TC Energy's $40 Billion Power Pivot

The pipeline giant just moved its growth story from U.S. gas corridors to Canadian power projects — and management says the market finally came to its risk preferences.

TRP · Earnings Call · 2026-11-05

A capital program that finally steps out

For the past two years, TC Energy's pitch was discipline: live inside a $6 billion-$7 billion annual capital budget, delever, and prove project execution. The third quarter of 2026 changes the cadence. Comparable EBITDA topped $3 billion, up 13% year over year, and comparable EPS came in at $0.94, up 22%. Management raised 2026 guidance to $11.8 billion-$12 billion and set 2027 at $12.3 billion-$12.5 billion, then extended a 5%-7% comparable EBITDA growth outlook through 2031. Leverage is now expected to exit 2026 at 4.55x-4.6x, below the 4.75x target, creating what management calls investment capacity rather than a constraint. The scale of the opportunity set is the headline: $30 billion of sanctioned and pending approval projects, more than $40 billion in origination, and a plan to spend $8 billion-$10 billion annually from 2029 through 2031. “With today's announcement of $3 billion of new projects, we now have $30 billion of sanctioned and pending approval project spend through 2031, primarily served through the continued conversion of our backlog into low-risk, in-corridor natural gas transmission projects.” — François Poirier, President and Chief Executive Officer · 2026-11-05 That is a meaningful step-up from the old range, but it is not a blank check. Sean O'Donnell framed the bridge to the high end as dependent on converting the origination funnel: “That $6 billion-$12 billion that we're looking for to get to the high end of that range, we're working off of a $40 billion backlog.” — Sean O'Donnell, Executive Vice-President and Chief Financial Officer · 2026-11-05 A 15% conversion ratio gets you to the midpoint; a faster conversion supports more than $9 billion a year. The debt to EBITDA target remains the guardrail.

The real pivot: from U.S. pipes to Canadian power

The bigger change is not the EBITDA range. It is where the growth is coming from. TC Energy has spent years telling investors that its best risk-adjusted returns were in U.S. natural gas pipelines, serving utilities in front of the meter. This quarter, the company put a $15 billion number on Canadian power origination — almost 4 GW, with more than 80% expected to contribute EBITDA before 2031. It expects $500 million-$1 billion of power investment announcements by year-end and says one or two projects could exceed $1 billion. “We could potentially be announcing one or two projects in excess of $1 billion as early as before the end of 2026.” — François Poirier, President and Chief Executive Officer · 2026-11-05 Management insists this is not a risk-appetite change. “Our risk preferences have not changed. What's happened is that the market's appetite and willingness to enter into the type of long-term contracts that fit now within our risk preferences has evolved.” — François Poirier, President and Chief Executive Officer · 2026-11-05 That may be true at the contract level: Greg Grant said TC is targeting return of and on capital inside the contract term, even for 10-year deals, and is looking at combined cycle, simple cycle, and behind-the-meter or grid-connected configurations. But the strategic contrast with prior calls is stark. In February 2026, François Poirier said plainly: “We're not looking at any power project development and ownership behind the meter at this time.” — Francois Poirier, President and Chief Executive Officer · 2026-02-13 And as recently as May 2025, he said “the lion's share of our discretionary capital wants to flow to the US.” — Francois Poirier, President and Chief Executive Officer · 2025-05-01 Now the $40 billion funnel is roughly 50/50 U.S./Canada, with $25 billion in gas and $15 billion in power — and all of the power origination is in Canada. That is a genuine pivot, not just a larger backlog. The anchor is Bruce Power. The MCR program is now expected to bring Unit 4 back online by the end of 2027, almost four months ahead of plan. By the early 2030s, Bruce free cash flow is expected to unlock $2 billion-$3 billion of annual investment capacity for TC Energy. If Bruce C proceeds, the number could get much larger:

We could actually be in excess of $10 billion a year, in a scenario where Bruce Power is proceeding with Bruce C.
François Poirier, President and Chief Executive Officer · 2026-11-05

That is the bull case in one sentence. It also explains why TC is willing to lean into Energy Solutions despite a history of avoiding merchant power risk. The pitch is speed to market — contracted dispatchable generation for customers who need reliable power faster than grid interconnection can deliver it. The power demand theme is everywhere in this reporting season, from utilities to equipment makers, but TC's version is contracted infrastructure, not merchant data-center exposure.

What the tape is saying — and what TC is not

The market's AI and data-center complex has been hit hard over the last 90 and 30 days. Global price action shows data-center semiconductors, optics, and power-adjacent hardware down sharply. TC Energy is not a data-center REIT or a GPU supplier. Its cash flows are 98% rate-regulated or long-term take-or-pay, its customers are investment-grade utilities, and it has 26 consecutive years of dividend growth. That distinction matters if investors are de-rating anything tied to AI power demand. TC's contracts are not merchant; they are the kind of long-duration supply diversity and reliability assets that utilities sign up for. The U.S. gas backbone is still the base. Crossroads project is a $1.8 billion, 1.4 Bcf/d expansion linking Appalachian supply to Midwest demand, underpinned by 20-year take-or-pay contracts. The American Midwest project adds about $400 million of east-to-west capacity on Northern Border. Tina Faraca said Crossroads can be upsized to more than 2 Bcf/d with limited capital. The Columbia Gas system moves roughly 20% of Appalachian production and connects to more than 10 states. This is still the engine, and it is why the 5% low end of the EBITDA range is credible even without new power projects.

The near-term catch

The funding plan is deliberately conservative. O'Donnell said the plan is internally funded: “This is an internally funded plan. No equity, no M&A, no capital rotation needed to achieve this plan if we can deliver as expected.” — Theresa Chen, Analyst · 2026-11-05 That removes the dilution overhang but also means the growth is back-end loaded. The $8 billion-$10 billion annual spend does not really begin until 2029. Before then, TC needs the NGTL investment framework to land. Management is targeting a settlement by the end of Q1 2027; if it fails, it will look at alternative routes, including working with the regulator. That is a harder deadline than prior calls, which spoke more loosely about progress by the end of the year. It is also a reminder that Canadian power and Canadian gas growth still depend on policy and regulatory execution. The project execution record is strong — 95% of projects on or ahead of schedule, recent projects delivered more than 10% under budget — but the power portfolio is new and largely uncontracted. Until those projects are signed and sanctioned, the upper end of the 5%-7% range is a promise, not a backlog. The low end is real. The high end is the option. That is the right way to frame TC Energy today: a de-risked midstream compounder with a newly aggressive Canadian power growth option attached.