Fortis Launches new Five-Year Capital Plan
By Adriano Marchese
Fortis (Canada) has announced its new five-year capital plan, valued at 25 billion Canadian dollars ($18.54 billion). This plan focuses on renewable energy and includes investments in Canada and the U.S.
A Shift Towards Renewable Energy
The Canadian regulated electric and gas utility, Fortis, revealed on Tuesday its low-risk and highly executable capital plan. Approximately 27% of the investment will be allocated to cleaner energy projects, specifically connecting renewables to the grid.
Fortis is also planning to invest in renewable energy and storage in Arizona and the Caribbean. Furthermore, the company will pursue cleaner fuel solutions in British Columbia.
Positive Growth Projections
These new investments are expected to generate a compounded annual growth rate of 6.3%, based on a constant foreign exchange basis. This growth will increase the midyear rate base to C$49.4 billion in 2028, up from C$36.8 billion this year.
The increase in capital funding is supported by the Inflation Reduction Act of 2022 in the U.S. Moreover, investments in Arizona will facilitate a transition away from coal-powered energy. Fortis plans to fund these initiatives primarily through cash from its operations and regulated debt.
Dividend Increase and Milestone Achievement
In addition to the capital plan, the Fortis board has announced a 4.4% increase in dividends. Chief Executive David Hutchens stated that this increase marks 50 consecutive years of dividend growth, making Fortis one of only two companies listed on the Toronto Stock Exchange to achieve this milestone.
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