Fortis Inc.

Ladies and gentlemen, thank you for standing by. My name is Phyllis and I will be your conference operator today. Welcome to the Fortis Q3 2021 results and new five-year Capital Outlook conference call and webcast. During the call, all participants will be in a listen-only mode. There will be a question and answer session following the presentation. At that time, Those with questions should press star followed by one on your telephone. If at any time during the conference you need to reach an operator, please press star zero. At this time, I would like to turn the conference over to Stephanie Amimo. Please go ahead, Ms. Amimo.

Thanks, Phyllis, and good morning, everyone. And welcome to Fortis' third quarter 2021 results, a new five-year Capital Outlook 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. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related US GAAP financial measures in our third quarter 2021 MDNA. Also, unless otherwise specified, all financial information is referenced in Canadian dollars. With that, I will turn the call over to David.

Thank you and good morning, everyone. Today, we are pleased to report our third quarter results as we continue to deliver safe and reliable service while navigating through the pandemic. Financially, our third quarter results reflect strong core operations moderated by a lower foreign exchange rate and cooler than normal weather in Arizona. On a year-to-date basis, we have delivered strong earnings growth absent foreign exchange. We are on track to deliver our $3.8 billion capital plan for 2021, with $2.6 billion invested through September. Additionally, we recently announced a dividend increase of approximately 6%, marking 48 consecutive years of dividend increases, a record we are very proud of. Before getting into our new five-year plan, I'd like to discuss the recent executive leadership developments here at Fortis. Last month, we announced that Jim Lurita will retire at the end of the year from his role as Executive Vice President of Business Development and Chief Technology Officer. Many of you know Jim as he has been working in our industry for many years. Jim, we appreciate your immense contributions to Fortis and wish you and Vanita all the best in retirement. And on a personal note, Jim, I'd like to express my sincere gratitude for the guidance, advice, and friendship that you have given me over these last seven years. Also, we announced the appointment of Stuart Lockreed, Senior Vice President of Capital Markets and Business Development. We welcome Stuart to the Fortis family in the third quarter and look forward to his support and building on the momentum across our businesses to execute on our growth strategy. Turning now to slide five, our new five-year plan calls for the investment of approximately $20 billion from 2022 through 2026, showing our ability once again to extend our strong underlying organic growth. This balanced low-risk plan is expected to translate into average annual rate-based growth of approximately 6%. Our plan shows we've come a long way since October of 2016, when Fortis acquired ITC and was first listed on the New York Stock Exchange. After that transaction closed, we rolled out a five-year capital plan of $13 billion for 2017 through 2021. While that seemed ambitious at the time, we're now on track to invest approximately $18 billion, an additional $5 billion over that same period, translating into rate-based growth of 8 billion or 6% on average annually. The new capital plan invests in our energy infrastructure and supports a cleaner energy future and includes $1 billion of incremental investments at our regulated utilities. Drivers of the increase include customer growth, enhancements to transmission reliability and capacity, and investments in cleaner energy. This growth in capital is reduced by a lower assumed exchange rate, which decreases the plan by approximately $600 million. The new plan is highly executable, with approximately 85% consisting of relatively small projects. The remainder consists of what we define as major capital projects, those exceeding $200 million, or just 1% of the five-year capital plan. Our plan includes 11 such projects, including the $200 million Okanagan capacity upgrade project at FortisBC that will address customer growth in the region through expansion of the existing natural gas transmission system. As the pie chart on the left-hand side of slide 8 highlights, nearly all of our new capital plan supports energy delivery and the transition to a cleaner energy future. Our utilities are planning for cleaner energy investments of $3.8 billion through 2026, a $500 million increase compared to our prior plan. This increase is driven mainly by additional renewables and energy storage in Arizona and renewable interconnections at ITC. In Arizona, Tucson Electric Power expects to invest in 275 megawatts of energy storage and another 90 megawatts of solar projects to support its integrated resource plan and exit coal by 2032. ITC plans to invest in transmission to interconnect renewables, including 2,800 megawatts of generator interconnections in the U.S. Midwest and in multi-value projects. At our Western Canadian electric and gas utilities, Clean energy initiatives include renewable and liquefied natural gas investments in British Columbia and distributed energy resource integration investments in Alberta. Investments in the Watanekiniap transmission project in Ontario and alternative energy technologies and battery investments in the Caribbean also support our sustainability strategy. Our carbon emissions reduction target is on track as we reduce emissions by nearly 2 million tons in 2020. With our continued investment in cleaner energy infrastructure, the planned closure of the San Juan Generating Station next year, and the beginning of seasonal operations at Springerville Generating Station, we are well on the path to meet our 75% carbon emissions reduction target by 2035. Our target is balanced and ensures reliable and affordable service while providing time and support for impacted communities. By 2035, we expect 99% of our assets will be related to energy delivery and renewable carbon-free generation. Beyond reducing Scope 1 emissions, all of our utilities are focused on improving their environmental footprint, including their Scope 2 and 3 emissions. Through investments in RNG and LNG, renewable interconnections, electric vehicles, energy efficiency initiatives, and other efforts, we are working to reduce economy-wide greenhouse gas emissions. In addition to improving our already low carbon footprint, the capital plan also supports steady rate-based growth across our portfolio of utilities. Central Hudson continues to lead the way with average annual rate-based growth of over 7 percent, driven by investments in infrastructure upgrades and information technology. Our consolidated rate-based growth will be mainly driven by our three largest utilities, ITC, FortisBC, and UNS Energy. The plan is expected to increase rate-based by $10 billion from approximately $31 billion in 2021 to nearly $42 billion in 2026, supporting average annual rate-based growth of approximately 6% through 2026. We have many other opportunities that could expand and extend growth at our regulated utilities, which are not reflected in our capital plan today. As we have previously discussed, ITC is strategically positioned in the Midwest to invest in incremental transmission required to support a renewable energy transition in the United States. The Lake Erie Connector Transmission Project and the MISO Long Range Transmission Plan could be large additions to our plan, and we expect to have additional clarity on these opportunities early next year. In Arizona, Tucson Electric Power's integrated resource plan will require investments in renewables and battery storage beyond 2026 in order to exit its coal generation in 2032. At FortisBC, reducing customer greenhouse gas emissions continues to be a priority. Whether it's LNG, renewable natural gas, or hydrogen, the infrastructure needed to support a decarbonized economy will complement our organic growth strategy and support CleanBC's roadmap to reduce customer greenhouse gas emissions. In light of these opportunities, as well as the potential acceleration of a clean energy transition in North America, we remain optimistic that we will be able to secure investments that will be additive to our current plan. Next, I'll spend a moment discussing recent increases in commodity prices and supply chain considerations given the impacts that the pandemic is having on the economy. First, we are seeing increases in natural gas prices, which are impacting our utilities in British Columbia, Arizona, and New York. While hedging policies and recovery mechanisms for these costs vary by regulatory jurisdiction, they are ultimately recovered from customers. This is expected to increase our customers' rates while these higher costs persist. As prices moderate, the same mechanisms will allow those rates to decrease. We remain focused on mitigating customer bill impacts through energy efficiency and conservation programs wherever possible. We will also continue our efforts to manage costs across our enterprise through innovation and process improvements to maintain affordable service to the communities we serve. As it relates to the supply chain, our Fortis operating group is focused on proactively managing our supply requirements with coordinated buying and utilizing supplier alliances to maintain reliable service and ensure the execution of our capital plan. Notably to date, we have had only minor supply chain concerns. However, we are currently doubling down on our supply chain efforts to be ready for 2022 and beyond. Due to the length of our planning cycle and the long-term nature of our capital plan, the recent price increases for commodities such as steel and copper are not fully reflected in our five-year plan. We will be evaluating these impacts going forward. As I mentioned, last month our board of directors declared a fourth quarter dividend of 53.5 cents, representing an increase of approximately 6 percent. Again, this marks 48 consecutive years of dividend increases. The strength of our local energy delivery businesses, coupled with our diverse geographic and regulatory footprint, positions us well to extend this record. And to that end, today, we are reaffirming our 6 percent average annual dividend growth through 2025. Now, I will turn the call over to Jocelyn for an update on our third quarter financial results.