Fortis’s $26 B Capex Plan Aims 6.5% Annual Asset Base Growth
Fortis’s regulated asset base is projected to grow 6.5% annually to about $53 billion by 2029 through a $26 billion capital plan focused on transmission, distribution and clean energy infrastructure. It targets 9% revenue CAGR, maintains 50-year dividend growth streak and carries $48 billion in leverage with negative free cash flow coverage.
1. Bull Case Overview
Fortis is positioned as a regulated electric and gas utility delivering predictable, rate-base-driven growth rather than rapid expansion, supported by exclusive service territories in Canada, the U.S. and the Caribbean.
2. Growth Projections
The company forecasts roughly 9% revenue CAGR and plans to expand its regulated asset base by 6.5% annually to approximately $53 billion by 2029 via a $26 billion capital expenditure program targeting transmission, distribution and clean energy projects.
3. Dividend Profile and Leverage
With over 50 consecutive years of dividend increases, Fortis maintains strong investor confidence but carries around $48 billion in debt and displays negative free cash flow coverage of its dividend obligations.
4. Risk Factors
Key risks include potential regulatory pushback on rate hikes as customer bills rise, sensitivity to interest rates and reliance on external financing, along with operational challenges in subsidiaries such as UNS Energy and FortisAlberta.