Fortis Reports Strong Q2 Earnings, $2.7B in Capital Investments, Tilbury LNG Expansion Approved

By John Damon | Just The News Iowa

Fortis Inc. (FTS) reported second-quarter 2026 net earnings of $396 million, or $0.78 per share, up $0.02 from last year, driven by growth at its ITC and UNS Energy subsidiaries. The company also announced a major milestone: approval for a $2 billion expansion of its Tilbury LNG facility in British Columbia, which promises rate benefits for customers and positions the Port of Vancouver as a leading LNG marine fueling hub.

Capital Investments on Track for $5.6 Billion in 2026

Through June, Fortis invested $2.7 billion in its systems, roughly half of its annual capital plan. The company expects to hit its $5.6 billion target for the year, with major projects tracking on schedule. This includes the Roadrunner Reserve battery storage project in Arizona, a 200-megawatt system now in service that can power 42,000 homes for four hours.

CEO David Hutchens emphasized the company's disciplined approach: “We remain on pace to invest $5.6 billion in 2026, with our major capital projects tracking well.”

Tilbury LNG Expansion Gets Green Light

FortisBC received an Order in Council from the British Columbia government approving the Tilbury Phase 1B expansion, a $2 billion regulated rate base investment. The project includes a marine jetty and liquefaction facility, with construction expected to start in mid-2027 and an in-service target of 2031. It will support LNG marine fueling services, creating jobs and economic growth in the province.

Hutchens called the expansion “an exciting opportunity” that “positions the Port of Vancouver as a leading LNG marine fueling hub and supports the transition to lower-emission marine fuels.”

The project also includes an equity partnership with the Musqueam Indian Band, though specific ownership percentages remain confidential.

Rate Base Growth and Dividend Guidance Remain Strong

Fortis projects average annual rate base growth of 7% through 2030, supported by a $26 billion five-year capital plan. The company also reaffirmed its dividend growth guidance of 4% to 6% annually through 2030, marking 52 consecutive years of dividend increases.

CFO Jocelyn Perry noted that the company’s funding plan remains on track, with $2.1 billion in long-term debt issued in the first half of 2026. “Our liquidity position and funding plans support our investment-grade credit ratings,” she said.

Arizona Data Center Demand Drives New Investment

In Arizona, TEP is negotiating with a data center customer for an incremental 300 megawatts of capacity, with potential expansion to 600 megawatts at the first site. A second site could add 500 to 700 megawatts. If finalized, new generation investment could range from $1.5 billion to $2 billion.

Hutchens stressed that data centers will not shift costs to residential customers: “These data centers have to cover their own costs and then some.”

TEP’s overall load pipeline in Arizona stands at 8 to 10 gigawatts of potential data center demand.

ITC Transmission Projects Advance in Iowa and Beyond

At ITC, the MISO long-range transmission projects under Tranche 2.1 are advancing. ITC expects $3.3 billion to $3.8 billion in investment beyond 2030 for awarded projects not subject to competitive bidding. For the Iowa Tranche 2.1 project, ITC has submitted bids for two opportunities, with MISO expected to award them in the fourth quarter.

ITC is also managing a pipeline of approximately 8 gigawatts of additional load, prioritizing sites that require fewer transmission upgrades to speed up service.

Rate Benefits for Customers in British Columbia

FortisBC’s LNG sales into the marine fueling market have already provided a 1.5% rate benefit for customers since 2024. The Eagle Mountain Pipeline project, once complete, is expected to add another 1.5% rate benefit.

“Through operational efficiency, disciplined capital planning, and innovation, our utilities continue to be laser-focused on finding better ways to reduce costs and support customer affordability,” Hutchens said.

Regulatory Progress in Arizona

TEP’s general rate application is progressing, with hearings concluded and a final decision expected by November 17. TEP has requested a 9.75% return on equity. The company expects implementation by December.

Susan Gray, TEP’s CEO, said: “We are optimistic that the judge will include the formula rate mechanism. Overall, I think we are wrapping up pretty closely here to be done by the end of the year.”

Decarbonization Progress and Sustainability

Fortis released its 2026 sustainability report, highlighting a 38% reduction in Scope 1 greenhouse gas emissions through 2025 compared to 2019 levels. The company continues to invest in clean energy solutions while maintaining reliability and affordability.

What This Means for Iowa

For Iowa, ITC’s transmission investments are particularly relevant. The MISO Tranche 2.1 projects could bring significant infrastructure upgrades to the state, supporting grid reliability and economic growth. ITC’s bids for Iowa projects are pending, with decisions expected later this year.

Fortis’s strong financial performance and dividend growth also underscore the company’s stability, which benefits Iowa investors and ratepayers alike.

This article is based on Fortis Inc.’s Q2 2026 earnings call transcript and related materials.