TC Energy's 'Golden Age': Power Demand, AI, and a $20B Origination Backlog

Q2 2026: 12% EBITDA growth, raised guidance, and a pipeline that signals a generational build-out

TRP · Earnings Call · 2026-07-30

A Quarter of Inflection

TC Energy's Q2 2026 results were a resounding affirmation of its strategic bet on natural gas as the bridge fuel for power demand. The company delivered 12% year-over-year comparable EBITDA growth, raised its 2026 outlook to the upper end of the $11.6–11.8B range, and, critically, expanded its capital pipeline to a scale that suggests a generational build-out. “We're capitalizing on the competitive advantages afforded by our incumbent footprint in some of the highest growth markets in North America and converting strong demand into high-return growth projects.” — Francois Poirier, President and Chief Executive Officer · 2026-07-30 The headline: demand growth is no longer just a thesis — it's materializing as data center demand and gas-fired power generation pull record volumes.

The 51 Bcf/d Demand Vision

The company upgraded its North American natural gas demand outlook to ~51 Bcf/d incremental by 2035, a 40% increase over 2025 levels and 11 Bcf/d above its prior forecast. “Accelerating power demand accounts for more than half of this increase and now represents approximately 16 Bcf per day of incremental growth through 2035.” — Francois Poirier, President and Chief Executive Officer · 2026-07-30 Crucially, ~70% of this demand sits in regions where TC is the incumbent operator — the U.S. Heartland, Alberta, and Mexico. The company's U.S. Heartland footprint, with its Columbia, ANR, and Great Lakes systems, is directly in the path of this growth. Management highlighted that nearly 60% of North American gas production by 2035 will originate from basins TC connects, underscoring its strategic position.

Capital Backlog: From $6B to $20B+

The capital story is equally bold. Sanctioned projects year-to-date total ~$3B at a ~12% unlevered IRR. The pending approval bucket grew to ~$7B (up $1B), largely reflecting the Crossroads expansion, which has signed precedent agreements and is slated for FID in Q4. More striking is the origination backlog—now over $20B, with 2/3 tied to power generation. “Nearly 2/3 of our origination backlog is associated with power generation.” — Sean O'Donnell, Executive Vice President and Chief Financial Officer · 2026-07-30 This is a dramatic step-up from the $12B discussed just a year ago, and management now explicitly expects the investment pace to step up in 2029–2030. To fund this, Sean O'Donnell laid out a three-part framework anchored on the 4.75x leverage commitment and the Bruce Power cash flow inflection post-2031. He noted that the final two MCR units complete in 2031–2032, unlocking $2–3B per year of incremental free cash flow.

So we've got this 2- or 3-year window between 2029 and, call it, 2030 or 2031 that we're really solving for to support Tina and Greg. And the hierarchy of funding sources as we look at that 3-year window, '29 to '31 before Bruce really kicks in is, obviously, it's just compounding the EBITDA gains that we're delivering quarter-over-quarter for you.
Sean O'Donnell, Executive Vice President and Chief Financial Officer · 2026-07-30

This is a marked shift from the previous "staying under $6B" conservatism, and it positions TC as one of the few midstream companies with a credible, self-funded growth runway well into the next decade.

Execution Excellence: Bruce, AI, and a Culture of Delivery

The operational beat extends beyond the backlog. Bruce Power returned Unit 3 to service 7 months ahead of schedule and ~15% below Unit 6's cost, delivering 99% availability in Q2. Meanwhile, the company is leveraging AI to optimize pipeline operations — a rare, quantified AI use case in midstream. Francois highlighted the $100M incremental AI EBITDA target for 2026, with proof-of-concept initiatives already running on small segments. “We have proof-of-concept initiatives going across the organization... we only have a near-term target for 2026 of $100 million of AI-related incremental EBITDA, and we're on track for achieving that this year.” — Francois Poirier, President and Chief Executive Officer · 2026-07-30 This ties into a broader theme of growth capital being deployed efficiently — the company has a track record of delivering projects under budget, which funds further growth.

Why It Matters

TC Energy is not just riding the power demand wave; it's building the pipes that enable it. The combination of a build multiple in the 5–7x range, a deepening backlog, and a clear funding path from Bruce's cash flow makes this a rare large-cap story of structurally accelerating growth. The market has taken note — though the stock's muted reaction (not shown here) suggests investors are still discounting the 2030+ capex cadence. If management can convert even half of the $20B origination pipeline into sanctioned projects at the promised returns, TRP's EBITDA could compound well above its 6% guide. The prior quarter's caution about "filling white space" has been replaced by a confident "we have more demand than we can satisfy." Indeed, as Francois said in February, “We haven't turned down a single project because of balance sheet or capital.” — Francois Poirier, President and Chief Executive Officer · 2025-11-08 And as Tina noted with regard to the growing pipeline, “We are continuing to see a deep pipeline of opportunities of all scope and scale.” — Tina Faraca, Executive Vice President and Chief Commercial Officer · 2026-02-13 That discipline, combined with today's growth, is the thesis.