Fortis (NYSE:FTS) executives highlighted capital investment, rate base growth and regulatory developments across key jurisdictions during the company’s 2025 annual results conference call, while also pointing to potential incremental growth opportunities in transmission, data center-driven load and LNG-related infrastructure.
2025 operational and strategic highlights
President and CEO David Hutchens said 2025 was “another strong chapter” for the company, emphasizing safety, reliability and disciplined execution of its regulated growth strategy. Fortis’ utilities invested CAD 5.6 billion in capital during the year, which management said strengthened systems, improved resilience and supported customer needs.
In addition, management pointed to recognition from The Globe and Mail’s Board Games report, where Fortis ranked number one in governance among 206 companies in the S&P/TSX Composite Index. Fortis also released its 2026 Climate Resiliency Report, describing how its utilities are addressing climate risks and using data-driven approaches to strengthen networks.
Financial results: EPS growth and segment drivers
Executive Vice President and CFO Jocelyn Perry reported fourth-quarter earnings per common share of CAD 0.83, up CAD 0.04 from the same quarter last year. Perry said reported quarterly results were affected by losses tied to the disposition of investments in Belize, while the prior-year quarter included a refund liability at ITC linked to a MISO-based ROE decision. Excluding those items, Perry said adjusted EPS increased by CAD 0.07 year over year.
For the full year, Fortis reported EPS of CAD 3.40, up CAD 0.16 from 2024. Perry said 2025 reported EPS included 13 cents per share of losses associated with dispositions in Turks and Caicos and Belize, about half related to income taxes. Adjusted EPS was CAD 3.53, up CAD 0.25 from 2024.
Perry outlined key adjusted EPS drivers by segment:
- Western Canadian utilities: contributed a 10-cent increase, largely from rate base growth, including earnings tied to FortisBC’s investment in the Eagle Mountain Pipeline Project. This was partially offset by the expiration of PBR efficiency mechanisms and a lower allowed ROE at FortisAlberta effective Jan. 1, 2025.
- U.S. electric and gas utilities: contributed an eight-cent increase. Central Hudson benefited from rate base growth and cost rebasing effective July 2024, along with impacts from changes to how a regulatory deferral for uncollectible accounts is recognized effective July 1, 2025, and a customer benefit fund contribution tied to an enforcement settlement. UNS Energy earnings declined due to regulatory lag for more than $700 million of rate base not yet in rates, milder weather and lower wholesale margins, partially offset by higher transmission revenues and AFUDC from major projects.
- ITC: added CAD 0.04 from capital investment and rate base growth, moderated by higher stock-based compensation and higher finance costs.
- Corporate and other: increased CAD 0.01, reflecting unrealized gains on foreign exchange contracts, tempered by higher finance costs and lower earnings contributions from Fortis Belize.
Perry also cited a favorable foreign exchange impact of CAD 0.08 for the year and said higher weighted average shares reduced EPS by CAD 0.06, driven by shares issued under the dividend reinvestment plan.
Capital plan and funding
Fortis reiterated its newly released CAD 28.8 billion five-year capital plan—its largest to date—primarily focused on regulated transmission and distribution investments. Management described the plan as “highly executable and low risk,” with 21% tied to major capital projects. Fortis expects rate base to rise by CAD 16 billion over five years, supporting average annual rate base growth of 7%.
On funding and credit, Perry said Fortis issued CAD 2.7 billion of long-term debt in 2025 and ended the year with nearly CAD 4 billion available on credit facilities. She said that following hybrid debt issuance and asset dispositions in 2025, the capital plan is still expected to be funded largely through cash from operations, utility debt and the dividend reinvestment plan. The company’s CAD 500 million at-the-market equity program has not been used, Perry said, but remains available for flexibility.
Perry added that S&P confirmed Fortis’ A- issuer rating and BBB+ senior unsecured debt rating in November and revised its outlook from negative to stable, citing improving financial measures and utility actions to mitigate physical risks such as wildfires. She also noted Moody’s withdrew its ratings for Fortis at the company’s request, which management said does not affect utility standalone ratings where Moody’s is used.
Incremental growth opportunities: ITC transmission, Arizona load, and Tilbury LNG
Management discussed potential upside beyond the five-year plan, including transmission development at ITC, large-load growth in Arizona and LNG-related infrastructure in British Columbia.
ITC: Hutchens said ITC is pursuing additional customer connections and MISO long-range transmission planning projects. He reiterated ITC’s expectation for additional tranche 2.1 investments of $3.3 billion to $3.8 billion for projects awarded via rights of first refusal in Michigan and Minnesota, plus system upgrade projects in Iowa not subject to competitive bidding, with most spending expected post-2030. During Q&A, incoming ITC CEO Krista Tanner said the company had not received specific updates on ROEs or incentives at FERC, though she said the commission’s new leadership appears focused on addressing long-running matters and ensuring decisions have “staying power.”
Arizona data centers: Hutchens highlighted an Arizona Corporation Commission-approved energy supply agreement for about 300 MW tied to a planned data center in Tucson Electric Power’s territory. The contract includes service at “full tariff rates with no discount,” a 75% minimum billing requirement, and “strong credit and security provisions,” he said. The ramp-up is expected to begin in 2027 and continue through 2029. Hutchens said the agreement remains subject to contractual contingencies and noted the developer closed its land lease with Pima County in December 2025.
In response to analyst questions about affordability, Hutchens said the first 300 MW would be served largely with existing and planned capacity, with interconnection costs paid by the customer, and argued this structure can improve affordability by spreading fixed costs over higher load. He said negotiations continue for an additional 300 MW at the same site and that TEP is also negotiating a second site in the 500–700 MW range. If later phases proceed, Fortis continues to estimate $1.5 billion to $2 billion of new generation investment through 2030 would be required.
Tilbury LNG: Hutchens said the B.C. regulator’s approval of the Tilbury LNG storage expansion project provides up to $300 million of potential incremental capital, subject to timing of environmental assessment approvals. In Q&A, management said it had no additional project updates to announce beyond that approval.
Regulatory updates: Arizona rate cases and formula mechanisms
Perry said both the UNS and TEP general rate applications in Arizona are progressing. For UNS Gas, the ACC administrative law judge issued a recommended opinion and order proposing an allowed ROE of 9.57% and a 56% common equity component, as well as revisions to the proposed formula mechanism including post-test-year adjustments. Management said UNS Gas objected to aspects of those revisions and that an ACC decision is expected in the first quarter, with new rates proposed to take effect March 1, 2026.
For TEP, management said staff testimony recommended a 9.75% ROE and 55% common equity component. Staff’s rate design testimony, including the formula mechanism, is expected in late February, with hearings expected to begin in April and an order anticipated in the fall.
During Q&A, Fortis discussed its view that the commission can rule on annual formula mechanisms despite a pending Arizona Court of Appeals case, characterizing that matter as procedural and emphasizing that formula rates would still be litigated through rate cases. Management also said it is in early stages of TEP’s integrated resource plan process, with stakeholder workshops underway and an expectation that the filing will become more active in coming months.
About Fortis (NYSE:FTS)
Fortis Inc is a Canadian diversified electric and gas utility holding company headquartered in St. John’s, Newfoundland and Labrador. Through a portfolio of regulated utility subsidiaries, the company develops, owns and operates electricity and natural gas transmission, distribution and generation assets. Fortis serves customers across multiple jurisdictions in Canada, the United States and the Caribbean, focusing on the delivery of safe, reliable energy to residential, commercial and industrial users.
The company’s core activities include operation and maintenance of transmission and distribution networks, ownership of generation facilities, and investment in grid modernization and system resilience.
