Fortis Inc. Releases Second Quarter 2025 Results

Executive Summary

• Fortis Inc. reported second quarter 2025 net earnings of $384 million ($0.76 per share), an increase from $331 million ($0.67 per share) in the prior year period.
• Year-to-date net earnings reached $883 million ($1.76 per share), driven by rate base growth, favorable exchange rates, and regulatory resets, partially offset by lower margins at UNS Energy.
• The company confirmed its $5.2 billion annual capital plan is on track with $2.9 billion invested in the first half of 2025, while highlighting significant load growth opportunities and regulatory progress.

Key Details

• Q2 2025 Financials: Net earnings of $384 million ($0.76/share) vs. $331 million ($0.67/share) in Q2 2024.
• YTD 2025 Financials: Net earnings of $883 million ($1.76/share) vs. $790 million ($1.60/share) in YTD 2024.
• Capital Expenditures: $2.9 billion invested in H1 2025; $5.2 billion annual capital plan remains on track.
• Load Growth (TEP): Agreement to provide ~300 MW to a data center in Arizona, subject to regulatory approval; initial phase expected operational by 2027. Further negotiations for 600 MW at the initial site and 500-700 MW at a second site.
• Regulatory Filings:
  • TEP: Filed general rate application with Arizona Corporation Commission seeking new rates effective Sept 1, 2026, including a US$172 million net increase in retail revenue.
  • Central Hudson: Filed joint proposal with NY Public Service Commission for a three-year rate plan with 9.5% allowed ROE; order expected in H2 2025.
• Credit Ratings: Fitch assigned first-time issuer and senior unsecured debt ratings of BBB+ with a stable outlook.
• Operational Updates:
  • Roadrunner Reserve 1 battery storage project (200 MW, 800 MWh capacity) placed in service at TEP in July 2025.
  • TEP announced plans to convert 793 MW of coal-fired generation at Springerville Generating Station to natural gas by 2030.
• Sustainability: Achieved 34% reduction in Scope 1 GHG emissions through 2024 vs. 2019. Interim targets of 50% by 2030 and 75% by 2035 may be delayed due to load growth and policy factors; coal-free generation target remains 2032.
• Outlook: $26.0 billion five-year capital plan expected to increase midyear rate base from $39.0 billion (2024) to $53.0 billion (2029). Dividend growth guidance maintained at 4-6% annually through 2029.

Notable Quotes

• "Our strong results for the first half of 2025 reflect the disciplined execution of our capital plan and regulated growth strategy," said David Hutchens, President and Chief Executive Officer, Fortis. "Coupled with progress on key regulatory proceedings in Arizona and New York, we are well positioned to achieve our key objectives for the year."