- Fortis (TSX:FTS), a diversified North American utility stock, has released its 2025-2029 capital outlook highlighted by C$26 billion in spending, the highest target in its history
- The company expects an average of 6.5 per cent in annual rate base growth from C$38.8 billion in 2024 to C$53 billion in 2029, which is up from 6.3 per cent in the 2023 outlook
- Fortis is a regulated North American electric and gas utility company with 9,600 employees serving customers in five Canadian provinces, 10 U.S. states and three Caribbean countries
- Fortis stock has added 15.51 per cent year-over-year, but only 8.88 per cent since 2019
Fortis (TSX:FTS), a diversified North American utility stock, has released its 2025-2029 capital outlook highlighted by C$26 billion in spending, the highest target in its history.
The capital plan is C$1 billion higher than the 2023 outlook, and is expected to yield an average of 6.5 per cent in annual rate base growth from C$38.8 billion in 2024 to C$53 billion in 2029, which is up from 6.3 per cent in the 2023 outlook.
According to Thursday’s news release, “the five-year capital plan is low-risk and highly executable, with nearly all investments being regulated and 23 per cent relating to major capital projects.”
Fortis expects to deliver incremental growth driven by projects tied to the Midcontinent Independent System Operator (MISO) long-range transmission plan (LRTP) and investments at subsidiary ITC, as well as distribution investments thanks to customer growth at FortisAlberta, with funding stemming primarily from cash from operations and regulated debt.
Other highlight allocations include:
- C$6.7 billion to support energy transition investments in renewable energy, energy storage, natural gas and interconnecting renewables to the grid.
- Approximately 50 per cent of the capital plan to strengthen Fortis’ infrastructure through modernization.
- A Q4 common share dividend increase of 4.2 per cent, marking 51 years of consecutive dividend increases, with annual dividend growth guidance set at 4-6 per cent until 2029.
- Initiatives in customer growth, cybersecurity and other strategic investment opportunities.
Beyond its five-year plan, Fortis sees high potential for growth in expanding the U.S. electric transmission grid with a focus on clean energy, transmission investments associated with the MISO LRTP Tranches 1, 2.1 and 2.2, in addition to:
- Regional transmission in New York.
- Climate adaptation and grid resiliency investments.
- Renewable gas solutions and liquefied natural gas infrastructure in British Columbia.
- The acceleration of clean energy infrastructure and load-growth investments across markets where it is active.
The company increased revenue by more than 29 per cent since the pandemic, growing from C$8.9 billion in 2020 to C$11.5 billion in 2023. It supported this increased market share with a robust 23.6 per cent jump in net income from C$1.27 billion in 2020 to C$1.57 billion in 2023. This year has been similarly value-accretive, with more than C$5 billion in revenue and more than C$800 million in net income generated through Q1 and Q2 2024.
Leadership insights
“Today we are pleased to announce our C$26 billion five-year capital plan, our largest to date,” David Hutchens, Fortis’ president and chief executive officer, said in a statement. “The plan is driven by transmission investments at ITC, resource transition in Arizona and economic and customer growth across our footprint. Notably at ITC, we see tangible opportunities beyond the five-year plan to invest in regional transmission in the U.S. Midwest supporting energy transition and load growth in the region.”
“Our regulated growth strategy remains committed to the delivery of reliable and affordable service for our customers and annual dividend growth of 4-6 per cent through 2029 for our shareholders,” Hutchens added.
About Fortis
Fortis is a regulated North American electric and gas utility company. Its 9,600 employees serve customers in five Canadian provinces, 10 U.S. states and three Caribbean countries.
Fortis stock (TSX:FTS) is up by 0.61 per cent, trading at C$61.07 per share as of 10:15 am ET. The stock has added 15.51 per cent year-over-year, but only 8.88 per cent since 2019.
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(Top photo: Fortis)