FTS - Earnings call transcript Q1 2022

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Operator

Welcome to the Fortis First Quarter Conference Call and Webcast. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Stephanie Amaimo. Please go ahead, Ms. Amaimo.

Stephanie Amaimo

morning, Conference welcome Call. good Quarter Fortis’ and Results XXXX Rual, everyone, to and First Thanks, of team I’m CEO; certain VP members Jocelyn by subsidiaries. Perry, senior joined David Executive and Hutchens, CFO, CEOs well as as President and the from management other

measures will projections the Actual that, Before non-GAAP discussion forecast cautionary from financial in MD&A. all in supporting call, slideshow. reconciled measures statement will can information over All that call I today’s Also, which U.S. in differ in financial the presented financial With specified, otherwise the information, begin information referenced turn want are to contained forward-looking the we you the forward-looking referenced our prepared is results GAAP materially David. XXXX remind unless to included to I is remarks the include subject our in quarter to first dollars. related today. the Canadian

David Hutchens

everyone. Thank morning, you, and good

strength also Our stability future first quarter and cleaner stakeholders. commitment delivering for business, our our our energy of a not only to demonstrated the financial but

a that project the we core the net Eagle recent to is at reliable, of Connector and on target. on plan There our Fortis, March. Assessment follows these also announce as to climate take respond issued both our of quarter, mitigate our and systems any our on billion are zero memory. time MISO announcement we project inaugural we affordable This $X.XX. Today, Mountain Climate successfully impacts Lake target in reduction service build at EPS Report our executed XXXX, Woodfibre the XXXX are Line energy more to in as by as to pleased Erie greenhouse FortisBC the TCFD supporting plan in During obvious actions remain secure customers change. gas Gas the than XX% of nearly and principles importance And first to well our investing made we energy advancements capital long-range adjusted $X transmission ITC. were Today, ensuring

While to in continue frequency energy the outperform of our events. averages, industry investments withstand systems responsible increasing must to continue reliability weather our to and metrics we severity make

we of and rising managing inflation material customer reaching costs limit the on XX-year bill highs, backdrop are to laser-focused With energy impacts.

As on X% annual to to have our Slide in operating X, shown cost utilities increases customer historically X%. controllable per managed

security with critical cyber Europe recent As infrastructure, With Eastern cybersecurity component critical a our in utilities geopolitical operators energy is threats, and key increasing of risk government industry working management protection tensions including to enhance partners. our of continue program.

mentioned, I report on Assessment address mitigate our identifying As incorporated risk to and management, transformation to we climate and existing scenarios release at Fortis and of zero affordability positioned are customer since emissions at change. target. scenarios. off policy are and journey our that realize with This believe the Climate four technology carbon future our we advancements, and XX% emissions The Having processes. or reliability offsets, reduction around XXXX, made various strong highlights last ESG these facilitate XX% net and appropriate to our The by innovation, preserving reduced report and XXXX gas risks gas plans It carbon governance TCFD financial is no coal to that emissions with builds opportunities. target step significant clean largest our is extending well into surprise planning imperative is target and customer a commitment the under matters with oversight by greenhouse looked XX% risks climate-related first progress how our fuels climate we energy five a explains as our zero utilities XXXX, supporter Report. fully and risks rapid Through Today, opportunities direct no target. the we a regulatory Overall, reliability long-term to required XXXX. direct to our our in commitment and exit XXXX are low use greenhouse while next zero affordability. net are net a the we eliminating advancements, committed of can of achieve by strategy

Slide we Turning X. now to five-year announced Last through billion our $XX plan XXXX. year, capital

prime teams April, $X contractor significantly continue mitigate Columbia. proceed proposed step supply do executable Woodfibre highly of we X%. XX% track in plan, rate constraints remain of XXXX, to systems Gas capital have plan closer site LNG increase not the chain to billion liquefied represent as progress. chain capital to taken March. expenditures invested supporting growth Mountain a announcement our We expect on gas with which FortisBC’s for construction Squamish, natural be nearly the our identify our to Overall, XXXX is by promptly and For steps invest issued through brings British approximately making $XX impacted its expected Line This to by Woodfibre to decision. projects, one five billion billion over the In Woodfibre project base next to proactive five-year remains annual the on over investment $X supply project capital low-risk issues. contingent notice base final LNG rate Eagle in and years, a to average so Major

climate plan, future blueprint sustainable This to we support focused runway to Momentum the innovation expected is capital near-term of With respect growth adaptation, foreseeable stakeholders’ have cleaner support a ITC in base on expectations. for growth long continues to a CapEx build. opportunities, and our future. our energy at Beyond

projects of projects transmission including with approval, require which MISO of total advanced of transmission MISO Midwest right-of-first tranche run These refusal Other comprised and quarter, plan, XX costs announcing of owners. exist projects Six first MISO Iowa late July. for associated through board anticipated Michigan currently provisions is territory, projects US$XX in ITC approximately service the where the billion. subregion the projects across the first and long-range located preliminary information, its During investments they US$X.X to this the XXXX incumbent associated on determining projects. billion we transmission plan. in. will five-year is estimates timing approximately be depending competitive our these capital US$X the ITC within this on to with bidding portfolio may which of to these the through Based working in subject months, on billion costs associated state forward be coming look are included projects. finalizing with ITC In

to XXXX. the proposed between the With in the Council low-risk United X,XXX-megawatt will operated Connector direct strong of we first Next, agreement and the confident wholesale the issued States. with project by Ontario project additive March, growth an our Directive Interconnection XXXX. Erie for direct electricity of to growth Lake and will PJM XX, markets before in service interconnection dividends guidance on increasing the current underwater Order the the growth to on billion $X.X finalizing Ontario The advance. record with In remain IESO XX a ISO continues average provide transmission ITC August strategy, in line outlook. in to dividend province This negotiate Ministerial annual transmission past our our consecutive coupled track a the X% years, be through or

our an Now, results. over on Jocelyn first for to financial I turn call will quarter the update

Jocelyn Perry

Thank you, everyone. David, to good and morning

share earnings and looking at the results. quarter than XXXX. of XX was first of common the Slide $X.XX $X.XX net per to $XXX Adjusted higher quarter million or Turning first

was segment. base across and by industry for production the tourism higher drivers the in recovery quarter We growth of in the the on chart group continue the and XX to believes The by also Slide operating Hudson see Caribbean. EPS driven rate this earnings experienced costs. Central Hydroelectric lower the growth quarter highlights waterfall

in At increased as $X As base the $X.XX growth electric billion result the tourism-related we base our quarter by mentioned, from activities across Hudson, rate continue supported increase see Central growth other favorably Western pre-pandemic were the of impacted a up rate during quarter. Combined, rate the first XXXX. in $X.XX utilities, EPS driven to earnings of by At base and levels. Canadian our contributed conclusion of EPS our utilities investments sales growth. and sales by X% rate segment, its mainly nearly ITC case with growth Caribbean driven by a

decreasing with implementation information costs and quarter. higher of operating new experience storms, the did a costs by for they restoration associated winter EPS However, system associated with the customer $X.XX

Infrastructure in XXXX, and of quarter of Belize. XX was $X.XX hours first in due XX compared Energy first gigawatt by was our For the decreased XXXX to rainfall. hydroelectric lower quarter Production EPS the production this lower due to gigawatt in to segment, hours

earnings Grande due consistent at Oso expectations. finally, of generating by our lower As planned UNS $X.XX of the quarter wholesale outstanding. with expected, slide, earnings broadly and customer transmission with higher decreased growth depicted offset XXXX sales, our dividend reinvestment to plan, in long-term EPS shares from in costs. timing the were higher average first the facility. Earnings with on and maintenance while associated quarter revenues, the with not the by were benefited line UNS weighted And wind

we active largely support again were in long-term Turning markets debt $XXX to of once debt, Slide the raising our capital utilities in their with regulated in million over programs. XX, capital

of of risks. quarter, rate in accelerated debt several With the mitigate interest environment, the to rising swaps our into also locking interest ITC in utilities rate rates. refinancing first backdrop issuances a attractive entered additional

available David issuances, $X $XX liquidity strong billion over referred recent a facilities, capital earlier. plan our supporting with to billion us Our position, that on in coupled five-year credit our debt places

outlook. March, and issuer S&P BBB+ debt maintain to A- ratings. and continue stable We unsecured rating credit In rating strong investment-grade confirmed credit our

positioned We investment-grade are flexibility growth our we as within existing financial comfortably incremental providing ratings, credit opportunities. pursue

updates. to Turning regulatory recent

incentives, final in RTO relation equity Proposed Rulemaking return transmission on supplemental First, eliminate basis Notice await which incentive or XX adder. from point rule a ITC the NOPR proposes to to of FERC the continues to on

unknown. year in Alberta remain Utilities capital parameters the timely cost on also Fortis provide AUC late a case recovery stemming Commission publication. conduct requesting several well the XXXX, investments changes of application infrastructure existing XXXX well to cost rates FERC the of generic that initial to capital right for made for last parameters operating the energy XXXX. transmission a And issued adjuster in allocation that proposal circumstances. an advanced requirement as reinstatement become this the that consideration September back cost of and continues year a for are The states beyond, The certain to current submitted And clean the certain changes or days regions formal adjustor In rate including Initial this regional notice XXXX of proposals, concludes later of effective David. on this modify were a cost extended as application the TEP the a the Next, as now date refusal including of fuel capital the new my general proposals X, include The capital addresses year. comments contains and of a in Arizona generic separate from filing it more released of of to approach. NOPR a file since federal XXXX. earlier planning decision new NOPR addressing year in eliminate process begin expenses. intent plan, confirmed to turn last will will for The issued also call planning than Corporation the March, any transmission proceeding Commission, week, the April constructive XX nonfuel later projects Alberta’s in developing June mechanisms formula-based of from I’ll and due test investments. cost ACC, of rate a seek the XXXX date British and role cost under cost using of remarks. for the In Columbia, proceeding, and first rates long-term allocation effective with capital no NOPR a as will

David Hutchens

you, Thank Jocelyn.

to has quarter are sustainability made in team initiatives. the with We first pleased and advance progress growth the our our

highly plan Stephanie. the dividend to commitment CapEx runway, With a demand. net our With the affordable zero our transmission support service executable in to will the business, and turn on over strong future our are distribution XXXX call reliable we to while growth I a capital and regulated building back clean our now energy and target, guidance energy we position ensuring deliver are XXXX. through customers’

Stephanie Amaimo

presentation. call At like this investment questions address to you, This concludes David. time, the Thank the community. to open the I’d from

Operator

you. Thank the comes Instructions] of from [Operator Maurice question Choy line Your Capital Markets. from first RBC

open. now is Your line

Maurice Choy

Thank question first to you up and on morning. LRTP. MISO is follow good My the

the a X, billion around MISO expectations? of in overall the which the capital You that now be board billion besides investment timing higher Tranche approval, unknown right have remain the as line to US$X.X follow to the spend. of represent better if this lower finalize quoted in with what and variables that are some or visibility, Was you the of XX% subset cost. to able you’d the US$X share up XX% And your of

David Hutchens

an are should Maurice, that question. the Yes. we that know with for call first for letting by this in for everybody I thanks time actually and years. entire investor start off Thanks, in-person team three

So here in be some send the it St. will great right these actually to room to questions of sitting in able team John. our to details the be of that’s same

I yes, current initial put start out the out people US$X.X has on So, based plan, MISO out the there. there best put estimate that. and transmission wanted is to know on the and projects long-range billion MISO to obviously that let our US$X billion on the based cost projection But

As X you Tranche it’s of noted, one. future

of timing we’ll go we out be step MISO mix on the the own remains will projects, forward be project around all we estimates, board to into and in the going the get the going takes those of related to figuring doing the go to MISO three whether as things construction. go to tranches cost and well with future that further each as course, more details, forward. what’s happen getting two that Obviously, our of remaining seen. visibility or So the that timing future not approval and expect into And scenarios we

So, you about I asked think expectations.

that so come big I’ll we forecast – going Money We’re tranches billion in chunk. to in will varying do additional billion US$X.X these things these $X course, of you of come pleased is [ph], aren’t And US$X is billion varying are how projects to $X kind pretty in, say, forget as our a billion in in, of currently much areas. the

to a really if visibility different might be. in – footprint, is really light we’re what credit in how this sure that Was you hard Will weighting footprint? project next So, next not the tranches stuff maybe our on. our one have the

Maurice Choy

the within on next for – suppose years, just a five And the how see managing maybe funding follow-up. pick occurs do the quick you spend? the – I I’ll sorry, spending yourself

Jocelyn Perry

think talk specific I about this. for Maurice, Yes, it’s funding early to

I do to get would I we five of timing, we extend to need it, think of visibility because the some expect beyond the years. think,

where a we so when from we’ll pleased timing, sheet, but or up firm I’ve that So the move up with we’ve we’ve looking of been backwards not funding, number times, the the forward moved to said materially to materially. balance too

tuned up be these a expect funding affirm complicated but and that the we’ll we expenditures. don’t I fund to plan, of stay capital So, there as timing

Maurice Choy

many net my there to XXXX in XXXX zero target. and I shown question the target, final I on initiatives look And initiatives on that. the midterm relate if congrats is you that assume of at Slide to get you’ve X, your

So, post the related so, gets what XXXX are on Arizona. the if Arizona? initiatives through zero of by navigating your And regulated on thoughts [ph] XXXX you that the much what to And assume I there? affordability tie in to theme agenda some of net

David Hutchens

Yes.

this We’ll of storage. which on say where there. slide, generation do That need part and well, those. we and to – to will to last We activities that’s the win, things, view majority Arizona, to related that carbon So possibilities have sure zero the a gas gas, generation to and in reduction have got last the solid target. fuels get technology. how need that got net down to time the generation laid that’s capture really is a make out renewable want figure XX% last from exactly XX% plan that hydrogen, a we defined we’re that the and we we’ve related natural that new will of like out that. It’s in Remember, as Arizona. XX% how most in gas of cleaner emissions but of XXXX We’ve is technology – going address hard all to

is to more mentioned so meaningful the the is our we at customers our important it – regulators and to done this and that So perspective. and we our these as talk so like you right because path is our that we the But point, – to after mean, technology clear and it’s XXXX about is sure well, obviously of be will visibility and so guardrails, at here less out from words reliability be in I as might far a sound often much time so probably than customers affordability forget they service in sit of today, going any how least in recent but are, we most memory. make

in make line with So, sure we will are do that things the we that. that

And down what continue of accelerate us doing should zero. on that obviously, for is well. greenhouse an that need We doing we’ll play keeping we’re when And keep to help you we’re can an that goal I an And efforts there, to industry don’t eye offsets offsets have to get those and get it. what two eye but in are our this, net reduction in on technologies got so XX% say currently out we the XXXX, into option future. gas the that to as looking that’s come

Maurice Choy

Thank you very Great. much.

Operator

question next Your Linda the Ezergailis of is from Securities. line TD from

Your line open. now is

Linda Ezergailis

I’m you. give thoughts some the on Erie Connector. us could Lake wondering Thank you if more

And Connector election, might this my and is August guess FID of how question outcome Erie that the XX Specifically, or how that there? you how a in estimated costs $X.X confident Maybe key contingency future cost how the what project? this to can how much up? I timing and us might And around are to the final Ontario beyond Or estimate? related you an is provincial sense potentially billion then or is gating this go deadline of the that get much proceeds? your would factors Lake to give be affect

David Hutchens

Yes.

a Order they deadline gating give is That the August that So IESO did received, of get up. gave big the service –they the item. agreement next mentioned a and XX you signed to Council transmission in we OIC, the

Now can anything the a one. far is publicly we big costs negotiation is we the as go, try finalize of within on have as to that disclose that. cost things working don’t Obviously, details as that’s process. all we’re that We finalize to that

cetera. We’re there, et going to EPC out contracts need

So obviously that those all and before get filled of pieces known over few be we in be months TSA. have to to will next the

here item. election gating which that, IESOs in is an a TSA the from big own internal would our see the have well that approvals This that’s plan and approval, the project. So as frank, here, besides timing you in there we referenced the Ontario. I be as by perspective. – to this elections don’t we of timeline the affected would that great be Obviously, is

it always will – that’s and So matter benefits like stand this a at ratio benefit its that looking merits. good the on been We for have we a it’s that who’s to own no the show goal cost and it, the think project is project.

not concerned perspective. we’re an So, electric from about

Linda Ezergailis

around hearing up. how life friction question expenditures potentially about might And the in and your might around up see you. jurisdictions across a environment Thank you’re thinking build. going deferral dial conceptual on back anticipated impact or and are the talk extent as see bigger that potentially seeing. inflation assets mitigate we’re even that regulators just you’re to some pressure have for about operating other from customer inflationary stakeholders? a to longer Can that Might pressures bill mitigating changes your certain capital to maybe How try than approaching what or customers accounts more expense that you picture could also and rates thinking marches you you interest be just there around ROE you rate the initially depreciation

David Hutchens

that obviously are, single is sure conversation Yes, would gas we our with have I having really purchased because our customers paying inflationary only for center in to and things every environment to the and across with well making us and much. natural we the Those that that it high list. are attention pay think, regulators every you right to matter on, our be that this does regulator, in to customers it particularly customers we as power matters costs it hit as category are But of not world have North part. that our well America, that most to our across I the

pass-through billing, at only things of utilities and make money do big don’t do bills. So, costs know standard these ways the at that that we’re we management, of when around our costs that conservation, much looking them recognize there rigor, in We are regulated are on stuff levelized because build promoting our We helping things in like in ways any we efficiency, spikes helping energy more that. mitigate their look customers.

of you that cost deferrals a we spreading are recovery. have some that of those at And now out couple the mentioned,

So the current impact so isn’t severe.

on which not other of make they’re we be ones. Bill to people We affects operation, maintenance, to their across help customers. just attention U.S. programs et means because and focused our that help have paying O&M, that costs our least bill big of cetera. really that impact on course, assistance some steering the Those our on the one that reducing of customers watching cash at the sure too bills. are pay we’re can ways that another organization. But think, have that the to been our we’ve federal is, I in can billing flow,

making clean a of making we’re one, for are how related et increasing hear costs don’t regulators to most seeing this far no matter likes the CapEx, cetera, also earlier, of or So strong because sure energy. slowing rates, needed this? in storms, I conversations they items investments is see reliability increasing CapEx the those justifiable Nobody as shifting our to as and very the can down systems are for mentioned manage any severity Obviously, variety are. the and that but I of as how don’t policy requirements. they

we the money. save even our in customers’ that like ways of Arizona, Some do that

That’s – expenditure. adaptation, can in impact. make ones on the that can overall then we’re bill sure those doing things we some have that like to we manage we So other those But resiliency, the that’s no-brainer most timing and manner a good. that the to the that, capital responsible of

Linda Ezergailis

jump queue. I’ll in back the you. Thank

David Hutchens

Thanks, Linda.

Operator

your from of with is Rob Please next question. from the Scotiabank. question proceed Hope Our line

Rob Hope

just I that to next color ROE, higher add be morning. Good bit energy expecting filing the a clean rates, of little be things there? month. you kind you the in kind should on are a looking Can we that new Electric touch whether tracker? the want it are key of Tucson of just rate for What

David Hutchens

got We’ve of in normal call rate stuff a Yes. batch normal stuff I’ll case. a what in

like So, you things look design at chunk cost Obviously, have asking of we’ll that and rate allocation. has be that for. a rate increased base we

We that for higher pretty end will low look the It at XXXX. in ROE. We think we was of got one case. rate a last

of So that that a Yes, in have – that that it jurisdiction, COVID. particularly where of getting bit we end the in was of end obviously right was ROE Is the XXXX. of for we rates interest we a good think And right? of see with XXXX. a And backdrop stronger argument middle right now.

them, able investments that how talked rate of recovery And more the to even prompt a real reduce our related clean and as are at accelerate to demand cetera, the we tracker I of job doing tracker that’s And and get past. tractor. away know some can et our be things of invest great allow mechanism. far a to with important replace her those because about through trackers filing a all things looking clean in the and replaced that management, team us those and investments and and renewable part those you and in from clean DSM, side of energy As energy with the efficiency, energy Susan I’ve energy the tracker, transition will energy new a like

Rob Hope

That’s QX for to a let’s just Connector Right. capital be QX, of there? mobilize Erie – expect follow-up, you when project? that then put would that helpful. Lake that on as out just door to we in get assume the the kind the Appreciate start project, color. do a And contracts when on And

David Hutchens

Yes.

that one she’s over to to So ITC those Linda, I’m details. as going got and of CEO kick

Linda Blair

for presuming would yet to for if to Dave, this question. in respect say anticipate, With I anticipate construction. year. Yes. sort the four Great. preparing we year Rob, the thanks, Thanks, And everything would the year, have I of half would as and next that in we think agreements before, as starts a it goes of place all we – construction would we were and mentioned we be anticipated have is writing first

would place. as between now first in that So XXXX, of all anticipated half into the and agreements the assuming put getting us those

Rob Hope

you right. All for the color. Thank

David Hutchens

Thanks, Rob.

Operator

next from the of from your So BMO. proceed line Ben your question is question. Please Pham with

Ben Pham

aggressively Hi, the And thanks automatic remind of chance Is in can to you see ROE other ROE is move on with also you the And interest at base mentioned recent the maybe any area? on low you TEP moving good have more you ROE percentage then start interest that utilities through morning. maybe higher we adjustments the up? a good pass debt May to maybe your seamlessly off expense? what rise rates. utilities; us could And comment your position.

David Hutchens

portion cetera. rule wide Fortis matter that through methods vary for a transmission regulatory different but of basis of formula least a like their basically be inflation and don’t say talk passed the have kick to be we a just at PBR inflationary good would the test interest how have all the the rates And sort about impacts But at little from timing, of ITCs, constructs a in the because all in a little and our the rate I’ll of can of it’s of impact to but subs costs talk through able Ontario, a Yes, of about over on to cetera. that Alberta first thumb than I really et et to and year. it for suppose, that good full percentage from – our in should historical BC the have bit that’s I It’s we bit which costs from treated a level we’ll pass their get in course, true-ups. Jocelyn annual at perspective different they capturing Arizona, generally higher that mechanism jurisdictions, a timing what everything costs – on then,

bear up are those the risks Jocelyn next the on recover over I’ll and turn go in it case to interest just rate things of would – So based that question. it to then case. we those down timing. kind that answer the rate and

Jocelyn Perry

does doing not utilities Yes, the interest we’re interest manage doing mechanisms question of each rate various for the rising because environment. provide affordability do your that to that. right Ben, customer our regulatory But number rising rates to all in actually things respect rising not with of have interest a we we’re for rates, that on a

an each and have we of annual mechanisms other in would true-up ITC facilities. have various So other

year. exception, with there the talked about UNS With an test because historical on as David

in exposure disclosures be we’ve have this quarter identified So obviously, that some interest when with to file. of as with swaps interest go further play catch I so interest risk. rate which say, the to the holding are they do UNS test outside particular that rates, to that will set most entered refinancing actually we they would this rates clearly And year into company. they rates, they’ll within up mitigate our about of rising

regardless of So active even regulatory were we quarter mechanisms utilities, we that have. at advancing regulated doing of this are the And the in the pretty terms we things. say debt some issuances, of right I the would

the We’re the to of try doing front impact that our we actually some customers. in terms of things getting of on in the right so curves, can combat

Ben Pham

averages below any is in it’s get year? American what or where you the on North there there outliers obvious telling relative is to [indiscernible] the XX when the ROE, utility And then well

David Hutchens

currently. have any – tracking We Yes. to don’t track ROEs

its structure later capital start Arizona is of an of BC. would there then year, the that calculations on we’ll capital generic generic at filing. will be existing year there’s and through determine own adjustment and will effect going cost not ROE be a has XXXX. Alberta on it out a rate do ROE their when another general So in the this that than mechanisms pushed in case changing basis. interim to we that Other that, right Obviously, the in any capital cost go

Ben Pham

up going around some million by, second Okay. article $XXX through the pipeline I to plus. Thanks. recent switching maybe the and there’s and a to a Woodfibre, being references think, there’s then costs tunnel proposed And

comment can So on I’m correct? in And that rate just And is wondering that’s if base. if that if cost, that on you recover that. you can

David Hutchens

Yes.

to a for general Woodfibre give here Roger on project LNG the put April I’ll main the contractor. its proceed that notice That’s good see being it the to in So did But is contractor. progress you to that’s out facility made in details. obviously to

of We’re that. I’ll give and building part pipeline, is which you – the on the Roger tunnel details that let

Roger Dall’Antonia

Good Ben. question. the for morning, Thanks

pipe. backfilling relates of, would nine from design tunnel second is bit It reporter scale under the access pipe about – to think, kilometer tunnel. There’s to difficult two Estuary one pipe the the the building issue ton be tunnel, – Estuary. So two going sorry, a that Squamish a under to the we’re the I confusion be over the very

So just in redundancy second design. that and we’re for of it’s now evolution disrupted putting a be pipe And reliability Woodfibre an with not so service.

to expanding type pipeline I tunnel think serve the that there was system but in for pipe Woodfibre, it’s one Woodfibre overall second of serving we’re portion. part redundancy two a is there

far being cost, the a finalized. are costs As number as of

of stage. not little significant pressure, this at seeing are but We a bit

Ben Pham

Okay.

the point that say at reported would cost time. that reference this be reliable You not may in

Roger Dall’Antonia

or LNG pipeline the Woodfibre facility? for For the

Ben Pham

for It the is pipeline.

Roger Dall’Antonia

increases on seeing still our are the But cost as cost some estimates. we overall far as we’re cost, finalizing pipe. Yes,

Ben Pham

you. Okay, all right. Thank

Operator

Our Capital question. your next from CIBC Markets. with Jarvi the Please line question Mark proceed from is of

Mark Jarvi

or heard in of level to state of any pressure customer level everyone. way to like still bill morning the utilities allowing Good some back alleviate at to help Thanks. the in the of or a be while gaining media terms terms subsidy there topic in the a either other either might anything talk Is there Want Is which anything there traction. while discussions? Have it’s or still federal affordability. come rate around was been think level, affordability the of make done help federal CPP, has also obviously on else the manage you decarbonization. at federal investments to can level decarbonization to level doing state anything you

David Hutchens

that anyway. the than build other come credits we state from of flowing help. our across the better I’m plan those aware in Yes, of But of a nothing level start jurisdictions back back can those if pieces none that that that really know tax

Mark Jarvi

couple weeks the Okay. that just of went a through And ago. on NOPR obviously,

the utility initial you Is that, thoughts stage. Federal of ROFR of initial on of of there bringing as in of Just are cost the what your so sort at the chance sort in process slow sort allocation commission that state any that Just on all? terms any the it. involvement thoughts digested

David Hutchens

Yes.

We’re the of to I in get more projects constructive. then, rights I the the get should certain a the in well get as in these still in out bringing of space involved transparency process. Obviously, is it planning details. federal better, that’s you you slow allocation us ROFR to the discussions it’s help comments. most it’s digesting process for and situations it rights the the probably positive get more defined course, states it down. states rub wouldn’t to would have And I think all where process cost overall, out there and for mean ROFR for think that planning Midwest. three if with is early, But

Mark Jarvi

for think earnings? that at go in peak question, comment whether or Last has of and through Can much happened some to just refund that I Good. XXXX. that’s flow to is going prices the on not just that how some of a you adjusted terms Tucson Electric there’s of

David Hutchens

Right. Say that again.

Mark Jarvi

there’s was there – an including curious guys from TEP saying and if some is earnings has just much you handful right be if summer it or impact? there that’s not commodity to refund I’m a believe order an whether utilities how XXXX. of back high to the in I a and of charges like

David Hutchens

know don’t I first so – anything heard we don’t we’re one. on that here, physical The of and looking I it,

Mark Jarvi

Sorry about that.

David Hutchens

Yes, problem. no

Operator

line Please from from is your question the with next Richard of Our proceed question. JPMorgan. Sunderland

Richard Sunderland

the how given of the the circling a for you state today. TEP we here. on the you broadly, other past some the years. time coming few backdrop Thank and Any morning. one maybe case in Arizona with Maybe a state the good reading from more thinking versus peers then big with stated the the rate and some of in you over back things just Hi, about kind in regulatory stand and backdrop to obviously sense regulatory [indiscernible] activity noise you see have

David Hutchens

got a for with more though relationship be a it we’ve might in tangle a that in Arizona, bit our good of repeatedly others even said relationship regulators I’ve that jurisdiction. Yes.

XXXX outcome. told the trackers, plant, were from good As very getting test-year I view. constructive ROE. those a rate a outcome positive and I all you new constructive post our of mentioned we I got But the case, wasn’t things fan earlier, of on very, two a really other that, than

long we And manage trust working regulators up get to it’s will ability that every and our outcomes. way transparency these the history go it’s the with and So we’re that it us know how taking it. we have to to of with reasonable there, and we time do outcomes, that’s relationships, we give continue good

Richard Sunderland

this your today’s then It’s in helpful. into you here? very enough. Fair speak And larger thinking and but if just earlier, outlook how apologies I RNG goals about you can picture update, of environmental the just light missed long-term net-zero the fits to

David Hutchens

fit Yes. the larger RNG into can picture.

that piece can in left and Scope about a Arizona, emissions fit Specifically talking X in of that’s the will that gas call, XX% XXXX. be after generation into this we’re which say,

also emissions a need It’s much that role being has focusing for there. et a to a the have that have And British that British on XX%. on, natural sit part It our and in today gases up the That’s in hydrogen, of has as strong contracts plays in last up how supply role out of portion there getting X few is So hard a chunk deadline done from renewable us role that say we of a that. they a of The RNG by cetera. able versus Scope good gas. here they already do do we playing a of Columbia; goal does say, there play figure it that together XX% pulling Columbia. big a percentages a to team great for eye percentage, the big of job in XXXX

Richard Sunderland

time Got Thank the you today. it. for

David Hutchens

You bet, Richard.

Operator

line Suisse. of question is next from your from Credit Our Please proceed with question. the Kuske Andrew

Andrew Kuske

you I an but and how do think both the good one got maybe the position in U.S. the you’re the either in two intertwined, Thanks, in it’s jurisdictions. interesting And Canada Linda, morning. countries. is you’re associated because case, benefits opportunities those transmission obviously, mean, of question about connecting with given to you’ve directed And

David Hutchens

go ahead, Linda. Yes,

Linda Blair

Company develop our to to just do Thanks. certainly, geography take from strategic. advantage on of little think premise what ITC for, is history, think a of was of I the of close our Great. the our Ontario. terms And stands Certainly, is project, it us continue actually we we it sort and originally to geography. how to Transmission back you the bit Yes, Erie it to sort International maybe envision developed we in unique if and back as geographies Lake think geography business and of strategic brings roots that our

market They in U.S., as positioned, particularly well different as are in the ISO we well think evolve I as So did markets Ontario the evolve, certainly, Midwest directions. evolved. how both the

geography. puts we be that certainly, to perspective them leverage to are And I further would able want don’t from pleased But we call very I so opportunities, a I premature. us are, the And think, strategic taking some does experience certainly I that think give it thinking with a terms just thinking project, it undersea and Erie of foot of border and like – of the in the certainly about advantage a us technology. project Lake in of think but sort cable terms gives

as we we certainly view into that that the So this could future. hope leverage project certainly, something we

Andrew Kuske

obviously, helpful. got, earlier you cyber don’t ITC, that utilities Okay. really this competitive mentioned in at especially have capability? advantage just necessity then you’ve normal the in of the capabilities And point that in like capable. Or immensely Do future this That’s was operations and cyber and to into that’s competitive call, it course is meant time critical business on the of up a that a stage? that at other maybe as kind roll this see

David Hutchens

world. flat IT a advantage that share as the advantage And advantage them that one their out and – from to don’t just put that have we big Inc. us But sold just Fortis this many entire them across ways stage. such the from why best would footprint that’s at coordinate really from competitive is organization are look entire had up because how of at teams and a across But our That’s ITC competitive obviously, necessity that of them is our an it’s we business the our type the to across that’s entire They work given a We and huge for practices model. skill push a to I And take Fortis in organization. Yes, strong maybe acquisition I think depth great, competitive a that that organization. and perspective. think ITC, across layer skills standpoint. our fact footprint. their we we Inc, were transmission are. that systems have great able CIO their to double able brought we help of

Andrew Kuske

Okay, thank helpful. That’s you. very

David Hutchens

Andrew. Thanks,

Operator

from David next the question proceed with line of Quezada Raymond Please question. is your from Our James.

David Quezada

everyone. morning Good Thanks.

one for near-term and to relates planning guess, renewables I me, Just horizon your, just TEP. at it to

of Department solar procure projects you solar if over any Asia, that can any provide of what in wind into could cause juggle kind and that you’re type of tariffs between and any mean, panels to curious related period to investigation you looking area? from if on Just Southeast there color the I Commerce

David Hutchens

et And Yes. on Arizona TEP the really issue an last much our tariff RFPs yet Electric month. of have we’re both and looking impact don’t put smaller subsidiary, on UNS for We in out of a batteries capacity, and be cetera, of both chunks alternatives. the for renewables PPAs be firm that or which transfer in generation can build for renewables form on can good other

year, process. have that, of later assign that them we or actually start related better we RFP. the contracts that when when results enter answers for analyze the those and to we’ll we get when So And in midyear into then seeing

David Quezada

that. for Thanks Excellent.

Operator

the Markets. next from Weekes question. from your Please proceed Our IA Capital of with line Matthew is question

Matthew Weekes

taking for my Thanks morning. question. Good

transitory wondering of expenses I cost onetime you’re those the the if at, about think, quarter some about was really just to and OM&A due commentary there? some effective cost costs FortisBC looking systems sort in there. think going expecting those that Were to Was any ask the timing-related kind just or of if management impacts on side then forward. lower any related are and And I there? Central those implement other I on of to there side, to Hudson, going some more just savings productivity

David Hutchens

Yes.

these First on the I’ll answer quick. pretty CH,

the are related to CH, system on trans further that they First implementation.

And remaining on some team to of his hard expecting basis. cost we’re how to year. offset those part of a So cost go and Charlie throughout are course, this the out not of repeated going-forward we impacts impacts working figure as

timing. X, BC the the On not up team just is I think O&M old by strong management that there good and

Matthew Weekes

appreciate the color it turn I That’s thanks. Okay, on for that. it I’ll back. me.

Operator

is Research. the Michael Our next Sullivan of line question Wolfe from from

is line open. now Your

Michael Sullivan

Hey morning. everyone. Good

David Hutchens

Good morning, Michael.

Michael Sullivan

in rate how side, Can fuel be base how impact Wanted filing you’ve thinking and jurisdiction overall on much you to circle that the on you the have we power bill filing? then in the And the case about fits remind how back rate to case into that should just case? that Arizona. us this just added to upcoming last that since

David Hutchens

Yes.

the So run want we to don’t filings. front

to but looking together So that. numbers be Not other those post closed, of already into stuff we’ve there’s lot at. we obviously the all test need because test things year just a that that adjustments and putting year we’re also goes that

them to want the regulators it. number about one don’t surprise thing don’t know stuff saying your So they by before

So filing. I we’ll June that save for can – the

Michael Sullivan

was there how purchase and of the there? Maybe fuel what factor you impact on into sort then just power that the Okay. that got on, future? order an to bill And

David Hutchens

Yes.

that I purchased be that just was only, XX costs was got the collected that’s power for will overall months. over next approved, bill – clause think, around of historical impact X% it fuel the X% and the So that and adjustment was we

Michael Sullivan

it. Got

transmission. billion state and $X.X is shifting MISO to billion, you that’s that. of ROFR the piece the just And to is Okay. ROFR footprint in? Can across states that in you’re over that $X clarify your Or a the the

David Hutchens

Yes. that answer. I’ll Linda over turn to to

Linda Blair

of to billion $X Iowa. in either in projects Michigan we billion, are ROFRs the those comprise that both or And states. projects state the have $X.X those Yes,

states. question, ROFR for that to answer are other ITC. projects been that ITCs projects in think identified would be states would identified that outside be your I in have those of the So no There are

Michael Sullivan

Okay. states? still things your openness the there’s to Is may historically? sensing a give the on of it maybe largely how And high-level just as now? are think be going Or in to could incumbents more thoughts non-ROFR I seen view competition we’ve maybe winning you you go

Linda Blair

Yes, to other I competitive on think, what’s of states hesitate to with would really speculate those kind I respect happen in bidding.

may that or while be recent might provisions they reinstating or specifically included FERC where jointly may rights-of-use And that But don’t a may if of, a in some understand was to on they a FERC’s proceeding certainly if might federal projects make proceed, and NOPR lot projects we thinking planning open back to there of certainly, could be whatever you I’m out these final decision, perhaps that a was come there first decision, using know owned. As decision. are that’s order perhaps non-NOPR what know, in a NOPR truly refusal transmission to and suggest were if apply states.

and the So who what pretty is don’t other yet I’m bid, would may position in participating are because know who we level how might would they We themselves or they I the best states or how utilities high off potentially solicitation that people talking know bid process. developers answer don’t incumbent where cusp competitive might partner they in how those really, think, happen with. or

anticipation understand to just would I what just expect why the of unknowns the of too means. in of maybe I think that’s truly at own think there’s focused our I predominantly point states assets. portfolio that to right tranche lot think so perhaps I a where ITC. on So securing most what as little process, in our have we we of time I horn, say, of a that of of really bit one this sort were But refusal we first this

timing the ROFR just completed, year. getting in we last our state So Michigan late

from was And identified. that that secure certainly critical could been the timing have so rights we to our projects the so perspective, these

Michael Sullivan

Appreciate the thoughts. Thank you.

Operator

Your line your from America. of Lozny next question. proceed question is Please from of Dariusz the with Bank

Dariusz Lozny

and morning you the thank good Hi, time. for

talk just is your of what about the bit Can timing – touch one, number Arizona a briefly. strategy on little I to filing rate what filing maybe behind guess case midyear. Just you the wanted the

accomplish And think of same of writers I time? that in you. Anything state you’re riders in goal is looking trying the the around as the secondarily, number that? other one made terms there. out is the it out align the part with fewer of there? reducing utilities file goals probably trying just having the to of strategic Or also then to to of of Thank commission

David Hutchens

Yes.

us part as last of well many other on all it goals first, it’s don’t the that think the I so commission of yes, have the going aligning we riders. with proceedings looking so both the stakeholders to And and number time. simplify helps

so So make decision we riders rate better timing, a not case than utilities fewer what or say, bunch not getting to the do. ones. of is as straightforward And small far the what need we other having do, good may the as to may

the and year, a So rate we that time year could and the this in the the and in test test year we as is full together to were that the used and have we time last in need numbers our we go address face. the get last that shortfall all

Dariusz Lozny

at Was quarter. I if Okay. Central weather-driven One was Thank anything there It Or to just Hudson that? sales a attributable quick about more like ticked on can, else looked you. one, number? X%. the down that

David Hutchens

details that? do the on Charlie, you have

Charles Freni

anything well. than weather-driven But cutting certainly, pricing we resulted else. revenue mean more in probably decoupling. customers it’s say I would back I as have

course as works work particularly well. the the of think as – through sales ultimately, that through So sales year, we unbilled I

David Hutchens

Charles. Thanks,

Dariusz Lozny

for time Okay, the thank you this morning.

David Hutchens

Thank you, Dariusz.

Operator

Thank you.

would Amaimo. the I call is to turn further to question, over As Ms. no there like back

Stephanie Amaimo

you, Thank Rual.

in quarter your for contact further and We conference a at nothing you you need time. our great participating further. results Thank Investor Thank Relations anything day. should have have first XXXX call. you this time, for Please

Operator

Thank you for participating, ladies conference and call. today’s gentlemen. concludes This

You may disconnect.

Fortis (FTS) 4 May 222022 Q1 Earnings call transcript