do have capacity. So with that growth, that we're talking about here today, that is not in the plan. Should it come in the plan, then it's possible that we will explore the, uh, hybrid Market. Uh, when we look at that growth and we met and we may also look at it
Uh regardless depending on the market and how the hybrids are pricing relative to other uh instruments. So yeah, definitely an area that we're exploring.
Okay. Thanks everyone.
The next question comes from John mold. With TD Cowen. Please go ahead.
Hi uh, good morning everybody. I'd like to take a another stab on the the large load, uh, front in a couple places, maybe just starting with uh, ITC. And I'm not asking for a view on on, in service dates but I'm just wondering if you can provide a little more detail on how the timing of the connection requests are paced. And you know, this 3, gigawatts of growth that you've seen since since last quarter, you know, in particular, the the pacing of, of at least what customers are looking for.
So are you are you asking like um how how soon they come in before they need it? Or um just speaking?
Yeah, how soon they're seeking to get you know, get connected. Like just if I was trying to map out the timing of all those requests is there a particular time period to which its weighted
Yeah. Let me I I I don't have any visibility to that. Linda do you have a a view on on kind of the detailed queue. Um, I guess uh,
CDs that they're looking for.
Look. I mean I think I would be sort of generalizing but I think back to Dave, I think an earlier comment you made. Is that look, they all want to be connected as soon as possible. Certainly, there's practical realities just in terms of, you know, where they are looking to locate their facilities. Um, you know, are they co-located with existing transmission infrastructure? Um, if not, what is the infrastructure, that's necessary, you know, the, you know, the MSO approval process, uh, to to get that infrastructure through the MSO Q. So, you know, it's a it's a difficult question. I I guess I would generalize and say you know, for for the majority I would say of the conversations that we are involved with. Um you know, with prospective customers, I would say that many um of their, you know, requests as well as what is, you know.
Reasonably doable. Um, we're looking at the outer years of that existing 5-year plan.
I would say the majority of those requests are looking at the latter part of our existing 5-year plan. So out into the 28, 2930 time frame.
So hopefully that that provides the context.
Yes, that's very helpful color. Uh, thank you. And then just on Arizona and the the new RP uh, irps that you're planning to file in 2026, you know, by what time would you need on the large load side to have something more definitive, you know, in place. So that, you know, that's reflected in the broader p. And also, you know, allows you to potentially demonstrate the rate benefits that that could potentially, you know, come from that in the various IRP portfolios. Just wondering what what the timing looks like there.
Yeah, so the the P is going through its process, they've had a couple workshops and we'll continue uh, more for uh, through 2026 with a with a target of filing, those integrated resource plans, I think in August of of next year, um, but there, there will be a bunch of different, um, resource portfolios, based on um you know different load growth scenarios with and without data centers and I and I think you even if we file a a integrated resource plan and it doesn't include something that we need later. We just we just update that, right? I mean it's it's just uh, you know, that's basically putting a stake in the ground for sort of the bread and butter uh resources that we need to serve our load growth but any of these um Edition
Investments that would that we would see and need and require for um additional data center growth. I kind of think of it as almost like a its own little mini IRP and and rate and rate Pace. Um that would have its own Revenue requirement. That would be served by or that would be met by these customers. So it's a bit of a different model, you wouldn't necessarily need to put them all together. And, you know, it's not like we filed this thing in August and say, okay, we got to close up shop anymore data centers that come in and ask us for energy, we can't figure this out. I mean, this is basically what we've been doing for the past, you know, a couple of years while we've had the, the 2023 integrated resource plan in effect is we still have these conversations, look at how we can meet the load and then adjust accordingly.
Okay. Um those are all my questions. Thanks very much for all that color.
Question comes from Patrick Kenney with National Bank Capital markets, please go ahead.
Thank you. Good morning everyone. Um,
and you know, seeing Alberta and BC continuing to to leg the 7% portfolio average um
You touched on some upside in the Okanagan but I'm just wondering if there might be any other macro or, you know, political Tailwind that you're watching out for that, um, you know, might help these 2 Utilities, close the gap.
Relative to the the group average growth profile, say over the next 3 to 5 years.
Oh yeah, for for sure. So the Okanagan 1 is is is actually it's a smaller part of the BC, utility portfolio, but I think has some some good substantial growth opportunities there. So I know we don't usually talk too much about the electric business in BC because of gas businesses, so big, but that does definitely have some additional uh, opportunities there. And then on, on the uh, LNG front, I mean, this is all about not, not just the, the, the extra, uh, upsized. I'll call it, uh, storage tank. That just got approved by the bcuc. That's, that's some that's 1 piece of additional investment. But also the additional, uh, LNG liquefaction capacity that we could put there for, um, increased, um, bunkering and most mostly for incre. The increased bunkering at that Tilbury site and there are some political Tailwind. I know. Um, there's been a lot of conversations about the, you know, some major projects in in an across Canada, uh, related to um, you know China.
To get the, the economy jump started. I think maybe some of the more of those details might come out later today when the budget is released. Um, but there is some good emphasis on, uh, LNG, uh, investments in, in BC. We hope some of that, you know, bleeds down and has some some good impact on looking at additional LG Investments, uh, for bunkering for, for BC. So, there are some Investments there. Um, and and I should note, I, I'll I'll come to BC's defense here a little bit as well. You know, these things are cyclical, right? So, um, the, the load growth when you, when you complete a bunch of big projects and, uh, and then do a new 5 year plan. It might not look as robust as the last 1, but believe me, there's, there's a lot of stuff in there, um, and they've executed well, uh, on the past and, uh, look to, you know, add to that on, on the going forward basis.
And then maybe for Jocelyn just just back on the funding plan. Um, looking at that 5 year, average cash flow to debt ratio of, uh,
Till it 12.4%. Um, is that 40 basis points?
Above s&p's threshold anyway, is that where you'd like to see it on a sustained basis? Or would you still like to see a little bit more cushion? Built over time? I guess. Maybe a different way to look at it. Like how much dry powder? Um, might you have based on your debt metrics, uh, to flex the capital program or
to handle any further weakness in the Canadian dollar.
Yeah, thanks Patrick. Yeah, you're right. The average for the S&P metric over the 5 years is 124. But as you get to the latter part of the plan, we're actually pushing more like a 100 basis points and you've probably heard me say before that, you know, that's sort of where we have been targeting our cushion. It gives us a lot of dry powder to to have the flexibility to to finance um the projects that are not in our Capital plan that we're talking here today. So yeah. So this is a plan that sets us up nicely to actually get to that uh adequate ample cushion in the latter part of the plan.
I I'll actually say 100 basis points is actually a lot of cushion, so I feel comfortable, uh, really having like 75 to 100 bits above, the threshold of 12%, uh, and we're getting there. And so it's, uh, this plan is actually improved over the prior year plan, which is a good thing. And in large part, it came from the fact that we've done some asset dispositions and, uh, We've continued our drip. So yep. I the cushion is um, uh, certainly met on average of 12.4. But we do, we do get to the, I'm going to call the ideal cushion, by the latter part of the plan.
Okay, that's perfect. Thanks all
This concludes our question and answer session. I would like to turn the conference back over to miss Amayo for any closing remarks.
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