Fortis Inc. has successfully concluded the first half of 2026, showcasing robust financial performance and significant strategic advancements. The company reported net earnings of $396 million, translating to $0.78 per common share for the second quarter, reflecting a $0.02 increase from the previous year. This growth is largely attributed to ongoing capital investments and the expansion of its rate base across various subsidiaries, notably ITC and UNS Energy. A major highlight is the regulatory approval for the Phase 1B expansion of the Tilbury LNG facility in British Columbia, signaling a substantial addition to the company's long-term growth pipeline. Fortis remains committed to its dividend growth guidance of 4% to 6% annually through 2030, underpinned by a disciplined regulated growth strategy and a diversified portfolio of North American utilities. The company's focus on operational efficiency and customer affordability continues to drive its investment decisions and project implementations.
During the second quarter of 2026, Fortis Inc. continued to execute its regulated growth strategy with precision, marked by considerable investments and strategic developments. By June, the company had channeled $2.7 billion into its utility systems, representing nearly half of its annual capital expenditure target of $5.6 billion. A pivotal moment for FortisBC was the receipt of an Order in Council from the British Columbia province, sanctioning the expanded Phase 1B of the Tilbury LNG facility. This approval unlocks an estimated $2 billion in regulated rate base investment and paves the way for construction to commence as early as mid-2027, with an in-service target of 2031. This project is expected to transform the Port of Vancouver into a leading LNG marine fueling hub, fostering job creation and economic prosperity while supporting the transition to lower-emission marine fuels. Furthermore, the company finalized an equity partnership with the Musqueam Indian Band for the Tilbury expansion, demonstrating a commitment to community engagement and shared growth. In Arizona, TEP is actively negotiating with a data center customer for an additional 300 megawatts of capacity, with potential to scale up to 600 megawatts, and is exploring further opportunities that could necessitate $1.5 billion to $2 billion in new generation investments. These initiatives, alongside advancements in MISO long-range transmission projects by ITC, underscore Fortis’s proactive approach to capitalizing on emerging market demands and enhancing its infrastructure.
Fortis's financial health remains strong, supported by judicious funding plans and investment-grade credit ratings affirmed by S&P and Fitch. The first half of 2026 saw the issuance of $2.1 billion in long-term debt by its utilities, aligning with its strategy to fund capital projects primarily through cash from operations, utility debt, and its dividend reinvestment plan. The company's commitment to sustainability was also highlighted with the release of its 2026 sustainability report, which detailed a 38% reduction in Scope 1 greenhouse gas emissions by 2025 compared to 2019 levels. This environmental stewardship is paralleled by efforts to ensure customer affordability, with initiatives like LNG sales into the marine fueling market and the Eagle Mountain Pipeline project providing rate benefits to customers in British Columbia. The ongoing TEP rate case in Arizona, which seeks a 9.75% return on equity, is nearing a decision, with an expected implementation by December. Despite minor impacts from foreign exchange fluctuations and dividend reinvestment plan shares, Fortis’s management expressed confidence in their ability to meet future challenges and maintain consistent growth.
Looking ahead, Fortis Inc. is poised for continued expansion and value creation. The company plans to release an updated five-year capital plan and a corresponding funding strategy alongside its third-quarter financial results, which will incorporate the substantial Tilbury LNG expansion and other pipeline opportunities. Management's strategic focus on operational excellence, coupled with prudent capital allocation, aims to enhance its rate base and sustain the impressive track record of dividend increases. The sustained growth in data center demand and the advancements in transmission infrastructure across its service territories provide fertile ground for future investments. Fortis's dedication to balancing growth with customer and environmental responsibility reinforces its position as a leading diversified regulated utility. The discussions during the earnings call emphasized a clear vision for long-term sustainable growth, built on a foundation of operational reliability, strategic infrastructure development, and a steadfast commitment to stakeholder value.