Fortis Turns the Page: Tilbury LNG Lands a Bigger Bet as Data-Center Load Builds

A steady Q2 masks a company-unique step-change — BC's Order in Council doubles the Tilbury bet — even as Arizona large-load growth rides a sector-wide wave.

FTS · Earnings Call · 2026-07-31

The quarter in one line

Fortis Inc. delivered a characteristically steady second quarter — net earnings of $396 million or $0.78 per share, up $0.02 year over year, with $2.7 billion invested through June and the $5.6 billion annual capital plan on track. Dividend growth of 4%–6% through 2030 and a 7% average annual rate-base CAGR are both intact, and the company's 52-year dividend-growth streak remains a centerpiece of the investment thesis. But the July 31 call was not about the quarter; it was about a project that vaults a large-cap regulated utility into a new, company-unique growth chapter.

The Tilbury step-change

The single biggest new theme this quarter is British Columbia LNG. Last week, FortisBC received an Order in Council approving a larger Phase 1B expansion of the Tilbury LNG facility, lifting total approved investment to roughly $2 billion in regulated rate base — up sharply from about $350 million in the current 5-year plan. Construction could start as early as mid-2027 with in-service as early as 2031.

More recently, we secured a milestone for a significant opportunity above and beyond our 5-year capital plan with the receipt of an Order in Council that supports the expansion of our Tilbury LNG facility in British Columbia.
David Hutchens · 2026-07-31

The contrast with the prior quarter is stark. In February, the CEO demurred on Tilbury expansion: “we don't have anything else to announce right now.” — David Hutchens, President and CEO · 2026-02-12 Four months later, Tilbury 1B is the top new keyword (179 momentum) alongside Tilbury 2 and the Order in Council. FortisBC CEO Roger Dall'Antonia laid out the three covered components — "the marine jetty, the liquefaction expansion as well as 230 kV power line" — and confirmed that “those 3 components are covered by the OIC.” — Roger Dall’Antonia · 2026-07-31 Tilbury 2's storage tank decision is expected "later this fall," while the larger liquefaction (up to 2.5 million tonnes per annum) remains further out and would be "designed with rate benefit." The rate benefit framing is the key to why this matters: LNG marine-fuel sales at the existing Tilbury 1A facility have already provided customers a ~1.5% rate benefit since 2024, and the Eagle Mountain Pipeline is expected to add ~1.5% once in service. This aligns with the affordability theme running across every utility call this season, but it's company-specific — nothing in the global top-75 themes touches LNG bunkering. This is a BC-centered story riding the province's pivot to gas.

Data-center load: riding the sector wave

Arizona is the other growth engine, but here Fortis is firmly part of a sector consensus. TEP continues negotiations for an incremental 300 MW of capacity to support a potential 600 MW build-out at the first site, plus a second site in the 500–700 MW range, with an estimated USD 1.5–2 billion of generation investment if agreements are finalized. The company keyword set shows Project Blue and data center customer both at 138 momentum — solid but not novel. That's because large load is a shared theme among recently reporting peers — DTE flagged "large load agreements," CMS cited "large load customers," and Alliant (LNT) mentioned "large load customers" and data-center development. The confluent signal is so clear that CIBC's Mark Jarvi opened his question by noting "positive commentary from large load with the Michigan LDCs and Alliant in the last couple of days." ITC's Krista Tanner confirmed the approach: “we are really directing them to where there are fewer upgrades needed.” — Krista Tanner · 2026-07-31 On pushback against data centers, the CEO argued the industry story is under-told: “everybody is on the same page that these data centers have to cover their own costs and then some.” — David Hutchens · 2026-07-31

What faded to the backstage

The other telling shift is what dropped off. Prior quarters were dominated by rate-case machinery — "Formula rate," "UNS Gas," "policy statement," "integrated resource plan." The keyword decliners history shows "Formula rate" fell sharply in 20262, along with "funding plan." That's not because the regulatory agenda vanished: the TEP general rate application hearings concluded and a final decision is due by November 17, with Susan Gray noting "we are optimistic that the judge will include the ARAM, the formula rate." Rather, the regulatory groundwork is now a backstage enabler for growth projects, not the headline. Funding is the open question. CFO Jocelyn Perry flagged that Tilbury "is putting good pressure on the amount that we're spending," and “we'll look at all funding options available to us with the aim is to keep our credit metrics in check.” — Jocelyn Perry · 2026-07-31 That answers the prior quarter's stance — “we don't drop those things into our capital plan until we have signatures on the dotted line” — David Hutchens, President and Chief Executive Officer · 2025-11-04 — with a new 5-year capital plan and funding plan expected on the Q3 call. The reframe from "rate case" to "growth project" is the real story: Fortis is positioning itself as a load-growth, project-driven utility at a time when the sector's conversation is dominated by tariffs and AI-driven power demand.