Thank you for standing by. This is Chuck, the conference operator. Welcome to the Fortis Inc. second quarter, 2026 results conference call. As a reminder, all participants are in a listen-only mode and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Ms. Stephanie Amaimo, Vice President, Investor Relations. Please go ahead, Ms. Amaimo.

Thanks, Chuck, and good morning, everyone. Welcome to Fortis' second quarter, 2026 results conference call. I'm joined by David Hutchins, President and CEO, Jocelyn Perry, Executive VP and CFO, other members of the senior management team, as well as CEOs from certain subsidiaries. Before we begin today's call, I want to remind you that the discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slideshow. Actual results can differ materially from the forecast projections included in the forward-looking information presented today. Non-GAAP financial measures referenced in our prepared remarks are reconciled to the related U.S. GAAP financial measures in our second quarter, 2026 MD&A. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. With that, I will turn the call over to David.

Thank you and good morning, everyone. During the first half of the year, our utilities continued to provide safe and reliable service while advancing our regulated growth strategy. Through June, we invested $2.7 billion in our systems and delivered earnings per share in the second quarter of $0.78. More recently, we secured a milestone for a significant opportunity above and beyond our five-year capital plan with the receipt of an order in council that supports the expansion of our Tilbury LNG facility in British Columbia. Today, we also released our 2026 Sustainability Report, highlighting our progress to decarbonize our energy mix, including a 38% reduction in our Scope 1 greenhouse gas emissions through 2025 compared to 2019 levels. With nearly half of our annual capital plan invested through June and our major capital projects tracking well, we remain on pace to invest $5.6 billion in 2026. In June, the second Roadrunner Reserve battery storage project was placed in service at TEP. This 200-megawatt energy storage system facilitates the integration of renewables into the grid with the capability to store 800 megawatt hours of energy, enough to serve 42,000 homes for four hours when deployed at full capacity. With our capital plan on track, we continue to expect average annual rate-based growth of 7% through 2030. Last week, FortisBC received an order in council from the province of British Columbia approving a larger Phase 1B expansion of a Stillbury LNG facility, allowing total investment of approximately $2 billion in regulated rate base. We currently have approximately $350 million in our current five-year plan. The OIC also provides the approvals required to implement an equity partnership with the Musqueam Indian Band and includes regulatory mechanisms to smooth the cost of recovery in the early years of the project. The Tilbury 1B expansion supports LNG marine fueling services and promotes jobs and economic growth in the province. The project positions the Port of Vancouver as a leading LNG marine fueling hub and supports the transition to lower emission marine fuels. This is an exciting opportunity and FortisBC will now proceed to develop and refine project cost estimates, which will be reflected in our next five-year capital plan, expected to be released with our third quarter results. While the project remains subject to certain regulatory approvals and permitting requirements, construction could start as early as mid-2027 and be in service as early as 2031. As for other opportunities above and beyond the plan, our teams continue to make steady progress. At ITC, the MISO long-range transmission projects associated with tranche 2.1 are advancing. As we have noted in the past, ITC expects $3.3 to $3.8 billion U.S. dollars of investment beyond 2030 for projects that have been awarded and are not subject to competitive bidding. For the Iowa Tranche 2.1 project subject to a competitive process, ITC has submitted bids for two opportunities, with MISO expected to award the projects in the fourth quarter. At TEP, negotiations continue with the data center customer for an incremental 300 megawatts of capacity to support a potential buildout of 600 megawatts at the first site. TEP is also in active negotiations for additional capacity at a second site in the range of 500 to 700 megawatts and is continuing to engage with other large customers for additional growth opportunities. If agreements are finalized for these subsequent phases, we estimate that new generation investment in the range of $1.5 to $2 billion U.S. dollars would be required. In Arizona, TEP and UNS Electric expect to file new integrated resource plans with the ACC in the fall. The IRPs will support increasing energy needs while taking into account clean, reliable, and affordable energy solutions. The IRP will include a high-growth scenario that evaluates the impacts of potential incremental data center load beyond the 300 megawatts currently approved, as well as the clean energy build-out scenario. Our utilities continue to prioritize capital investments focused on operational need and customer bill impacts. As we highlighted last quarter, both ITC and UNS are great examples of how load growth and cost-effective capital projects can benefit customers. Adding to the discussion, continued growth of the LNG markets is also expected to provide rate benefits for customers in British Columbia. First, sales of LNG into the growing marine fueling market associated with our current Tilbury 1A facility have provided a rate benefit for customers of approximately 1.5% since 2024. The further expansion of FortisBC's Tilbury 1B facility is expected to build on this rate benefit. Additionally, increased demand served through the Eagle Mountain Pipeline Project will increase the utilization of Fortis BC's gas system, and once complete and in service, is expected to provide a rate benefit of approximately 1.5%. Overall, through operational efficiency, disciplined capital planning, and innovation, Fortis Utilities continue to be laser-focused on finding better ways to reduce costs and support customer affordability. Our dividend remains a core component of our investment thesis. We have demonstrated that we can grow our dividend responsibly, having increased it for the past 52 consecutive years, while maintaining a disciplined approach to balance sheet strength. Looking ahead, we remain confident in our 4-6% annual dividend growth guidance through 2030, supported by our regulated growth strategy. Now I will turn the call over to Jocelyn for an update on our second quarter financial results.

Thank you, David, and good morning, everyone. For the quarter, we reported net earnings of $396 million, or $0.78 per common share, an increase of $0.02 compared to the second quarter of last year. At ITC, EPS increased by $0.02, largely due to continued capital investment and related rate-based growth, partially offset by higher finance costs and stock-based compensation expense. UNS contributed a $0.02 increase driven by higher retail electricity sales, including the impact of warmer weather. This increase was moderated by the timing of operating costs, as well as regulatory lag associated with rate-based growth not yet reflected in customer rates. Our Western Canadian utilities increased EPS by $0.01, largely driven by capital investment. The corporate and other segment reflects unrealized losses on foreign exchange contracts, higher finance costs, and lower earnings due to the disposition of Fortis Belize in the fourth quarter of 2025, partially offset by the timing of income tax recoveries. And while not shown on the slide, results at Central Hudson were consistent with the second quarter of 2025, as rate-based growth was offset by the timing of quarterly revenue. And earnings for our other electric segment were also comparable quarter over quarter, as earnings growth in the segment was offset by the impact of the Fortis TCI disposition completed in the third quarter of last year. Foreign Exchange had a $0.01 unfavorable impact for the quarter, and higher-weighted average shares issued under our Dividend Reinvestment Plan impacted EPS by $0.01. On a year-to-date basis, earnings were $897 million, or $1.76 per common share. Results year-to-date were mainly driven by the same factors discussed for the quarter, with a few additional items to note for Central Hudson and UNS Energy. For the six-month period, Central Hudson was up $0.03, primarily due to rate-based growth and the timing of operating costs. At UNS, EPS was down three cents as higher retail sales were tempered by lower margin on wholesale sales, the timing of operating costs, and the regulatory lag for rate-based growth, not yet in rates. For the first half of 2026, our utilities issued $2.1 billion of long-term debt, and our funding plan remains on track. As we have noted in the past, our capital plan is expected to be funded largely from cash from operations, utility debt, and our dividend reinvestment plan. In May, S&P confirmed our A-minus issuer and BBB-plus unsecured debt credit ratings and stable outlook, and Fitch also confirmed the corporation's BBB-plus issuer and unsecured debt credit ratings and stable outlook. Overall, our liquidity position and our funding plan support our investment-grade credit ratings. As Dave mentioned, we expect to release our new five-year capital plan on our third quarter earnings call, and we will address our new funding plan at that time. On the regulatory front, the TEP general rate application continues to progress. During the quarter, hearings concluded and the Administrative Law Judge issued an extension of the procedural schedule, such that a final decision on the rate case be issued by November 17th. That concludes my remarks. I'll now turn the call back to David.

Thank you, Jocelyn. In closing, we have delivered a strong first half while maintaining our focus on what matters most, operating our utilities safely, reliably, and affordably. Our two-pronged focus on execution is clear, with our annual capital plan on track and our advancement of opportunities above and beyond the plan. Backed by a disciplined strategy and a diversified regulated portfolio, we remain confident in our ability to deliver on our rate-based and dividend growth outlook through 2030. That concludes my remarks. I will now turn the call back over to Stephanie.

Thank you, David. This concludes the presentation. At this time, we'd like to open the call to address questions from the investment community.

Thank you. We would now begin the question-and-answer session. To join the question queue, please press star, then 1 on your telephone. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. And to withdraw your question, please press star, then 2. And our first question for today will come from Maurice Choi with RBC Capital Markets.

Please go ahead thanks and good morning everyone um as you know i probably like to see bc take the spotlight here so maybe my first question um if you could help unpack the next steps for october 1b and also an update on the bigger tilbury phase 2 i appreciate that and presumably phase 2 also has some great benefits for customers over and above all the other ones yeah thanks maurice and roger has been waiting for this question so i'm going to turn it right over to roger the our ceo of forest bc roger thanks uh david thanks for the question reese uh maybe i'll try to anticipate some of

the other questions as well uh starting with uh uh tilbury 1b so the uh the project itself uh with the Order and Council from the government, really has three components. It's the marine jetty, the liquefaction expansion, as well as 230 kV power line to provide power for the electric drive liquefaction. Those three components are covered by the OIC. The next steps, we're still assessing and designing plans to address the conditions that came out of the Environmental Assessment Certificate that the Provincial and Federal Government provided to us in 2024. and then designing the liquefaction and power needs for the TLSC. So that's going to start in earnest with hope that we'll be in construction for TLSC, or sorry, for October 1B sometime in 2027. We are also finalizing agreements with the Musqueam on there. equity investment the percentage that they may take is confidential at this point but working on finalizing the limited partnership agreement that will allow them to have a direct equity investment in this project for T for Tilbury 2 as a reminder there's two components to Tilbury 2 The first is the Tilbury storage tank that's replacing one of the existing tanks at Tilbury that was built and commissioned in 1971. As that facility is basically end-of-life Tilbury storage expansion which we received BCUC approval in 2025 for. Once the EA is approved, start the process for construction on that. That doesn't come with direct rate benefit. It really is primarily resiliency, but the size of the tank up to 3 BCF from what the current facility is, about a 0.6 BCF, there will be some gas supply benefit where we can manage summer winter gas cost differentials, so we will be able to expand our gas supply capabilities on system. The rest, though, is really just resiliency for system disruption and peak weather events. Tilbury 2 also has up to 2.5 million tons per annum of liquefaction. That is further out. If that does get built, that would be designed with rate benefit, but it's too early to understand what those rate benefits might be. Hopefully, that answers the questions.

Maybe this is a quick follow-up. Just timing us as to when these projects might be sanctioned.

Tilbury, for the Tilbury II projects, the EA is expected later this year. We are in the mandated, I think, 151-day review period, and that is going to end sometime in Q4, and then it will be referred to Cabinet. And at that point, there's a 30-day timeframe for Cabinet to approve the Environmental Assessment Certificate. So that timing holds, and there's no additional process requested by the Environmental Assessment Office over to both the storage tank and the added liquefaction later this time.

And if I could finish off in Arizona, there continues to be, I guess, selective data center opposition in the U.S., and I know that you highlighted some great benefits in one of your slides. But at TEP, have you more recently witnessed any change in how your customers' negotiations, whether that be the pace, whether it be the terms?

Yeah, so obviously there has been a bit of pushback in data centers across the U.S. and in general for various reasons. I think one of the stories our industry wasn't really pushing as well as it should have been is the rate benefit that these types of projects can have for our customers. And that's the message that we're trying to get out in Arizona and anywhere else we can, as is everyone else, including data center developers, because there is a really good positive story, as you can see in our deck, that customer rate benefit that we see, and that's just from the first phase of Project Blue. But the customers, as in the data center customers themselves, are very aware of making sure that we get the right design and are obviously willing and able to make sure that they, and there's been all kinds of conversations and pledges, et cetera, at every level in government and whether it's federal, local, and with utilities and data. And then the data centers and hyperscalers themselves, we're all on the exact same page to make sure that there is no, you know, cost shift or allocation of the costs that are needed to build and serve those customers that get shifted to the other customers. And, you know, everybody's on the same page that these data centers have to, you know, cover their own costs and then some. And that's where we get that. And then some is the part that gives us the benefits that we see to lower the rest of the customer's rates by them sharing an actual large portion of the overall system fixed cost by the usage that those data center customers have. So the message is we all have the same message. We're just making it's a bit hard to get people to listen to it.

Thank you for that and good luck with that.

The next question will come from Ben Pham with BMO. Please go ahead.

I know you mentioned your expected refresh of the CapEx plan in the fall. Could you talk about maybe if there's any potential to look beyond the five-year plan to maybe look at a long horizon, And just thinking about this Tilbury expansion going through 2031, you got the ITC transmission opportunity. It just also seems like your backlog is also more visible than it has been versus last year.

Yeah, Ben, you know, obviously from a planning perspective, and there's a lot of things that we do that extend beyond the five-year period. The integrated resource plans are a prime example. The LRTP projects, there's a lot of things. obviously, that we that we look at longer term. But just given, you know, how, you know, those types of forecasts tend to diverge and have quite a quite a wide air bars when you get past the five year period, it would really be tough to be able to put out a five year, say, capital plan or, you know, more than a five year capital plan without having a whole bunch of caveats. So we We kind of want to stick with that, and I wouldn't say five years is a short time period by any means, but we know that that's why we try to provide the color around what's going on within our portfolio and that above and beyond the plan conversation and try to break those into things that we see within the next five years, things that we could essentially add to the existing five-year capital plan, but more importantly, things that extend that growth beyond the five-year plan. So we try to give color around that, but to lay out numbers that far, I don't know if that would be all that beneficial.

Okay, got it. And going back to the Tilbury expansion, and if you can maybe quantify or maybe attempt to think about this, is you have enough time to think about the impact on the balance sheet as well you put the capex in there i know the the first nations piece is is still tbd but uh in a range of scenarios if you looked at there's a concept plate potential look at atm ben this is jocelyn thanks for the question yeah tilbury will be wrapped up with uh our whole look at the five-year plan and uh so we'll no doubt this is uh putting good pressure

on the amount that we're spending, but we need to firm up the time for Tilbury in particular and when and how these investments will be coming into play. And so we'll look at all, you know, funding options available to us with, you know, the aim is to keep our credit metrics in check. So that's something that we're going to be taking a deeper dive on in fall.

Okay, got it.

The next question will come from Mark Jarvie with CIBC Capital Markets. Please go ahead.

Hey, good morning, everyone. I know we're going to get the CapEx refreshed, but just on the Tilbury project, anything you can kind of indicate in terms of the profile of the CapEx? Is there material amounts before 2030 or has most of this come in the early 2030s?

Yeah, we haven't put that together yet. Obviously, there is a shape to the CapEx spend. that, you know, kind of typically on large projects will start out slowly and, you know, ramp up over time. As I mentioned in the remarks, we could see this online as early as 2031. And as we spend, you know, capital, remember, we also, you know, get AFUDC on these projects So there's a whole lot of modeling that still has to be done. But when we get that shape in there, we'll let you know. And that kind of goes to that prior question, you know, shape of capital matters to not just the overall size of the capital plan.

Understood. And just in the last couple of days, you know, some positive commentary from large load with the Michigan LDCs and Alliant as well in Iowa. Just your view in terms of any updated views on ITC conversations with the local distribution companies in terms of, you know, accelerating investments to facilitate large loads in those regions.

Yeah. Krista, you want to address that? She's obviously very close to those conversations with our largest customers, which happen to be CMS, DTE, and Alliance. So, Krista?

Yeah, good morning. Yeah, we remain very optimistic, having really positive conversations with the large data centers. We are working hand-in-hand with the customers that you just noted because, of course, transmission can take a long time. So we're at the table with them. At this point, we don't, you know, everything that we've announced publicly, we have, and we're just sticking to that, you know, approximately 8 gigawatts of additional load in our queue. And, you know, of course, that doesn't mean it'll all come to fruition, but, you know, that's really what's in our pipeline that's not, you know, we haven't yet finalized. so most of this would be the loads we trying to cite where they can use existing transmission generation or is there a view that there's some upgrades required just given the speed to power demands for some of these customers yeah you know there's not really a rule of thumb for transmission you know we're seeing when we get a large load it can be anywhere from you know 10 million to to 100 million right um but we are because of what you just said speed to power we are moving them, you know, we are working hard to direct them to places where we need fewer upgrades because, you know, they need to be on two years or less, and, you know, a new line would take much more than that, obviously. So from our point of view, we are really directing them to where there are fewer upgrades needed, which still provides a benefit to us in terms of the right relief for our customers.

Okay.

The next question will come from Mike Lundgren with Barclays. Please go ahead.

Hi, thanks for taking my question. So on the TEP rate case, there was obviously a change in the procedural schedule for a decision after the November election. Just wondering how you're feeling about this and the rate case more broadly coming out of the hearings that happened in May.

Yeah, we're feeling good. I'll turn it over to Susan to give a little color from Arizona, but I think we definitely were not surprised to see that the open meeting or the final decision on the TEP rate case to be slid a little bit given the November elections. Susan, do you want to provide a little color on where we stand?

Yeah, sure. Good morning, and thanks for the question, Mike. Yeah, so as Dave mentioned, we are expecting a recommended opinion and order from the judge to come out fairly soon, and as we've just filed briefings, you know, I think we're pretty close on a lot of the issues, particularly in alignment with staff, ACC staff. The main, we were a part on ROE and in our recent filing, TEP came down to 9.75, which is now a 10.2% increase that we're asking for. That's the impact of changing the ROE. You know, I think we're, we are optimistic that the judge will include the ARAM, the formula rate, and, you know, I think there was some varying opinions on what the dead ban should be, but overall I think the design of the ARAM is likely going to look a lot like what we got for Unisource Gas. So, I think we'll know more as the briefings have just come out, and then the judge's recommended opinion in order, and then we expect to get a decision probably in November with an implementation date in December. So, I think we're wrapping up pretty closely here to be done by the end of the year.

Thank you. And then, sticking with Arizona, you know, obviously, you talked about the Project Blue Data Center and the expansion opportunity there, you know, the $1.5 to $2 billion of opportunity. Just wondering if you could talk more about your pipeline beyond this in the state, you know, where you stand with that opportunity, and anything you could share there would be helpful.

Go ahead, Susan.

Yeah, so when you talk about pipeline, I assume you're talking about the gas pipelines?

You're talking about the pipeline of projects, like, you know, we've got the Project Blue, but what's behind them?

Sure, yeah, and so we still have, you know, eight to ten gigawatts of data center pipeline in our queue. But we also have the Hermosa Mine that's coming online. Copper World is probably in the later, latter part of our five-year plan. And then we've got some other manufacturing and other, even some existing customers that are growing. So it's not all data center growth in Tucson. There's kind of a wide variety of opportunities that we're seeing.

Great. Thanks for taking my question.

Again, if you have a question, please press star, then one. Our next question will come from Eli Jawson with JPMorgan Securities. Please go ahead.

Hey, good morning, everyone. Maybe sticking with Arizona, I just wanted to shift to the political landscape. Obviously, we saw a primary outcome just a few days ago, And I just wanted to kind of get your thoughts there, you know, if there was any surprise and whether or not that would impact your overall kind of regulatory strategy within the state.

Yeah, I'll take that one, Susan. I mean, I still spend a lot of time in Arizona, so I'm pretty up to speed on the politics there. I mean, I don't know. I wouldn't call it surprise. When there's three folks running for two seats and in a primary, it's hard to call which way that'll split. It doesn't matter to us from a regulatory strategy perspective. We'll see how the general election turns out as well. But in the end, this is two of the five commissioners that are up. So even a complete change in commissioners, a complete turnover there would still have three that we've known and built relationships with over these past couple of years or several years in some of the commissioners' cases. So we don't we don't change, you know, our regulatory strategy, you know, based on election. So we you know, we work with the regulators that are in those roles and and work to to push for a good and solid policy that helps us support the things that matter most to our customers. So that's that that doesn't change from from election to election.

Got it. And I know there's been a lot of discussion on Arizona, but maybe just last question on the on the IRP. You know, we know that we had that timeline in October for the filing. Can you just remind us sort of the range of outcomes that, you know, we can expect coming out of that IRP and how that affects sort of the opportunity set that you have in Arizona?

So we don't really have a range of outcome yet other than one from the old IRP. So we really are waiting for the results of this. And then, of course, we run a whole bunch of different scenarios in this process. You know, pick one as kind of the recommended portfolio for filing with the commission, obviously, with the rest of those scenarios as well. But at the end of the day, that's when we start looking at what that scenario looks like, whether or not it gets through the process with the corporation commission. And then we start, well, we'll be penciling in some of those investment opportunities as we go through this process. and start communicating those at that time. Right now, we haven't released all of the scenarios and what those look like, but those will be released, and it's something that folks can see. I mean, it'll be more on a very high level kind of revenue, net present value revenue requirement for those portfolios, but it'll show the investments that are needed and what years those are needed. And so, it'll provide some of the data for folks like you all on the call to do some back of the envelope and see what would be needed in those different timeframes.

Great. Thanks for the call.

You bet.

This concludes our question and answer session. I would like to turn the conference back over to Ms. Amaymo for any closing remarks. Please go ahead.

Thank you, Chuck. We have nothing further at this time. Thank you, everyone, for participating in our second quarter conference call. Please contact Investor Relations should you need anything further, and have a great day.

This brings a close to today's conference call. You may disconnect your lines. Thank you for your participation, and have a pleasant day.