Fortis provides new five-year outlook
Fortis announced its five-year capital investment plan of $17.3 billion for the period 2019 to 2023, up $2.8 billion from the prior year's plan. Consolidated rate base is projected to increase from $26.1 billion in 2018 to approximately $32.0 billion in 2021 and $35.5 billion in 2023, translating into a three and five-year compound annual growth rate of 7.1% and 6.3%, respectively. The Corporation's Board of Directors also announced a 2.5c or 5.9% increase in the fourth quarter 2018 common share dividend. Fortis President and CEO Barry Perry said: "Our five-year capital investment plan has increased nearly 20% over the plan announced at this time last year." "Key industry trends including grid modernization, the delivery of cleaner energy and electrification, will result in incremental investments in the U.S. Midwest ($900 million), Arizona ($600 million) and Ontario ($600 million)," said Perry. "Projects that address system capacity and improve safety and reliability for our customers are also driving additional investment at our natural gas operations in British Columbia ($600 million)." The Corporation's capital investment plan is virtually all occurring at its regulated utility businesses and consists mostly of a diversified mix of highly executable, low-risk projects. It is expected that the capital investment plan will be funded with cash from operations, debt raised at the utilities and common equity from the Corporation's dividend reinvestment plan. The remaining funds required to finance the increased growth in regulated North American assets are expected to be generated from asset sales, with approximately $1 billion to $2 billion of proceeds expected over the five-year planning period. The Corporation's at-the-market common equity program will also be available to provide further financing flexibility. "We are committed to maintaining our investment grade credit ratings as we continue to grow our regulated utility businesses across North America and deliver on our 6% average annual dividend growth target," said Perry. "Our portfolio of high quality regulated electric transmission, electric distribution and natural gas distribution utilities, coupled with our expected growth rate, presents a compelling low-risk value proposition for our shareholders." Beyond the base capital investment plan, Fortis continues to pursue additional sustainable organic growth and near and long-term development projects. Key development projects not yet included in the capital investment plan include a small-scale LNG export terminal at the Tilbury facility in British Columbia; the fully permitted, cross-border, Lake Erie Connector electric transmission project in Ontario; and the Big Chino Valley Pumped Storage project in Arizona.