Canadian Utilities Limited

Canadian Utilities reported Q2 2026 adjusted earnings of CAD 140 million, up from CAD 121 million in Q2 2025. ATCO Energy Systems posted adjusted earnings of CAD 124 million, up CAD 8 million year over year; ATCO EnPower posted CAD 15 million; and ATCO Australia posted CAD 34 million, up CAD 13 million year over year. Cash flow from operating activities increased by CAD 160 million year over year, driven mainly by higher earnings and higher customer rates in gas distribution. For guidance, management reiterated a CAD 12 billion five-year capital program, said it underpins a 6.9% compound annual growth rate, expects Yellowhead Pipeline to enter service in Q4 next year, and said it does not anticipate the need to issue common equity for regulated utility growth.

Bob Myles framed the quarter around the company’s three priorities: growth and prosperity, operational excellence, and financial leadership. He highlighted the early completion of the Central East Transfer-Out project, final approval for Yellowhead Pipeline, and positive regulatory outcomes on rate applications and CWIP treatment as evidence of execution and constructive regulation. He also pointed to additional growth avenues in storage, transmission, interties, and potentially data-center-related infrastructure, while noting the company remains focused on balancing growth with affordability and system reliability.

Katie Patrick emphasized a disciplined financing plan to support growth while preserving balance sheet strength. She said regulated equity needs are expected to be funded through internally generated cash, the CAD 700 million of capital raised in late 2025, and about CAD 850 million of additional capital securities, with no anticipated common equity issuance for regulated utility growth. She also tied Q2 performance to inflation indexing, rate-base growth, and stronger gas-distribution cash flows, noting Australia inflation assumptions of 4.2% in 2026 versus 3.4% in 2025 and that every 10 basis points of higher inflation adds about CAD 1.2 million to earnings.

Analyst John Mould asked where management is spending time on incremental growth beyond challenged power generation, and Bob Myles said the company is focused on gas storage, is evaluating midstream opportunities, and would look to pursue them. Mould also pressed on the difficulty of intertie projects; management said there is still a lot of work to do, but highlighted the McNeill Saskatchewan intertie, northwest Alberta transmission growth, and potential Alberta-B.C. interconnections as priorities. Bob said the B.C.-Alberta intertie may be the lead opportunity, but no firm timeline was given.