ST. JOHN'S, N.L. — Fortis Inc. came out with two big announcements Wednesday, outlining an impending leadership change and its five-year plan for capital infrastructure projects.
President and CEO Barry Perry, who has led the company since 2015, will retire at the end of this year. He's worked for 35 years and been with Fortis for over 20 of those years. Current Fortis chief operating officer and UNS Energy CEO David Hutchens will succeed Perry as the new president and CEO effective Jan. 1, 2021.
Perry described his retirement as a "personal decision" in a news release and referred to it at the start of a conference call Wednesday morning regarding the five-year plan.
"I am honoured and privileged to have served the company for more than 20 years," Perry said in the call. "To say I'm proud of the success of Fortis would be an understatement."
Fortis, headquartered in St. John's, is a regulated corporation with several subsidiary electric and gas utility companies in Canada, the United States and the Caribbean region. Among its properties are Newfoundland Power and Maritime Electric, the principal electric utility for Prince Edward Island.
Perry said the company has stuck to the vision of its late founder Angus Bruneau and added that he has confidence in Hutchens, who he described as "the right choice to lead Fortis into a cleaner energy future" for its customers.
"Our team is best in class, and I know they will continue to guide our utilities to serve customers well and continue to find opportunities to grow."
Hutchens has been with UNS Energy, a Fortis subsidiary, for 25 years and moved up the ranks before becoming its president and CEO in 2014. He became Fortis' executive vice president of western utility operations at the beginning of 2018 and was named its chief operating officer two years later.
Hutchens said his goal will be growth driven by the shift to clean energy.
"I am confident that we will continue to steer our leading North American energy business toward an even better future for our employees, customers, shareholders and planet," he said in the conference call.
Hutchens elaborated on the company's focus in a news release.
"Our continued focus on energy delivery, our effective business model supporting our growth strategy, proven dividend track record and outlook, and our strong ESG (environmental, social and corporate governance) profile make Fortis a premium North American utility," he said, adding that Fortis will remain a Canadian-headquartered company.
Capital plan, emissions target
In a separate announcement Wednesday, Fortis detailed its five-year capital investment plan, which will see $19.6 billion spent between 2021 and 2025.
"The new five-year plan supports our investment-grade credit ratings and dividend growth, providing stability for our shareholders," Perry said in a news release.
For 2020, the company was set to spend $4.3 billion on capital projects and it expects to be on target for that spending figure. Fortis' rate base —the value of property on which a utility can earn a specified rate of return — is expected to grow this year by approximately eight per cent. The company's consolidated rate base is projected to grow from $30.2 billion in 2020 to $36.4 billion in 2023 and $40.3 billion in 2025. This represents three and five-year compound annual growth rates of 6.5 per cent and 6.0 per cent, respectively.
"Our long-term strategy and growth platform remains stronger than ever," Perry said in Wednesday's conference call. "Over the past decade, we've expanded our business into the U.S. with the purchase of three investor-owned utilities, including our largest acquisition, the purchase of ITC (Holdings Corp.) in 2016.
"I'm so happy we acquired the businesses that we did when we did. With our acquisitive chapter behind us, we have successfully transitioned the company to organic growth, which is expected to drive our growth strategy for years to come."
Fortis also announced Wednesday a corporate-wide carbon emissions reduction target of 75 per cent below 2019 levels by 2035. Tucson Electric Power's move to leave behind coal generation and ramp up wind and solar power systems and energy storage systems will reportedly be central to achieving this goal, as will clean energy initiatives at other Fortis utilities.
Fortis' board has declared a common share dividend of $0.505 per share on issued and outstanding fully paid common shares. Those shares will be payable Dec. 1 at the close of business on Nov. 18. The common share dividend value represents a 5.8-per-cent increase over the previous quarterly dividend.
Fortis is listed on the Toronto and New York stock exchanges under the symbol FTS. In mid-afternoon trading Wednesday, it was up 15 cents from Tuesday's close of $52.90 on the Toronto Stock Exchange.
