Slide 1: 2021-2025 Five-Year Outlook Conference Call
2021-2025 FIVE-YEAR OUTLOOK CONFERENCE CALL SEPTEMBER 23, 2020
Slide 2: Forward Looking Information
FORWARD LOOKING INFORMATION Fortis includes forward-looking information in this presentation within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looki
Slide 3: Operational Update & Business Outlook
OPERATIONAL UPDATE & BUSINESS OUTLOOK BARRY PERRY PRESIDENT & CEO
Slide 4: Welcome & Business Update
WELCOME & BUSINESS UPDATE SAFE & RELIABLE SERVICE DURING COVID-19 2020 CAPITAL PLAN ON TRACK 2021-2025 FIVE-YEAR OUTLOOK CORPORATE-WIDE CARBON REDUCTION TARGET ANNOUNCED 4
Slide 5: A Premium Energy Delivery Business
A PREMIUM ENERGY DELIVERY BUSINESS 93% TRANSMISSION & DISTRIBUTION ASSETS HIGH-QUALITY PORTFOLIO: ➢ 10 Utility Businesses ➢ 3.3M Electric & Gas Customers ➢ 9,000 Employees ➢ 99% Regulated Utility Assets ➢ $24B Market Capitalization(1) ➢ ~14% Average Annual 20-Year Total Shareholder Return(1) ➢ ~$30B
Slide 6: Long-Term Strategy
LONG-TERM STRATEGY AREAS OF FOCUS ➢ Safe and reliable service DIVERSE BUSINESS MODEL SUPPORTING GROWTH STRATEGY Leveraging our operating model, geographic and regulatory ➢ Capital investment plan diversity, operating expertise, reputation and financial strength to execute on growth opportunities ➢ S
Slide 7: Five-Year Outlook Highlights
FIVE-YEAR OUTLOOK HIGHLIGHTS ~$19.6B ~6% ~6% 2021-2025 Rate Base Average Annual Capital Plan Growth Dividend Growth Guidance to 2025 $800M increase Rate base grows 47 consecutive years over prior year ~$10B to $40.3B of dividend increases plan of $18.8B over five-year plan 7
Slide 8: Dividend Guidance Supported by Long-Term Growth Strategy
DIVIDEND GUIDANCE SUPPORTED BY LONG-TERM GROWTH STRATEGY 6% 47 YEARS $2.0 AVERAGE ANNUAL DIVIDEND OF CONSECUTIVE GROWTH GUIDANCE TO 2025 DIVIDEND INCREASES $1.5 $1.0 $0.5 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20F 8
Slide 9: Committed to Improving Our Low-Carbon Emissions Profile
COMMITTED TO IMPROVING OUR LOW-CARBON EMISSIONS PROFILE 2019 Scope 1 Emissions Ranking Relative to Peers ~90% OF SCOPE 1 EMISSIONS 60,000 ARE CONCENTRATED IN ARIZONA AT TEP 50,000 Ktonnes CO2 equivalent 40,000 ➢ Excluding TEP emissions, Fortis would be one of the lowest ranked in 30,000 its peer gro
Slide 10: Corporate-Wide Carbon Emissions Reduction Target
CORPORATE-WIDE CARBON EMISSIONS REDUCTION TARGET OF 75% BY 2035 COMPARED TO 2019 LEVELS PROVIDES CUSTOMERS WITH CLEANER ENERGY Reduction in Scope 1 Emissions by 2035 Using a 2019 Base Year 16,000 ➢ Industry leader in sustainability with 14,000 shorter timeframe for reduction and 12,000 using current
Slide 11: Focused on Energy Delivery Assets & Renewable Generation
FOCUSED ON ENERGY DELIVERY ASSETS & RENEWABLE, CARBON-FREE GENERATION 75% BY 2035 TARGET WILL BUILD ON EXISTING BY 2035, 99% OF FORTIS ASSETS WILL BE ENERGY DELIVERY OR RENEWABLE GENERATION LOW-EMISSIONS PROFILE 2019 TOTAL ASSETS PROJECTED 2035 TOTAL ASSETS Focused on initiatives Energy beyond targe
Slide 12: Sustainability Leader
SUSTAINABILITY LEADER Continued Focus on Carbon emissions reduction target of Energy 75% by 2035 Delivery using a 2019 base year Industry leader in Industry recognition(1) for Safety Strong Governance and Reliability grounded in local leadership & independence More than 40% of Fortis Inc. Directors
Slide 13: Five-Year Capital
FIVE-YEAR CAPITAL DAVID HUTCHENS COO
Slide 14: $19.6B Five-Year Capital Plan
$19.6B FIVE-YEAR CAPITAL PLAN $800M INCREASE OVER PRIOR PLAN BALANCED CAPITAL OVER THE FIVE-YEAR PERIOD(1) $3.9B ANNUAL $3.8 $3.9 $3.9 $4.0 APPENDICES $4.0 AVERAGE (Billions) 80% Electric 20% Gas 5-Year Capital by Location: 2021F 2022F 2023F 2024F 2025F 55% U.S. Regulated - Independent Electric Tran
Slide 15: Low Risk, Highly Executable Capital Plan
LOW RISK, HIGHLY EXECUTABLE CAPITAL PLAN CAPITAL PLAN IS FOCUSED ON DELIVERING SAFE, RELIABLE AND COST-EFFECTIVE SERVICE TO OUR CUSTOMERS Regulated 99% Sustaining Major 58% Capital Projects Growth 15% 26% Non-Regulated Other Smaller Projects 1% 16% 85% 15
Slide 16: Capital Plan Concentrated at Three Largest Utilities
CAPITAL PLAN CONCENTRATED AT THREE LARGEST UTILITIES Capital Plan by Segment(1) (billions) ITC $5.1 FortisBC 4.4 UNS Energy 3.8 Other Utilities 2.3 FortisAlberta 2.0 Central Hudson 1.8 Non-Regulated 0.2 Total 2021-2025 Capital Plan $19.6 (1) US dollar-denominated capital expenditures translated at a
Slide 17: $5.1B Five-Year Capital Plan at ITC
$5.1B FIVE-YEAR CAPITAL PLAN AT ITC ➢ Infrastructure investments including reliability and resiliency upgrades, increased capacity, etc. ➢ Physical and cyber investments to enhance grid security ➢ Interconnections to support 2,800 MW of cleaner energy Note: US dollar-denominated capital expenditures
Slide 18: $4.4B Five-Year Capital Plan at FortisBC
$4.4B FIVE-YEAR CAPITAL PLAN AT FORTISBC ➢ Major integrity projects including Inland Gas Upgrades Project and Transmission Integrity Management Capabilities Project ➢ Natural gas infrastructure including a new LNG storage tank ➢ Automated Gas Metering Infrastructure 18
Slide 19: Two New Major Capital Projects at FortisBC
TWO NEW MAJOR CAPITAL PROJECTS AT FORTISBC TILBURY RESILIENCY TANK - ~$200M APPENDICES ➢ Increase LNG storage at the Tilbury site and increase available regasification capacity to provide short-term backup gas supply ➢ Project will enhance resiliency in face of system or supply disruptions ➢ Initial
Slide 20: $3.8B Five-Year Capital Plan at UNS Energy
$3.8B FIVE-YEAR CAPITAL PLAN AT UNS ENERGY ➢ Distribution investments including customer meter infrastructure and grid resiliency and modernization ➢ Vail to Tortolita Transmission Project ➢ Transition to cleaner energy Note: US dollar-denominated capital expenditures translated at a forecast USD:CA
Slide 21: Opportunities to Expand & Extend Capital Plan
OPPORTUNITIES TO EXPAND & EXTEND CAPITAL PLAN ITC UNS FortisBC CUC ➢ Significant renewable capacity ➢ 2020 Integrated Resource Plan ➢ Further develop Tilbury to ➢ Achieve local government goal and battery storage in MISO and (IRP) filed in June outlined TEP’s position BC as a marine of 70% renewable
Slide 22: Financial Outlook
FINANCIAL OUTLOOK JOCELYN PERRY EVP & CFO
Slide 23: Consolidated Rate Base
CONSOLIDATED RATE BASE $40.3B IN APPENDICES RATE BASE BY 2025(1) $40.3 $38.3 $36.4 $34.3 $32.2 $30.2 ➢ Rate base grows by ~$10B over the five-year period (Billions) ➢ Growth driven by asset resiliency, modernization and cleaner energy initiatives 2020F 2021F 2022F 2023F 2024F 2025F Regulated - Indep
Slide 24: Strong Rate Base Growth Across Portfolio of Utilities
STRONG RATE BASE GROWTH ACROSS PORTFOLIO OF UTILITIES 5-YEAR RATE BASE CAGR OF ~6% RATE BASE(3) 9.3% Central Hudson $40.3B 6.2% UNS Energy $30.2B 6.0% ITC 5.7% FortisBC(1) 4.8% Other Regulated Utilities(2) 2020F 2025F (1) Includes energy efficiency programs that are included in rate base but are not
Slide 25: 2021-2025 Funding Plan
2021-2025 FUNDING PLAN Debt(3) MAINTAINING 33% APPENDICES INVESTMENT-GRADE CREDIT RATINGS 5-YEAR CAPITAL PLAN ➢ Acceleration of equity funding $19.6B DRIP(2) in late 2019 Cash From 6% Operations(1) 61% ➢ Debt primarily at operating utilities ➢ Subsidiary balance sheets reflect approved capital struc
Slide 26: Investment-Grade Credit Ratings
INVESTMENT-GRADE CREDIT RATINGS “The ratings affirmation on Fortis and subsidiaries reflect the parent’s execution of CREDIT RATINGS its deleveraging plan over the past year and improved financial measures... Our view of Fortis’ business risk profile as excellent has not changed.” - S&P Global Credi
Slide 27: Manageable Debt Maturities & Strong Liquidity
MANAGEABLE DEBT MATURITIES & STRONG LIQUIDITY CONSOLIDATED FIXED-TERM DEBT MATURITIES(1) ($B) LIQUIDITY ($B) ~$3B IN LONG-TERM $2.0 APPENDICES DEBT ISSUED YEAR-TO-DATE 2020 5-Year Average ~$1.0B Thousands $6 $1.5 ➢ Strong access to debt markets $1.0 $4 5.2 4.7 ➢ Highlighted by inaugural green bonds
Slide 28: Update on Regulatory Proceedings
UPDATE ON REGULATORY PROCEEDINGS • Notice of Proposed Rulemaking (NOPR) on Incentives – Transmission Incentive NOPR issued in March 2020; comments filed July 1, 2020 and awaiting next steps • TEP General Rate Application – Hearings concluded in June 2020; decision expected in late 2020 • 2020 Rate I
Slide 29: Why Invest in Fortis?
WHY INVEST IN FORTIS? Focused on Strong Virtually 6% Well-Run ESG Highly Innovative Energy Growth All Dividend Businesses Leader Diversified Delivery Profile Regulated Guidance 29
Slide 30: 2021-2025 Five-Year Outlook Conference Call
2021-2025 FIVE-YEAR OUTLOOK CONFERENCE CALL SEPTEMBER 23, 2020
Slide 31: Table of Contents
TABLE OF CONTENTS 1. ITC Holding Corp. 32-35 7. 2021-2025 Rate Base by Segment 53 2. UNS Energy 36-39 8. 2021-2025 Capital by Segment 54 3. Central Hudson 40-41 9. Major Capital Projects 55 4. FortisBC 42-46 10. Investment-Grade Credit Ratings 56 5. FortisAlberta 47-48 11. Our Leadership Team 57 6.
Slide 32: ITC Holdings Corp.
ITC HOLDINGS CORP. Type of Utility Transmission Regulator FERC Cost of Service with FERC Formula Regulatory Model Rates 10.77-11.41% ROE on Current Regulatory Construct 60% equity Cost-based, forward-looking Significant Regulatory Features formula rates with annual true-up 2020F Rate Base(1) $9.4B 5
Slide 33: ITC Capital Investment Overview
ITC CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) $3.6B Infrastructure Investments Rebuild, reliability, resiliency, system efficiencies, Infrastructure increased capacity, circuit overloads, pocket load Investments growth $700M New Interconnections Supports economic development, load interconnec
Slide 34: ITC Major Capital Projects
ITC MAJOR CAPITAL PROJECTS Expected to be Total 2021-2025 Expected Year Major Capital Projects ($M) incurred to the Forecast of Completion end of 2020(1) Multi-Value Regional Transmission Projects 637 261 2023 • MVP 5 Hickory Creek Line comprised of ~100-mile 345kV transmission line from Iowa to Wis
Slide 35: ITC Building the Grid of the Future
ITC BUILDING THE GRID OF THE FUTURE OPPORTUNITIES BEYOND THE PLAN Access to ~16,000 New Regional Technologies Markets 4 GW and 9 GW Regional transmission Miles of Transmission of battery storage necessary to facilitate in MISO and SPP increased demand for queues(1) renewables 565 Substations Grid Se
Slide 36: UNS Energy
UNS ENERGY Tucson UNS Electric UNS Gas Electric Gas Type of Utility Electricity Distribution Arizona Corporation Commission Regulator & FERC Cost of service/historical test year & Regulatory Model FERC formula transmission rates 9.75% ROE 9.75% ROE 9.5% ROE on Current Regulatory Compact on 50% on 50
Slide 37: UNS Capital Investment Overview
UNS CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) $1.3B Distribution Infrastructure Customer meter infrastructure, grid resiliency, Distribution modernization Transmission Infrastructure Infrastructure $1.1B Transmission Infrastructure Vail to Tortolita, new substations $3.8B $800M Generation Div
Slide 38: UNS Major Capital Projects
UNS MAJOR CAPITAL PROJECTS Expected to be Total 2021-2025 Expected Year Major Capital Projects ($M) incurred to the Forecast of Completion end of 2020 Vail to Tortolita Transmission Project(1) - 244 2023 • Includes the construction of an upgraded 230kV transmission line within TEP’s service territor
Slide 39: Arizona Focused on Renewables
ARIZONA FOCUSED ON RENEWABLES TEP INTEGRATED RESOURCE PLAN FILED IN JUNE 2020 ~460 MW of New Wind, 3,400 MW Planned Additions of Solar and Storage Wind, Solar and Storage ➢ TEP expects to have coal-free generation mix 2020-2021 2022-2035 by 2032 ➢ TEP’s power will be more than 70% renewable by 1,073
Slide 40: Central Hudson
CENTRAL HUDSON Type of Utility Gas and Electricity Regulator New York State Public Service Commission Regulatory Model Cost of service on future test year Current Regulatory Compact 8.8% ROE on 50% equity Significant Regulatory Features Revenue decoupling 2020F Rate Base(1) $2.1B 5-Year Rate Base CA
Slide 41: Central Hudson Capital Investment Overview
CENTRAL HUDSON CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) Distribution $1.0B Distribution Infrastructure Infrastructure Distribution automation and modernization $240M Transmission Infrastructure $1.8B Replacement of aging infrastructure $550M IT, General and Other Modernization Building the W
Slide 42: FortisBC
FORTISBC FortisBC FortisBC Gas Electric Type of Utility Gas distribution Electricity Regulator British Columbia Utilities Commission Regulatory Model Cost of service with incentive mechanisms 9.15% ROE on 40.0% Current Regulatory Compact 8.75% ROE on 38.5% equity equity Multi-year rates with revenue
Slide 43: FortisBC Capital Investment Overview
FORTISBC CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL $2.1B Sustainment & Customer Growth Ongoing maintenance requires significant capital investment Includes customer growth and general plant investment Sustainment & Customer Growth $1.2B Major Integrity Projects Inland Gas Upgrades Project Transm
Slide 44: FortisBC Major Capital Projects
FORTISBC MAJOR CAPITAL PROJECTS Expected to be Total 2021-2025 Expected Year Major Capital Projects ($M) incurred to the Forecast of Completion end of 2020 Eagle Mountain Woodfibre Gas Project - 350 2025 • 47-km gas line will service a small-scale, third-party owned facility for export to Asian mark
Slide 45: FortisBC Major Capital Projects Continued
FORTISBC MAJOR CAPITAL PROJECTS (CONTINUED) Expected to be Total 2021-2025 Expected Year Major Capital Projects ($M) incurred to the Forecast of Completion end of 2020 Tilbury 1B 9 376 2025 • Construction of additional liquefaction and dispensing in support of optimizing the existing investment in T
Slide 46: FortisBC's Clean Growth Pathway
FORTISBC’S CLEAN GROWTH PATHWAY 30% GHG REDUCTION BY 2030 Energy Renewable LNG Zero & Low-Carbon Efficiency Natural Gas Transportation Positioning BC Currently Utilizing as a Domestic & FortisBC Renewable Natural Gas(1) International Owns and Operates Conservation & Efficiency Bunkering Hub --------
Slide 47: FortisAlberta
FORTISALBERTA Type of Utility Electricity distribution Regulator Alberta Utilities Commission Regulatory Model PBR Current Regulatory Compact 8.5% ROE on 37% equity ~85% of revenue derived from Significant Regulatory Features fixed-billing determinants 2020F Rate Base $3.7B 5-Year Rate Base CAGR 3.0
Slide 48: FortisAlberta Capital Investment Overview
FORTISALBERTA CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL Distribution Infrastructure $1.6B Distribution Infrastructure Safety & reliability of distribution assets, meter upgrades, pole management program, modernization $2.0B $400M IT, General and Other IT, General and Other 48
Slide 49: Other Electric Utilities
OTHER ELECTRIC UTILITIES (1) Type of Utility Electricity Newfoundland and Labrador Board of Island Regulatory and Appeals Regulator Ontario Energy Board Commissioners of Public Utilities Commission Regulatory Model Cost of service on future test year Cost of service on future test year Cost of servi
Slide 50: Other Electric Utilities Continued
OTHER ELECTRIC UTILITIES (CONTINUED) (1) Type of Utility Electricity Regulator Utility Regulation and Competition Office Government of the Turks and Caicos Islands Regulatory Model Cost of service Cost of service 2019 Achieved ROE 12.10% 8.00% 2020F Rate Base(2) $0.7B $0.5B 5-Year Rate Base CAGR 8.8
Slide 51: Other Electric Capital Investment Overview
OTHER ELECTRIC CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) Distribution $900M Distribution Infrastructure Infrastructure Newfoundland Power and Caribbean Utilities $650M Generation Diversification Caribbean Utilities shift to cleaner energy $2.4B IT, General and Other Generation $650M Transmiss
Slide 52: Other Electric Major Capital Projects
OTHER ELECTRIC MAJOR CAPITAL PROJECTS Expected to be Total 2021-2025 Expected Year Major Capital Projects ($M) incurred to the Forecast of Completion end of 2020 Wataynikaneyap Transmission Power Project(1) 252 479 2023 • Partnership with 24 First Nations to connect remote communities in Northern On
Slide 53: 2020-2025 Rate Base by Segment
2020-2025 RATE BASE BY SEGMENT (1) Rate Base 5-Year CAGR ($billions) 2020F 2021F 2022F 2023F 2024F 2025F to 2025 Regulated - Independent Electric Transmission ITC(2) 9.4 9.9 10.6 11.3 11.9 12.5 6.0% Regulated - US Electric & Gas UNS Energy 5.6 6.2 6.7 7.0 7.3 7.6 6.2% Central Hudson 2.1 2.3 2.5 2.7
Slide 54: 2021-2025 Capital Plan by Segment
2021-2025 CAPITAL PLAN BY SEGMENT (1) Capital Forecast 2021-2025 ($millions) 2021F 2022F 2023F 2024F 2025F TOTAL Regulated - Independent Electric Transmission ITC 1,000 1,007 993 1,107 993 5,100 Regulated - US Electric & Gas UNS Energy 749 781 840 853 547 3,770 Central Hudson 306 416 409 346 310 1,7
Slide 55: Major Capital Projects
MAJOR CAPITAL PROJECTS Expected 2020 2021-2025 Year of ($ Millions) Forecast(1) Plan(1) Completion ITC Multi-Value Regional Transmission Projects 12 261 2023 Major Capital ITC 34.5 kV to 69 kV Transmission Conversion Project 99 148 Post-2025 Projects UNS Vail to Tortolita (2) - 244 2023 15% UNS Oso
Slide 56: Investment-Grade Credit Ratings
INVESTMENT-GRADE CREDIT RATINGS Company Fortis Inc. A-(1) Baa3 BBB (High) ITC Holdings Corp. A-(1) Baa2 n/a ITC Regulated Subsidiaries A A1 n/a TEP A- A3 n/a Central Hudson A- A3 n/a FortisBC Energy n/a A3 A FortisBC Electric n/a Baa1 A (low) FortisAlberta A- Baa1 A (low) Newfoundland Power n/a A2 A
Slide 57: Our Leadership Team
OUR LEADERSHIP TEAM Barry Perry President & CEO Fortis Inc. Executives Nora Duke David Hutchens James Laurito Jocelyn Perry Jim Reid Gary Smith EVP, Sustainability & COO, EVP, Business EVP, CFO EVP, CLO & EVP, Eastern Canadian & CHRO CEO UNS Energy Development & CTO Corporate Secretary Caribbean Ope