Fortis Secures $2B Tilbury LNG Expansion Approval, Eyes Data Center Growth
The Canadian utility reported Q2 earnings of $0.78 per share while advancing major growth projects in British Columbia, Arizona, and across its grid network.
Major LNG Expansion Approved
Fortis Inc. secured a significant regulatory milestone with British Columbia's approval of a larger Phase 1b expansion of its Tilbury LNG facility, representing approximately $2 billion in regulated rate base investment—substantially more than the $350 million currently allocated in the company's five-year plan (earnings call, 2026-07-31).
The order in council from the province includes regulatory mechanisms to smooth cost recovery in early project years and provides approvals for an equity partnership with the Musqueam Indian Band. "The project positions the Port of Vancouver as a leading LNG marine fueling hub and supports the transition to lower emission marine fuels," President and CEO David Hutchens said during the July 31 earnings call.
Construction could begin as early as mid-2027, with the facility potentially entering service by 2031, subject to regulatory approvals and permitting requirements. The expansion is expected to build on existing rate benefits, with current Tilbury 1A LNG sales providing customers approximately 1.5% in rate relief since 2024 (earnings call, 2026-07-31).
Q2 Financial Performance
For the second quarter, Fortis reported net earnings of $396 million, or $0.78 per common share, up $0.02 from the prior-year period. Year-to-date earnings through June reached $897 million, or $1.76 per share (earnings call, 2026-07-31).
ITC contributed a $0.02 increase driven by continued capital investment and rate base growth, though partially offset by higher finance costs. UNS Energy also added $0.02, benefiting from higher retail electricity sales including warmer weather impacts, Executive VP and CFO Jocelyn Perry reported.
The company invested $2.7 billion in its systems through June and remains on track to deploy $5.6 billion in capital for full-year 2026. "We remain on pace to invest $5.6 billion in 2026," Hutchens confirmed, supporting the company's targeted 7% average annual rate base growth through 2030 (earnings call, 2026-07-31).
Data Center and Transmission Opportunities
Beyond its base capital plan, Fortis is advancing several major growth opportunities. At Tucson Electric Power (TEP), management continues negotiations with a data center customer for an incremental 300 megawatts of capacity to support a potential 600-megawatt build-out at an initial site. TEP is also in active discussions for additional capacity of 500 to 700 megawatts at a second location.
"If agreements are finalized for these subsequent phases, we estimate that new generation investment in the range of USD 1.5 billion to USD 2 billion would be required," Hutchens stated (earnings call, 2026-07-31).
At ITC, MISO long-range transmission projects associated with tranche 2.1 are progressing, with the company expecting $3.3 billion to $3.8 billion USD in investment beyond 2030 for awarded projects not subject to competitive bidding. ITC has submitted bids for two Iowa tranche 2.1 projects, with MISO expected to award contracts in the fourth quarter.
Sustainability and Dividend Outlook
Fortis released its 2026 sustainability report showing a 38% reduction in Scope 1 greenhouse gas emissions through 2025 compared to 2019 levels. The company maintained confidence in its 4% to 6% annual dividend growth guidance through 2030, backed by its regulated growth strategy. Fortis has increased its dividend for 52 consecutive years (earnings call, 2026-07-31).
The company plans to release an updated five-year capital plan with its third-quarter results, which will incorporate the Tilbury expansion details.
This article was generated by MarginX from the earnings call on 2026-07-31. It is not investment advice.