INVESTOR PRESENTATION
June 2022
FORWARD-LOOKING INFORMATION
Fortis includes forward-looking information in this presentation within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information"). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would, and the negative of these terms, and other similar terminology or expressions have been used to identify the forward-looking information, which includes, without limitation: GHG emissions reduction targets and projected asset mix; forecast capital expenditures for 2022-2026, including cleaner energy investments; forecast rate base and rate base growth through 2026; the nature, timing, benefits and costs of certain capital projects and additional opportunities beyond the capital plan, including the MISO long-range transmission plan and the Lake Erie Connector Project; targeted average annual dividend growth through 2025; the expected timing, outcome and impacts of regulatory proceedings; expected funding sources for the capital plan and expected capital structure; potential impacts of changes in commodity prices and supply chains; and scheduled debt maturities.
Forward looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information, including, without limitation: no material impact from volatility in energy prices, the global supply chain or rising inflation; reasonable regulatory decisions and the expectation of regulatory stability; the successful execution of the capital plan; no material capital project or financing cost overrun; no material changes in the assumed U.S. dollar to Canadian dollar exchange rate; sufficient human resources to deliver service and execute the capital plan; no significant variability in interest rates; and the Board exercising its discretion to declare dividends, taking into account the business performance and financial condition of the Corporation. Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. These factors should be considered carefully and undue reliance should not be placed on the forward- looking information. For additional information with respect to certain of these risks or factors, reference should be made to the continuous disclosure materials filed from time to time by the Corporation with Canadian securities regulatory authorities and the Securities and Exchange Commission. All forward-looking information herein is given as of the date of this presentation. Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
Unless otherwise specified, all financial information is in Canadian dollars and rate base refers to midyear rate base.
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A PREMIUM ENERGY DELIVERY BUSINESS
93% Transmission & Distribution Assets
HIGH QUALITY PORTFOLIO
10 Regulated Utility Businesses
3.4M Electric & Gas Customers
9,100 Employees
99% Regulated Utility Assets
~$28B Market Capitalization(1)
~12% Average Annual 20-Year Total Shareholder Return(1)
$31.1B 2021 Rate Base
(1) As of June 17, 2022.
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BUILDING ON OUR COMMITMENT TO A CLEAN ENERGY FUTURE WITH A 2050
PATHWAY TO NET-ZERO
2019
Achieved 20% GHG Emissions Reduction Since 2019
2021 |
50% GHG Emissions Reduction
NET-ZERO TARGET
20302032 Coal-FreeGeneration Mix
2035
75% GHG Emissions Reduction Target by 2035
Compared to 2019 Levels
ADDING CLEAN GENERATION
3,400 MW Planned Additions of Wind, Solar and Storage from 2022-2035
PLANNED COAL RETIREMENTS | |||
2022 | 2027 | 2031 | 2032 |
-170 MW | -387 MW | -110 MW | -406 MW |
San Juan | Springerville | Four Corners | Springerville |
Unit #1 | Unit #2 |
Net-Zero Target
(Scope 1)
2050
Actual GHG Emissions Reduction
Forecast GHG Emissions Reduction
Illustrative Emissions Reduction
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TEP GENERAL RATE APPLICATION - OVERVIEW
Application supports TEP's clean energy transition and continued delivery of safe and reliable service
2017 Rate Case | 2020 Rate Case | 2022 Rate Case | |||||||
Application | Settlement | Application | Decision | Application | |||||
Test Year | June 30, 2015 | December 31, 2018 | December 31, 2021 | ||||||
New Rates Effective | January 2017 | February 2017 | May 2020 | January 2021 | September 2023 | ||||
Rate Base | US$2B | US$2B | US$2.7B | US$2.7B | US$3.6B(1) | ||||
Non-Fuel Rate Increase | US$110M | US$82M | US$115M | US$58M | US$159M | ||||
Equity/Debt | 50%/50% | 50%/50% | 53%/47% | 53%/47% | 54%/46% | ||||
ROE(2) | 10.35% | 9.75% | 10.35% | 9.15% | 10.25% | ||||
Adjustor Mechanisms: | |||||||||
• | Purchased Power & Fuel Adjustment Charge (PPFAC) | ✓ | ✓ | ✓ | |||||
• | Lost Fixed Cost Recovery Mechanism (LFCR) | ✓ | ✓ | ✓ | |||||
• | Demand Side Management (DSM) | ✓ | ✓ | DSM | Base rates | ||||
• | Renewable Energy Standard (REST) | ✓ | ✓ | REST | Base rates | ||||
• | Environmental Cost Adjustor (ECA)(3) | ✓ | ✓ | Repurposed to RTM | |||||
• | Tax Expense Adjustor Mechanism (TEAM) | ✓ | ✓ | ||||||
• | Transmission Cost Adjustment Mechanism (TCA) | ✓ | ✓ | ||||||
• | Resource Transition Mechanism (RTM)(3) | NEW | |||||||
- Includes US$0.2B in post-test year adjustments.
- Excludes fair value increment.
- The RTM seeks to recover new clean energy investments, subject to annual cap of total revenues and replace the current ECA .
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Fortis Inc. published this content on 23 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 June 2022 11:35:09 UTC.