Fortis, Inc. Q2 FY2024 earnings call

• Operationally, teams delivered reliable service despite severe weather, with $2.3B invested by end of June in system reliability, customer growth, clean energy. 2024 capital plan $4.8B on track; Wataynikaneyap Power Transmission Project completed.
• Regulatory progress: Iowa Supreme Court stayed injunction for ITC Midwest Tranche 1 projects; MISO's LRTP Tranche 2.1 investment estimate increased; BC's Tilbury Marine Jetty project got federal EA certificate.
• Sustainability: 2024 Sustainability Report released with resiliency, biodiversity, energy efficiency info; progress on sustainability targets.
• Dividend guidance: Confident in 4%-6% annual dividend growth through 2028 based on strong track record and low risk growth strategy.

For the second quarter, U.S. Electric and Gas Utilities contributed a $0.05 EPS increase quarter-over-quarter. In Arizona, EPS was up $0.07 due to new customer rates and warmer weather. Central Hudson's EPS decreased $0.02 mainly due to a regulatory settlement and prior period target. ITC's EPS increased $0.02 from rate-based growth offset by higher holding company finance costs. Western Canadian Utilities increased EPS by $0.02 from new cost of capital in BC, tempered by operating costs and tax expenses. The other electric segment EPS decreased $0.01 due to higher costs and lower equity income. The Corporate and Other segment decreased mainly from Aitken Creek disposition and higher finance costs. Revenue contribution % details weren't explicitly given in absolute terms but the EPS impacts per segment were outlined.

• 2024 capital plan $4.8B remains on track.
• Rate base expected to increase by ~$12B to over $49B by 2028 with average annual growth of 6.3%.
• Confident in 4%-6% annual dividend growth through 2028.

• Regulatory uncertainties: Iowa Supreme Court stay of injunction could be temporary affecting Tranche 1 projects.
• Supply chain: While strategic vendor relationships mitigate, monitoring ongoing.
• Regulatory lag: In Arizona, generic docket advances but timing/outcome uncertain.

Q: Updated view of electric and gas demand outlooks across utilities, especially on load growth and gas-fired power.

A: David Hutchens mentions TEP and UNS Electric adding combustion turbines to address renewable variability, data centers in Iowa, Michigan, Alberta with load growth potential but TBD on specifics.

Q: Transmission costs sharing and policy making.

A: David Hutchens states load should pay for itself and has positive impact on customer affordability.

Q: ITC Iowa injunction stay.

A: Linda Apsey says stay could continue indefinitely as Supreme Court acts at discretion.

Q: Central Hudson regulatory outlook.

A: David Hutchens says new rates help close ROE gap, next rate case filed.

Q: Vancouver gas ban reversal and gas necessity.

A: David Hutchens talks about affordability and need for both electric and gas for clean energy transition.

Q: Iowa projects and spending.

A: Jocelyn Perry says no immediate impact on spending, strategic vendor relationships mitigate supply concerns.

Q: Arizona regulatory lag docket.

A: Susan Gray talks about forward test year or formulaic rate workshops in fall to reduce regulatory lag.

Q: Wataynikaneyap project long-term vision.

A: David Hutchens says it's an entry point to Ontario market for more transmission development.