Ben Pham

Ben Pham asked for an update on the timing of the New Mexico transaction, noting previous delays, and whether its decision is linked to the pending Blackstone application. He also inquired about the remediation status and potential 2026 costs related to Nova Scotia Power's cybersecurity incident last year, and its impact on the 2026 ROE expectation.

Answer

Scott Balfour, President and CEO, explained they are awaiting the hearing examiner's recommendation for the New Mexico transaction, with no believed link to the TXNM/Boxo transaction. Peter Gregg, Former President and CEO of Nova Scotia Power, stated that insurance is expected to cover the cybersecurity costs, significant progress has been made on remediation (85% of meters communicating, 100% by end of next month), and no significant impact is expected on 2026 earnings.

Ben Pham asked for an update on the timing of the New Mexico Gas transaction, inquiring about any recent delays and whether the decision is linked to the pending Blackstone application. He also questioned the remediation status of Nova Scotia Power Inc.'s cybersecurity incident from last year, its impact on 2026 earnings, and if it's built into the ROE expectation.

Answer

Scott Balfour, President and CEO, stated that they are awaiting the hearing examiner's recommendation for the New Mexico Gas transaction, with no believed link to the TXNM/Blackstone transaction. Peter Gregg, former President and CEO of Nova Scotia Power, confirmed confidence that insurance will largely cover cybersecurity costs, which were expensed in 2025. He reported significant progress on the head-end system, with over 85% of meters communicating and 100% expected by the end of next month, anticipating no significant impact on 2026.

Ben Pham followed up on EPS CAGR, asking how Emera considers 2025 as a base year, given the marketing trading benefits and Tampa rates, which might make it a high starting point for future CAGRs. He also inquired about the drivers behind the quietly increasing rate base CAGR for Nova Scotia Power, ensuring it normalizes for thermal securitization, and asked for clarification on a positive contribution from Block Energy.

Answer

CFO Greg Blunden explained that when setting forward EPS guidance, Emera would likely normalize for tailwinds experienced in 2025, such as Emera Energy earning at the midpoint of its higher range and consistent foreign exchange rates. He clarified that Nova Scotia Power's rate base investments are focused on reliability, predominantly transmission and distribution, including battery storage, transmission upgrades, and vegetation management, all supporting the transition to an ISO and renewable energy targets. Blunden also clarified that the Block Energy contribution was due to a more favorable settlement on a contract than previously accrued in 2024.

Ben Pham followed up on the EPS CAGR, asking how Emera considers 2025 as a base year, given the marketing and trading benefits and Tampa rates, and if future guidance would normalize for these tailwinds. He also questioned the drivers behind Nova Scotia Power's increasing rate base CAGR, confirming if it's normalized for thermal securitization. Finally, he asked for clarification on a positive contribution from Block Energy, which was thought to be shut down.

Answer

Greg Blunden, Emera's Chief Financial Officer, explained that the initial 5-7% EPS CAGR guidance was based on Emera Energy earning its midpoint range and consistent foreign exchange rates. He confirmed that future EPS guidance would likely normalize for the tailwinds experienced in 2025. For Nova Scotia Power, Mr. Blunden confirmed the rate base CAGR is normalized for thermal securitization, driven by reliability investments, transmission and distribution upgrades, battery projects, and efforts to support the ISO transition and 2030 renewable energy targets. Regarding Block Energy, he clarified that the positive contribution was due to a more favorable settlement on a contract than anticipated, adjusting for an overaccrual from 2024.

Asked about the drivers within the 5-7% EPS guidance, the strategy for refinancing upcoming hybrids, and the impact of the recent cybersecurity incident on future IT/cyber capital spending.

Answer

The EPS guidance is supported by tailwinds from Emera Energy and Florida growth. The company has always planned to refinance its 2026 hybrids and has flexibility in how it does so, but expects to maintain a similar level of hybrid capital. The cybersecurity incident is part of an ongoing evolution of IT investment and does not trigger a major change in capital plans.

Ben Pham of BMO Capital Markets asked about the key drivers behind the 5-7% EPS guidance and the assumptions for the 2026 hybrid refinancing. He also inquired how the recent cybersecurity incident affects IT investment strategy.

Answer

CFO Greg Blunden identified outperformance from Emera Energy and strong load growth in Florida as near-term tailwinds for the EPS guidance. He confirmed the 2026 hybrid refinancing was always in the long-term plan and that they expect to replace it with comparable financing. He added that the cybersecurity incident doesn't fundamentally change their IT strategy, which is one of continued evolution and investment in prevention, similar to industry peers.

Ben Pham asked for context on Enbridge's total renewable power development portfolio in gigawatts, beyond the 1 GW in queue and 2 GW safe-harbored, and plans for replenishing it. He also inquired if Enbridge would be interested in re-entering electric transmission projects in Ontario, given potential competitive bidding.

Answer

Head of Corporate Strategy and President of Renewable Power Allen Capps stated that Enbridge's total gross generation, including growth, is about 7.4 GW (4.3 GW net basis), with over 2 GW of safe-harbored opportunities to keep them busy for the next three years. President and CEO Greg Ebel added that they are not currently looking to pick up additional assets but will re-evaluate post-2028. Regarding electric transmission, Greg Ebel explicitly stated that Enbridge would not re-enter that business due to its different risk profile, though they are bidding on a wind project (Gichigami) in Ontario.

Ben Pham asked for context on Enbridge's total renewable power development portfolio in gigawatts, beyond the 1 GW in queue and 2 GW safe harbored, and plans for replenishing it. He also asked if Enbridge would be interested in competitive bidding for electric transmission projects in Ontario, given past involvement.

Answer

Allen Capps (Head of Corporate Strategy and President, Renewable Power) stated that total net generation (including in-service and under construction) is 4.3 GW, and the 2+ GW of safe harbored opportunities will keep them busy for the next three years. Greg Ebel (President and CEO) added that they are not looking to pick up additional assets right now. Regarding electric transmission in Ontario, Allen Capps mentioned the Gichigami wind project bid, but Greg Ebel explicitly stated that he does not see Enbridge getting back into electric transmission, as it has a very different risk profile.

Ben Pham asked for a reminder on the contractual mechanism for the Woodfibre LNG project as it approaches its in-service date, particularly how the final toll is set and its impact on returns. He also inquired about Enbridge's appetite for further LNG investments beyond Woodfibre, considering strategic partnerships and investments on the BC coast.

Answer

Cynthia Hansen, Head of Gas Transmission Business Unit, explained that the final toll for Woodfibre LNG will be set closer to the in-service date, ensuring returns based on that structure and limiting exposure to cost overruns, with construction 50% complete for a 2027 in-service. Greg Ebel, President and CEO, added that the Canadian budget's accelerated bonus depreciation for low-emission LNG projects would be beneficial. Greg Ebel stated that Enbridge is opportunity-rich but would not pursue LNG facilities with commodity exposure, preferring projects with solid regulated rates of return like storage and pipeline expansions, and will assess further BC coast opportunities after Woodfibre.

Ben Pham asked for a reminder on the contract mechanism for the Wood Fiber LNG project as it approaches its in-service date. He also inquired about Enbridge's appetite for further LNG investments beyond current projects, considering strategic partnerships and investments on the BC coast.

Answer

Cynthia Hansen, Head of Gas Transmission Business Unit, clarified it's the Wood Fiber LNG project, explaining that the final toll will be set closer to the in-service date, limiting exposure to cost overruns. She noted 50% construction completion and a 2027 in-service target. Greg Ebel, President and CEO, added that Canadian budget's accelerated bonus depreciation for low-emission LNG projects should be helpful. Greg Ebel stated Enbridge is 'opportunity rich' but will not take on LNG facilities with commodity exposure, preferring pipeline and storage projects with solid regulated returns, aligning with its low-risk investor proposition.

Ben Pham of BMO Capital Markets asked about the trend in project returns, noting recent projects appear to have higher returns, and inquired about expansion potential for both Canadian and U.S. gas storage assets.

Answer

President & CEO Gregory Ebel confirmed a strategic focus on higher-return, lower-multiple projects, leveraging the company's ability to be selective. EVP of Gas Transmission Cynthia Hansen detailed accessible expansion at Aiken Creek and strong interest in Gulf Coast storage expansions at facilities like Trace, Egan, and Moss to serve growing LNG and industrial demand.

Ben Pham asked if the Arizona Corporation Commission could rule on the annual formula mechanism for UNS Gas and TEP while a Court of Appeals case was pending. He also inquired whether customer affordability concerns were more pronounced in specific states or provinces across Fortis's North American franchises.

Answer

David Hutchens, President and CEO, Fortis, clarified that the Court of Appeals case primarily concerned procedural aspects of a policy statement, not the commission's ability to approve formula rates in a fully litigated rate case, which is within Arizona statutes. He noted that affordability is a universal focus across all jurisdictions, with Fortis actively working to address it consistently across its footprint, rather than being heightened in one specific area.

Ben Pham asked if the Arizona Corporation Commission could rule on the annual formula mechanism for UNS Gas and TEP while a Court of Appeals case is pending. He also inquired if Fortis is observing heightened customer affordability concerns in specific states or provinces across its North American franchises.

Answer

David Hutchens, President and CEO, Fortis, affirmed that the commission can rule on the formula mechanism, clarifying that the Court of Appeals case is procedural regarding a policy statement, and formula rates can be litigated within a rate case under Arizona statutes. Regarding affordability, he stated it varies by jurisdiction, often influenced by political focus, but Fortis is consistently prioritizing and addressing affordability across all its utilities as a critical, company-wide concern.

Ben Pham asked for an update on Fortis's potential initiation of EPS CAGR guidance and sought insights into asset sale trends, buyer appetite for Caribbean assets, and the company's perspective on CUC within the overall Fortis portfolio.

Answer

David Hutchens, President and CEO of Fortis Inc., stated that the company is still evaluating EPS guidance, with the outcome of the Tucson Electric Power rate case (formula rates) being a key factor for a steadier earnings outlook. He also noted that market interest for assets fluctuates and clarified that recent Caribbean asset sales are not a signal for further divestitures, including CUC.

Ben Pham asked for an update on Fortis's consideration of initiating EPS CAGR guidance. He also inquired about observed trends in buyer appetite for Caribbean assets, specifically CUC, and whether recent asset sales indicate a broader strategy to trim or optimize the portfolio.

Answer

David Hutchens, President and CEO, stated that Fortis continues to evaluate EPS guidance but is currently satisfied with providing detailed rate-based growth, capital, and funding plans, along with dividend guidance. He mentioned that the variability in Arizona earnings, particularly awaiting the outcome of the Tucson Electric Power rate case for formula rates, is a factor preventing EPS guidance at this time. Regarding asset sales, Mr. Hutchens noted that buyer interest in Caribbean assets fluctuates. He clarified that the recent transactions were distinct and discrete, not a read-through that Fortis is exiting the Caribbean, and that the company's current portfolio is strong with 100% regulated assets.

Ben Pham of BMO Capital Markets questioned the recent materialization of the second data center site in Arizona, the broader pace of discussions with data center companies, and the potential impacts of recent federal legislation on Fortis's business.

Answer

UNS Energy President & CEO Susan Gray clarified the second site is part of the same project previously discussed, with details now becoming public. President & CEO David Hutchens added that discussions with other potential customers are on hold pending capacity development. Regarding legislation, he stated there is very limited near-term impact, as corporate taxes were unchanged and ITC's projects are already allocated. Longer-term, it may change the economics of future renewable projects.

Ben Pham asked for a breakdown of the building blocks for the 5%-7% EBITDA growth guidance, specifically what amounts to growth, rate cases, and efficiencies, and what factors contribute to reaching the higher end of the range. He also inquired about the company's expectations for dividend growth.

Answer

Sean O’Donnell (EVP and CFO) explained that the baseline for EBITDA growth is capital coming into service, with up to half a dozen rate cases being the biggest driver of the range. Asset availability, commercial innovations, and technology (robotics, AI, preventative maintenance) are smaller but growing influences. He reiterated that the 3%-5% dividend growth range is consistent, but given the high returns (12.5% or better) on new projects, capital will be directed towards these projects, implying dividend growth will remain at the low end of that range for the foreseeable future.

Ben Pham asked for a breakdown of the building blocks contributing to TC Energy's 5%-7% EBITDA growth guidance, specifically what amounts to growth, rate cases, and efficiencies, and what factors drive the range towards 6% or 7% and beyond. He also inquired if the company is still expecting the previously highlighted ranges for dividend growth.

Answer

Sean O’Donnell, Executive Vice President and Chief Financial Officer, explained that the EBITDA growth is primarily driven by capital coming into service, with rate cases being the biggest driver of the range. Smaller but growing influences include asset availability, commercial innovations, and technology. He confirmed that the 3-5% dividend growth range is consistent, but given the high returns (12.5% or better) on new projects, capital will be directed towards these, implying dividend growth will remain at the lower end of the range for the foreseeable future.

Ben Pham of BMO Capital Markets asked for an update on the progress of filling the $6-7 billion annual capital plan through 2030 and questioned if the company would remain within that range given the increased cadence of project opportunities.

Answer

EVP & CFO Sean O’Donnell noted that about a third of the capital 'white space' has been filled since Investor Day. President & CEO François Poirier affirmed their commitment to the $6-7 billion range, explaining that long regulatory lead times and a focus on execution capacity make it challenging to meaningfully increase spending before 2028.

Ben Pham from BMO Capital Markets requested an update on the remarketing progress for Cedar LNG capacity, clarification on the extension of Peace Pipeline contracts, and asked at what point the company would prioritize share buybacks over growth capex given the stock's performance.

Answer

SVP & Corporate Development Officer Stuart Taylor confirmed strong progress on Cedar LNG remarketing, with definitive agreements expected by year-end 2025. SVP & COO Jaret Sprott affirmed that expiring Peace Pipeline contracts have been successfully extended as part of an ongoing, multi-year strategy. President & CEO Scott Burrows addressed capital allocation, stating that near-term capital is largely committed to FID'd projects like Cedar, and while buybacks are debated, growth projects that enhance the franchise are currently prioritized.

Asked how Nova Scotia Power's strong Q1 results reconcile with its full-year ROE guidance and requested a comparison of the current New Mexico Gas sale application process to the one from over a decade ago.

Answer

Despite a strong Q1, the full-year outlook for Nova Scotia Power remains consistent with earning just below the allowed ROE band, similar to the previous year's ~8.5% ROE. The current New Mexico regulatory commission is appointed (versus elected previously) and has provided balanced outcomes. The company is confident it can demonstrate the required 'net benefit' for customers in the sale process.

Asked about the Canada Infrastructure Bank's role in the Atlantic tie-in project and questioned the company's dividend policy, including whether the payout ratio is weather-normalized and its potential direction for 2024.

Answer

The CIB's involvement is envisioned as a 50% funding partner in a special purpose vehicle. The company does not weather-normalize its payout ratio, and while it's currently high, they expect it to decrease over time as earnings growth outpaces dividend growth. They acknowledged investor feedback on moderating dividend growth.