Slide 1: Investor Presentation Q3 2021
INVESTOR PRESENTATION Q3 2021
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 ➢ ~9,000 Employees ➢ 99% Regulated Utility Assets ➢ ~$27B Market Capitalization(1) ➢ ~14% Average Annual 20-Year Total Shareholder Return
Slide 4: Long-Term Strategy
LONG-TERM STRATEGY Leveraging our operating model, geographic and regulatory diversity, operating expertise, reputation and financial strength to deliver a cleaner energy future Proven Dividend Track Focus on Growth Strong ESG Profile Record & Outlook 6% Average Annual Execute on growth Strengthenin
Slide 5: Delivering Safe and Reliable Service
DELIVERING SAFE AND RELIABLE SERVICE All Injury Frequency Rate(1) Average Electricity Customer Outage Duration(2) 3.9 3.8 3.6 3.5 1.78 1.50 1.67 1.45 1.45 2.2 1.38 2.1 2.1 1.9 1.8 1.09 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Fortis USA Bureau of Canadian Electricity Fortis Canadian Electri
Slide 6: Q2 Sales Trends
Q2 SALES TRENDS Retail Sales Q2 2021 vs. Q2 2020 Sales Trends • Peak load increased 5% due to temporary closure N/A of auto manufacturers and suppliers in Q2 2020 • Overall increase driven by warmer weather and +3% increased cooling load; residential sales up 1%; C&I up 5% • Q2 sales reflect warmer
Slide 7: 2021 Sustainability Update Highlights
2021 SUSTAINABILITY UPDATE HIGHLIGHTS Delivering Cleaner Energy to Customers Report Highlights: 50+ new key performance indicators added to Carbon emissions reduction report, including 14 that align with SASB standards target of 75% by 2035 compared to 2019 levels Strengthened linkage between sustai
Slide 8: Fortis Signs On as a TCFD Supporter
FORTIS SIGNS ON AS A TCFD SUPPORTER Solidifying Our Commitment to the Task Force on Climate-Related Financial Disclosures (“TCFD”) Recommendations: • Fortis has become a TCFD supporter and is committed to implementing the TCFD recommendations • Climate scenario analysis ongoing to assess the resilie
Slide 9: Carbon Emissions Reduction Target of 75% by 2035
CARBON EMISSIONS REDUCTION TARGET OF 75% BY 2035 Our target represents avoided emissions equivalent to taking ~2 million cars off the road in 2035 compared to 2019 levels Reduction in Scope 1 Emissions by 2035 Achievable Target Largely Driven by Plan Improves Already Using a 2019 Base Year TEP’s Int
Slide 10: ESG Leadership
ESG LEADERSHIP Continued focus on Carbon emissions reduction Energy (1) target of 75% by 2035 Delivery using a 2019 base year Industry leader in Industry recognition for Safety Strong Governance and Reliability grounded in local leadership & independence Focused on More than Diversity $15 million Wo
Slide 11: Capital Plan Supports Low-Risk Growth
CAPITAL PLAN SUPPORTS LOW-RISK GROWTH Rate Base 5% 3% 6% 6% 6% $40.3B 8% $30.5B 2021-2025 Capital Plan $19.6 Billion 36% 30% Distribution Transmission 2020A 2025F Transmission supporting clean energy RNG/LNG Clean Generation Traditional Generation (1) Information Technology Other Note: Rate base gro
Slide 12: Opportunities to Expand & Extend Growth
OPPORTUNITIES TO EXPAND & EXTEND GROWTH Other Opportunities ➢ Electric Vehicle Infrastructure ➢ Lake Erie Connector Project ➢ 2020 Integrated Resource Plan ➢ Further develop Tilbury to (~$1.7B) (IRP) outlined TEP’s ambitious position BC as a marine ➢ Biden Infrastructure Plan and realistic sustainab
Slide 13: 6% Average Annual Dividend Growth Guidance to 2025
6% AVERAGE ANNUAL DIVIDEND GROWTH GUIDANCE TO 2025 47 Years of Consecutive Dividend Increases 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 13
Slide 14: Credit Ratings and Liquidity
CREDIT RATINGS AND LIQUIDITY Credit Ratings Credit Facilities ($B) (1) A- (2) 4.3 3.9 A (low) 1.0 1.3 Baa3 June 30, 2021 Dec. 31, 2020 Remaining Capacity Utilized (1) S&P credit ratings for Fortis Inc. and ITC Holdings Corp. reflect the issuer credit ratings. The unsecured debt rating for Fortis Inc
Slide 15: Regulatory Update
REGULATORY UPDATE • Notice of Proposed Rulemaking (NOPR) on Incentives – In April 2021, FERC issued a supplemental NOPR proposing to eliminate the 50 bps RTO adder for transmission owners that have been RTO members for more than three years; stakeholder comments filed in June 2021; initial NOPR issu
Slide 16: Why Invest in Fortis?
WHY INVEST IN FORTIS? Geographic Focused on Low-Risk Virtually 6% Well-Run ESG Innovative & Regulatory Energy Growth All Dividend Growth Businesses Leader Diversity Delivery Profile Regulated Guidance 16
Slide 17: Investor Presentation
INVESTOR PRESENTATION Q3 2021
Slide 18: Table of Contents
TABLE OF CONTENTS 1. ITC Holding Corp. 19-23 8. 2021-2025 Capital Plan by Segment 37 2. UNS Energy 24-26 9. Major Capital Projects 38 3. Central Hudson 27-28 10. Investment-Grade Credit Ratings 39 4. FortisBC 29-30 11. Exposure to Foreign Exchange 40 5. FortisAlberta 31-32 12. Manageable Debt Maturi
Slide 19: 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 2021F Rate Base(1) $9.9B 5
Slide 20: ITC Capital Investment Overview $5.1B
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 21: ITC Building the Grid of the Future
ITC BUILDING THE GRID OF THE FUTURE OPPORTUNITIES BEYOND THE PLAN New Generation Access to Grid Technologies Shifts Regional Markets Security 4 GW and 14 GW of 71 GW and 119 GW Regional transmission Hardening of battery storage in additional renewable necessary to facilitate telecommunications MISO(
Slide 22: Opportunities to Expand & Extend Growth
OPPORTUNITIES TO EXPAND & EXTEND GROWTH • In April, the Canada Infrastructure Bank announced that it would fund up to 40% of the ~$1.7B project cost • In May, the Ontario government authorized IESO to commence contract negotiations • Project expected to: • Provide ~$100M of annual savings to custome
Slide 23: Opportunities to Expand & Extend Growth
OPPORTUNITIES TO EXPAND & EXTEND GROWTH • In March, MISO outlined a long-range transmission planning (LRTP) roadmap with a focus on system constraints and configuration options • Potential new, regional projects • Visibility on initial projects could be as early as this year 23
Slide 24: 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 9.50% ROE 9.75% ROE Current Regulatory on 53.0% on 52.8% on 5
Slide 25: UNS Capital Investment Overview $3.8B
UNS CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) $1.3B Distribution Infrastructure Customer meter infrastructure, grid resiliency, modernization Distribution Transmission Infrastructure Infrastructure $1.1B Transmission Infrastructure Vail-to-Tortolita, new substations $3.8B $800M Generation Div
Slide 26: Arizona Focused on Renewables
ARIZONA FOCUSED ON RENEWABLES TEP Integrated Resource Plan filed in June 2020. With this IRP, TEP expects to have coal-free generation mix by 2032 and TEPs power will be more than 70% renewable by 2035 ~460 MW of New Wind, 3,400 MW Planned Additions of Solar and Storage Wind, Solar and Storage 2020-
Slide 27: Central Hudson
CENTRAL HUDSON Type of Utility Gas and Electricity New York State Public Service Regulator Commission Regulatory Model Cost of service on future test year Current Regulatory Compact 8.8% ROE on 50% equity Significant Regulatory Features Revenue decoupling 2021F Rate Base(1) $2.3B 5-Year Rate Base CA
Slide 28: Central Hudson Capital Investment Overview $1.8B
CENTRAL HUDSON CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) Distribution Infrastructure $1.0B Distribution Infrastructure Distribution automation and modernization $1.8B $240M Transmission Infrastructure Replacement of aging infrastructure $550M IT, General and Other Modernization Building the W
Slide 29: 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 Current Regulatory Compact 8.75% ROE on 38.5% equity 9.15% ROE on 40.0% equity Multi-year rates with revenue
Slide 30: FortisBC Capital Investment Overview $4.4B
FORTISBC CAPITAL INVESTMENT OVERVIEW $2.1B Sustainment & Customer Growth 2021-2025 CAPITAL 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 31: 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 fixed- Significant Regulatory Features billing determinants 2021F Rate Base $3.8B 5-Year Rate Base CAGR 2.
Slide 32: FortisAlberta Capital Investment Overview $2.0B
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 32
Slide 33: Other Electric Utilities
OTHER ELECTRIC UTILITIES (1) Type of Utility Electricity Newfoundland and Labrador Island Regulatory and Appeals Regulator Board of Commissioners of Public Ontario Energy Board Commission 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 Government of the Turks and Caicos Regulator Utility Regulation and Competition Office Islands Regulatory Model Cost of service Cost of service 2020 Achieved ROE(2) 9.0% 4.1% 2021F Rate Base(3) $0.8B $0.5B 5-Year Rate Base CAGR 8.8
Slide 35: Other Electric Capital Investment Overview $2.4B
OTHER ELECTRIC CAPITAL INVESTMENT OVERVIEW 2021-2025 CAPITAL(1) Distribution $900M Distribution Infrastructure Newfoundland Power and Caribbean Utilities Infrastructure $650M Generation Diversification $2.4B Caribbean Utilities shift to cleaner energy IT, General and Other Generation $650M Transmiss
Slide 36: 2020-2025 Rate Base by Segment
2020-2025 RATE BASE BY SEGMENT (1) Rate Base 5-Year CAGR to ($billions) 2020A 2021F 2022F 2023F 2024F 2025F 2025 Regulated - Independent Electric Transmission ITC(2) 9.5 9.9 10.6 11.3 11.9 12.5 6.0% Regulated - US Electric & Gas UNS Energy 5.7 6.2 6.7 7.0 7.3 7.6 6.2% Central Hudson 2.1 2.3 2.5 2.7
Slide 37: 2021-2025 Capital Plan by Segment
2021-2025 CAPITAL PLAN BY SEGMENT (1) Capital Plan 2021-2025 ($millions) 2021F 2022F 2023F 2024F 2025F TOTAL Regulated - Independent Electric Transmission ITC 1,000 1,007 993 1,107 993 5,100 Regulated - US Electric & Gas UNS Energy 749 781 840 853 547 3,770 Central Hudson 306 416 409 346 310 1,787 T
Slide 38: Major Capital Projects
MAJOR CAPITAL PROJECTS Total Incurred to Expected the End of 2021-2025 Year of ($ Millions) 2020 Plan(1) Completion Major Capital Projects ITC Multi-Value Regional Transmission Projects 642(2) 261 2023 15% ITC 34.5 kV to 69 kV Transmission Conversion Project 445 148 Post-2025 UNS Vail-to-Tortolita P
Slide 39: 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 A A1 n/a Subsidiaries 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 (1
Slide 40: Foreign Exchange Exposure
FOREIGN EXCHANGE EXPOSURE Earnings and Capital Plan • ~66% of operating earnings(1) from U.S. and Caribbean • ~60% of $19.6B five-year capital plan from U.S. and Caribbean • Five-year capital plan translated at forecast USD:CAD FX rate of $1.32; FX rate to be updated in conjunction with release of n
Slide 41: Manageable Debt Maturities
MANAGEABLE DEBT MATURITIES 5-Year Average ~$0.8B 2.0 1.5 $ billions 1.0 0.5 - 2021F 2022F 2023F 2024F 2025F Fortis Fortis Subsidiaries Note: Debt as at June 30, 2021 and excludes any new debt issuances during the forecast period. Excludes repayments of finance leases along with the current portion o
Slide 42: Strong Leadership Team
STRONG LEADERSHIP TEAM David Hutchens President & CEO Fortis Inc. Exec. Nora Duke James Laurito Jocelyn Perry Jim Reid Gary Smith EVP, Sustainability & EVP, Business EVP, CFO EVP, CLO & EVP, Eastern Canadian & CHRO Development & CTO Corporate Secretary Caribbean Operations Linda Apsey Roger Dall’Ant