Electric Utility / Gas Utility
(N/A in provided text)
FTS
Fortis Inc. is a Canada-based diversified regulated electric and gas utility holding company and a well-diversified leader in the North American regulated electric and gas utility industry. The company's shares are listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) and trade under the symbol FTS.
Fortis Inc. operates as a prominent electric and gas utility company across Canada, the United States, and Caribbean countries. It is involved in generating, transmitting, and distributing electricity and natural gas to a broad customer base. The company's operations are segmented across several key regions and subsidiaries, emphasizing its diversified regulated utility model.
Fortis Inc. operates through various regulated utilities, each serving specific geographic areas:
- United States Operations: Generates, transmits, and distributes electricity to approximately 452,000 retail customers in southeastern Arizona (including the greater Tucson metropolitan area) and 105,000 retail customers in other parts of southeastern Arizona, with an aggregate capacity of 3,442 megawatts (MW). It also sells wholesale electricity to other entities in the western United States.
- Canadian Operations:
- Distributes natural gas to approximately 1,000,000 residential, commercial, and industrial customers in British Columbia, Canada.
- Owns and operates the electricity distribution system serving approximately 592,000 customers in southern and central Alberta.
- Owns four hydroelectric generating facilities with a combined capacity of 225 MW in Alberta.
- Distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW.
- Provides electricity distribution and generation on Prince Edward Island with a generating capacity of 90 MW.
- Offers integrated electric utility service to approximately 70,000 customers in Ontario.
- Provides service to approximately 277,000 customers in Newfoundland and Labrador.
- Caribbean Operations: Serves approximately 35,000 customers on Grand Cayman, Cayman Islands, and approximately 18,000 customers on certain islands in Turks and Caicos.
The company positions itself as having "Ten utility operations: One strong company," highlighting its diversified approach across multiple jurisdictions.
Fortis operates through a portfolio of regulated utilities, including ITC, UNS Energy, Central Hudson, FortisBC Energy Inc., FortisAlberta Inc., FortisBC Inc., and other electric divisions. This diversified structure provides a stable revenue base underpinned by regulatory frameworks.
- Q2 2025 Results: Fortis Inc. reported strong financial results with net earnings of $384 million, up from $331 million in Q2 2024. Sales rose to CA$2.82 billion, and net income reached CA$404 million, both increases compared to the previous year. Growth was driven by rate base expansion, favorable exchange rates, and strategic investments.
- Q1 2025 Performance: The corporation reported net earnings of $499 million ($1.00 per common share), an increase of $40 million ($0.07 per common share) over Q1 2024. This improvement was attributed to rate base growth across utilities and the conclusion of Central Hudson's 2024 general rate application.
- Annual 2024 Performance: In 2024, Fortis's revenue was $11.51 billion, a slight decrease of -0.08% from $11.52 billion in the prior year. Earnings showed a positive trend, increasing by 6.64% to $1.61 billion.
- Market Capitalization: $24.6 billion (as of July 31, 2025)
- Shares Outstanding: 504 million (as of July 31, 2025)
- Trailing 12-Month Revenue: $8.49 billion (as of June 30, 2025)
Fortis has a robust capital investment plan focused on enhancing its regulated asset base and driving sustainable growth:
- The Corporation's $26.0 billion capital plan for 2025-2029 is an increase of $1.0 billion over the previous five-year plan.
- This plan includes significant investments in projects related to the MISO long-range transmission plan, resiliency initiatives at ITC, and distribution upgrades driven by customer growth at FortisAlberta.
- The capital plan is projected to increase the midyear rate base from $39.0 billion in 2024 to $53.0 billion by 2029, representing a five-year compound annual growth rate (CAGR) of 6.5%.
- Fortis is on track with its $5.2 billion annual capital plan, having invested $2.9 billion in the first half of 2025.
- The company manages $75 billion in regulated assets and is committed to growth through its $26 billion investment plan by 2029.
Fortis is actively involved in strategic projects to enhance its operations and contribute to the energy transition:
- Battery Storage Initiative: The Roadrunner Reserve 1 battery storage project, a 200 MW system capable of storing 800 MW hours, was placed in service at TEP in July 2025. This project aids in integrating renewable energy and can power approximately 42,000 homes for four hours.
- Generation Transition: TEP plans to convert 793 MW of coal-fired generation at its Springerville Generating Station to natural gas by 2030, focusing on customer affordability, local communities, and reliability.
- Transmission Infrastructure: The Wataynikaneyap Transmission Power project was completed in 2024, connecting 17 First Nations communities to the Ontario power grid. Fortis holds a 39% ownership interest in this transmission line, which is majority-owned by 24 First Nations.
Fortis is a favored investment for income-focused investors due to its stability and growth prospects.
- Dividend History: The company boasts a 51-year record of annual dividend increases.
- Growth Outlook: Fortis expects its long-term growth in the regulated rate base to drive earnings, supporting a dividend growth guidance of 4-6% annually through 2029.
- Operational Focus: Nearly 100% of its operations are regulated, providing a predictable revenue stream.
Fortis maintains strong credit ratings, reflecting its financial stability and robust business model:
- Fitch Ratings: Assigned a first-time BBB plus credit rating in Q2 2025.
- Moody's Investor Services: Confirmed the Corporation's Baa3 issuer and senior unsecured debt credit ratings with a stable outlook in March 2025.
- DBRS Limited: Confirmed the Corporation's A (low) issuer and senior unsecured debt credit ratings with a stable outlook in May 2025.
Fortis is committed to reducing its environmental impact and transitioning to cleaner energy sources:
- Emissions Reduction: Achieved a 28% reduction in Scope 1 emissions by 2022 compared to 2019 levels. The company is on track to meet its target of reducing greenhouse gas (GHG) emissions by 50% by 2030 and 75% by 2035.
- Net-Zero Target: Established a 2050 net-zero direct GHG emissions target, aiming for 99% of its assets to focus on energy delivery and renewable, carbon-free generation upon achieving these goals, while maintaining customer reliability and affordability.
Fortis is focused on enhancing shareholder value through disciplined execution of its capital plan, leveraging the balance and strength of its diversified regulated utility portfolio, and capitalizing on growth opportunities. Key strategic priorities include:
- Infrastructure Modernization: Investing in upgrading and expanding its transmission and distribution networks.
- Sustainable Energy Transition: Expanding investments in renewable energy and energy storage solutions.
- Customer Affordability and Reliability: Balancing growth initiatives with maintaining affordable rates and reliable service across its diverse operating footprint.
- Transmission Grid Expansion: Exploring further opportunities to expand the electric transmission grid in the U.S. beyond the current capital plan.
Clients/Investors to abstain them from dealing in any schemes of unauthorised collective investments / portfolio management, indicative/ guaranteed/fixed returns / payments etc.
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Mr. Amit Bansal
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