Fortis Inc.

operator today. Welcome to Fortis Q4 2023 Earnings 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 1 on their telephone. If at any time during the conference you need to reach an operator, please press star 0. At this time, I would like to turn the conference over to Stephanie Amimo. Please go ahead, Ms. Amimo.

Thanks, Laura, and good morning, everyone. Welcome to Fortis' fourth quarter and annual 2023 results conference call. I am 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 U.S. GAAP financial measures in our annual 2023 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. Today, we are pleased to report strong 2023 operational and financial results. During the year, we provided reliable service to our customers, invested $4.3 billion of capital in our energy systems, concluded key regulatory applications, and sold the non-regulated Aiken Creek natural gas storage facility, and further reduced our carbon emissions. Adjusted EPS grew approximately 9%, excluding foreign exchange impacts, with rate growth and the regulatory outcomes in British Columbia and Arizona serving as key drivers. And with our track record of executing a regulated growth strategy, we increased our fourth quarter dividend by 4.4%, marking 50 consecutive years of increases in dividends paid, a milestone of which we are very proud. Our utilities operate electric and natural gas transmission and distribution systems across North America, and we know that the safety and reliability of the service we provide is imperative to our customers and employees and is embedded in everything we do. In 2023, our metrics were top quartile for safety and reliability relative to our North American peer benchmarks. As we make the necessary investments in our utilities, we remain focused on managing customer bill impacts. While we have limited control of energy commodity costs and higher interest rates, both of which are passed through to our customers, we continue to manage operating costs through these innovation and process improvements. We also work with our customers to help them manage their bills through our Energy Efficiency and Demand Side Management, or DSM, programs. Just last week, the British Columbia Utilities Commission aborted BC's $600 million DSM plan for 2024 through 2027. The plan continues cost-effective initiatives for customers to save on energy use while incorporating new programs to further align with the Clean BC roadmap to 2030. Customer affordability is critical as we execute our clean energy goals and invest in the resiliency of our energy systems. We continue that track record of dependable shareholder returns despite a challenging year for the utility sector. In 2023, we delivered an annual total shareholder return that ranked in the top quartile of our utility peer group. Over a 20-year period, we have had an average annual return of approximately 11%. significantly higher than the returns generated by the benchmark indices. Through 2023, we achieved a 33% reduction in Scope 1 emissions compared to 2019 levels. The closure of the coal-fired sand generating station in June 2022, as well as the start of seasonal operations of the Springerville units in 2023, contributed to the emissions reductions. With this continued progress, we are on track to achieve our targets to reduce Scope 1 greenhouse gas emissions 50% by 2030, 75% by 2035, and net zero by 2050. While all of our utilities play a part in reducing carbon emissions, the bulk of the reductions will be achieved through the execution of TEP's integrated resource plan. In November, both TEP and UNS Electric filed their 2023 IRPs with the Arizona Corporation Commission. TEP's IRP calls for the addition of over 2,200 megawatts of renewable generation, over 1,300 megawatts of energy storage and 400 megawatts of natural gas peaking units through 2038 and supports the closure of TEP's remaining 900 megawatts of coal-fired generation by 2032. This balanced portfolio supports the delivery of cleaner, reliable, and affordable energy for our customers. The new natural gas capacity will accelerate renewable energy additions and will support TEP using less coal generation through 2032, further reducing cumulative Scope 1 emissions. In December, TEP and UNS Electric issued a joint all-source request for proposals seeking new resources in support of the IRPs. The RFP calls for over 600 megawatts of renewables and energy efficiency resources and over 800 megawatts of firm capacity. As for the next steps on the IRPs, we expect a decision from the ECC in the fall. Looking ahead, we expect to release our climate report during the first quarter of 2024, showcasing the climate scenario work completed by our utilities over the past two years, to ensure we are building climate resiliency into our operations. In the third quarter, we announced our highly executable, low-risk $25 billion five-year capital plan, our largest to date. In the fourth quarter, as part of the Iowa Right of First Refusal proceeding, a district court placed an injunction on MISO's long-range transmission projects in Iowa. As a result, ITC's Tranche 1 projects located in Iowa are currently on hold. Jocelyn will speak to this in more detail in the regulatory update. In late December, the BCUC denied FortisBC's application for the Okanagan capacity upgrade, our smallest major capital project, estimated at approximately $200 million. While the BCUC agreed with the need to address pipeline capacity shortfalls in the Okanagan region, they instructed FortisBC to investigate other options to meet capacity needs and submit a plan by the end of July. FortisBC's investment in the Eagle Mountain Wood Fiber Gas Line project is now forecasted at $750 million through 2027 compared to $420 million previously estimated. The increase was a result of amendments made to agreements with Wood Fiber LNG and other partners that became effective following the completion of certain conditions including the BCUC approval of an amended transportation rate schedule. This allows for an increase in our rate base without increasing customer rates. Our five-year capital plan of $25 billion remains on track, supporting average annual rate base growth of approximately 6%. Our next five-year plan is in progress, and we expect to release it in the fall. The plan, we continue to pursue additional opportunities. ITC continues to work with MISO on tranche two of the long-range transmission plan, and we expect MISO board approval in the second half of this year. In addition, we estimate between $2.5 and $5 billion U.S. dollars of incremental investments through 2038 at TD and UNS Electric to support their IOPs. We also anticipate growth opportunities associated with renewable natural gas solutions and LNG infrastructure in British Columbia. Across all of our utilities, we expect additional growth opportunities to support climate adaptation, grid resiliency, and the clean energy transition. As mentioned earlier, we increased our common share dividend in the fourth quarter by 4.4%, marking 50 consecutive years of increases in dividends paid. In 2023, we also extended our 4% to 6% annual dividend growth guidance through 2028. supported by our low-risk regulated growth profile. Now I will turn the call over to Jocelyn for an update on our fourth quarter and annual financial results.