Fortis Inc. · TSX:FTS
Fortis — Investor Day (September 2023)
81 slides from Fortis's investor day presentation, Sep 19, 2023
Slide 1: 2023 Investor Day
2023 INVESTOR DAY September 19, 2023
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: Agenda
01 Strategic Priorities & Growth Outlook (20 min.) 02 Business Updates (60 min.) ITC Holdings Corp. AGENDA UNS Energy FortisBC 03 Financial Update (20 min.) 04 Conclusion & Question Period (20 min.) 3
Slide 4: Today's Speakers
TODAY’S SPEAKERS David Hutchens Linda Apsey Susan Gray Roger Dall’Antonia Jocelyn Perry President & CEO President & CEO President & CEO President & CEO EVP, CFO Fortis Inc. ITC Holdings Corp. UNS Energy FortisBC Fortis Inc. 4
Slide 5: Our Vision & Strategy
OUR VISION & STRATEGY A Premium North American Utility Delivering a Cleaner Energy Future SUSTAINABLE GROWTH • Operational Excellence • Financial Strength • Diversified Regulated Portfolio • Local Business Model • Strong Governance 5
Slide 6: Our Common Ground
OUR COMMON GROUND PROVISION OF SAFE & RELIABLE SERVICE GOOD GOVERNANCE Priority #1 Fortis Ranked #1 in The Globe & Mail 2022 Board Games • Health and safety of our employees, customers and contractors • Utilities operate within the parameters of common policies and best practices • Doing whatever it
Slide 7: Investor Day Highlights
INVESTOR DAY HIGHLIGHTS $25B 6.3% 4-6% 2024-2028 5-Year Annual Dividend Capital Plan Rate Base Growth Guidance CAGR Extended through 2028 $2.7B increase over Transmission investments 50 years of consecutive 2023-2027 capital plan driving annual 7% rate increases in dividends paid base growth at ITC
Slide 8: Transmission Driving Incremental Capital
TRANSMISSION DRIVING INCREMENTAL CAPITAL +$0.4B $25.0B +$0.3B +$0.6B +$1.4B Other Regulated REGULATED GROWTH DRIVERS Utilities $22.3B ✓ Clean energy capital strengthened by Inflation Reduction Act (Direct & Indirect) ✓ System adaptation & resiliency +$2.7B Increase ✓ Customer growth & economic devel
Slide 9: $25B Capital Plan at a Glance
$25B CAPITAL PLAN AT A GLANCE 18% $6.8B 57% Major Capital Cleaner Energy Sustaining Projects Capital(1) Capital(2) (1) Cleaner energy investments defined as capital that supports reductions in air emissions, water usage and/or increases customer energy efficiency. (2) Capital expenditures required t
Slide 10: Strong Rate Base Growth Across Regulated Utility Portfolio
STRONG RATE BASE GROWTH ACROSS REGULATED UTILITY PORTFOLIO 5-Year Rate Base CAGR of 6.3%(1) Rate Base $49.4B ITC 7.0% FortisBC 6.5% $36.8B UNS Energy 6.0% Other Regulated 5.8% 2023F 2028F (1) 2023-2028 CAGR calculated based on a constant foreign exchange rate. 10
Slide 11: Reducing Carbon Emissions
REDUCING CARBON EMISSIONS Targets On Track Achieved 29% GHG Emissions Reduction Since 2019 2019 50% GHG Emissions Reduction Target 2022 Coal-Free Generation Mix 2030 2032 2035 Net-Zero Target (Scope 1) 75% GHG Emissions Reduction Target 2050 Actual GHG Emissions Reduction Forecast GHG Emissions Redu
Slide 12: Building Climate Resiliency
BUILDING CLIMATE RESILIENCY 2021 • Committed as a TCFD supporter • Identified risks and opportunities under four climate scenarios at five largest utilities It is no longer enough to design our systems based on historical weather, we 2022 • Inaugural TCFD and Climate Assessment are planning for futu
Slide 13: Maintaining Customer Affordability
MAINTAINING CUSTOMER AFFORDABILITY KEY AREAS OF FOCUS Managing Controllable Operating Costs Targeting controllable Focused on preventative operating costs in line with maintenance and historical levels innovation to reduce operating costs Helping customers manage Cleaner energy their energy costs in
Slide 14: History in the Making
HISTORY IN THE MAKING 4.4% 4-6% Announced Annual Dividend Q4 2023 Growth Guidance Dividend Increase Extended through 2028 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23F 14
Slide 15: ITC Business Update
ITC BUSINESS UPDATE Linda Apsey
Slide 16: ITC Overview
ITC OVERVIEW 25,800 km $12.0 billion GREATER GRID Lines of transmission 2024F rate base GREENER FUTURE Assets in 8 U.S. States 22,971 MW Michigan and Iowa key states Peak demand ~700 Fortis owns 80.1% dedicated employees Interest in ITC FERC Rate Regulated 10.77-11.41% Allowed Cost-based, forward-lo
Slide 17: ITC: Executing the Plan
ITC: EXECUTING THE PLAN 2024-2028 Sources of Sustainable Growth Local Trends Macro Trends Key Initiatives • Execution of capital plan • Grid modernization and • ITC assets in ideal location • Managing interest rate risk reliability with rich wind resources • Customer value and and progressive RTOs •
Slide 18: ITC: Capital Plan Supports 7% Rate Base Growth
ITC: CAPITAL PLAN SUPPORTS 7% RATE BASE GROWTH Transmission investments supporting a safe, reliable energy grid and driving the transition to cleaner energy Capital Plan Rate Base $15.6B +$1.4B $11.3B $7.2B Capital Plan $5.8B 2024 - 2028 Capital Plan 2023 - 2027 2023F 2028F Infrastructure Investment
Slide 19: ITC: Drivers of Transmission Growth
ITC: DRIVERS OF TRANSMISSION GROWTH 2024-2028 $7.2B Capital Plan Drivers Reliability & MISO LRTP Renewable Economic Grid Modernization Tranche 1 Interconnections Development • Ensuring grid reliability, • Investing US$1.2B in • Interconnecting • Interconnecting new improving resilience, and Michigan
Slide 20: ITC: Beyond the Plan Robust Capex Pipeline
ITC: BEYOND THE PLAN ROBUST CAPEX PIPELINE Proven track record of capital execution and a long-term pipeline of transmission investment to benefit customers and the environment, while driving value for shareholders Economic Development & Customer Connections – new large load interconnections such as
Slide 21: ITC: Focused on Customer Value & Affordability
ITC: FOCUSED ON CUSTOMER VALUE & AFFORDABILITY Transmission Investment Provides Customer Affordability Customer Value is a Top Priority • Essential to providing a reliable and flexible energy grid • Disciplined cost management practices that meets public policy goals, facilitates economic developmen
Slide 22: ITC: Favourable Transmission Landscape & Economic Environment
ITC: FAVOURABLE TRANSMISSION LANDSCAPE & ECONOMIC ENVIRONMENT Transmission investment is critical in achieving multiple stakeholder objectives • Ensuring a reliable and a resilient electric grid is a national priority and is key to accomplishing public policy objectives • ITC’s footprint continues t
Slide 23: UNS Energy Business Update
UNS ENERGY BUSINESS UPDATE Susan Gray
Slide 24: UNS Energy Overview
BUILDING A SUSTAINABLE & UNS ENERGY OVERVIEW RELIABLE ENERGY FUTURE 23,500 km $7.6 billion of electric T&D lines 2024F rate base 5,100 km 2,949 MW of natural gas T&D lines Peak demand 712,000 ACC & FERC Regulated electric and gas customers Cost of service/historical test year & FERC formula transmis
Slide 25: UNS Energy: Focused on Clean Energy Transition
UNS ENERGY: FOCUSED ON CLEAN ENERGY TRANSITION 2024-2028 Sources of Sustainable Growth Local Trends Macro Trends Key Initiatives • Execution of capital plan • Clean energy transition • Historical customer growth • Managing inflation and supported by tax incentives and peak demand customer affordabil
Slide 26: UNS Energy: Capital Plan & Rate Base Growth
UNS ENERGY: CAPITAL PLAN & RATE BASE GROWTH Capital Plan Rate Base $9.5B +$600M $7.2B $5.2B Capital Plan $4.6B 2024-2028 Capital Plan 2023-2027 (1) 2023F 2028F Energy Resources Distribution Infrastructure Transmission Infrastructure IT, General & Other Maintenance Generation (1) 2023F rate base incl
Slide 27: UNS Energy: Historical Customer Growth & Peak Demand Trends
UNS ENERGY: HISTORICAL CUSTOMER GROWTH & PEAK DEMAND TRENDS Historical Customer Growth at TEP (%) Retail Peak Demand at TEP (MW) 1.3% 2,467 2,427 1.2% 1.2% 2,413 2,393 2,367 1.1% 2,273 0.9% 0.7% 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 27
Slide 28: UNS Energy: Regional Economic Growth
UNS ENERGY: REGIONAL ECONOMIC GROWTH Economic development focused on Top growth segments Examples of announced regional growth four main areas: 1. Business attraction • Mining American Battery Factory • Battery Manufacturing • 100 MW 2. Business expansion/key account • Transportation & Logistics Sou
Slide 29: UNS Energy: TEP's Path to a Reliable & Affordable Energy Future
UNS ENERGY: TEP’S PATH TO A RELIABLE & AFFORDABLE ENERGY FUTURE Exit from Coal On Track Coal-free Over 50 million tonnes generation of CO2 emissions mix by 2032 avoided over 15 years 2024-2028 Capital Plan 2017-2023 2024-2035 Assumes ~1,000 MW of owned generation 508 MW 903 MW Completed Coal Retirem
Slide 30: UNS Energy: Tax Incentives Reduce Regulatory Lag & Benefit Customers
UNS ENERGY: TAX INCENTIVES REDUCE REGULATORY LAG & BENEFIT CUSTOMERS Expected benefits at UNS ✓ Between rate cases, tax incentives are expected to reduce regulatory lag for eligible projects ✓ Tax credit monetization through lower taxes paid over the project life Investment Tax Credits: Available fo
Slide 31: UNS Energy: Beyond the Capital Plan at TEP
UNS ENERGY: BEYOND THE CAPITAL PLAN AT TEP Assessing Future Capacity Needs 2024-2035 Capacity Needs (MW) • New integrated resource plan expected to be filed in November 2023 Potential New IRP Capacity Needed Will look at all-source • Assessing capacity needs in 2028 and long-duration generation opti
Slide 32: UNS Energy: Regulatory Backdrop Improving
UNS ENERGY: REGULATORY BACKDROP IMPROVING Positive regulatory tone General Rate Case Outcome at TEP from the Arizona Corporation Commission ✓ Timely regulatory decisions ✓ Tracker mechanisms working as intended (i.e., purchased US$900M US$100M power fuel adjustor clause) Rate Base Increase Non-Fuel
Slide 33: FortisBC Business Update
FORTISBC BUSINESS UPDATE Roger Dall’Antonia
Slide 34: FortisBC Overview
FORTISBC OVERVIEW 51,200 km ~2,600 of natural gas T&D lines dedicated employees 7,300 km $7.6 billion of electric T&D lines 2024F rate base 1.1 million BCUC Regulated natural gas customers Cost of service with incentive mechanisms 188,000 electric customers 9.65% Allowed Gas 45% Electric 41% ENERGY
Slide 35: FortisBC: Leading the Clean Energy Transformation
FORTISBC: LEADING THE CLEAN ENERGY TRANSFORMATION 2024-2028 Sources of Local Trends Macro Trends Key Initiatives Sustainable Growth • Implementing the CleanBC • Managing inflation and • Execution of capital plan • Cleaner energy solutions Roadmap customer affordability • Advancing regulatory and • C
Slide 36: FortisBC: Generic Cost of Capital Outcome
FORTISBC: GENERIC COST OF CAPITAL OUTCOME BCUC decision received in September 2023 establishing cost of capital parameters for FortisBC effective January 1, 2023 Allowed Equity ROE Thickness FortisBC Energy 9.65% 45% (previously 8.75%) (previously 38.5%) FortisBC Electric 9.65% 41% (previously 9.15%
Slide 37: FortisBC: Critical to the Energy Transition
FORTISBC: CRITICAL TO THE ENERGY TRANSITION FortisBC systems play a critical role in delivering more energy than any other utility in British Columbia 33% ✓ Expanded conservation plans FortisBC delivers ✓ Renewable and low carbon energy offerings two-thirds of BC’s peak energy demand 33,000 MWh Peak
Slide 38: FortisBC: Capital Plan & Rate Base Growth
FORTISBC: CAPITAL PLAN & RATE BASE GROWTH Capital Plan Rate Base +$300M $10.4B $2.0 $4.9B $7.6B $1.7 Capital Plan $4.6B 2024-2028 $8.4 Capital Plan $5.9 2023-2027 2023F 2028F Reliability & Integrity LNG Projects FortisBC Energy FortisBC Electric Major Integrity Projects Renewable Gases 38
Slide 39: FortisBC: Clean Energy Landscape
FORTISBC: CLEAN ENERGY LANDSCAPE British Columbia FortisBC Clean Growth Policy Environment Pathway to 2050 • GHG reduction targets of 40% by 2030, 60% by 2040 and 80% by 2050 • Cap on gas utility customer emissions calls for a 47% reduction by 2030 • Greenhouse Gas Reduction Regulation allowing acqu
Slide 40: FortisBC: Electrify City of Kelowna Case Study
FORTISBC: ELECTRIFY CITY OF KELOWNA CASE STUDY Overview • FortisBC delivers gas to 40,000 customers and electricity to 66,000 customers in the City of Kelowna • FortisBC combined the City of Kelowna gas and electric consumption data into a single model to explore the inter-connectedness of the two e
Slide 41: FortisBC: Beyond the Capital Plan
FORTISBC: BEYOND THE CAPITAL PLAN Renewable Gas – Incremental investments enabled by the Greenhouse Gas Reduction Regulation. Near-Term Tilbury 1B Expansion – Potential for additional liquefaction capacity and supporting infrastructure to transport LNG to (1-5 years) ships at the Tilbury LNG site. R
Slide 42: Financial Update
FINANCIAL UPDATE Jocelyn Perry
Slide 43: Financial Objectives
FINANCIAL OBJECTIVES 1. 2. 3. 4. Execute Regulated Balanced Maintain Deliver 4 – 6% Growth Strategy Funding Plan Investment-Grade Annual Dividend Credit Ratings Growth 43
Slide 44: Strong Track Record of Delivering & Outperforming Capital Plans
STRONG TRACK RECORD OF DELIVERING & OUTPERFORMING CAPITAL PLANS 2019-2023 Capital ACTUAL CAPITAL EXPENDITURES ~17% HIGHER THAN PROJECTED FIVE YEARS AGO +$2.9B • Execution of historical capital plans despite pandemic and supply chain disruptions • $20.2B Clean energy transition augmenting incremental
Slide 45: Executing Our Regulated Growth Strategy
EXECUTING OUR REGULATED GROWTH STRATEGY 5-Year Rate Base CAGR(1) 6.8% $26.1B in 2018 compared to $36.8B for 2023F 5-YEAR LOOK BACK AT KEY ACCOMPLISHMENTS Annual Dividend Growth Guidance Range 4 - 6% Supporting funding flexibility Balance Sheet Strengthened Asset Sales of Waneta and Aitken Creek(2) a
Slide 46: Incremental Capital Concentrated in Outer Years
INCREMENTAL CAPITAL CONCENTRATED IN OUTER YEARS $2.7B OF INCREMENTAL CAPITAL IN 2024-2028 VS. 2023-2027 $5.7B $4.8B $5.0B $0.9 $5.0B $4.3B $4.5B $0.2 $0.5 $0.4 $4.6 $4.5 $4.8 $4.1 (1) 2023F 2024F 2025F 2026F 2027F 2028F 2023-2027 Five-Year Plan Incremental Capital (1) 2023 reflects a USD:CAD foreign
Slide 47: Balanced Approach to Funding Growth
BALANCED APPROACH TO FUNDING GROWTH Equity from DRIP Supplemented 4-6% Annual Dividend Growth by ATM Program Guidance Range Cash From Operations(1) • Annual proceeds from DRIP of ~$400M • Flexibility to fund more capital with internally $25B 55% Net Debt(2) 34% generated funds • $500M ATM program to
Slide 48: Investment-Grade Credit Ratings
INVESTMENT-GRADE CREDIT RATINGS Moody’s CFO/Debt(1) S&P FFO/Debt(1) CREDIT METRICS 11.7% ~12.0% ~12.0% Forecast metrics inclusive 11.4% 11.0% 11.0% of expected Alternative 11.0% Minimum Tax (AMT) and 10.5% recent regulatory decisions 2022A 2023F 2024-2028 2022A 2023F 2024-2028 Average Average Rating
Slide 49: Debt Maturities & Preference Share Dividends
DEBT MATURITIES & PREFERENCE SHARE DIVIDENDS Preference Share Dividend Rate Resets Debt Maturities Remain Attractive • 33% holdco debt/ total debt(1) • Interest costs at regulated utilities recovered through customer rates • Limited non-regulated maturities through the end of 2025 2024 • ITC Holding
Slide 50: Regulatory Outlook
REGULATORY OUTLOOK 2023 2024 General Rate Generic Cost of Capital Third Performance Based General Rate Application Proceeding Rates Term Application • New rates effective Sep. 1, 2023 • Decision retroactive to Jan. 1, 2023 • Decision expected in H2 2023 • Application filed seeking new rates effectiv
Slide 51: Regulatory Compact
REGULATORY COMPACT Weighted Average Allowed ROE Weighted Average Equity Thickness 9.8% 50.9% 9.7% 250 basis points increase in 48.4% our consolidated regulated equity thickness driven by TEP and FortisBC Energy 2018 Current 2018 Current Note: Weighted average based on 2023 forecast rate base and cap
Slide 52: Growing Responsibly: Five-Year Plan Highlights
GROWING RESPONSIBLY: FIVE-YEAR PLAN HIGHLIGHTS $25B 6.3% 4-6% Balanced Funding 2024-2028 5-Year Annual Dividend Plan Capital Plan Rate Base CAGR Growth Guidance Supportive of through 2028 Investment-Grade Credit Ratings $2.7B increase Rate base increases 50 years of Credit metrics over 2023-2027 $12
Slide 53: Why Invest in Fortis?
SUSTAINABLE GROWTH Focused on Executing Robust Transmission Transparent Strong Investment Pipeline Funding Plan Rate Base Growth Cleaner 4-6% Annual Investment-Grade Energy Transition Dividend Growth Credit Ratings WHY INVEST IN FORTIS? LOW-RISK Safe, Well-Run Utilities Regulatory & Constructive Str
Slide 54: Appendix
APPENDIX FORTIS..
Slide 55: Table of Contents
TABLE OF CONTENTS ITC Holdings Corp. 56 – 57 UNS Energy 58 – 59 Central Hudson 60 – 61 FortisBC 62 – 64 FortisAlberta 65 – 66 Other Electric 67 – 68 2023-2028 Rate Base by Business Unit 69 2024-2028 Capital Plan by Business Unit 70 Cleaner Energy Capital 71 Major Capital Projects 72 Strong Investmen
Slide 56: ITC Overview
ITC OVERVIEW FERC regulated electric transmission utility 25,800 km $12.0 billion GREATER GRID Lines of transmission 2024F rate base GREENER FUTURE Assets in 8 U.S. States 22,971 MW Michigan and Iowa key states Peak demand ~700 Fortis owns 80.1% dedicated employees Interest in ITC FERC Rate Regulate
Slide 57: ITC Capital Investment Overview
ITC CAPITAL INVESTMENT OVERVIEW $3.9B Infrastructure Investments Grid Security Rebuild, reliability, resiliency, system efficiencies, increased capacity, circuit overloads, pocket load growth MISO LRTP $1.5B MISO Long-Range Transmission Plan Includes portion of investments for Tranche 1 $7.2B Infras
Slide 58: UNS Energy Overview
UNS ENERGY OVERVIEW BUILDING A SUSTAINABLE & Vertically integrated electric and gas utility RELIABLE ENERGY FUTURE 23,500 km $7.6 billion of electric T&D lines 2024F rate base 5,100 km 2,949 MW of natural gas T&D lines Peak demand 712,000 ACC & FERC Regulated electric and gas customers Cost of servi
Slide 59: UNS Energy Capital Investment Overview
UNS ENERGY CAPITAL INVESTMENT OVERVIEW Generation $2.0B Energy Resources Maintenance Expected energy storage, renewables and other IT, General & investments associated with exit from coal Other $1.4B Distribution Infrastructure Grid resiliency and modernization Transmission Infrastructure $5.2B Ener
Slide 60: Central Hudson Overview
CENTRAL HUDSON OVERVIEW Electric and gas T&D utility TOGETHER WE 15,100 km of electric T&D lines ~1,100 dedicated employees POWER ENDLESS POSSIBILITIES 2,400 km $3.1 billion of natural gas T&D lines 2024F rate base 300,000 New York Public Service electric customers Commission Regulated Cost of servi
Slide 61: Central Hudson Capital Investment Overview
CENTRAL HUDSON CAPITAL INVESTMENT OVERVIEW Transmission Infrastructure $1.3B Distribution Infrastructure Distribution automation and modernization $2.2B Distribution $600M IT, General & Other Building the Workforce of the Future Capital Plan(1) Infrastructure 2024-2028 $300M Transmission Infrastruct
Slide 62: FortisBC Overview
FORTISBC OVERVIEW Gas LDC and integrated electric utility 51,200 km ~2,600 of natural gas T&D lines dedicated employees 7,300 km $7.6 billion of electric T&D lines 2024F rate base 1.1 million BCUC Regulated natural gas customers Cost of service with incentive mechanisms 188,000 electric customers 9.
Slide 63: FortisBC Capital Investment Overview
FORTISBC CAPITAL INVESTMENT OVERVIEW Renewable Gases Major Integrity $2.6B Reliability & Integrity Investments Projects Ongoing maintenance requires significant capital investment Includes customer growth and general plant investment $4.9B LNG $1.4B LNG Projects Tilbury 1B Reliability Tilbury LNG St
Slide 64: FortisBC: Major Capital Projects
FORTISBC: MAJOR CAPITAL PROJECTS 2024- Estimated Tilbury LNG Storage Expansion – Project aims to increase on-system storage for immediate backup 2028F Completion gas supply to customers in the Lower Mainland area of British Columbia. In March 2023, the BCUC issued an adjournment decision on the proj
Slide 65: FortisAlberta Overview
FORTISALBERTA Electric distribution utility OVERVIEW 90,200 km $4.4 billion distribution lines 2024F rate base ~85% 584,000 of revenue derived from customers fixed-billing determinants AUC Regulated 2,767 MW Performance-based rate Peak demand (PBR) setting 8.50% 37% ~1,100 dedicated employees Allowe
Slide 66: FortisAlberta Capital Investment Overview
FORTISALBERTA CAPITAL INVESTMENT OVERVIEW IT, General $2.5B Distribution Infrastructure & Other Safety and reliability of distribution assets, meter upgrades, pole management program, modernization $3.1B $600M IT, General & Other Capital Plan 2024-2028 Distribution Infrastructure 66
Slide 67: Other Electric Overview
OTHER ELECTRIC OVERVIEW Electric T&D utilities 23,110 km Five of electric T&D lines regulated electric utilities(1) 480,000 Equity investments DELIVERING A CLEAN customers Wataynikaneyap Partnership & Belize Electricity ~1,500 dedicated employees Three North American countries ENERGY FUTURE $3.7 bil
Slide 68: Other Electric Capital Investment Overview
OTHER ELECTRIC CAPITAL INVESTMENT OVERVIEW IT, General & Other $900M Distribution Infrastructure Transmission $900M Generation Diversification $2.5B Infrastructure Capital Plan(1) Distribution $400M Transmission Infrastructure Infrastructure 2024-2028 $300M IT, General & Other Generation Diversifica
Slide 69: 2023-2028 Rate Base by Business Unit
2023-2028 RATE BASE BY BUSINESS UNIT Rate Base 5-YEAR CAGR to ($BILLIONS, EXCEPT FOR CAGR) 2023F 2024F 2025F 2026F 2027F 2028F 2028 Regulated – Independent Electric Transmission ITC(1) 11.3 12.0 12.7 13.4 14.4 15.6 7.0% Regulated – U.S. Electric & Gas UNS Energy 7.2 7.6 8.1 8.5 9.0 9.5 6.0% Central
Slide 70: 2024-2028 Capital Plan by Business Unit
2024-2028 CAPITAL PLAN BY BUSINESS UNIT Capital Plan(1) 2024-2028 ($MILLIONS) 2024F 2025F 2026F 2027F 2028F TOTAL Regulated – Independent Electric Transmission ITC 1,252 1,474 1,449 1,477 1,537 7,189 Regulated – U.S. Electric & Gas UNS Energy 1,111 854 912 1,310 973 5,160 Central Hudson 408 421 437
Slide 71: Capital Plan Supports Cleaner Energy Future
CAPITAL PLAN SUPPORTS CLEANER ENERGY FUTURE ~$1B Increase in Cleaner Energy Investments Delivering Renewables to the Grid $3.4B • ITC MISO LRTP and wind / solar interconnections $25B • T&D investments associated with New York’s Climate Leadership and Community Protection Act Capital Plan Renewable E
Slide 72: Major Capital Projects
MAJOR CAPITAL PROJECTS Major Capital 2024- Estimated Projects ($ Millions) 2023F 2028F Completion Date 18% ITC MISO LRTP(1) 16 1,486 Post-2028 UNS Energy Vail-to-Tortolita Transmission Project 101 273 2026 $25B UNS Energy Renewable Generation(2) - 417 2027 UNS Energy Battery Storage(3) 137 345 2025
Slide 73: Strong Investment-Grade Credit Ratings
STRONG 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
Slide 74: Other Sensitivity Exposure
OTHER SENSITIVITY EXPOSURE Foreign Exchange ROE & Equity Ratio • USD:CAD FX Rate of 1.30 for 2024-2028 ROE Equity +/- 25 bps +/- 100 bps • 65% of operating earnings(1) / 60% of capital ITC $0.03 $0.03 plan in USD at U.S. & Caribbean utilities UNS Energy $0.02 $0.01 • +/- $0.05 change in USD:CAD – EP
Slide 75: Ongoing Regulatory Proceedings
ONGOING REGULATORY PROCEEDINGS ITC Midwest Capital Structure Complaint – In 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’s request for rehearing was denied by FERC in March 2023 MISO B
Slide 76: Ongoing Regulatory Proceedings (Continued)
ONGOING REGULATORY PROCEEDINGS (CONTINUED) Customer Information System (CIS) Implementation – In January 2023, Central Hudson filed a response to the PSC’s show cause order in respect of its new CIS; interim agreement reached with the PSC in July 2023 including independent third-party verification o
Slide 77: Strong Leadership Team
STRONG LEADERSHIP TEAM Fortis Inc. Executive David Hutchens Jocelyn Perry Jim Reid Gary Smith Stuart Lochray President & CEO EVP, CFO EVP, Sustainability & CLO EVP, Operations & Innovation Sr. VP Capital Markets & Business Development Utility Linda Apsey Chris Capone Roger Dall’Antonia Ruth Forbes S
Slide 78: ESG Leadership
ESG LEADERSHIP Environmental Social • 2050 net-zero direct emissions goal, with interim targets to reduce • Building on our strong record of mutually beneficial GHG emissions 50% by 2030 and 75% by 2035 partnerships with Indigenous peoples • Progress: More than halfway to achieving our 50% by 2030 t
Slide 79: Ensuring Safe & Reliable Service
ENSURING SAFE & RELIABLE SERVICE SAFE OPERATIONS RELIABLE SERVICE All-Injury Average Electricity Customer Frequency Rate(1) Outage Duration (Hours)(3) 1.73 1.60 3.8 3.8 3.5 3.3 2.3 2.1 1.8 1.9 2.0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 USA Bureau of Labor Statistics Fortis Fortis Electric
Slide 80: Upcoming Events
UPCOMING EVENTS Expected Earnings Release Dates Other Investor Events • Wolfe Utilities, Midstream & Clean Energy Conference – • Q3 2023 – October 27, 2023 September 28, 2023 • Q4 2023 – February 9, 2024 • EEI Financial Conference – November 12-14, 2023 • Wells Fargo 22nd Annual Midstream & Utilitie
Slide 81: Glossary
GLOSSARY ACC: Arizona Corporation Commission JEMS: Jobsite Energy Management System Aitken Creek: Aitken Creek Gas Storage ULC, a direct 93.8%-owned subsidiary of FortisBC Holdings Inc. km: kilometre AMI: Advanced Metering Infrastructure AMT: Alternative Minimum Tax LNG: liquefied natural gas ATM: A