Enbridge Inc Q4 FY2024 Earnings Call

Good morning. And welcome to the Enbridge Inc. Fourth Quarter 2024 Financial Results Conference Call. My name is Rebecca Morley, and I’m the Vice President of Investor Relations. Joining me this morning are Greg Ebel, President and CEO; Pat Murray, Executive Vice President and Chief Financial Officer; and the heads of each of our business units. Colin Gruending, Liquids Pipelines; Cynthia Hansen, Gas Transmission and Midstream; Michele Harradence, Gas Distribution and Storage; and Matthew Akman, Renewable Power. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session for the investment community. Please note this conference call is being recorded. As per usual, the call is being webcast, and I encourage those listening on the phone to follow along with the supporting slides. We’ll try to keep the call to roughly one hour and answer as many questions as possible. We will be limiting questions to one plus a single follow-up if necessary. We’ll prioritize questions from the investment community. So if you are a member of the media, please direct your inquiries to our communications team, who would be happy to assist you. As always, our Investor Relations team will be available following the call for any follow-up questions. On Slide 2, I will remind you that we will be referring to forward-looking information in today’s presentation and Q&A. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure filings. We’ll also be referring to non-GAAP measures summarized below. And with that, I’ll turn it over to Greg Ebel.

Well, thanks very much, Rebecca, and good morning, everyone. Thanks for joining us as we look back on record fourth-quarter and full-year earnings. We’re going to start today by recapping the many milestones we achieved in 2024, then I’d like to speak to Enbridge’s performance through all market cycles and the benefits of our low-risk business model. From there, I’ll showcase how we are positioned to meet the increasing power generation and industrial needs of our customers in North America. We will then jump into updates for each of our business units. Pat will walk everyone through the quarter’s financial highlights and capital allocation priorities. And lastly, I’ll close the presentation with a final note on our value proposition before we open the calls for your questions. We delivered record EBITDA and DCF per share in 2024, with new assets and continued customer demand contributing to a 13% increase in EBITDA over 2023. In December, we increased our dividend for the 30th consecutive year, extending our status as one of the only dividend aristocrats in our sector. While I’m pleased that Enbridge delivered a 37% total shareholder return to investors in 2024, I’m even more pleased that our business model will continue to generate strong returns for our shareholders as we advance our strategic priorities. On the growth front, we closed the acquisition of three premier U.S. natural gas utilities, creating the largest gas utility franchise in North America. We also announced three highly strategic tuck-in acquisitions of Permian and Gulf Coast assets, building on our integrated oil footprint and establishing a meaningful natural gas presence in the region. Across the business, we added over $8 billion of organic projects to our backlog, diversified across all four of our franchises. That backlog now includes approximately $3 billion of annual utility investment, earning strong returns under quick-cycle capital writers and regulated return frameworks. Prudent capital recycling remains an important part of our business model, allowing us to opportunistically surface value for shareholders. In April, we closed the sale of our interest in Alliance and Aux Sable and subsequently announced the sale of our interest in the East-West Tie Line for combined proceeds of approximately $3.2 billion. Our long-held leverage target of 4.5 times to 5 times continues to be the sweet spot for Enbridge, and we expect full-year contributions from our recently acquired and in-service assets to benefit this metric through 2025. We’ll continue to equity self-fund up to $8 billion to $9 billion of growth projects annually, staying within our debt-to-EBITDA ratio while supporting future growth for Enbridge and driving returns for shareholders. Now let’s spend a minute reviewing our low-risk business model that allows us to perform so consistently. 2024 marks Enbridge’s 19th consecutive year of achieving guidance, underscoring the stability of our business despite the myriad of macroeconomic challenges we’ve encountered these past two decades. Looking ahead, with the uncertainty around North American trade relations, I want to remind everyone how each franchise has a commercial framework that will ensure reliable low-risk cash flows. In Liquids, the Mainline is supported by an ROE performance collar and a progressive toll ratchet on line three surcharge, providing two forms of volume protection. The rest of our Liquid systems are predominantly underpinned by long-term take-or-pay contracts. In our Gas Transmission business, our pipelines operate under a mix of cost-of-service frameworks and negotiated take-or-pay rates, delivering over 24 Bcf per day of natural gas to customers. Our utility business is fully regulated with flow-through cost structures inclusive of the cost of natural gas supply. In Renewables, our projects are backed by long-term power purchase agreements with high-quality customers and governments. Our commitment to discipline gives us confidence that we can extend our track record of meeting financial guidance, steadily growing our dividend, and continuing to create value for our investors. Now let’s talk about how we’re positioned to meet increasing natural gas infrastructure demand and serve our customers. Enbridge is the only major Midstream company with a portfolio that offers long-haul Gas Transmission, the reliability of utility infrastructure, and the emissions benefits of Renewable Power. This unique combination allows us to provide diverse and comprehensive energy solutions for electric power that not only meet the affordability and reliability needs of customers, but also support their long-term sustainability goals. In 2024, we added over $5 billion of gas and renewable projects. These include pipeline projects for more than 2 gigawatts of new natural gas generation in Tennessee and Carolina, a new Permian gas egress pipeline which directly supports U.S. Gulf Coast LNG, two sets of offshore pipelines in the Gulf, and the sanctioning of approximately 1.2 gigawatts of solar in Ohio and Texas. We’re pleased with what we’ve delivered and expect to continue sanctioning attractive projects across each of our franchises. Now I’ll jump into the business update, starting with Liquids. 2024 was a milestone year for LP with record annual volumes on Gray Oak, Ingleside, and Flanagan South. We fully expect that under all Canada-U.S. trade relation outcomes, Canadian oil will continue to flow south, and our Mainline is the vital conduit supplying downstream demand centers across the continent and ensuring energy security for millions of North American consumers and workers. As we expected, the Mainline experienced strong volumes all year, averaging throughput of 3.1 million barrels per day, even with TMX entering service. The Mainline has been back in apportionment since November, reflecting continued strong demand for our system. Increased demand, alongside our operational excellence, has us earning near the upper end of our ROE collar earlier than expected. As the basin grows, we continue to advance conversations with customers to develop additional WCSB egress for late 2026, early 2027, and later in the decade. Additionally, we signed a letter of intent with the Government of Alberta to accelerate future expansion opportunities across our system and support their growth ambitions. In order to bring more condensate to Canada, we’re proceeding with a very capital-efficient, customer-backed expansion of Southern Lights Pipeline. Earlier this year, we announced a 120,000 barrel per day expansion of the Gray Oak Pipeline to support growing demand from shippers seeking delivery to Corpus Christi, where our Ingleside facility is located. We’re expanding our Storage offering at Ingleside to support those additional volumes on Gray Oak, and we also acquired and plumbed in two nearby docks, which significantly increase Ingleside’s VLCC loading windows. Our Liquids franchise is positioned to grow and provide industry-leading service to customers across the continent. Our Gas Transmission business experienced another year of high utilization in 2024, continuing into 2025, and we are 100% re-contracted on our gas pipes this year. We’ve already seen a few new throughput records on our systems over the last few weeks. Our total U.S. transmission system recorded its two highest delivery days ever in January, supported by all-time highs on Maritimes and Northeast U.S. as well as a couple of top 10 days on Texas Eastern and Algonquin. Two of our Storage facilities, Egan Hub and Moss Bluff, recorded some of their highest-ever daily withdrawals in January as well. During 2024, we sanctioned approximately $4 billion in new capital projects predominantly focused around the U.S. Gulf Coast infrastructure, extending our growth backlog through the decade. The U.S. Federal Government has now announced a reversal of the LNG pause on non-FTA facilities, which has bolstered our confidence in other LNG expansion opportunities. In the fourth quarter, we placed the Venice Extension Project into service, and it’s now supplying natural gas to the Plaquemines LNG Terminal in Louisiana. We also completed a 6.5 Bcf expansion of Tres Palacios Gas Storage facility in Texas, enhancing our competitive service offering for Gulf Coast customers along our Texas Eastern system. In the Permian, we acquired a 19% interest in the Whistler Joint Venture, partnering with WhiteWater Midstream and MPLX to establish an integrated and growing natural gas footprint in the area. Alongside these partners, we sanctioned the Blackcomb Pipeline, expected to enter service in 2026 and provide up to 2.5 Bcf per day of natural gas egress out of the Permian Basin. In the third quarter, we announced our acquisition of a 15% stake in the DBR system, a key conduit for the Whistler Pipeline. These investments will drive growth opportunities through the decade. On the regulatory front, we recently received approval from the Canadian Energy Regulator for our $1.2 billion Aspen Point T-North expansion, ensuring capacity to serve growing LNG demand on our BC pipe system. In the U.S., we reached and filed a negotiated settlement with customers on Texas Eastern, and we reached settlements in principle on Algonquin Gas Transmission and Maritimes U.S. New rates on Texas Eastern have been in effect since October 1, 2024, and we expect FERC approval of AGT and Maritimes and Northeast Settlement later this year. Now let’s turn to GDS. The utility franchise has approximately doubled in size this year, having brought Enbridge Gas Ohio, Utah, Idaho, Wyoming, and North Carolina in-house. The Gas Distribution and Storage business is now delivering over 9 Bcf per day of gas to over 7 million customers. Our team is working every day to deliver reliable and affordable natural gas to these customers, and we continue to invest in key infrastructure across North America to meet growing customer demand. To that point, both Enbridge Gas North Carolina and Ohio hit new daily all-time throughput records last month. Enbridge Gas Utah moved its fourth-highest daily gas throughput in history, and Enbridge Gas Ontario delivered a single-day record for the most gas storage withdrawals out of the Dawn Hub. Each of our four utilities are critically important to their markets, and we expect to invest about $3 million annually across our utility franchise, earning strong returns under quick-cycle capital frameworks. At our Ontario utility, we anticipate sanctioning the St. Laurent Pipeline Project in the coming months, a $200 million multi-phase development enhancing our existing footprint in Ottawa. North Carolina has two exciting projects to highlight this quarter. The T15 project will serve Duke Energy’s new Roxboro natural gas power generation plant, and Moriah establishes an LNG gasification facility in Person County to support system reliability. Both are examples of essential developments ensuring reliable and growing service offerings for customers. We are making strong progress integrating all the new assets into the Enbridge family. Now let’s jump into Renewables before passing it off to Pat. Throughout 2024, we advanced our Renewables platform under our utility-like business model. We’re pursuing growing projects with high-quality blue-chip customers that demonstrate strong risk-adjusted investment returns. In 2024, we sanctioned approximately 1.2 net gigawatts of new quick-cycle solar projects, and almost 20% of that capacity is already operating. I’m excited to announce that the entire Fox Squirrel facility in Ohio is now in service, generating 577 megawatts of renewable power under long-term contracts with Amazon. Earlier this year, we sanctioned the Orange Grove Solar project, which will generate 130 megawatts of power under long-term agreements with AT&T, supporting the growing electric generation needs of the ERCOT market. We also sanctioned the Sequoia Solar project in Texas, which is backed by power purchase agreements with customers, including AT&T and Toyota. In Europe, we continue to advance our offshore portfolio, having placed Fécamp and Provence Ground Large into service in 2024. Both those facilities are supported by long-term PPAs with EDF. Manufacturing is largely completed for Calvados, and the drilling campaign is underway. We now expect the project to enter service in 2027, which is later than our original schedule. With that, I’ll pass it off to Pat to review our financial performance.

Good morning, everyone. Thank you, Greg. This has been a busy year for us, and I’m pleased to report record fourth-quarter and full-year EBITDA and DCF per share. For the quarter, EBITDA increased considerably to over $5.1 billion, reflecting an over $1 billion increase from the same period last year. Our DCF per share for the quarter rose to $1.41, an approximately 10% increase over last year, and our adjusted earnings per share rose to $0.75, reflecting a 17% increase over the same timeframe. Liquid EBITDA benefited from toll escalators on the Mainline, strong throughput on our Gulf Coast and Mid-Continent assets, and lower power costs. This was partially offset by lower ex-Gretna volumes. Although 2024 was stronger than we anticipated, 2023 had realized a record fourth quarter. Gas Transmission was up significantly from 2023, owing to contributions from the Whistler JV, Tomorrow RNG, Aitken Creek, and the TETCO rate settlement taking effect on October 1st. As a reminder, we achieved that GTM growth despite the sale of our interest in the Alliance and Aux Sable partnerships in the second quarter of 2024. For the first time, our Gas Distribution business reflects a full quarter of EBITDA from all three U.S. LDCs acquired in 2024. This drives about $500 million of year-over-year increase within the segment. In Renewable Power, we recognized another tranche of investment tax credits relating to the Fox Squirrel Phase 2, alongside a full quarter of contributions from our higher interest in Hohe See and Albatros assets acquired in Q4 2023. Below the line, higher average rates and debt balances from the closure of the various U.S. utilities resulted in higher financing costs in the fourth quarter compared to last year. Reflecting on full-year results, 2024 EBITDA exceeded our recast guidance range, supported by strong utilization and demand across all franchises as well as a weakening CAD to U.S. foreign exchange rate. For DCF, we finished the year just below our guidance midpoint despite pre-funding the U.S. gas utilities, which is a great outcome and a testament to the growth within our business. As Greg mentioned earlier, this marks our 19th consecutive year achieving or exceeding our financial guidance, and while it’s early, we’re currently on pace to extend that track record in 2025. On that note, I’m pleased to reaffirm the 2025 guidance we provided in December. We continue to expect adjusted EBITDA between $19.4 billion and $20 billion, and DCF per share of $5.50 per share to $5.90 per share. Full-year LDC contributions, new assets in service, and continued cost-saving initiatives are expected to drive the majority of growth in 2025. While it's early, so far, the Mainline has been in apportionment all year. We’ve experienced colder weather in Ontario, and the current strength of the U.S. dollar could be tailwinds if experienced for the entire year. These could be partially offset by a slower-than-expected decline in U.S. interest rates. I’m also reaffirming our midterm outlook and look forward to discussing this with the investment community in a few weeks at our upcoming Investor Day. Now I’ll close my remarks with a refresher on our long-held commitment to capital discipline before passing it back to Greg. Our three-pillar approach to capital allocation is unchanged in 2025. The balance sheet will remain strictly in focus, with our financial guardrails governing all investment decisions. We expect full-year contributions from the U.S. gas utilities that closed in 2024 to benefit our leverage metric in 2025. A thoughtful capital recycling program has been a cornerstone of our business for decades, and we successfully recycled over $15 billion of assets since 2014, including our recently announced East-West Tie Line sale. Sustainably returning capital via low-risk dividends is a hallmark of our investment offering. We’re committed to growing the dividend supported by our diversified and high-quality cash flow profile. Lastly, on growth, you can expect us to prioritize brownfield investment at low multiples when sanctioning new projects to supplement our backlog. Our capital backlog now sits at $26 billion, with $5 billion of assets placed into service in 2024, and $8 billion of newly sanctioned projects added through 2029. As always, a special thank you to all the team members for delivering on another exceptional year. With that, I’ll pass it back to Greg to finish the presentation.

Well, thanks very much, Pat. Again, 2024 caps off a record year of financial and operational performance here at Enbridge. Our steadily growing dividend, supported by a utility-like cash flow profile, remains a cornerstone of our investment offering, demonstrated by 30 years of consecutive dividend increases. The complementary nature of our overlapping businesses will continue to drive growth, enable optimization, and enhance our opportunity set throughout the decade. Enbridge is a first-choice investment opportunity, offering an attractive yield alongside visible, long-term growth that is largely insulated from economic gyrations. Before we close, I’ll remind everyone to please join us on March 4th for our Annual Investor Day in New York. The team’s excited to see you and share the opportunities being realized across the organization and driving our future growth. With that, I’d like to thank you all for listening, and Operator, please open the lines for questions.

Thank you. Your first question comes from a line of Jeremy Tonet from JPMorgan. Your line is open.

Hi, good morning. I wanted to wish the team a happy Valentine’s Day. I'm curious about WCSB production and the growth opportunities there. Could you discuss how you see that developing over time and how significant it could become in your opinion?

Yeah. Well, maybe I’ll just start, but I’ll turn it over to Colin very quickly here. You’re really seeing great opportunities in production growth, and we’re looking at a lot of quick-hit, permit-light, low-multiple, brownfield type activities on the Liquids front to serve the markets on both sides of the border. So you’re going to hear more about that during Investor Day. Colin, do you want to speak to a little bit what we’ve been doing the last month or so?

Good morning, Jeremy. It’s only been about a month since that announcement. I mean, I’ve been working feverishly on that even before then. I would view that announcement as an endorsement of our role and our playbook. We’ll look to tell you a lot more in a couple of weeks on Enbridge Day, but maybe zoom out a bit further, FID-ing a number of projects in the calendar year. Fundamentally, I think production is surprising to the upside. Not huge capital projects by our customers, but as you’ve been reading, lots of debottlenecking and optimization, potentially re-rating that kit, and then on the demand side, strong as well. It’s shaping up well and there are infrastructure opportunities from tip to stern, regionally, Mainline, market access, and export. We’ll tell you more.

Yeah. Jeremy, kind of like my opening comments I mentioned, it’s just one aspect that gives us really great confidence about continuing our growth right through the decade, and you would have seen apportionment the last few months. Not only are the pipes being used, but the requirements for more are definitely there. So I look forward to talking about that further in a couple of weeks.

Got it. We will wait for more details then. At the risk of a question that might be more fully answered at Analyst Day as well, just wondering with the new regime within D.C. and different policies towards energy and energy infrastructure development in general. Wondering if you could share any thoughts on what that means for Enbridge, particularly around Line 5 or otherwise?

Yeah. Sure. The first and foremost thing, and you’ve heard us say this among others as well, but we’ve got the portfolio that backs it up. It’s an all-of-the-above energy solution that’s going to be needed. So if you’ve got Liquids, natural gas, and power assets, it’s on. If you’ve got export assets, it’s on. So we’ve got all those pieces, which I think is positive. I think a more rational approach to sustainability issues, taxation, and permitting reform will be critical to us. And we’re already seeing it again, just with requests for things like gas generation, as Colin just mentioned on the oil side. I think that’s going to be extremely positive. We’ve sure, let’s get into it. We’ve got tariff concerns out there, but there’s such a hard wiring of the energy system in North America that we just don’t see that as a material impact. Given what we’re seeing from customers, that’s actually bearing out in reality and we’re going to see it happen on the investment side as well.

Great. That’s helpful. See you guys in a few weeks.

Thanks, Jeremy.

Your next question comes from the line of Robert Catellier from CIBC Capital Markets. Your line is open.

Hey. Good morning, everyone. I want to continue on the Liquid side here. I wondered if you could comment on the discourse that has been popping up about the need to diversify our markets for energy. In the event that Canada develops the political will, can you indicate your appetite and under what circumstances to invest in a long-haul Liquids pipeline in Canada, such as Northern Gateway or even a line going East?

Sure. Thanks, Rob. That’s a really thoughtful question and we’ve obviously given a lot of thought to that. I will start by saying that we’re really focused intently more on broader themes, macro trends like production, demand growth, earnings, and returns on capital than day-to-day political gyrations. We’re not blind to trade discussions and disputes. Real sustainable trends aren’t made in a day or a month; it takes a long time. That’s why we’re focused on some quick, low capital short plays, and that’s going to be the reality for a long time to come. Gas, oil, energy is going to move north and south more than it does east and west. But specifically regarding Northern Gateway, I’m pleased to see Canadian policymakers focused on that issue and realizing the true benefits of diverse markets. We’ve pitched that for a long time, as we’ve said for years that we’ve been missing the boat on LNG and Liquids exports. We worked really hard on Northern Gateway the first time around, hoping to be in service for Canadians. We had permits, regulatory approvals, indigenous participation, strong customer support. Unfortunately, that project was cut short by the federal government, costing us hundreds of millions of dollars and affecting our investors. That’s powerful learning. So for us to consider reinvesting on a project like that, whether it’s east or west, we’d need to see real change on numerous fronts. We need to see positive moves like those from Premier Smith in Alberta in terms of committing volumes on major pipes and seeking solutions to energy mobility in Canada and North America. We would need to see legislative changes at the federal and provincial government level that identify major infrastructure projects like Northern Gateway as being in the national interest. Further changes in permitting laws, more support for energy production rather than reduction, increased indigenous consultation, engagement and participation via loan guarantees. That loan guarantee program would be too small for substantial projects. Lastly, we believe you would likely need CapEx costs and reasonable return trackers to ensure attracting the right capital for major projects. So, Robert, it’s a lot of coordinated legislative and regulatory action needed before we think investors or customers would greenlight such projects.

That’s a great answer. I can only hope that the politicians understand the need for a better risk transfer mechanism to undertake these massive projects, given the history.

Amen.

Just another quick one here on Renewables. I’m just curious if you’re seeing anything coming out of the Trump administration that maybe updates your outlook for what you expect on onshore Renewables under the new administration and what it could mean for reducing the gap between your DCF per share and the other per share metrics.

Ladies and gentlemen, we are experiencing some technical difficulties. Please stand by.

Hey, Rob. Sorry, we got disconnected there. It’s a nice spot to be in from a capital allocator perspective. All our business units have opportunities, which means we get to pick the ones with the very best returns, which works for investors.

Okay. Thank you very much.

Thanks, Rob.

Your next question comes from the line of Ben Pham from BMO Capital Markets. Your line is open.

Hi. Good morning. And maybe on the Renewables side of things, I know it’s a good quarter, new projects coming in, and I see you have some comments on the stimulus situation in the U.S. Can you comment, and maybe just given how the public equities have performed the last couple of years, meaningful underperformance, how does that look relative to developing Renewable Power assets?

Well, maybe I’ll start, but I’m sure Matthew will have some thoughts. First of all, it goes to the customers, and you can see who we’re signing up, the Amazons, AT&Ts, Toyotas, and I think you’ll see some other big tech-type data center players signing up with us that want to work with big players. They also want to see differentiated opportunities, whether it’s just solar, wind, or gas. I think we’re in a good spot to provide different offerings across jurisdictions, and we’re a big player. They know we’re going to execute. Maybe Matthew can speak to the purchase of our development team in Dallas too.

Thanks, Ben. The public equities, for us, it boils down to the model we pursue on Renewables. It’s the low-risk commercial model. You’re seeing big write-downs in offshore, with some companies in trouble on development or supply chain issues. Our competitive advantage lies in the fact that we have supply chain capabilities. We don’t take big speculative risks on offshore leases. All our power is fully contracted, as you’ve seen, with high-quality blue-chip counterparties. What we’re seeing on our side is frankly opportunity. The few big players with those capabilities will continue to see, as we’ve seen, strong risk profiles and returns. As you see in the results, record results in Renewables show that we’re getting good returns and that these projects are accretive right from the start, both on cash flow and earnings per share. We look forward to more of that.

Okay. Thanks for the context. And maybe just the U.S. gas utilities, even Enbridge Gas too, can you comment on where the realized ROEs trended during 2024 versus allowed?

Where the realized ROEs trended during 2024? Yes. Generally, we expect all our utilities to attract and to meet their expected ROEs or their allowed ROEs, and they’re very steady. The U.S. utilities don’t have exposure to weather. We’re very pleased with how Ohio, North Carolina, Utah, and Wexpro finished the year. They all finished on budget, exactly where we were expecting them to. In Ontario, it was a mild winter last year, impacting our realized ROE for Ontario. We won’t file that until the fall, but we would be below that based on the weather results.

So you think in a weather-normalized basis, Ben, they’re all in the 10% range, right? Just like the Gas Transmission stuff in Western Canada, which is very solid, steady, quick-cycle, given that 10% return on equity with minimal risk.

Okay. Got it. Thank you.

Thanks.

Your next question comes from the line of Manav Gupta from UBS. Your line is open.

Good morning. Congrats on a strong quarter. Your guidance generally tends to be a little conservative as it was in 2024. Help us understand what could drive you towards the top end of that guidance for 2025?

Thanks for the question. Historically, if you looked at our performance, we usually sit right within the guidance range. We overperformed a little on EBITDA this year, which is great to see. If you think about guidance for next year, we’ve had lots of commentary around the fact that it was set on a $135. If we stay above that, that’ll help from a tail-end perspective. We should remember, though, that we do hedge a significant amount of that. When we released guidance back in December, we kind of gave a sensitivity that for every $0.01 the dollar stays above that $135 all year, that’s about $0.01 in DCF and about $50 million in EBITDA. You can kind of see where that might land as a result. Michelle noted that last year, we experienced warmer weather. This year, starting off fairly well. We’ve got colder weather in Ontario and even eastern U.S., which I think can help that. Potentially, offsetting that are U.S. interest rates not coming down quite as expected, given how inflation has stayed in the U.S. So when you take all those together, I think we’re pretty comfortable with our guidance range, potentially with a few more tailwinds than headwinds at this moment.

Perfect. My quick follow-up is here is, help us understand the kinds of discussions you’re having with data center operators regarding incremental power and your leverage in the positive data center power market demand? Thank you.

For sure. It’s not just talk; we’re actually signing up and executing on projects. We’ve talked about the 1.5-gigawatt pipeline we’re building for TVA on the gas side, driven by electricity demand. In North Carolina, a 1.4-gigawatt project for Duke. In Utah, we’ve connected several players, a couple of hundred behind the meter megawatt plays. In Ontario, lots of discussions with data centers specifically. Ohio, we’re connecting a 1-gigawatt facility there. That’s five gigawatts just in that group between GDS and GTM that we’ve signed up and are executing on power generation. When you add 2 gigawatts on solar, and again, you’ve seen companies like AT&T and Amazon, there’s a significant amount of engagement happening. It’s not all the big players; there are many small players too. Each gigawatt amounts to about 200 million cubic feet a day or so. Every Bcf you add 5 gigawatts translates into significant infrastructure demand. We’ll discuss this more at Investor Day too.

Thank you.

Your next question comes from the line of Maurice Choy from RBC Capital Markets. Your line is open.

Thanks, and good morning, everyone. I just wanted to touch on capital allocation for a moment here. If tariffs do occur meaningfully and are prolonged, what adjustments, if anything, do you see in your capital allocation strategy, geographically or regarding types of infrastructure?

Unless it’s a very high tariff and prolonged, we just don’t see significant changes on that front. Starting with GES and GTMs on the gas side, those flows largely don’t go back and forth across the border. Some do, but not significantly. We’re continuing to invest in export facilities, both LNG and liquids. As such, near-term, we don’t foresee a significant change in our plans. We’ve talked about major East-West projects, but those aren’t going to happen soon. We’re focused on short, quick-hit projects, and you’ll continue to see products move back and forth across the border on the Liquid side of things. We’re very focused on supply chain issues. Being a big player usually positions us as a top customer for much of the equipment we need.

That’s a good point about the timing difference between longer-term solutions and political cycles. Are there any parts of the energy value chain, whether on Liquids or oil or gas, that you see as worthwhile to bulk up on given current political uncertainties?

Look, I think, it’s good for us to bulk up on the gas side in the last couple of years, both on the Distribution side and the Gas Transmission side. We acquired multiple storage facilities and entered new gas deals out of the Permian, which positions us great on that front. Sometimes, I’ve heard of the big four being talked about in gas, but we’re really the real deal in gas, and we’re continuing to move those projects forward. There are great opportunities on the Liquid side too. We’ve got the right portfolio in the right jurisdictions, both in and out of North America. That’s a solid place to be, and there are exciting new offshore projects we're considering that were overlooked last year. That’s exciting as we move through the end of the decade.

Perfect. Thank you very much.

Thanks.

Your next question comes from the line of Rob Hope from Scotiabank. Your line is open.

Good morning, everyone. Maybe to stick with permitting, the B.C. Government has accelerated some permits for the Aspen project on T-North. Can you maybe update us on discussions regarding the larger capital plan there and whether or not you could see some acceleration of permitting and construction?

Thanks, Rob. We’re excited to see the B.C. Government supporting the Aspen Point project. We received our big CER approval for that. We’re continuing to work through that. There’s still some permitting from the B.C. Hydro point for some power connections, which is all positive. We are a big supporter, of course, of gas infrastructure in B.C. We continue to deliver to both industrial and residential bases while supporting LNG exports as well, so we think this is a beneficial development. There are lots of opportunities for growth there; it’s a great business for us. That’s a true cost of service business, and as Greg said, with our ROE at 10%, it’s something we like in our portfolio.

Appreciate that. And transitioning to the Gas Distribution side, you now have the U.S. assets under your belt for a little while there. How has the integration process gone, and are you able to see any early signs of some chunkier projects akin to the ones in the Carolinas?

You bet, Rob. The integration, first of all, is going really well so far. There’s still a lot of work to do, but we’re definitely seeing the benefits of bringing these utilities together. Whether it’s pursuing opportunities or bringing customer solutions that worked in one area to another, what I would say is the growth we anticipated when we were looking at this back in mid-2023 is certainly there. We’re absolutely seeing customer additions and modernization. We’re truly experiencing a tailwind on electrification, whether for data centers or otherwise. Natural gas plays a very obvious role, as we’re seeing growth across our businesses. Greg earlier mentioned data center growth; we’re supporting it across every one of the utilities. We probably have about a gigawatt and a half we’re supporting in Ontario alone. The Ontario Government has come out with its largest procurement ever, and they are very supportive of meeting all energy needs, so plenty of growth ahead in Utah, North Carolina, and Ohio. I mean, we’re modernizing and seeing steady customer growth across the board.

What’s nice is that you get both big and small projects. You may hook up 200-megawatts behind the meter, which might cost $50 million, and start seeing them add up quickly. Then, as you said, projects in North Carolina may be 1-gig, 1.5-gig at $500 million to $600 million. The mix of all those projects has great counterparties; we’re thrilled with these prospects. We will continue to grow them out, with capital around $3 billion annually for the utilities on a combined basis. This is steady, quick-cycle that converts into EBITDA the following year.

I appreciate that. The U-Haul ranking was a new insight for me. Thank you for that.

You bet.

Your next question comes from the line of Theresa Chen from Barclays. Your line is open.

Good morning. Thank you for taking my questions. I wanted to revisit the tariff discussion regarding the headlines over the past couple of months. There has been a lot of noise on who would bear the cost of tariffs if they were to come to fruition. It doesn’t seem like demand elasticity would really impact the volumes on your system, especially when you think about the various contractual measures in place, be it ROE collar or NDCs through the U.S. portion. But based on your analysis, if not the infrastructure provider, who do you think would bear the cost of that economic redshift?

Colin can talk about which of his customers might see that.

We agree generally with your synopsis of this. There’s pretty sticky demand for a number of reasons. Many of our customers have integrated business models and infrastructure, production, refining, etc. They’ve built their business around that. Supply switching to U.S. refiners has been discussed and written about recently, but suboptimal, right? Must-run systems are vital to society as well. Thus, the impact on volumes in our systems will be negligible in a tariff situation, depending on the size of the tariff. The tariff impact will likely be shared to some extent, depending on the region and refining options.

Theresa, let’s keep this in context. I think even this has been recognized by policymakers, as energy makes up about 10% of costs compared to other products. The elasticity of that is marginal. We don’t expect much change. I’m concerned that if tariffs came in, it may impact overall economic growth rather than energy demand directly. But with all that is happening, especially from data centers, I question if that’s even material. So we’re focusing on long-term trends, what’s happening, and as Colin said, societal needs give us great confidence that the tariff issue is not significant.

Just another point: we’re seeing strong nominations on the system. GenFab sold out in light of this, so that’s the trend so far.

Got it. Thank you. Moving on to a different point, what is the path forward for Rio Bravo and Rio Grande, given the series of executive orders from the current administration that repealed some of the regulations that required EJ reviews? What do you think will happen, and can you tell us about next steps along any impediments or catalysts?

Thanks, Teresa. As a reminder, the Rio Bravo Pipeline is now being managed directly through the Whistler joint venture, which we still hold interest. I think there’s opportunity for clarity with a new administration. We know FERC is going through their Supplemental Environmental Impact Statement process, gathering relevant information, which is ready to be filed. As you mentioned, NextDecade filed additional information indicating the executive orders should be considered through this process. I expect we’ll continue to see Rio Bravo work with the FERC to move through that impact statement, potentially with clarity before then.

Thank you.

Thanks, Teresa.

Thank you for your ongoing interest in Enbridge. As always, our Investor Relations team is available following the call for any additional questions you may have. Once again, thank you and have a great day.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.