Fortis Inc. outlines ambitious C$25 billion capital plan for 2024-2028
Fortis Inc. (TSX/NYSE: NYSE:FTS) has announced a five-year capital plan of C$25.0 billion for the period of 2024 to 2028, marking an increase of C$2.7 billion from the previous five-year plan. This ambitious plan is expected to elevate the midyear rate base from C$36.8 billion in 2023 to C$49.4 billion by 2028, translating into a five-year compound annual growth rate of 6.3% on a constant foreign exchange basis.
The North American regulated electric and gas utility leader, Fortis, has allocated approximately 27% of the five-year capital plan to cleaner energy investments. These investments will be focused on connecting renewables to the grid, renewable and storage investments in Arizona and the Caribbean, and cleaner fuel solutions in British Columbia.
The company's growth is largely driven by investments in transmission in the U.S. Midwest and a resource transition plan in Arizona. The increase in the capital plan is supported by the Inflation Reduction Act of 2022 and largely reflects regional transmission projects at ITC associated with tranche one of the Midcontinent Independent System Operator long-range transmission plan as well as investments in Arizona to support Tucson Electric Power's exit from coal.
The Board of Fortis declared a common share dividend of C$0.59 per share on the issued and outstanding fully paid common shares of the Corporation. This represents an approximate 4.4% increase in the quarterly dividend, payable on December 1, 2023, to the common shareholders of record at the close of business on November 17, 2023.
David Hutchens, President and CEO, Fortis Inc., stated that this dividend increase marks "50 years of consecutive increases in dividends paid," making Fortis one of only two companies listed on the Toronto Stock Exchange to reach this significant milestone. The Corporation's annual dividend growth guidance of 4-6% has been extended one year through 2028.
Hutchens further elaborated on the company's strategy, stating that their "sustainable regulated growth strategy is focused on delivering cleaner energy that remains affordable and reliable for our customers while supporting annual dividend growth of 4-6% through 2028."
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