Maurice Choy

Maurice Choy asked about Emera's dividend outlook and payout ratio trajectory, following the extension of the EPS growth target to 2030. He also inquired about early stakeholder engagements and power generation requisitions related to future data center opportunities, and whether potential data center growth is incremental to the 5-7% EPS target.

Answer

Jared Green, CFO, stated that the company favors the 1-2% dividend growth and aims for a 70-75% payout ratio. Scott Balfour, President and CEO, confirmed Tampa Electric is in advanced system planning with data center developers, with current generation plans including 150-200 MW of solar annually and two H-Class GE machines in the queue. He clarified that data center growth is not baked into the current 5-7% EPS guidance and could be incremental, primarily benefiting customer affordability by reducing rate pressure.

Maurice Choy asked about Emera's dividend outlook and the potential extension of its 1%-2% growth target through the end of the decade, inquiring about the projected payout ratio. He also questioned the early stakeholder engagements and power generation requisitions related to future data center opportunities in Tampa Electric's service territory, and whether this potential data center growth is incremental to the existing 5%-7% EPS growth target.

Answer

Jared Green, CFO, stated that the organization favors the 1%-2% dividend growth and aims for a 70%-75% payout ratio. Scott Balfour, President and CEO, confirmed Tampa Electric's involvement in advanced system planning discussions with potential data center developers, outlining current generation plans including 150-200 MW of solar annually and two H-Class machines from GE. He clarified that data center growth is not factored into the current 5%-7% EPS guidance, with its primary benefit seen as reducing rate pressure for customers.

Maurice Choy asked about Emera's engagement with the Nova Scotia government regarding the Nova Scotia rate case, both before and after the filing, especially given public comments about rate impact, and what measures are being taken to avoid a repeat of the 2022 outcome. He also questioned the implications of the funding and capital expenditure plans on credit metrics and the payout ratio, specifically regarding the previously mentioned 50 basis points annual improvement in cash flow-to-debt and a payout ratio target of 80% by 2027.

Answer

Peter Gregg, President and CEO of Nova Scotia Power, emphasized that the rate case filing is a consensus agreement with all customer representatives, balancing reliability and affordability. He confirmed ongoing productive discussions with provincial officials and expects the government to participate as interveners in the regulatory process. Greg Blunden, Emera's Chief Financial Officer, affirmed that the funding plan remains consistent, and with the New Mexico Gas sale and Nova Scotia securitization, Emera fully expects to continue improving credit metrics. He noted that Emera is at or above its downgrade thresholds with rating agencies and the path for further improvement remains unchanged.

Maurice Choy inquired about Emera's engagement with the Nova Scotia government regarding the Nova Scotia rate case, both before and after the filing, especially given public comments on rate impact, and what measures are being taken to avoid legislative intervention seen in 2022. He also asked for an update on credit metrics and payout ratio targets based on the current funding and CapEx plans.

Answer

Peter Gregg, President and CEO of Nova Scotia Power, highlighted the consensus filing with all customer representatives as a balanced approach to reliability and affordability. He confirmed ongoing productive discussions with provincial officials and expects the government to participate as interveners in the regulatory process. CFO Greg Blunden affirmed that the funding plan remains consistent, expecting continued improvement in credit metrics over the next couple of years, with the company meeting its downgrade thresholds with Fitch and S&P, and effectively at the 12% target with Moody's.

Maurice Choy from RBC Capital Markets asked for more details on the regulatory discussions in Nova Scotia and questioned how Emera will achieve its 2025 cash flow-to-debt target without the proceeds from the delayed New Mexico Gas sale.

Answer

Peter Gregg, President & CEO of Nova Scotia Power, reiterated that discussions with stakeholders are constructive but declined to provide further details, stating he hopes to have updates soon. CFO Greg Blunden explained that strong year-to-date business performance is the primary driver for meeting credit metric targets, noting their FFO-to-debt ratio is already approaching the target range on a trailing twelve-month basis.

Maurice Choy asked if the $10-$20 billion of projects expected over the next 24 months would maintain similar average returns of 10%-11% as seen in 2025-2026, or if the project mix might lead to different portfolio returns. He also inquired about signs from Canadian and Alberta governments regarding support for major energy infrastructure projects, including potential backstopping of costs or financing.

Answer

EVP and CFO Pat Murray expressed confidence that returns would likely average up, driven by mid-teen returns from renewable projects, strong returns from liquids projects, and utility contributions, along with base asset optimizations. President and CEO Greg Ebel added that Enbridge balances risk-adjusted returns, noting slightly thicker equity and ROEs in recent utility rate cases. Regarding government support, Greg Ebel stated that while signals are positive, concrete action is needed, particularly on the industrial carbon charge by April. He emphasized that Enbridge is not looking to take on development risk in jurisdictions with historical policy challenges.

Maurice Choy asked if the CAD 10-20 billion of projects over the next 24 months are expected to have similar 10-11% returns as 2025/2026 projects, or if the mix might lead to different portfolio returns. He also inquired about signs from Canadian/Alberta governments regarding support for major energy infrastructure projects, including backstopping cost overruns or financing.

Answer

Matthew Akman (EVP and President, Gas Transmission) stated confidence that returns would likely average up, citing mid-teen returns for renewables and strong returns in GTM. Greg Ebel (President and CEO) added that risk-adjusted returns are considered. Regarding government support, Greg Ebel had not heard of backstopping for private sector players but emphasized the need for concrete action and stable policy, pointing to the upcoming April timeframe for a solution on industrial carbon charge as crucial. Allen Capps (Head of Corporate Strategy and President, Renewable Power) clarified that Enbridge is comfortable with project development and delivery, but policy protection and durability are the biggest crux.

Maurice Choi asked about Enbridge's crude oil production growth projections, specifically the 'more than a million barrels a day by 2035' forecast, and how it's viewed now given a more supportive Canadian regulatory and political landscape. He also questioned the returns for the Pelican CO2 hub, asking how these lower-carbon opportunities compete for internal capital given perceptions of lower returns than traditional liquid pipeline projects.

Answer

Greg Ebel, President and CEO, stated that the crude oil production growth projections remain stable and internally consistent, with potential upside if Canadian federal policy fully supports a 'global energy superpower' vision, but the business plan is calibrated to the base case. Regarding the Pelican CO2 hub, Greg Ebel confirmed that it was sanctioned because it meets or exceeds returns from other liquids projects outside the Mainline, benefiting from clear tax incentive structures and long-term contracts. Pat Murray, EVP and CFO, added that Enbridge is taking a selective, disciplined 'crawl-walk-run' approach to low-carbon infrastructure.

Maurice Choi asked about Enbridge's crude oil production growth projections, specifically the 'million barrels a day by 2035' forecast, and how it's viewed now given a more supportive Canadian regulatory and political landscape. He also inquired about the returns for the Pelican CO2 hub, asking how these lower-carbon opportunities compete for internal capital given perceived lower returns than traditional liquids pipeline projects.

Answer

Collin Grending, Head of Liquids Pipeline Business Unit, stated that the million bpd growth by 2035 projection is stable, with potential upside if Canadian federal policy supports a 'global energy superpower' vision, but their business plan is calibrated to the base case. Greg Ebel, President and CEO, confirmed the Pelican CO2 hub earns at least the returns of other liquids projects outside the mainline, if not better, due to tax incentives (from the OBBB bill) and long-term 20-25 year contracts. Pat Murray, EVP and CFO, added that it's a selective investment, adopting a crawl-walk-run approach to low-carbon infrastructure.

Maurice Choy of RBC Capital Markets asked about the breadth of strategic cooperation with major tech customers like Meta, AT&T, and Amazon beyond single-project transactions.

Answer

President & CEO Gregory Ebel and EVP of Power Matthew Akman confirmed that discussions with these customers are becoming more strategic and moving 'up the chain' beyond simple supply procurement. They highlighted that these large players want to work with a major, reliable energy partner like Enbridge across multiple platforms, signaling opportunities for deeper, long-term relationships.

Maurice Choy asked for an updated outlook on the Ingleside (EIEC) facility and U.S. crude exports given the global trade landscape. He also inquired about Enbridge's view on the Ontario regulator's recent cost of capital decision and the jurisdiction's competitiveness for capital allocation.

Answer

Colin Gruending, EVP of Liquids Pipelines, reiterated a bullish view on exports and Ingleside's competitive advantages, noting they are expanding the facility and leveraging its capabilities for other commodities. Regarding Ontario, Michele Harradence, EVP of Gas Distribution, stated the decision doesn't impact Enbridge's ROE until 2029 and that capital allocation considers ROE, equity thickness, and regulatory certainty across all jurisdictions. CEO Greg Ebel added that the Ontario government's pro-gas policy is a positive signal.

Maurice Choy of RBC Capital Markets inquired about potential adjustments to capital allocation strategy in a scenario of prolonged tariffs and asked which parts of the energy value chain might be worth strengthening amid political uncertainty.

Answer

President & CEO Greg Ebel stated that he does not foresee significant changes to capital allocation from tariffs, given the integrated nature of the energy system. He highlighted that Enbridge has already 'bulked up' its natural gas business through recent acquisitions in distribution, transmission, and storage, positioning the company well. He affirmed that both the gas and liquids businesses present strong, low-risk growth opportunities.

Maurice Choy inquired about the effectiveness of Fortis's data center energy supply agreement in Arizona, specifically regarding full tariff rates, minimum billing, and credit provisions, and why this model succeeds where others in North America face challenges. He also asked about the gating items for the next phase of data center expansion and any updates from FERC regarding ongoing matters.

Answer

David Hutchens, President and CEO, Fortis, explained that the initial 300 MW data center capacity is supplied from existing resources, with the customer covering interconnection costs, leading to increased fixed cost recovery and improved customer affordability. He noted that additional capacity for future phases requires further investment and contractual finalization. Krista Tanner, President and CEO, ITC Holdings Corp., added that while there are no specific updates on FERC ROEs or incentives, the new chair is focused on clearing old dockets and ensuring bipartisan, durable decisions.

Maurice Choy inquired about the effectiveness of Fortis's Arizona data center energy supply agreement, highlighting its full tariff rates, minimum billing, and strong credit provisions, especially in the context of broader affordability concerns and challenges faced by other power markets in tariff design. He also asked about gating items for the remaining 300 MW at the initial Arizona data center site and updates from FERC on ongoing matters with a new chair.

Answer

David Hutchens, President and CEO, Fortis, explained that the agreement leverages existing capacity, with the data center covering interconnection costs, leading to increased fixed cost recovery without additional investment burden on existing customers. He noted that the second 300 MW phase requires additional capacity and finalized contractual details. Krista Tanner, President and CEO, ITC Holdings Corp., added that FERC is focused on cleaning up long-standing dockets and ensuring decisions have staying power, aiming for regulatory certainty.

Maurice Choy asked about the timing and likelihood of incremental generation opportunities at TEP and the Tilbury LNG storage expansion upside within the five-year plan, and also inquired about the funding plan, specifically future asset sales or optimization opportunities given recent divestitures.

Answer

David Hutchens, President and CEO of Fortis Inc., explained that significant steps, including securing agreements, siting, permitting, and regulatory approvals, are required before these opportunities can be included in the base capital plan. He clarified that the mention of asset sales in the funding plan was retrospective, not indicative of future divestitures, and reiterated that the Dividend Reinvestment Plan (DRIP) is the only planned equity source, with the ATM program as a standby.

Maurice Choy inquired about the timing and likelihood of additional capital opportunities beyond the base plan, specifically the $1.5 billion-$2 billion incremental generation at TEP and the $300 million LNG Tilbury storage expansion, questioning why these aren't already part of base estimates. He also asked about the future of asset sales for funding, given recent dispositions and the company's 100% regulated asset portfolio.

Answer

David Hutchens, President and CEO, explained that these opportunities require significant steps, including securing agreements, obtaining siting and permitting, and navigating regulatory processes, especially for data centers. He clarified that the company only includes projects in the capital plan once agreements are signed. Regarding asset sales, Mr. Hutchens stated that the focus is on executing the current five-year capital plan, emphasizing that recent dispositions were backward-looking for funding, and there are no current plans for further asset trimming from the now 100% regulated portfolio. He reiterated that the DRIP is the only planned equity source, with the ATM program as a standby.

Maurice Choy from RBC Capital Markets asked about the Springerville coal-to-gas conversion, its impact on GHG targets, the potential for a similar conversion at the Four Corners plant, and the outlook for gas infrastructure in British Columbia.

Answer

President & CEO David Hutchens stated the Springerville conversion is an affordability and reliability story, leveraging existing assets and made economic by a partnership with Salt River Project. He noted a Four Corners conversion hasn't been looked at. FortisBC President & CEO Roger Dall’Antonia added that while BC is embracing LNG export opportunities, the domestic gas agenda's future will become clearer after the CleanBC policy review later in the year.

Maurice Choy asked if formula rate mechanisms at ITC and TEP could mitigate shareholder risk from higher costs due to tariffs, and questioned the potential impact of proposed legislative changes to the Inflation Reduction Act (IRA).

Answer

President and CEO David Hutchens responded that regulatory mechanisms are expected to pass through prudently incurred costs, making tariffs a customer affordability concern rather than a shareholder risk. Regarding the IRA, he expressed confidence in its bipartisan support and noted that most of Fortis's expected tax credits are already in a 'safe harbor' zone, minimizing near-term risk.

Maurice Choy of RBC Capital Markets inquired about Fortis's updated electric and gas demand outlook, specifically noting changes driven by data centers and manufacturing. He also asked about the policy progression for sharing transmission costs for new load and sought clarification on the Iowa Supreme Court's stay of injunction for ITC, including any potential stranded asset risks.

Answer

President and CEO David Hutchens addressed the demand outlook, highlighting UNS's plans for 600 MW of new gas turbines and significant potential load growth in Arizona and Michigan. He noted that new load must be self-funding. Linda Blair, an executive from ITC, clarified that the court's stay could remain indefinitely and affirmed there is no concern of stranded asset risk for the Tranche 1 projects as they are being developed under the MISO tariff.

Maurice Choy of RBC Capital Markets asked about Fortis's engagement with S&P on physical asset and wildfire risk, the associated regulatory frameworks, and for details on FortisBC's new rate framework proposal.

Answer

EVP & CFO Jocelyn Perry stated that Fortis is actively sharing mitigation plans with S&P and regulators, noting that while no specific wildfire mechanisms exist, costs are managed via current rate structures. President & CEO David Hutchens added that risk is highest in Western North America but is mitigated by favorable Canadian legal structures and the urban nature of Arizona assets. Regarding FortisBC, Hutchens and executive Roger Dall’Antonia explained the new 3-year plan is structurally similar to the last, with a key change being a 3-year sustaining capital forecast instead of a formula-based one, and retains the ability to file for large projects separately.

Maurice Choy inquired about Brookfield Infrastructure Partners' approach to mitigating technology risk in data center contracts, potential underappreciated market risks, and the premium returns generated from data center developments compared to the 12-15% target range.

Answer

Sam Pollock, CEO, explained that data center developments yield 9-10% on cost and are monetized at 5.5-6% cap rates, resulting in high-teens to twenties equity returns. Udhay Mathialagan, Head of Global Data Center Businesses, detailed how long-term, specific 15-year contracts for core infrastructure (power and cooling) mitigate technology risk by isolating the company from customer-side compute infrastructure changes.

Maurice Choy inquired about Brookfield Infrastructure Partners' strategy for mitigating technology risk in data center contracts, identifying underappreciated market risks, and quantifying the superior returns expected from these investments beyond the 12-15% target range.

Answer

CEO Sam Pollock explained that new data centers are developed at a 9-10% yield to cost and monetized at 5.5-6% cap rates, leading to equity returns in the high teens or twenties. Udhay Mathialagan, Head of Global Data Center Businesses, detailed how long-term, specific 15-year contracts for core infrastructure (power and cooling) manage technology risk by isolating the company from customer-specific compute infrastructure changes.

Maurice Choy asked about the timing and success metrics for Brookfield Infrastructure's contemplated LP unit repurchases and the establishment of an ATM program for BIPC shares, also inquiring if a secondary target was to tighten the spread between the two securities.

Answer

CFO David Krant stated the programs were still being contemplated, with the primary objective to increase BIPC liquidity and avoid dilution by potentially pairing the ATM with an NCIB, given strong capital recycling. CEO Sam Pollock added that any impact on the spread between securities would be speculative.

Maurice Choy of RBC Capital Markets asked why the U.S. remains a top investment geography and whether recent asset sales, which were all partial stakes, indicate a strategic shift or buyer preference.

Answer

CEO Sam Pollock explained the U.S. is highly attractive due to the AI infrastructure boom driving opportunities, though he sees this expanding globally, particularly in Europe. Regarding asset sales, he stated there is strong demand in all markets for quality assets. He noted that the partial sell-downs were specific to each deal's circumstances and not indicative of a broader strategy, as future sales could be 100% exits.

Maurice Choy asked for examples of investment opportunities related to the onshoring of U.S. manufacturing and inquired about the contract profile for the upcoming NEBC Connector project in Canada.

Answer

CEO Sam Pollock and Managing Partner Dave Joynt highlighted opportunities to fund onshoring of critical industries like semiconductors and batteries, as well as investments in ports and energy infrastructure. Regarding the NEBC Connector, Dave Joynt confirmed it is backed by contractual obligations, not speculation, and fits into a strong medium-term outlook for natural gas driven by data center demand and LNG exports.

Maurice Choy from RBC Capital Markets asked if the Transport segment would be a major source of asset sales to fund the Data segment's growth and inquired about the performance and outlook for the Midstream segment.

Answer

CEO Sam Pollock clarified that Transport asset sales are based on individual asset life cycles, not a strategic shift, and that Data's growth also includes fiber and towers. COO Ben Vaughan expressed strong optimism for the Midstream segment, citing a $1 billion backlog and a potential for $2-3 billion more in low-risk, brownfield expansion projects in Western Canada driven by high utilization.

Maurice Choy asked for management's perspective on how recent global election outcomes, including the one in the U.S., might create tailwinds or headwinds for its assets, and where the company is currently finding the best risk-adjusted returns for new acquisitions.

Answer

CEO Sam Pollock stated that the primary business drivers, digitalization and decarbonization, are largely insulated from political shifts. He noted that digitalization has broad support, and while decarbonization has nuances, key decisions are made at corporate and state levels. He identified the U.S. as the most interesting market due to massive capital investment, followed by Korea, where a similar capital investment trend is creating opportunities for incentivized returns.

Maurice Choy asked for more details on South Bow's tax optimization and U.S. legislation changes, specifically if these benefits extend beyond 2026 or if the company expects to return to prior cash tax rates. He also asked for quantification of cost savings from transition agreements and their impact on the 2-3% EBITDA CAGR objective.

Answer

Van Dafoe, Senior VP and CFO, explained that U.S. legislation allowing additional interest deductions would continue as long as the law stands. He noted that accelerated tax pools provide benefits in 2025 and 2026, with a return to a regular cadence in 2027, primarily a shift between current and deferred tax. Bevin Wirzba, President and CEO, added that optimizing processes post-TSA exit (e.g., supply chain) creates savings that flow to variable tolls and some to EBITDA, but these optimization efforts are not included in the 2-3% EBITDA CAGR outlook.

Maurice Choy inquired about the specifics of South Bow's tax optimization and U.S. legislation changes, asking if these benefits would extend beyond 2026. He also sought quantification of cost savings from transition agreements and whether these were factored into the 2-3% EBITDA CAGR objective.

Answer

Van Dafoe (Senior VP and CFO) explained that tax wins included extended interest deduction caps from U.S. legislation (ongoing benefit) and accelerated tax pools (benefit in 2025-2026, returning to regular cadence in 2027). Bevin Wirzba (President and CEO) noted that optimizing processes post-TSA exit would create savings, some flowing to the variable toll and some to EBITDA, but clarified that these optimization efforts were not included in the 2-3% EBITDA CAGR outlook.

Maurice Choy of RBC Capital Markets asked about South Bow's long-term strategic position amid expectations of growing Canadian crude oil production and the potential opportunities that will arise as the company exits its final Transition Service Agreements (TSAs).

Answer

President and CEO Bevin Wirzba stated that South Bow is well-positioned to serve growing supply with its strategic corridor to the Gulf Coast, anticipating potential egress constraints by early 2027. He explained that exiting the TSAs allows the company to accelerate business plans and focus teams on core operations and customer solutions, which underpins the existing 2-3% EBITDA CAGR growth outlook.

Maurice Choy questioned the stability of the year-end leverage target, asking if it reflects low expected costs or confidence in recovering costs by year-end. He also sought clarification on the drivers behind the moderated outlook for spot volumes.

Answer

SVP and CFO P. Van Dafoe confirmed the 4.8x debt-to-EBITDA target is unchanged because the company expects all incident-related costs to be covered by insurance or through its variable toll within the year. President and CEO Bevin Wirzba added that while total costs are not yet disclosed, the response has gone well. Wirzba explained the moderated spot volume outlook is consistent, with pre-existing headwinds from excess basin egress now compounded by tariff uncertainty and operational restrictions.

Maurice Choy inquired about TC Energy's ability to exceed $6 billion in capital expenditures without capital rotation and how the company views engaging in an active capital rotation program for mature or de-risked projects. He also asked if the expected 5-7x build multiple for future projects reflects evolving returns across certain asset or project types, or if returns have remained broadly steady over the past 12 months.

Answer

François Poirier, President and Chief Executive Officer, clarified that the primary source of deleveraging is EBITDA growth, driven by commercial and technological innovations. He stated that while the bias would be towards capital rotation if external equity were needed to grow the capital program above $6 billion, the focus is first on optimizing existing assets and improving ROIC. Sean O’Donnell, Executive Vice President and Chief Financial Officer, and François Poirier confirmed that the 5-7x build multiple guidance has remained steady over the past year, with projects executing within this range, and this outcome is expected to be very achievable for the $17 billion development pipeline.

Maurice Choy followed up on François Poirier's comment about potentially exceeding $6 billion in CapEx without capital rotation, asking how TC Energy views active capital rotation for mature or de-risked projects from a financial discipline perspective. He also inquired if the expected 5x to 7x build multiple for future projects has seen evolving returns for certain asset or project types over the past 12 months, or if they have broadly remained steady.

Answer

François Poirier (President and CEO) clarified that the primary source of deleveraging is EBITDA growth through optimization and efficiencies, including commercial and technological innovations. He stated that while capital rotation would be the bias if external equity were needed to grow the capital program above $6 billion, the focus is first on maximizing ROIC on existing assets. Sean O’Donnell (EVP and CFO) confirmed that the 5x to 7x build multiple guidance has remained steady over the past 12 months, with executed projects falling within this range, and this outcome is expected to be achievable for the $17 billion BD pipeline. François Poirier added that if competitors face similar inflationary pressures, those costs would be reflected in bids, allowing TC Energy to maintain its target returns.

Maurice Choy of RBC Capital Markets asked for an updated view on the Canadian energy policy landscape following recent legislation and sought more detail on customers requiring greater capacity than originally planned for data center projects.

Answer

President & CEO François Poirier described recent federal legislation as a positive step that supports Canada's potential as an energy exporter. EVP & COO Tina Faraca provided examples like the Pulaski and Maysville projects, which were upsized post-sanctioning to meet growing power generation demand, underscoring a robust pipeline of opportunities driven by electrification and data centers.

Maurice Choy asked if Canadian permitting reform is a direct gating factor for specific TC Energy projects or a broader call to action for the basin. He also questioned whether potential upside from new projects would reinforce the existing 5-7% CAGR for the 2027 comparable EBITDA guidance or potentially move it higher.

Answer

CEO Francois Poirier described permitting reform as a broader issue needed to spur activity across the basin, which would benefit TC Energy, while reiterating that the highest risk-adjusted returns and discretionary capital currently favor the U.S. CFO Sean O'Donnell responded that while project execution is strong, it is too early in the year to revise the 2027 EBITDA guidance, stating the company prefers to show more proof before reflecting potential upside in its outlook.

Maurice Choy questioned the available mothballed capacity on the Canadian Mainline and the cost to restore it, and asked how potential prolonged tariffs might alter capital allocation, given the existing focus on the U.S.

Answer

Retiring executive Stanley Chapman stated that due to strong demand, all available Mainline capacity is fully contracted, though Line 2 remains unavailable for service and is under evaluation. President and CEO Francois Poirier and EVP & COO Tina Faraca clarified that while tariffs could influence future decisions, the current U.S. project pipeline is largely insulated due to domestic sourcing for key materials like pipe, and the company's capital allocation will continue to favor the highest risk-adjusted returns, which are currently in the U.S.

Maurice Choy from RBC Capital Markets inquired about translating strong WCSB fundamentals into a long-term EBITDA growth rate, the potential for margin growth amid competition, and the long-term competitiveness of the Fort Saskatchewan facilities.

Answer

President & CEO Scott Burrows reiterated the outlook for mid-to-high single-digit volume growth but deferred giving specific long-term EBITDA guidance. SVP & CFO Cameron Goldade added that future growth will come from both volumes and margin initiatives, like the Prince Rupert terminal optimization. SVP & COO Jaret Sprott defended the competitiveness of Fort Saskatchewan, highlighting its scale, connectivity, and access to diverse North American markets, which provides valuable optionality for customers beyond West Coast exports.

Maurice Choy from RBC Capital Markets asked for Pembina's view on the competing Taylor-to-Gordondale pipeline project and the rationale behind the slight change in the 2025 exit leverage target.

Answer

SVP Jaret Sprott stated that Pembina is supportive of both its project and the competing one, believing both are required to handle future NGL and condensate growth from LNG developments. CFO Cameron Goldade explained the minor adjustment to the leverage target (3.4x-3.7x) was due to the timing of cash flows, non-cash working capital changes, and cash tax payments, not a structural change. He also reconfirmed the guidance assumes the existing Alliance toll.

Maurice Choy asked for clarification on the Greenlight project's return profile, questioning if it would be closer to 7x or 10x build multiples. He also asked if the company's risk appetite has changed and if future power projects would be limited to sites near existing infrastructure.

Answer

SVP & CFO Cameron Goldade was reluctant to provide a specific multiple due to ongoing negotiations but stated it would be within Pembina's historical range, emphasizing the company's advantage in capital execution. President and CEO J. Burrows confirmed the strategy is focused on value chain extension on company-owned land, not on becoming a general independent power producer.

Maurice Choy from RBC Capital Markets asked if the data center MOU timeline had shifted due to the AESO's decision moving to mid-September and questioned Alberta's capacity to support gigawatt-scale data centers over time.

Answer

President and CEO John Kousinioris clarified that the MOU timeline is progressing independently of the AESO's DTS execution date and that progress is strong. He expressed high confidence in Alberta's ability to develop a robust data center industry, which he noted would help rebalance the province's current generation oversupply, benefiting TransAlta's diverse portfolio.

Maurice Choy asked for clarity on TransAlta's long-term strategy, specifically regarding the ideal portfolio mix, contracted EBITDA targets, and expectations for federal energy policy changes. He also questioned if the regulatory landscape is creating hurdles for data center negotiations.

Answer

CEO John Kousinioris and CFO Joel Hunter outlined a deliberate strategy to increase the stability of cash flows by growing the contracted portion of EBITDA to over 70%, thereby reducing reliance on the Alberta merchant market. Kousinioris added that they expect a 'status quo' on federal regulations and confirmed that the policy environment is not a major obstacle in current discussions with potential data center counterparties.

Maurice Choy questioned the strategic goal behind potential M&A of legacy gas assets in the U.S. and asked about TransAlta's investment capacity within its target debt-to-EBITDA range, as well as its stance on pursuing an investment-grade credit rating.

Answer

President and CEO John Kousinioris explained the M&A strategy aims to leverage TransAlta's operational and energy marketing expertise in the growing Western U.S. market. EVP & CFO Joel Hunter added that the company has approximately $500 million to $750 million in investment capacity while staying within its 3-4x debt-to-EBITDA target. He clarified that while they have an investment-grade rating from DBRS, the goal is to maintain the current BB+ rating with S&P and Moody's for maximum financial flexibility.

Maurice Choy asked about the new emphasis on capital recycling, questioning the drivers behind this strategic shift. He also asked for clarification on which assets are considered 'core' to the business, how program success is evaluated, and for an update on the 2025 financial outlook.

Answer

CEO John Kousinioris explained that while portfolio review has always been ongoing, the current focus on capital recycling is more acute due to significant opportunities for both new projects and legacy asset redevelopment. He identified the legacy coal-to-gas assets, Centralia, the hydro fleet, Sarnia, and the Australian business as core. EVP & CFO Joel Hunter added that any recycling must have a good use of proceeds. Kousinioris stated that capital allocation is evaluated on risk-adjusted returns, accretion to key metrics, and credit impact. He also reaffirmed confidence in the 2025 outlook, citing the company's strong hedge position.

Inquired about tariff exposure beyond what was mentioned, potential government support for Nova Scotia Power (NSPI) regarding affordability, and the development of the East-West energy corridor.

Answer

Tariff anxiety is low, with the focus on managing customer affordability and supply chain constraints. There is strong alignment between Nova Scotia's government and federal goals, particularly on offshore wind and critical minerals, which could benefit NSPI. The company is also encouraged by momentum for an East-West energy corridor, where NSPI's interest would be in transmission investment.

Asked for clarification on the 2025 EPS growth outlook potentially exceeding the 5-7% range, including the earnings base and potential headwinds. Also inquired about the scale of the data center investment opportunity in Florida and its inclusion in the 5-year plan.

Answer

Scott Balfour (executive) confirmed the optimistic outlook for 2025, citing FX tailwinds, and noted potential headwinds would be normal operational risks like weather. Greg Blunden (executive) stated that data center investments are not currently in the 5-year capital plan and are viewed as a modest load growth opportunity rather than a major capital driver.

Inquired about the company's path to achieving its 12% CFO to debt threshold, the likelihood of a settlement in the Tampa Electric rate case, and sought confirmation of the dividend payout ratio target following the New Mexico Gas sale.

Answer

The CFO to debt target range reflects normal volatility, with improvements expected from general business growth and new rates. A settlement in the Tampa Electric case is now considered unlikely, with the company preparing for a litigated hearing. The dividend payout ratio target of approximately 80% by 2027 is reaffirmed.

Maurice Choy inquired about the impact of the expanded federal indigenous loan guarantee program on First Nations partnerships, the risk of rising capital costs from tariffs, and the potential for project delays.

Answer

President and CEO David Lebeter and CFO Harry Taylor noted the loan program will make financing easier for partners, allowing Hydro One to redeploy capital faster. On costs, they stated that while tariffs create uncertainty, the company is mitigating impacts through strategic sourcing, inventory management, and productivity initiatives. They do not anticipate delays to major projects.

Maurice Choy from RBC Capital Markets inquired about the potential outcome of the ongoing cost of capital review, specifically regarding the base ROE and equity ratio. He also asked about the strategic rationale for acquiring a stake in the East-West Tie line beyond the financial benefits.

Answer

President and CEO David Lebeter stated his best guess is that the ROE and equity ratio will remain similar, as he has received no indication of a change. He noted the East-West Tie acquisition was strategic because it connects a gap in the transmission system, aligns with the company's indigenous partnership model, and strengthens its core position in Ontario. He also confirmed asset sales are not a currently planned funding source.

Maurice Choy inquired about the cost savings on the Chatham to Lakeshore transmission line and their applicability to future projects. He also asked about the timeline for other project applications and the long-term funding strategy for the company's significant capital expenditure plan.

Answer

President and CEO David Lebeter attributed the Chatham to Lakeshore savings to strong indigenous and municipal partnerships, streamlined environmental processes, and efficient land acquisition, noting each project is unique. CFO Harry Taylor stated that no equity issuance is anticipated within the current rate period and highlighted the company's strong balance sheet, supported by an upsized credit facility and healthy FFO to debt metrics.

Maurice Choy from RBC Capital Markets asked for tangible examples of how the refreshed strategy differs from the previous one, whether related investments are covered by the current rate plan, and for quantification of the revised broadband forecast's impact on EPS and dividends.

Answer

President and CEO David Lebeter explained the strategy is a 'refresh,' not a revamp, with key changes being a more proactive customer service approach and elevating IT/digital capabilities to a core strategic priority. He confirmed these changes will be funded within the current rate envelope. CFO Chris Lopez noted that a $0.5 billion broadband investment would add approximately 0.5% to EPS growth and that any related dividend increase would be a future decision for the Board.

Maurice Choy asked about the RIPET methanol removal project, questioning if there are differences in risk, returns, or terms when servicing Chinese customers versus those in Japan or South Korea. He also asked if regulatory approval is now the main obstacle for expanding export capacity, given strong demand and available rail capacity.

Answer

Vern Yu, President and CEO, explained there are no material differences in terms, but AltaGas is mindful of credit quality and governance with Chinese counterparties, often requiring letters of credit. He clarified that the key gating items for expansion are ensuring capital cost and schedule risks are managed and securing permits in a timely manner, not commercial demand.

Maurice Choy from RBC Capital Markets questioned if there are different risk-return profiles or contract terms for LPG exports to China versus Japan or South Korea. He also asked if regulatory hurdles are the main remaining obstacle for expansion and whether returns on future phases are expected to exceed the initial phase of REEF.

Answer

President and CEO Vern Yu explained that there are no material differences in terms, but AltaGas is mindful of credit quality and governance with Chinese counterparties, often requiring letters of credit. Yu confirmed the main gating items for expansion are ensuring capital cost and schedule certainty and securing permits, not commercial demand. He also affirmed that subsequent expansion phases are expected to be more profitable than the initial phase due to pre-built infrastructure.

Maurice Choy from RBC Capital Markets asked about the RIPET methanol removal project, questioning if there were differences in risk, returns, or terms when servicing Chinese customers versus those in Japan or South Korea. He also asked if regulatory and consultation hurdles were the primary remaining obstacles for capacity expansion and if returns on future expansions are expected to be higher.

Answer

President and CEO Vern Yu clarified that there are no material differences in commercial terms, but credit quality for some Chinese counterparties is managed carefully, often with letters of credit. He confirmed that the main gating items for expansion are internal diligence on capital costs and schedule, followed by permitting. Yu also affirmed that subsequent expansion phases at REEF are expected to be more profitable than the initial phase due to pre-built infrastructure.

Maurice Choy from RBC Capital Markets asked about differences in risk and terms when servicing Chinese customers versus other Asian markets, whether regulatory hurdles are the main obstacle for export expansion, and if returns on future expansions are expected to be higher.

Answer

President and CEO Vern Yu responded that while contract terms are similar, AltaGas carefully manages credit risk with Chinese counterparties, often requiring letters of credit. He identified confirming capital costs and securing permits as the primary gating items for expansion, not commercial demand. He also confirmed that subsequent expansion phases are expected to be more profitable than the first, as major infrastructure like the wharf and rail are pre-built.

Maurice Choy from RBC Capital Markets asked about the RIPET methanol removal project, questioning if there are differences in risk or terms when servicing Chinese customers versus those in Japan or South Korea. He also asked if regulatory hurdles are the main remaining obstacle for export expansion and if returns on future phases are expected to be higher.

Answer

President and CEO Vern Yu explained that contract terms are materially similar across Asian markets, with the key focus for China being credit quality, which is managed via letters of credit. He clarified that the primary gating items for expansion are internal capital discipline and obtaining permits, not commercial demand. Mr. Yu also confirmed that subsequent expansion phases are expected to be more profitable than Phase 1, as they leverage the pre-built wharf and rail infrastructure.

Maurice Choy inquired about the REEF project, asking if positive updates on construction productivity and cost savings meant the project was trending below budget, and about pre-building infrastructure for future phases. He also asked if achieving the company's leverage target is entirely dependent on the proceeds from the MVP asset sale.

Answer

President & CEO Vern Yu confirmed that REEF Phase 1 pre-builds significant rail and jetty infrastructure for future expansions, but the overall capital estimate is unchanged for now as some risks remain, despite major items like earthworks being materially derisked. EVP & CFO James Harbilas affirmed that the MVP sale is the quickest path to the leverage target, potentially providing a 0.4x to 0.5x improvement, and noted the sale process is robust and in its 'middle innings' with an update expected in Q1.