Slide 1: Investor Presentation Q1 2023
INVESTOR PRESENTATION Q1 2023 1
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: A Premium Energy Delivery Business
A PREMIUM ENERGY DELIVERY BUSINESS 93% Transmission & Distribution Assets HIGH QUALITY PORTFOLIO 10 Regulated Utility Businesses 3.4M Electric & Gas Customers 9,200 Employees 99% Regulated Utility Assets ~$26B Market Capitalization(1) ~9% Average Annual 10-Year Total Shareholder Return(1) $36B 2023F
Slide 4: Driving Sustainable Growth
OUR VISION & STRATEGY DRIVING A PREMIUM NORTH AMERICAN UTILITY DELIVERING A CLEAN ENERGY FUTURE SUSTAINABLE GROWTH Operational Excellence Financial Strength Diversified Regulated Portfolio Substantially Autonomous Business Model Strong Governance 4
Slide 5: Delivering Safe and Reliable Service
DELIVERING SAFE AND RELIABLE SERVICE Average Electricity Customer Managing Controllable Operating Outage Duration (Hours)(1) Costs Below Inflation 3.8 3.8 3.5 3.3 2.3 2.1 1.8 1.9 2.0 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Fortis compound average growth rate Fortis Electricity Canada
Slide 6: 20-Year Total Shareholder Return
20-YEAR TOTAL SHAREHOLDER RETURN Cumulative 20-Year Total Shareholder Return 751% Average Annual Total Shareholder Returns 459% 1-Year (7.9%) 409% 5-Year 7.2% 10-Year 8.7% 20-Year 11.3% 2002 2006 2010 2014 2018 2022 Fortis S&P/TSX Composite Index S&P/TSX Capped Utilities Index Note: Cumulative 20-ye
Slide 7: Carbon Emissions Reduction on Track
CARBON EMISSIONS REDUCTION ON TRACK 2022 Sustainability Highlights: Achieved 28% GHG Emissions Reduction Since 2019 • Released first TCFD and Climate Report 2019 • Fortis aligned with GRI and SASB • Strong board diversity with 54% female directors and 2 directors identifying as 50% GHG Emissions Red
Slide 8: ESG Leadership
ESG LEADERSHIP Environmental Social • 2050 net-zero direct emissions goal, with • Focus on Indigenous partnerships and business interim targets to reduce GHG emissions • 1,800 KM Wataynikaneyap transmission line Fortis ranked #1 50% by 2030 and 75% by 2035 connecting 17 remote First Nations communit
Slide 9: $22.3B Five-Year Capital Plan
$22.3B FIVE-YEAR CAPITAL PLAN $5.9B Cleaner Energy Capital Plan Supports Continued Focus on Investments(1) Low-Risk Rate Base Growth Customer Affordability • Targeting controllable operating cost 35% increases below inflation, consistent with Transmission historical practice $46.1B • Focused on prev
Slide 10: Five-Year Plan at a Glance
FIVE-YEAR PLAN AT A GLANCE Average Annual Capital of $4.4B Highly Executable Capital Plan $4.7B $4.6B $4.5B $4.3B $4.2B • 83% Smaller Projects • 17% Major Projects • 55% U.S. • 41% Canada • 4% Caribbean 2023F 2024F 2025F 2026F 2027F • 99% Regulated Regulated - Independent Electric Transmission (ITC)
Slide 11: Capital Plan Concentrated at Three Largest Utilities
CAPITAL PLAN CONCENTRATED AT THREE LARGEST UTILITIES $2.3B • Infrastructure investments including • Reliability and integrity investments • Includes ~$1.2B of renewable and reliability and resiliency upgrades, storage investments to transition to • Natural gas infrastructure including cleaner energy
Slide 12: No Discrete Equity Required to Fund 2023-2027 Capital Plan
NO DISCRETE EQUITY REQUIRED TO FUND 2023-2027 CAPITAL PLAN Predictable Funding Plan Capital Plan Funded Primarily with Cash from Operations and Debt at Regulated Subsidiaries Net Debt(2) • Regulated debt used to repay maturing debt, and fund capital 33% expenditures and operating requirements Equity
Slide 13: Beyond the Plan
BEYOND THE PLAN Inflation Reduction Act • A catalyst for future transmission investments • Renewable generation including TEP’s IRP(1) • Interconnecting renewables to the grid • Electric vehicle infrastructure • Funding for community transition from fossil fuels Climate Adaptation & Grid Resiliency
Slide 14: Long Capex Runway
LONG CAPEX RUNWAY Responding to stakeholder expectations and capitalizing on opportunities to expand & extend growth Business development in existing footprint Connect more renewable generation to the grid Prepare grid for additional electrification Build more renewable generation Invest in technolo
Slide 15: Dividend Guidance Supported by Long-Term Growth Strategy
DIVIDEND GUIDANCE SUPPORTED BY LONG-TERM GROWTH STRATEGY 49 YEARS of Consecutive Dividend Increases 4-6% Annual Dividend Growth Guidance through 2027 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 15
Slide 16: Ongoing Regulatory Proceedings
ONGOING REGULATORY PROCEEDINGS ITC Midwest Capital Structure Complaint Denied – In November 2022, FERC denied the complaint filed by the Iowa Coalition for Affordable Transmission (ICAT) seeking to lower ITC Midwest’s equity ratio from 60% to 53%; ICAT filed a request for rehearing with FERC in Dece
Slide 17: Why Invest in Fortis?
WHY INVEST IN FORTIS? Focused on Geographic & 4-6% SAFE, ENERGY Regulatory ANNUAL DIVIDEND WELL-RUN DELIVERY DIVERSITY Growth Guidance Local Utilities LOW-RISK Virtually ESG Growth All INNOVATIVE REGULATED Leader Profile 17
Slide 18: Appendix
FORTIS APPENDIX
Slide 19: Table of Contents
TABLE OF CONTENTS ITC HOLDINGS CORP. 20-21 UNS ENERGY 22-26 CENTRAL HUDSON 27-28 FORTISBC 29-30 FORTISALBERTA 31-32 OTHER ELECTRIC UTILITIES 33-35 2022-2027 RATE BASE BY BUSINESS UNIT 36 2023-2027 CAPITAL PLAN BY BUSINESS UNIT 37 MAJOR CAPITAL PROJECTS 38 MACRO OUTLOOK & ASSUMPTIONS 39 SALES TRENDS
Slide 20: ITC Holdings Corp.
ITC HOLDINGS CORP. Type of Utility Transmission Regulator FERC Regulatory Model Cost of Service with FERC Formula Rates Current Regulatory Construct 10.77-11.41% ROE on 60% equity Cost-based, forward-looking formula rates Significant Regulatory Features with annual true-up 2023F Rate Base(1) $11.1B
Slide 21: ITC Capital Investment Overview
ITC CAPITAL INVESTMENT OVERVIEW 2023-2027 CAPITAL(1) $3.4B Infrastructure Investments Grid Security Rebuild, reliability, resiliency, system efficiencies, increased capacity, circuit overloads, pocket load growth MISO $1.2B New Interconnections LRTP Supports economic development, load interconnectio
Slide 22: 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 9.15% ROE on 9.50% ROE on 9.75% ROE on Current Regulatory Construct(1)
Slide 23: UNS Capital Investment Overview
UNS CAPITAL INVESTMENT OVERVIEW 2023-2027 CAPITAL(1) $1.3B Distribution Infrastructure Grid resiliency and modernization Generation Maintenance $1.2B Renewable Generation Distribution Energy storage, renewable investments Infrastructure IT, General $1.0B Transmission Infrastructure $4.6B and Other V
Slide 24: TEP General Rate Application
TEP GENERAL RATE APPLICATION APPLICATION SUPPORTS TEP’S CLEAN REQUESTED REVENUE ENERGY TRANSITION AND CONTINUED REQUIREMENT (US$M) DELIVERY OF SAFE AND RELIABLE SERVICE Clean Energy Transition Springerville 2019 Rate Case 2022 Rate Case Depreciation San Juan Staff Raptor Retirement Oso Application D
Slide 25: Arizona Focused on Renewables
ARIZONA FOCUSED ON RENEWABLES TEP INTEGRATED RESOURCE PLAN FILED IN 2020 • Next IRP expected in 2023 3,400 MW Planned Additions of Coal-free Wind, Solar and Storage 250 MW 100 MW 99 MW generation mix by 2032 Oso Grande Wilmot Solar (1)(2) Borderlands(1) >70% renewable power by 2035 2021 2022-2035 Ov
Slide 26: Reliable & Affordable Service During Clean Energy Transition
RELIABLE & AFFORDABLE SERVICE DURING CLEAN ENERGY TRANSITION TEP’s goal is to transition to a cleaner grid while maintaining affordable rates and reliable service for our customers 1,073 MW Planned Coal 3,400 MW of Planned Wind, Retirements by 2032 Steel for Fuel Transition Solar and Storage Resourc
Slide 27: Central Hudson
CENTRAL HUDSON Type of Utility Electric and Gas Transmission & Distribution Regulator New York State Public Service Commission Regulatory Model Cost of service on future test year Current Regulatory Construct(1) 9.0% ROE on 49% equity Significant Regulatory Features Revenue decoupling 2023F Rate Bas
Slide 28: Central Hudson Capital Investment Overview
CENTRAL HUDSON CAPITAL INVESTMENT OVERVIEW 2023-2027 CAPITAL(1) Transmission $1.1B Distribution Infrastructure Infrastructure Distribution automation and modernization $500M IT, General and Other $1.8B Distribution Infrastructure Modernization Building the Workforce of the Future IT, General and $20
Slide 29: FortisBC
FORTISBC FortisBC Energy FortisBC Electric Type of Utility Gas distribution Electricity Regulator British Columbia Utilities Commission Regulatory Model Cost of service with incentive mechanisms Current Regulatory Construct 8.75% ROE on 38.5% equity 9.15% ROE on 40.0% equity Multi-year rates with re
Slide 30: FortisBC Capital Investment Overview
FORTISBC CAPITAL INVESTMENT OVERVIEW 2023-2027 CAPITAL $2.6B Reliability & Integrity Investments Ongoing maintenance requires significant capital investment Sustainability Includes customer growth and general plant investment Major Integrity Projects LNG $1.3B LNG Projects Tilbury 1B Tilbury LNG Res
Slide 31: FortisAlberta
FORTISALBERTA Type of Utility Electricity distribution Regulator Alberta Utilities Commission Regulatory Model PBR Current Regulatory Construct 8.5% ROE on 37% equity ~85% of revenue derived from fixed-billing Significant Regulatory Features determinants 2023F Rate Base $4.2B 5-Year Rate Base CAGR (
Slide 32: FortisAlberta Capital Investment Overview
FORTISALBERTA CAPITAL INVESTMENT OVERVIEW 2023-2027 CAPITAL $2.4B Distribution Infrastructure IT, General Safety & reliability of distribution assets, meter and Other upgrades, pole management program, modernization $500M IT, General and Other $2.9B Distribution Infrastructure 32
Slide 33: Other Electric Utilities
OTHER ELECTRIC UTILITIES (1) Type of Utility Electricity Newfoundland and Labrador Board of Regulator Island Regulatory and Appeals Commission Ontario Energy Board Commissioners of Public Utilities Regulatory Model Cost of service on future test year Cost of service on future test year Cost of servi
Slide 34: 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 2022 Achieved ROE 10.8% 10.8% 2023F Rate Base(2) $0.8B $0.5B 5-Year Rate Base CAGR (202
Slide 35: Other Electric Capital Investment Overview
OTHER ELECTRIC CAPITAL INVESTMENT OVERVIEW 2023-2027 CAPITAL(1) IT, General $1B Distribution Infrastructure and Other Newfoundland Power, Maritime Electric and Caribbean Utilities Transmission $750M Generation Diversification Infrastructure Caribbean Utilities shift to cleaner energy $2.4B Distribut
Slide 36: 2022-2027 Rate Base by Business Unit
2022-2027 RATE BASE BY BUSINESS UNIT Rate Base 5-YEAR CAGR to ($BILLIONS, EXCEPT FOR CAGR) 2022A 2023F 2024F 2025F 2026F 2027F 2027 Regulated - Independent Electric Transmission ITC(1) 10.5 11.1 11.9 12.5 13.2 14.1 6.1% Regulated – U.S. Electric & Gas UNS Energy 6.7 7.0 7.4 7.8 8.5 9.1 6.3% Central
Slide 37: 2023-2027 Capital Plan by Business Unit
2023-2027 CAPITAL PLAN BY BUSINESS UNIT Capital Plan(1) 2023-2027 ($MILLIONS) 2023F 2024F 2025F 2026F 2027F TOTAL Regulated - Independent Electric Transmission ITC 1,103 1,177 1,137 1,180 1,220 5,817 Regulated – U.S. Electric & Gas UNS Energy 1,006 690 986 1,027 891 4,600 Central Hudson 384 343 418
Slide 38: Major Capital Projects
MAJOR CAPITAL PROJECTS Major Capital ESTIMATED Projects 2023-2027 COMPLETION 17% PLAN ($ Millions) DATE ITC MISO Long-Range Transmission Plan(1) 923 Post-2027 UNS Energy Renewable Generation(2) 417 Various UNS Energy Vail-to-Tortolita Transmission Project 378 2027 $22.3B FortisBC Tilbury LNG Storage
Slide 39: Macro Outlook & Assumptions
MACRO OUTLOOK & ASSUMPTIONS Foreign Exchange Interest Rates • USD:CAD FX Rate of 1.30 for 2023-2027 • Primary exposure to rising rates at Fortis Inc. • 65% of operating earnings(1) / 60% of capital and ITC Holdings (non-regulated) plan from U.S. & Caribbean • Average annual near-term non-regulated •
Slide 40: Q4 Sales Trends
Q4 SALES TRENDS RETAIL ELECTRIC Q4 2022 vs. Q4 2021 SALES SALES TRENDS • Peak load down 5% due to milder weather impacts and N/A economic conditions • Increase primarily due to favourable weather impacts and +3% customer growth; excluding weather impacts, retail sales (1) up 1% • Residential sales d
Slide 41: 2022 Sales Trends
2022 SALES TRENDS RETAIL ELECTRIC 2022 vs. 2021 SALES SALES TRENDS N/A • Peak load up 1% due to favourable weather impacts • Increase primarily due to higher cooling load associated +1% with warmer temperatures and customer growth; (1) Excluding weather impacts, retail sales flat • Residential sales
Slide 42: Limited Pension Exposure
LIMITED PENSION EXPOSURE Defined Benefit Pension Plans • 101% of $3.1B pension benefit obligation funded at December 31, 2022 • Allocation of plan assets at December 31, 2022 Equities – 48% Fixed income – 43% Other – 9% • ~80% of pension assets subject to regulatory mechanisms UNS pension pl
Slide 43: Strong Liquidity & Credit Metrics
STRONG LIQUIDITY & CREDIT METRICS Active in Ample Credit Improving Debt Markets Facilities CFO/Debt Metrics(3) 11.7% • Over $3B in long-term debt raised in 2022 $3.8B 11.1% Weighted average rate of 3.9%(1) $3.2B Terms ranging from 5-30 years • Includes ~$400M in green debt $2.1B $1.6B US$170M
Slide 44: Long-Term Debt Issuances
LONG-TERM DEBT ISSUANCES Over $3B in Long-Term Debt issued in 2022 • Fortis Inc. – $500M unsecured 7-year 4.43% notes(1) • ITC US$300M secured mortgage bonds(2) US$75M secured 30-year 3.05% notes US$600M unsecured 5-year 4.95% notes(3) • UNS Energy – US$325M unsecured 10-year 3.25% notes • Cen
Slide 45: Debt Maturities
DEBT MATURITIES 10-Year Average: $1.2B $3.0 $2.5 $2.0 billions $1.5 $1.0 $0.5 $- 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F Non-Regulated (1) Regulated Note: Debt as at December 31, 2022 and excludes any new debt issuances during the forecast period. Excludes repayments of finance l
Slide 46: Investment-Grade Credit Ratings
INVESTMENT-GRADE CREDIT RATINGS COMPANY Fortis Inc. A-(1) Baa3 A (low) ITC Holdings Corp. A-(1) Baa2 n/a ITC Regulated Subsidiaries A A1 n/a TEP A- A3 n/a Central Hudson BBB+ Baa1 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
Slide 47: Strong Leadership Team
STRONG LEADERSHIP TEAM David Hutchens Jocelyn Perry Jim Reid Gary Smith President & CEO EVP, CFO EVP, Sustainability & CLO EVP, Operations & Innovation Fortis Inc. Exec. Stuart Lochray Stephanie Amaimo Julie Avery Karen Gosse Ron Hinsley Karen McCarthy Regan O’Dea Kevin Woodbury Sr. VP Capital Marke