Infrastructure Capex Upside Becoming More Balanced but No Valuation Tailwind

Research evidence excerpt

Infrastructure Capex Upside Becoming More Balanced but No Valuation Tailwind

r support as a national

priority for federal energy policy. We now forecast C$2.1Bn of consolidated capex upside relative Improving backdrop indeed, but still fourth

to the C$28.8Bn plan (vs. C$1.6Bn previously in JEFe). This integrates an incremental C$300Mn in quartile growth at a premium valuation keeps

FY28 and FY29 associated with storage expansion at Tilbury in British Columbia, which is pending us hold. Rate of change in EPS and upside

environmental assessment likely to occur in 2026. Further, we add another C$200Mn of capex in to Street merits watching. It's not just AZ

2030 which reflects the rate base opportunity for marine bunkering and resiliency expansion for outlook but a litany of improving but modest

Tilbury 1B and Phase 2 LNG expansion. We now see 7.9% rate base growth vs. 7% guided, though factors.

the ~30% of the portfolio that is not AZ/ITC/BC still lags most peers.

Setting up the 3Q26 guidance roll-forward: timing of approvals, deals matters. FTS refreshes its

capital plan in late-3Q or with 3Q earnings reporting; each of the last two annual refreshes has seen

rate base growth accelerate ~50bps. Conservatism in FTS's guidance framework likely dictates

Julien Dumoulin-Smith * | Equity Analystthat not all of the upside we see in ITC transmission (~C$400Mn), AZ data centers (~C$1.1Bn, a

+1 (281) 774-2066 | jds@jefferies.com

50% probability weighting of the US$1.5-$2.0Bn upside), and BC (~C$500Mn) will integrate into the

Paul Zimbardo * | Equity Analystplan. It may not be a given to anticipate another +50bps uplift to 7.5%, but expect mid-cycle updates

+1 (212) 778-8497 | pzimbardo@jefferies.com

for some of the larger project-related upside when available.