Robert Hope

Robert Hope inquired about how Tampa Electric's returns and rate filings influence the upper and lower ends of Emera's extended EPS outlook to 2030. He also asked if capital could be materially cut from Nova Scotia Power and reallocated to Florida if the regulatory or political situation in Nova Scotia worsens.

Answer

Scott Balfour, President and CEO, explained that new rates typically allow earning in the upper half of the ROE band, while nearing rate needs can reduce ROE to the lower half. He confirmed that a lack of regulatory support for capital investment in Nova Scotia would prevent investment. Peter Gregg, Former President and CEO of Nova Scotia Power, expressed confidence in the consensus agreement and the independent regulatory process.

Robert Hope inquired about the factors influencing Emera's EPS outlook to 2030, specifically how Tampa Electric's returns and rate filings might push earnings to the top or bottom end of the growth range. He also asked if Emera would consider cutting capital at Nova Scotia Power and reallocating funds to Florida if the regulatory or political situation in Nova Scotia were to worsen, given the 2026 outlook for Nova Scotia Power earning at the lower end of its band.

Answer

Scott Balfour, President and CEO, explained that new rates typically allow earning in the upper half of the ROE band, while nearing the need for new rates often results in the lower half. He also noted that weather is a significant driver. Regarding Nova Scotia Power, he stated that capital would not be invested without regulatory support, emphasizing confidence in the evidentiary record. Peter Gregg, former President and CEO of Nova Scotia Power, reiterated confidence in the independent regulatory process and the consensus agreement with customer representatives.

Robert Hope inquired about the updated capital forecast, specifically noting a shift with less capital in the near term (2026-2027) and more in the 2029-2030 timeframe, asking for drivers behind this change. He also questioned how credit metrics influence capital deployment and if Emera would consider incremental equity for potential upside to forecasts.

Answer

CFO Greg Blunden explained that some Tampa Electric capital was accelerated into 2025, particularly solar investments, to get ahead of policy uncertainty. He also noted that the Peoples Gas rate settlement led to profiling some planned capital over a longer period. Blunden added that while there's no shortage of capital opportunities, Emera balances execution ability, lead times, customer rate impact, regulatory lag, and funding/credit metrics, confirming willingness to issue equity for accretive projects.

Robert Hope asked about the updated capital forecast, specifically inquiring about the shift in capital allocation, with less in the near term and more in 2029-2030, and the key drivers behind this change. He also questioned how credit metrics influence the capital forecast, potential upside, and Emera's willingness to issue incremental equity for accretive projects.

Answer

Greg Blunden, Emera's Chief Financial Officer, explained that some Tampa Electric capital for 2026-2027 was accelerated into 2025, particularly for solar investments, to get ahead of policy uncertainty. He also noted that People's Gas capital was profiled over a longer period due to a rate settlement. Regarding credit metrics, Mr. Blunden stated that while there's no shortage of capital opportunities, pacing considers execution, lead times, customer rates, regulatory lag, funding, and credit metrics. He confirmed Emera's willingness to issue equity for accretive capital projects.

Robert Hope of Scotiabank inquired about potential upside from data center development at Tampa Electric and sought an update on transmission projects in Nova Scotia, including interprovincial connections and support for offshore wind.

Answer

CEO Scott Balfour addressed the data center topic, stating that while discussions for hundreds of megawatts of load are ongoing, any significant growth is realistically a 2027-2028 event and not yet in the capital plan. Regarding Nova Scotia, Peter Gregg, President & CEO of Nova Scotia Power, noted that conversations at the federal level about transmission and offshore wind are encouraging but still in the very early stages.

Rob Hope inquired about Enbridge's strategy to potentially exceed its $10-$11 billion annual investment capacity, considering the $10-$20 billion project pipeline, and whether other funding sources would be utilized. He also asked if the Venezuela situation could impact the timing of MLO 3 and the consistent demand for Canadian crude in the Gulf Coast.

Answer

President and CEO Greg Ebel and EVP and CFO Pat Murray stated that investment capacity grows with EBITDA, and the $39 billion backlog extends through 2033, fitting within existing capacity. Greg Ebel mentioned capital recycling, like the West Coast pipeline sale, as a buffer. EVP and President of Liquids Pipelines Colin Gruending explained that MLO 3 development involves multiple options and that while Venezuela's impact is uncertain, the U.S. Gulf Coast remains the best heavy refining market for Canadian crude. Greg Ebel reiterated that Venezuelan crude is a supplement, not a replacement.

Rob Hope inquired about the potential to exceed the CAD 10-11 billion annual investment capacity, given the CAD 10-20 billion project backlog over the next two years, and the reliance on other funding sources. He also followed up on the Venezuela situation, asking if it could slow MLO 3 timing and if Canadian crude would find a home in the Gulf Coast regardless.

Answer

Greg Ebel (President and CEO) expressed confidence in the investment capacity, noting that the CAD 39 billion backlog extends through 2033 and capacity grows with EBITDA. He also mentioned capital recycling, such as the West Coast pipeline sale, as a buffer. Greg Ebel and Colin Gruending (EVP and President, Liquids Pipelines) discussed MLO 3, emphasizing the need for policy changes in Canada to support increased oil and gas production first. Colin Gruending added that the U.S. Gulf Coast remains the world's best heavy refining market, and Canadian crude will continue to find a home.

Rob Hope asked about Enbridge's engagement with the Canadian Major Projects Office, given the improving policy environment and over $8 billion in BC projects, to potentially de-risk these developments. He also inquired about the potential for a Mainline Optimization Phase Three (MLO-3) and beyond, and how much more incremental capacity could be extracted from the basin without significant large-diameter pipe construction.

Answer

Greg Ebel, President and CEO, stated that Enbridge has not utilized the Canadian Major Projects Office for its current short-cycle, permit-light projects but maintains conversations with them for potential future support. Collin Grending, Head of Liquids Pipeline Business Unit, confirmed that engineers are exploring MLO-3 and MLO-4, with 'in corridor, in fence line solutions' for potential future acceleration if Canadian federal policy supports a 'global energy superpower' vision, but noted it's premature to discuss details.

Rob Hope asked about Enbridge's engagement with the Canadian Major Projects Office, given the improving policy environment and over $8 billion in BC projects, to potentially de-risk these investments. He also inquired about the future of Mainline Optimization, specifically what an MLO3 might look like and how much more incremental capacity could be extracted without large-diameter pipe.

Answer

Greg Ebel, President and CEO, stated Enbridge has not used the Major Projects Office as their projects are short-cycle and permit-light, but they maintain communication and would engage if needed. Collin Grending, Head of Liquids Pipeline Business Unit, mentioned that MLO3 and MLO4 are being explored by engineers as 'hitters warming up in the dugout,' with in-corridor solutions, but it's premature to discuss, noting potential for upside with a larger Canada-US trade deal.

Rob Hope from Scotiabank inquired about the contractual frameworks for data center customers and whether the company's focus is shifting to post-2027 projects as the near-term investment capacity fills up.

Answer

President & CEO Gregory Ebel emphasized a preference for highly-rated counterparties like major utilities and tech giants, requiring strong credit support from smaller players. EVP & CFO Patrick Murray confirmed that while near-term years like 2025-2026 are filling up, the focus is now on securing high-return projects for the latter half of the decade to extend the growth outlook.

Rob Hope asked where Enbridge sees the best opportunities for its U.S. Gulf Coast gas "super system"—in storage, LNG connectivity, or more Permian egress capacity. He also inquired about the current M&A environment and the potential for more attractive tuck-in deals.

Answer

Cynthia Hansen, EVP of Gas Transmission, replied that opportunities exist across all areas, including laterals, storage expansions (citing three recent open seasons), and projects tied to LNG facilities. President and CEO Greg Ebel added that any M&A must compete with a $50 billion organic growth portfolio and be accretive, but acknowledged that opportunities can arise in volatile markets, though he hasn't seen significant stress yet.

Rob Hope from Scotiabank asked for an update on the larger capital plan for the T-North system in British Columbia and inquired about the integration of the new U.S. gas utilities and the emergence of larger-scale projects.

Answer

EVP, Gas Transmission Cynthia Hansen confirmed positive momentum on the T-North system, supported by the B.C. government and driven by LNG export demand. EVP, Gas Distribution Michele Harradence reported that the U.S. utility integration is proceeding well, with growth meeting expectations and a significant tailwind from power generation demand for data centers. CEO Greg Ebel added that the combined utilities have a ~$3 billion annual capital plan with a mix of large and small projects.

Robert Hope inquired about the key drivers of the Texas Eastern Pipeline (TEPCO) rate case settlement and its expected EBITDA impact. He also asked for a breakdown of the recast 2024 EBITDA guidance, questioning if it solely reflects the new utility assets or includes other business unit adjustments.

Answer

Cynthia Hansen, EVP of Gas Transmission and Midstream, explained the TEPCO settlement was a 'black box' prepackaged deal considering capital, operating costs, and future rates, resulting in a 6% rate increase in late 2024 and another 2.75% in 2026. President and CEO Greg Ebel confirmed the 2024 guidance update was solely due to layering in the acquired utilities and their financing, noting the base business is performing at the upper end of its original guidance.

Rob Hope asked for Fortis's perspective on the Arizona ALJ's decision regarding formula mechanisms for UNS Gas, specifically what aspects were favorable and what required reconsideration. He also inquired about progress on the next phase of Tilbury LNG projects in British Columbia.

Answer

David Hutchens, President and CEO, Fortis, noted the distinct nature of the UNS Gas and TEP rate cases. Susan Gray, President and CEO, UNS Energy Corporation, expressed satisfaction with the pilot program designation for formula rates and the proposed ROE, but highlighted concerns about the lack of post-test year plant recovery, the ROE reduction due to formula rates, and the efficiency credit. Hutchens added that beyond the recently approved LNG tank, there are no new Tilbury project announcements, but the company sees good opportunities for additional LNG investments in BC.

Rob Hope asked for Fortis's perspective on the Arizona ALJ decision regarding formula mechanisms for UNS Gas, highlighting aspects the company found favorable and unfavorable. He also inquired about any progress on the next wave of LNG projects at Tilbury in British Columbia.

Answer

David Hutchens, President and CEO, Fortis, clarified that the UNS Gas and TEP rate cases are distinct. Susan Gray, President and CEO, UNS Energy Corporation, expressed satisfaction with the 'pilot program' designation for formula rates but voiced concerns about the lack of post-test year plant recovery, the reduced ROE, and the efficiency credit. She noted an amendment was filed to align with staff recommendations. David Hutchens stated there were no new updates on Tilbury LNG projects beyond the recently approved tank, but acknowledged government focus on large projects in BC.

Rob Hope asked for clarification on the timing of securing the $1.5 billion-$2 billion in new generation capital in Arizona, considering long lead times, and when these projects could be in service. He also inquired about the number of opportunities contributing to ITC's 8 GW of potential load growth from data centers and the likelihood of sanctioning some of these projects within the next 12 months.

Answer

David Hutchens, President and CEO, stated that customers desire immediate connection, but generation projects involve significant lead times for siting, permitting, and equipment acquisition. He expects timelines similar to the first 300 MW project in Arizona, aiming for online by 2027, and believes the $1.5 billion-$2 billion is achievable within the next five-year period. Linda (from ITC) added that while they have insight into the 8 GW of load growth and ongoing planning studies, it's premature to specify timelines or identify projects, but the queue continues to grow, and they remain optimistic for future announcements.

Rob Hope inquired about the timing for securing the $1.5 billion-$2 billion in new generation in Arizona and when these projects could be in service, as well as details on ITC's 8 gigawatts of potential load growth from data centers, including the number of opportunities and potential sanctioning within the next 12 months.

Answer

David Hutchens, President and CEO of Fortis Inc., noted that while customers desire immediate connection, lead times for generation construction and resource mix (battery storage, renewables, combustion turbines) mean the 2027-2030 timeline is more realistic. Linda H. Apsey, President and CEO of ITC, confirmed ongoing planning studies for the 8 GW load growth but stated it's premature to speculate on specific projects or timelines, though the queue continues to expand.

Robert Hope of Scotiabank inquired about the development timeline for generation assets to support the new Arizona data center opportunities and asked for confirmation on the primary sources of upside potential for the capital plan.

Answer

President & CEO David Hutchens and UNS Energy President & CEO Susan Gray explained that the first 300 MW of the data center load will use existing and planned capacity, coming online around 2027. The next 300 MW will go through an RFP process, targeting a 2030-2031 in-service date. David Hutchens confirmed that Arizona and ITC represent the greatest upside potential, but noted other opportunities exist across the portfolio, including in British Columbia.

Robert Hope inquired about the potential impact of government tariffs on Fortis's 2025 and 2026 capital plans and sought an update on the progress of negotiations with large-load customers, such as data centers, in Arizona.

Answer

President and CEO David Hutchens clarified that any potential tariffs are viewed as a cost and customer affordability issue rather than a near-term supply chain or execution risk for the capital plan. He also confirmed that negotiations with a large customer in Arizona are progressing meaningfully, although the general pace for such deals has slowed industry-wide due to macroeconomic factors.

Robert Hope from Scotia Capital asked about the regulatory outlook for Central Hudson, questioning if new rates would close the gap between achieved and allowed ROE. He also inquired about the broader sentiment towards natural gas, referencing a reversed gas ban in Vancouver and the fuel's role in home ownership costs and grid reliability.

Answer

President and CEO David Hutchens confirmed the new rates should help close the ROE gap at Central Hudson, as costs related to the CIS implementation are now resolved. Regarding natural gas, he noted a growing recognition across jurisdictions of the need for both gas and electric systems to ensure affordability and reliability, pointing to a recent RNG approval in British Columbia as a key development for supplying clean molecules.

Robert Hope from Scotiabank inquired about the path to accelerating transmission investments at ITC amidst permitting challenges and asked where Fortis is experiencing the most significant load growth.

Answer

President & CEO David Hutchens cited positive federal developments like NEPA reforms and the DOE's CITAP program, which aim to expedite permitting. However, he identified recurring legal challenges as the primary bottleneck requiring a legislative solution. For load growth, Hutchens highlighted the U.S., particularly ITC and UNS service territories in the Midwest and Arizona, as hotspots driven by data centers and manufacturing, spurred by incentives like the Inflation Reduction Act.

Robert Hope inquired about the acceleration of Brookfield Renewable Partners' battery outlook from 7 GW to 10 GW, asking if this is driven by larger opportunities like the 1 GW project with a sovereign wealth fund, and also questioned the M&A environment for acquiring assets amidst rising prices and increased power demand.

Answer

CEO Conor Teskey confirmed that the accelerated battery outlook is due to dramatically declining costs and technological advancements, making batteries an increasingly economic solution globally, with larger projects being a key driver. He noted that battery development is faster due to pre-built equipment and grid incentives. For M&A, he described a constructive market for deployment into growth and consolidation, emphasizing scale capital as a competitive advantage, leading to attractive deployment opportunities.

Robert Hope of Scotiabank questioned Brookfield Renewable's potential role as a capital source for the next phase of U.S. nuclear buildout, including the necessary frameworks and protections, and discussed factors for contracting existing hydro assets with Microsoft.

Answer

CEO Connor Teskey emphasized Brookfield Renewable's strong position in nuclear due to Westinghouse ownership and capital access. He outlined strategies for investment protection, such as sharing cost overrun burdens with offtakers or suppliers. He also confirmed that the Microsoft framework always included hydro, and more hydro deals are possible.

Robert Hope asked if Brookfield Renewable (BEP) could be a source of capital for the next phase of nuclear buildout with the U.S. government partnership, outlining the framework and protections needed, and the factors leading to contracting existing hydro assets with Microsoft over new wind/solar builds.

Answer

CEO Connor Teskey affirmed BEP's strong position in nuclear growth due to Westinghouse ownership, capital access, and development expertise, noting that the U.S. government is backstopping initial projects. He detailed protection strategies for BEP's direct investment, including sharing cost overrun burdens with offtakers or suppliers. He also clarified that the Microsoft framework always included hydro, reflecting broader demand for hydro generation.

Robert Hope of Scotiabank inquired about the strategy for recontracting hydroelectric capacity given increased demand. He also asked whether the acquisition opportunities arising from weak public market valuations are concentrated in North America or are more geographically diverse.

Answer

Connor Teskey, an executive, explained that recontracting hydro assets at current high market rates provides a significant EBITDA uplift and creates highly attractive, low-cost up-financing opportunities to fund growth. He noted increased interest from corporate buyers for hydro power. On M&A, Teskey stated that while public market opportunities are primarily North American-focused due to where most companies are listed, the trend is driven by capital constraints faced by public developers, creating opportunities for carve-outs and take-privates.

Robert Hope from Scotiabank requested a breakdown of the U.S. development pipeline between wind and other technologies, and sought clarification on which potential U.S. regulatory changes are not expected to materially impact the business, specifically regarding ITCs and PTCs.

Answer

Connor Teskey, an executive, explained that about two-thirds of the short-term development pipeline is outside the U.S. Of the U.S. portion, only 25-30% is wind, and it is almost entirely on private land, minimizing exposure to federal policy uncertainty. He reiterated that while changes to tax credits (ITCs/PTCs) would be most impactful, they are not expected, and the company believes it could pass through any impact via higher PPA prices due to strong underlying demand.

Robert Hope inquired which asset classes are most susceptible to U.S. tax policy changes and asked about the strategic fit of non-renewable power investments, like the Infinium sustainable aviation fuel project, within the company's broader framework.

Answer

Executive Connor Teskey responded that low-cost technologies like onshore wind and solar are insulated because they can absorb subsidy rollbacks by raising PPA prices and still be competitive. Higher-cost, subsidy-reliant sectors would be more exposed, but Brookfield avoids them. On new ventures like Infinium, Teskey explained that they are assessed against a high benchmark set by renewables and require significantly higher risk-adjusted returns. He noted the Infinium investment is in a proven technology backstopped by long-term, take-or-pay contracts, similar to their green power model.

Robert Hope inquired about the acceleration of Brookfield Renewable Partners' battery outlook from 7 GW to 10 GW, asking if this is driven by larger opportunities like the 1 GW project with a sovereign wealth fund, and if this indicates a trend towards larger projects for grid reliability. He also asked for an assessment of the M&A environment in the current rising price and power addition landscape.

Answer

CEO Connor Teskey confirmed that the accelerated battery outlook is driven by dramatically declining costs, making batteries an increasingly economic solution globally. He noted that batteries can be executed faster due to pre-built equipment and grid incentives, leading to larger projects. Mr. Teskey also stated that Brookfield Renewable Partners views scale capital as a competitive advantage in the current constructive M&A market, which is ripe for deployment into growth and broader consolidation, positioning the company to play a significant role.

Robert Hope inquired about Brookfield and BEP's potential role as a capital source for the U.S. nuclear buildout under the government partnership and the framework for such investments. He also asked about the factors leading to contracting an existing hydro asset with Microsoft and the potential for more such deals.

Answer

Connor Teskey (CEO, BEP) highlighted Brookfield Renewable's strong position in nuclear growth due to Westinghouse ownership, capital access, and development expertise, noting that while the U.S. government initially backstops projects, BEP would require specific protections for direct investment. Regarding Microsoft, Mr. Teskey explained that the framework agreement always included hydro, reflecting broader demand for hydro generation, and confirmed the possibility of more hydro deals in the future.

Robert Hope asked about Brookfield Renewable's potential role as a capital source for future nuclear buildouts under the U.S. government partnership and the framework for such investments, as well as the rationale behind contracting existing hydro assets with Microsoft.

Answer

CEO Connor Teskey highlighted Brookfield Renewable's strong position in nuclear growth due to Westinghouse ownership, offtaker relationships, capital access, and development expertise. He explained that while the U.S. government initially backstops projects, Brookfield Renewable would consider investing with protections like shared cost overrun burdens or incremental financing. Regarding Microsoft, he noted that the framework agreement always included hydro, and the recent deal reflects broader demand for hydro generation, with more hydro deals possible.

Robert Hope of Scotiabank inquired about the strategy for recontracting hydroelectric assets given increased demand from various buyers. He also asked if the M&A opportunities arising from weak public market valuations are concentrated in North America or are more geographically widespread.

Answer

Executive Connor Teskey explained that recontracting hydro assets at higher market prices provides a significant EBITDA uplift and creates highly accretive up-financing opportunities to fund growth. He noted that interest from large corporate buyers for hydro power has increased dramatically. On M&A, Teskey confirmed that opportunities from public market weakness are primarily North American-focused, largely because that is where most public renewable companies are listed, and include both take-privates and corporate carve-outs.

Robert Hope questioned the strategy for recontracting hydro assets, including the potential for grouping assets or holding merchant exposure. He also asked about the geographic concentration of M&A opportunities arising from weak public market valuations.

Answer

Connor Teskey, an executive, explained that recontracting hydro assets at higher market rates creates a significant EBITDA uplift and attractive up-financing opportunities to fund growth accretively. He noted increased interest from corporate buyers for hydro power, which was previously focused only on wind and solar. On M&A, he indicated that public market opportunities are primarily North American-focused, driven by the capital constraints of listed peers, and include both take-privates and corporate carve-outs like the recent National Grid Renewables deal.

Robert Hope asked for a breakdown of the U.S. development pipeline between wind and other renewables, and for more color on which potential U.S. regulatory changes are expected versus those that are not, particularly concerning ITCs and PTCs.

Answer

Connor Teskey (executive) detailed that about two-thirds of the near-term pipeline is outside the U.S. Of the U.S. portion, only 25-30% is wind, which is almost entirely on private lands, minimizing exposure to federal permitting issues. He reiterated that while changes to tax credits would be most impactful, the company is confident it could pass through any such changes via higher PPA prices due to strong underlying demand, thereby preserving margins.

Robert Hope asked for deeper insight into the significant increase in the data operations capital backlog in Q4, particularly the hyperscale component, and the outlook for its growth. He also requested an update on the $3.9 billion backlog related to the Intel facility, including timing, cash flow, returns, and potential follow-on investments.

Answer

David Krant, CFO, explained that the backlog increase was driven by significant leasing activity, including 800 MW signed globally, which are added to the backlog upon contract signing. He noted the Intel JV's first fab has reached its in-service date, producing wafers, with the second fab progressing well. Sam Pollock, CEO, confirmed the progress on Intel.

Robert Hope asked for deeper insight into the significant increase in the data operations capital backlog in Q4, particularly the hyperscale component, and its future outlook. He also requested an update on the $3.9 billion Intel-related backlog, including timing, cash flow, returns, and potential follow-on investments.

Answer

CFO David Krant explained that the backlog growth was driven by significant leasing activity, including 800 MW signed globally, and the onboarding of the bulk fiber backlog from Hotwire. Projects are added to the backlog upon contract signing. COO Ben Vaughan confirmed that one of the two Intel fabs has reached its in-service date and is producing wafers, with the second fab progressing well towards completion.

Robert Hope of Scotiabank asked if BIP's midstream investment focus might shift from gas to oil assets and whether data center investments are trending toward larger campuses.

Answer

Operating Partner Brian Baker responded that while BIP considers all commodities, the most significant current oil-related opportunities are organic expansions within their existing portfolio. CEO Sam Pollock added that for data centers, BIP is flexible, developing both campus-style sites and bespoke large-scale projects with integrated power solutions for major hyperscalers.

Robert Hope questioned the rationale behind the approximately $1 billion tuck-in acquisition for the Triton container business and asked if trade tensions between China and the U.S. are impacting container demand and contracting.

Answer

Managing Partner Dave Joynt explained that the Triton acquisition was highly accretive, securing a portfolio with over 99% utilization and contracts at above-market rates. He clarified that the business is insulated from near-term trade flow shifts due to its long-term, contracted nature (7-year average duration), and that re-contracting continues at attractive rates as customers retain their container fleets.

Robert Hope of Scotiabank sought clarification on whether the 40% capital deployment in the data sector referred to deal flow and asked for a roadmap on how the Data segment could surpass the Transport segment in FFO within five years.

Answer

CFO David Krant confirmed the 40% figure relates to the current pipeline of new investment opportunities and highlighted that the existing organic backlog is also over 70% data-driven. CEO Sam Pollock explained that the Data segment's rise to the largest contributor would be achieved through a combination of new investments in data and divestitures of mature assets in other sectors.

Robert Hope asked about the company's strategy concerning a potentially stronger U.S. dollar and whether it could drive investment into regions with weaker currencies like Brazil. He also inquired how much of the recent elevated inflation has yet to roll through into the 2025 organic growth figures.

Answer

CEO Sam Pollock explained that the company hedges its foreign investments and doesn't speculate on currency movements, but noted that capital scarcity in countries with weaker currencies can create attractive investment opportunities. CFO David Krant stated that most of the business captures inflation with minimal lag, so recent elevated levels are already reflected. He noted the U.K. regulated utility is the main exception with a regulated lag, which will continue to benefit results.

Robert Hope asked for more details on the increasing size and complexity of TC Energy's projects, inquiring about typical project sizes and the company's willingness to pursue larger projects given the favorable U.S. regulatory outlook. He also questioned how the $17 billion project backlog is expected to progress over the next year, specifically if TC Energy is turning away projects due to organizational requirements or if the backlog could expand further.

Answer

Tina Faraca (EVP and COO of Natural Gas Pipelines) noted that project volumes range from half a bcf to over a bcf, with hyperscaler projects taking more time due to supply chain constraints. François Poirier (President and CEO) clarified that increased size and complexity refer to in-corridor expansions, not multi-billion dollar multi-jurisdictional projects, with an average backlog project size of $500 million, potentially creeping up to $1 billion. He emphasized that TC Energy has not turned down any projects due to balance sheet or capital constraints and expects the backlog to grow, potentially leading to an increase in the $6 billion annual capital spend target post-2028/2029.

Robert Hope asked for more details on the increasing size and complexity of TC Energy's projects, and if the company is more willing to pursue larger projects given the favorable U.S. regulatory outlook. He also inquired about the expected progression of the $17 billion project backlog over the next year and whether any projects are being turned away due to organizational requirements.

Answer

Tina Faraca, Executive Vice President and Chief Operating Officer, Natural Gas Pipelines, explained that project scales range from half a billion cubic feet per day (bcf) to over a bcf, with hyperscaler projects taking more time due to supply chain constraints. François Poirier, President and Chief Executive Officer, clarified that 'larger' projects are still in-corridor expansions, averaging $500 million, potentially reaching $1 billion, but without increased execution complexity. He confirmed that TC Energy has not turned down any projects due to balance sheet or capital constraints, emphasizing room under the $6 billion CapEx level and the potential to increase this level by 2028 or 2029.

Robert Hope from Scotiabank inquired how the increasing size of data center campuses is reflected in the project pipeline and asked for key upcoming milestones for the Bruce C nuclear project.

Answer

EVP & COO Tina Faraca explained they work with utilities on aggregated power demand, leading to sizable projects. President & CEO François Poirier added that larger projects don't always mean proportionally higher complexity or cost. EVP & President of Power & Energy Solutions, Greg Grant, stated that for Bruce C, work is progressing on environmental reviews and engineering, with an FID not expected until the early 2030s.

Robert Hope inquired about the increased visibility for new project announcements, asking if this was due to contracts nearing finalization and whether the projects were primarily data center-related or a mix including coal-to-gas and LNG. He also asked if the Northwoods project could serve as a template for future power-related projects.

Answer

President of U.S. Natural Gas Pipelines Tina Faraca confirmed that the momentum is driven by projects progressing through development, with a focus on power generation for data centers, coal-to-gas conversions, and general electrification. She noted a pipeline of ~25 GW of opportunities. CEO Francois Poirier added this outlook is based on specific projects in late-stage negotiations. Tina Faraca affirmed that the Northwoods project is a repeatable template for future brownfield, in-corridor expansions leveraging their existing footprint.

Rob Hope of Scotiabank asked for clarification on the 'mutually binding' ethane supply agreement with Dow, questioning how discussions have changed given Dow's project delay and if the agreement's timing is independent of the cracker's in-service date.

Answer

SVP & CFO Cameron Goldade affirmed that they work closely with Dow and noted significant activity is still ongoing at the construction site. He reiterated the nature of the contract, stating it is a 'mutually binding supply agreement' for Pembina to sell and Dow to buy 50,000 barrels per day of ethane, describing the terms as 'pretty clear.'

Robert Hope from Scotiabank inquired about the Yellowhead straddle project's viability given the Dow delay and whether the Dow supply agreement has a sunset date or other recourse for Pembina.

Answer

CEO J. Burrows noted the Yellowhead project's timeline (late 2028-2029) was always later, so the Dow delay doesn't change current plans. CFO Cameron Goldade added that no material capital was being spent on it in 2025. SVP Jaret Sprott confirmed the project could still be accretive by extracting C3+ even if ethane sales were delayed. Regarding the Dow agreement, Goldade stated that Pembina has capital protections but declined to share further details out of respect for the partnership.

Robert Hope asked for more color on the initial consultations with Alliance shippers and whether existing contracts could be reopened. He also inquired about the source of capital efficiency gains for the ethane supply project with Dow.

Answer

Jaret Sprott, an executive, stated that while details are confidential, conversations with Alliance shipper groups are progressive and include discussions around contract outcomes, with more information expected in May. Regarding the ethane project, he clarified the capital efficiency comes from optimizing a portfolio of opportunities and maximizing existing assets, particularly the RFS III de-ethanizer tower.

Robert Hope followed up on the RFS complex, asking if incremental contracts reflect the higher capital cost of RFS IV and how much uncontracted capacity remains. He also inquired about the progress of ethane opportunities and whether a tight labor market might shift focus away from the RFS III DS project.

Answer

SVP Jaret Sprott confirmed there is limited white space at the RFS complex, even with RFS IV, and that new contracts reflect a combination of volume fees and downstream ancillary services. Regarding ethane, he stated that several projects have advanced to pre-feed studies, and the RFS III DS project is small enough that labor pressures are not a deterrent. President and CEO J. Burrows added that updated cost data will inform the final decision on which ethane projects to pursue.

Robert Hope of Scotiabank inquired about the key gating factors for executing a data center Memorandum of Understanding (MOU), TransAlta's interest in pursuing additional capacity from dropped developers, and the company's strategy for mid-life natural gas M&A in the U.S.

Answer

President and CEO John Kousinioris explained that the MOU process is progressing well and the timeline is about finalizing details following the ISO's policy shift, not significant impediments. He confirmed an increasing focus on natural gas M&A in the U.S. West and Ontario, noting that the multiples for these assets are attractive and work well with TransAlta's energy marketing expertise.

Robert Hope inquired about the strategic rationale behind the Nova Clean Energy investment, questioning how its 7% return compares to other development opportunities, and asked if industry-wide challenges with organic growth are pushing TransAlta more towards M&A.

Answer

President and CEO John Kousinioris clarified that the Nova investment's primary value is not the 7% coupon but the exclusive option to acquire and direct late-stage development projects in the Western U.S. He confirmed that due to rising costs and complexities in greenfield development, the company is currently prioritizing M&A opportunities, particularly for U.S. gas and contracted renewable assets, which offer more derisked, value-accretive growth.

Robert Hope inquired about TransAlta's most and least attractive M&A opportunities, focusing on geographies and asset types, and asked for potential outcomes of the Keephills data center development.

Answer

President and CEO John Kousinioris, along with EVP & CFO Joel Hunter, identified Western North America, particularly the Pacific Northwest and Desert Southwest, as key M&A focus areas. They noted that both legacy gas assets and renewables are presenting attractive valuations. Regarding Keephills, John Kousinioris detailed a phased development plan, starting with providing behind-the-fence power from existing units to a data center, supported by extensive preliminary technical and zoning work to de-risk the project for potential customers.

Robert Hope asked about the expected duration of the pressure restrictions from the corrective action order, its potential impact on spot volumes into 2026, and whether the unchanged maintenance capital guidance could increase based on the investigation.

Answer

SVP and COO Richard Prior explained it's too early to speculate on the exact timeframe for lifting pressure restrictions, noting the process is dynamic and may occur in phases as the investigation progresses. He cautioned against using a prior incident as a direct proxy. Prior also clarified that the maintenance plan will be revised, bringing forward incident-related integrity work while deferring non-urgent tasks, with the costs expected to be operational and permitted within the variable toll structure.

Robert Hope inquired about the most impactful changes new CEO Rod West has implemented in his first two months and asked for details on the capital spending timeline for the Southwest Power Pool (SPP) projects.

Answer

CEO Roderick West stated his initial focus has been on setting a vision for a premium pure-play utility, improving stakeholder engagement, and lowering the cost profile. Regarding the SPP projects, he noted that capital spending details beyond what is public have not been disclosed and will not be until the company is further along in the process.

Robert Hope questioned the reason for delaying the 2025 outlook and asked for more details on the technology platform issues and related billing investigation in Missouri.

Answer

Interim CFO Brian Chin and Executive Chris Huskilson clarified that the guidance delay is to provide incoming CEO Rod West approximately 90 days to review the business and contribute to the new outlook, not due to operational issues. Chief Transformation Officer Sarah MacDonald addressed the Missouri issues, acknowledging customer frustration with billing post-SAP implementation and stating the company welcomes the commission's investigation to demonstrate progress and improvements.

Robert Hope asked about the potential for incremental transmission connections to Manitoba and Quebec and how the pace of transmission investment might be affected by a slowdown in industrial demand.

Answer

President and CEO David Lebeter explained that stronger connections with neighboring provinces offer opportunities to optimize resources, like using their reservoirs as batteries. He also stated that the pace of transmission investment is likely to continue regardless of a minor economic downturn, driven by existing grid congestion, population growth, and new mining activities.

Robert Hope of Scotiabank asked for details on the increased confidence in the rural broadband program, which led to its inclusion in the financial plan. He also questioned the outlook for future productivity gains given inflationary pressures and potential tariffs.

Answer

CFO Henry Taylor explained that new provincial government funding broke a 'log jam' and spurred a steady increase in applications from ISPs, providing the confidence to include $300 million in guidance. He affirmed that productivity is an 'evergreen initiative' and the company will continue to find savings to offset inflationary impacts.

Robert Hope asked new CFO Harry Taylor for his initial impressions and any planned changes to financial or regulatory strategy. He also requested an update on the broadband business and the expected cadence of work.

Answer

CFO Harry Taylor stated his focus is on continuing the company's successful track record, citing strong fundamentals, a solid balance sheet, and significant growth opportunities. Regarding broadband, he explained that the pace of work is dependent on orders from Internet Service Providers, which have been slower than anticipated, leading to the current guidance.

Robert Hope inquired about the impact of global propane price volatility on contracting for the remainder of the year and whether AltaGas is seeing increased demand from new countries. He also asked how the company's strategy for the REEF II expansion has evolved in the current environment.

Answer

Vern Yu, President and CEO, acknowledged the price volatility but emphasized that demand for Canadian propane remains robust. He noted that AltaGas is highly hedged for 2025 and has secured its necessary supply. Regarding REEF, Mr. Yu stated that demand for global exports is extremely strong, and the company is exploring a low-cost debottlenecking of the current project before considering larger subsequent phases, which are undergoing regulatory and design review.

Robert Hope of Scotiabank inquired about AltaGas's experience with contracting propane barrels amid recent tariff-driven volatility and whether demand was increasing from new international markets. He also asked for an update on the REEF II expansion project, specifically regarding its potential size, scope, and any ongoing discussions to accelerate its development.

Answer

President and CEO Vern Yu responded, stating that demand for Canadian propane has remained robust despite market volatility and that AltaGas is highly hedged for 2025. Regarding REEF, Yu explained that the company is first focused on a low-cost debottlenecking exercise, with more details expected mid-year. For larger, subsequent expansion phases, he noted that detailed engineering, design work, and stakeholder consultations have commenced.

Robert Hope of Scotiabank inquired about the impact of global propane pricing volatility and tariffs on contracting, potential shifts in demand from Asian countries, and the evolving strategy for the REEF II expansion, including its size, scope, and potential acceleration.

Answer

President and CEO Vern Yu explained that while propane prices are volatile, demand for Canadian propane remains robust, and AltaGas is highly hedged for 2025. He noted that demand for global exports is strong, exceeding the 2027 tolling target. The company is first exploring a low-cost debottlenecking of the REEF facility, with more details expected mid-year, before considering larger, subsequent phases that will require further permitting and stakeholder consultation.

Robert Hope of Scotiabank inquired about the impact of volatile global propane pricing on contracting for the remainder of the year and whether AltaGas is seeing increased demand from new international markets. He also asked for an update on the strategic thinking, size, and scope for the REEF II expansion project.

Answer

President and CEO Vern Yu acknowledged the price volatility but emphasized that demand for Canadian propane remains robust. He noted that AltaGas is highly hedged for 2025, has secured its necessary supply, and expects price spreads to normalize. Regarding REEF's expansion, Mr. Yu explained that demand is extremely strong, and the company has already exceeded its 2027 tolling target. The immediate focus is on a low-cost debottlenecking of the current project, with more significant expansion phases pending regulatory processes and detailed engineering, which are now underway.

Robert Hope asked for more color on the 2025-2026 NGL year, questioning why guidance was only provided for H1 and if AltaGas was retaining exposure for potentially wider spreads from U.S. tariffs. He also inquired about the pacing of future growth projects like Dimsdale and Pipestone III, considering current capital spending on REEF and deleveraging goals.

Answer

EVP & CFO James Harbilas explained that full-year hedging guidance awaits the finalization of the tolling versus merchant volume split for the new contract year starting April 1. President & CEO Vern Yu added that tariff uncertainty has significantly increased customer demand for tolling contracts. Regarding project pacing, Mr. Yu noted that the completion of Pipestone II and progress on REEF in 2025 will create future capital capacity for a strong portfolio of opportunities in both Utilities and Midstream. Mr. Harbilas added that projects have varied timelines, allowing for staggered funding.

Rob Hope questioned the path forward for the advanced replacement program (ARP) in Washington D.C. following a recent regulatory setback. He also asked how AltaGas is balancing balance sheet improvement against optimizing the timing of asset sales for Blythe and MVP.

Answer

President of Utilities Donald Jenkins explained that the company will refile its D.C. modernization program application by September and expects an order in early 2025, ensuring program continuity. EVP and CFO D. James Harbilas stated that while Blythe's retention value is currently high, the company has actively kicked off the monetization process for its now-operational MVP asset to accelerate deleveraging.

Robert Hope inquired about the REEF project, asking how the successful tolling of existing assets will integrate with the expansion and for updates on project costs and returns. He also asked about unused capacity in Northeast B.C. and which expansion projects are advancing most quickly.

Answer

President and CEO Vern Yu stated the goal is to have the portfolio 60% tolled by REEF's 2027 startup, targeting a 6x-8x build multiple. He and Randy Toone, EVP & President of Midstream, noted that the Townsend facility is about 50-60% utilized with active producer discussions, and an FID for a North Pine expansion is anticipated by year-end.

Inquired about achieving the 2024 credit metric target, the trend of fuel costs versus collections, and the risks associated with the Atlantic Loop project.

Answer

The company is confident in meeting its 2024 credit metric target through a combination of organic growth and asset sales. The current focus is on the Nova Scotia-New Brunswick tie-in, not the full Atlantic Loop, and the project is progressing well with standard transmission project risks being managed.