Good morning, everyone, and welcome to St. John's, where it all started. I'm pleased that so many of you could join us in person here, and also welcome all the folks who are joining us virtually as well. Just for frame of reference, if you can see Signal Hill, it's a nice day in St. John's. You can see it, we're all set for beautiful weather here. It's so apropos to have this conversation about our 50-year, 50 year of consecutive dividend increases right here. I also know this is looking backwards, and perhaps some of you are interested in looking forwards as well. I think that's what we're gonna do today, is we're gonna o bviously, we celebrated the 50th consecutive year, now let's see where we are going next.
And since we are gonna be looking forward, here's the forward-looking information, that you should review, in conjunction with this presentation and our materials. A couple things of note here. The first is that we are gonna be speaking in Canadian dollars, unless otherwise, mentioned. So sometimes we'll switch between Canadian and U.S. dollars. But the other thing is, we're using a constant FX in our forecast. That's 1.3. That's the same that we used in the last forecast, just so that we're comparing apples to apples. So the agenda today, I'll get us all started up, started talking up our priorities and our growth outlook. Then we're gonna kick it over to talk about our three largest utilities: ITC, UNS Energy, and FortisBC, and how they, fill in that picture.
We'll have a financial update, and then we will have Q&A at the end for both folks in person and those who are attending virtually. Today's speakers, yours truly, as well as Linda from ITC, Susan from UNS, Roger from FortisBC, and of course, Jocelyn will cover the financial pieces at the tail end. Let's start with a real super high-level view of our company. I won't go into great detail 'cause I know so many of you are familiar with our company, but we are a company that consists of 10 regulated utilities across North America, in Canada, the U.S., and the Caribbean. The characteristics of those utilities and our company are important to understand. One, we're 99% regulated, so that's our thing, where we buy regulated utilities, and we grow those regulated utilities.
And now we are very much focused on organically growing those utilities, as you'll see in the presentation today. But we're also primarily an energy delivery company. 93% of our assets are related to the transmission and distribution of electricity and natural gas. Why is that important? Well, I bring that up because that means only 7% is non-T&D-type assets, which are generation, and that's typically where you get the higher environmental footprint. Well, only 5% of our assets are related to fossil generation, and as you'll see, and those of you who have followed us for a while will know, we've got a plan to address those fossil emissions that I'll talk about here in a few minutes. Our company has got two things we're really focused on.
That's being a premium North American utility, and the second is delivering a cleaner energy future. It doesn't get much more straightforward than that. But we do that by specifically focusing on five priority areas. The first is the clean energy transition. Again, you'll see that theme throughout today. You'll see how the clean energy transitions that's happening across North America, in Canada, the U.S., Caribbean, everywhere in the world, as a matter of fact, but specifically in our sector and for our utilities, you'll see how that shines through and how it develops into projects for our capital plan. But that's a good main key driver of our growth opportunities, both in this plan and going forward.
But we also have to balance it with our other priorities: innovation and technology, making sure that we have the right people and culture in our organization, those regulatory relations that are so important in our regulated companies, and of course, our customer and communities. But there's a couple other foundational pieces that I want to talk about, too, because it's really important to understand these on reflecting on our execution, not just the last 50 years, but why we're set up to execute well going forward. The first is our local business model. That's why you have three different CEOs up here who will talk about their subsidiaries in as much detail as you want to hear. We have a local model because that's exactly what we need for the type of businesses that we are.
Regulated utilities need to be in their customers, in their communities, with their customers, their regulators, and other stakeholders. Those decisions that happen in those communities are influenced by those communities, and each of those communities, each one of those companies, has a very different regulatory environment, customer environment, et cetera. So we want to make sure that we are balancing that right by having that local leadership there. But we also bring it up to the Fortis level, and at the Fortis level, we take those 9,200 employees that we have across the entire organization and are able to pick their brain on any topic and get the best answers and use those best practices and share those across our organization. So that's a key part of our foundation of how we execute so well here at Fortis.
A couple other key pieces of that foundation are what I call operational excellence, and the other is governance. Operational excellence is safety and reliability. Look, safety is and always will be our number one priority. The safety of our employees, our customers, our contractors, our communities, that is number one. And close behind it, as we all know, is reliability. As we see, you know, more and more of these extreme weather events, we have to make sure that we're planning accordingly. We're good at that. We're good at safety and reliability because that's all we do. That's the 99%. That's what we do. We run regulated utilities, so we know that business, and we stick to it. The other is around governance. That's, that's such a good metric for how well an organization is run, is how does it test from a governance perspective?
Well, I'm proud to say that our board, the Fortis Inc. Board, was ranked number one out of 226 companies in the S&P/TSX Composite Index for governance in The Globe and Mail's annual Board Games. That's something that's incredibly impressive, and it's impressive, it being number one out of 226 is great in and of itself, but they actually w e have belts and suspenders on governance. We even have that same level of governance down at our subsidiaries. We have independent boards at the majority of our subsidiaries that also provide an additional level of governance. So when you think about two litmus tests for why is a company in our sector doing well, look at safety, reliability, and governance.
Those are, those are very much the, the key things that you should be looking at. So we talked about 50 years. Let's get into some other numbers. This is one that I'm also really proud of, CAD 25 billion. Our new five-year capital plan, released today, is CAD 25 billion. It's a CAD 2.7 billion increase over the last five-year capital plan. That's driving a 6.3% rate base growth. And, you, you got to call out where that growth is coming from. The big portion of that growth, as you'll see on the next slide, half of it is coming from ITC as they tick up their growth rate to 7% over the next five years.
All of this supports, you know, supports our strong 4%-6% dividend growth rate that we also just extended another year through 2028 after we announced our 50th-year dividend today. Let's get down into the breakdown of what's driving that incremental capital. You'll be able to hear a little bit more of these details from the CEOs, because these are the three CEOs who will be speaking. ITC, as I mentioned, half of that increase related to additional transmission projects, mostly around the MISO Long Range Transmission Plan, Tranche 1, also the additional interconnections. UNS is related to the resource transition, up you know $600 million.
FortisBC, up $300 million, related to some clean fuel investments, as well as some general investments in infrastructure like AMI systems, etcetera. The other $400 million that I'll mention is, the majority of that is from Central Hudson, and, you know, that's related to their transmission and distribution investments. New York has a very, I'll say a very aggressive climate action plan, their Climate Leadership and Community Protection Act. It really is driving a lot of investments for Central Hudson and gas there in New York State. I will mention, too, though, that this does not include those of you who have seen some of the announcements around the New York Transco project.
So there, there's a big $3 billion project that was announced, one of the Propel projects in New York. $2 billion of that is going to New York Transco. Well, Central Hudson actually owns 10% of New York Transco, so that 10% is not capital. It's an equity investment in the way that that's formed, so we don't have it in this slide. It's also much later. We don't expect that to come into service until around the 2030 timeframe anyway. Obviously, early days on all that, on figuring out when that money will flow, but wanted to make sure you had that in the back of your mind for full disclosure as well.
The things driving growth are the things that you would expect, the clean energy transition, the capital that we need. Obviously, that's been ramped up or catalyzed by the Inflation Reduction Act, so we're seeing plenty of that across our subsidiaries. Again, things that we need to invest in from a climate adaptation perspective that I'll talk to in a minute, as well as, you know, this is the best, this is the best way you want to see that growth come in, customer growth and economic development. That's, that's the way that we want to be growing our utilities, is seeing that economic development within our footprints, and that's exactly what we're seeing. So at a glance, I'll just talk real briefly about how that CAD 25 billion capital plan is split up.
We like to talk about our major, capital projects, which for us is anything over CAD 200 million, which really isn't all that big when you think of a CAD 25 billion capital plan. It's, you know, less than 1% per project. We have 10 capital projects that, that constitute 18% of our, of our capital plan. The reason we talk about this is to show that that other 82% are small, kind of standard investments. I also want to say that the 18% is standard investments, too. They're just larger. I mean, we've got three transmission projects, we've got two LNG projects, we've got two renewable projects, we've got two gas pipelines, and we got an AMI system in that, in that group of 10. That's all regular stuff.
That's all the things that we know how to invest in and how to develop. The other thing that we like to measure is how much of this money in this capital plan is going towards cleaner, what we call cleaner energy capital. If you remember from the last five-year capital plan, this is up CAD 900 million or, you know, call it rounding to CAD 1 billion of additional cleaner energy capital over the next five years. And those are things like additional transmission investments at ITC, as well as renewable energy investments, and a couple of new cleaner fuel investments. And then, of course, sustaining capital, that's there to tell you about all the rest of the stuff that's not in that 18%.
This is the regular investments that we make on a day-to-day, year-to-year basis to make sure that we're maintaining our system at the right level. And then we always have to rank them, and we want to look at our utilities and see where that growth is. And as I mentioned, ITC is at the top of that 7% growth rate, with FortisBC right behind it at 6.5%. Now, the reason this is important, those are our three largest utilities, so this is a major portion, just those three utilities is a major portion of our capital plan. So to see how that breaks down is important. And then, of course, as you look over the five years, this grows our rate base by CAD 12.6 billion over five years. That's the way to grow.
That organic growth of dollar-for-dollar investments in our regulated infrastructure is the best and safest return for your money as investors. S o let's talk about the rest of it. We're building that capital plan, but what else are we doing from a company's perspective that's important, the things that we need to focus on? We continue to focus on that clean energy transition and delivering that cleaner energy future, and we are still at it. In the first three years since we put out our 75% greenhouse gas reduction goal by 2035, first three years, 29%. We're shutting down the coal plants in Arizona and replacing them with renewable energy and storage. So we have a great track record already in these first three years, and we're on track to continue along that path.
In fact, we were so comfortable after the first couple of years of this goal that we extended it and put in a net zero by 2050 goal, just last year. So these are the things that we continue to focus on. You know, this is very important for us to make sure that we, as a company, are doing our part to reduce emissions. This is also part of that greenhouse or part of our, our strong ESG story, because remember I mentioned that only 5% of our assets are fossil generation. We're talking a lot about 5% of our assets. So this is this really shows us, it shows you, that we're very focused on the clean energy future.
But that's not it, because it's not just enough to reduce the emissions from what we are doing, but we have to make sure that we're planning accordingly for additional, you know, future climate scenarios that we know we're going to see more, severe weather events as we go forward. So how do we plan for that? It's. We have to build that climate adaptation and resiliency into our plans. When you think about looking at future scenarios, across our broad footprint, you know, flash back to that slide that showed our footprint across North America, those are very different. The plans, the scenarios are very different by each jurisdiction. As you might imagine, sitting up here in Newfoundland is quite a bit different weather, quite a bit different system than we would need, say, in Arizona.
So we focus on what we need for, you know, extreme heat waves in Arizona. We talk about, you know, hurricanes, ice storms, whatever it may be. We need to bring in partners, whether they're industry partners and of course, across our own Fortis subsidiaries, to develop these types of plans and scenarios and then work them into our planning on a going-forward basis, work them into the standards that we need to set across our sector. So we're partnering with the likes of EPRI and their Resilience and Adaptation Initiative, which is an industry-wide effort to do just that, to help define and determine what some of those future scenarios would look like, and of course, the standards needed to build our systems on a going-forward basis.
Then we got to figure out how to use technology quite a bit better, too, because all of that ties into it. When whether you're talking about mitigation, preparation, response, or recovery, we need to be making sure we're doing each one of those in the view of what's coming, not what's happened in the past. And that's part of what we're doing from a TCFD perspective, too. We became a supporter of TCFD back in 2021, and we continue running our climate scenarios through that process with our subsidiaries to look at the risks and opportunities that those provide, and then, of course, planning accordingly. So I need to spend some time talking about customer affordability, because this is incredibly important.
When we talk about the clean energy transition, and you look at that graph of our greenhouse gas emissions, and how we're going to reduce those, that takes investments. When we think about resiliency and climate adaptation, that takes investments. How do we make sure that we can manage and execute our capital plan and still keep our customers' rates affordable? Believe me, that's front and center in our company and each one of our jurisdictions. So the things that we focus on, and these, some of these are more obvious than others. We have to maintain a very close control of the operating costs that we can control. That's extremely important. We have to look for efficiency. We have to use technology. Those are things where that business model that I mentioned earlier come into play.
It's the ability to share across our footprint, across our subsidiaries, those best practices so that we can reduce costs as best we can, and of course, while we're maintaining reliability. The other thing that, and I mentioned the, the greenhouse gas reduction story, and that takes capital, but you can't forget that, particularly in the story in Arizona, what are we doing? We're shutting down coal plants, pulling out not only fuel, but O&M. So those are costs that customers are already paying, and we're replacing that with capital. Well, in the best circumstances, you can do that and actually save money or get, get at least close, but there is a large offset. Those are the types of investments that we want to look at, the old standard, you know, CapEx for OpEx kind of investments that every business looks for.
But we have a very obvious target-rich environment as far as parts of our resource portfolio go. The other thing that we need to focus on is how, I mean, our customers manage their bills. We do that, and always have done that for a very long period of time, with energy efficiency, demand-side management programs, et cetera. That's really important. We have to make sure and it's important for us, too, because that limits the amount of infrastructure investments we have to make. We like high, flat load to serve, right? So we have to figure out how to, one, reduce the amount of energy that our customers use, and two, flatten it out so they get a better resource, you know, allocation across our entire footprint.
That's critical, especially as we look at electrification. Well, electrification also can provide a very strong economic benefit to our customers. I mean, whether it's electric vehicles, and that's part that we have to also make sure. There's a big education piece here out for our customers and customers in general in our sector, you know, the investment in, say, electric vehicle. Even though you will see your electric bill go up, and I'll pick a number 'cause I'll use Arizona numbers for my car. And yeah, I'll pay. You know, if I drive 1,000 miles a month, I'll pay, like, $40.
Well, if I drove the same amount in a similar car that was gasoline-powered, it would be 3x, maybe 4 x that, depending on where your gas prices are. Right now, it's 3x, and it looks like it's going to 4 x. So that's the savings we have to make sure that we're celebrating with our customers, and also to make sure that our grid is ready to do that, to make sure that we can bring in that electrification. Bill assistance programs are always important as well. This actually, I'll tie this with the Inflation Reduction Act. When there's federal dollars out there, when there's any type of assistance, money out there for our customers, we wanna make sure we help them get it. We pass through Inflation Reduction Act dollars.
We look for LIHEAP money down in the U.S. and other dollars that are available for our customers, and we make sure that the customers that are- that have the need for that- those dollars gets it. A couple other initiatives that I think are well worth talking about as well. One is the Energy Imbalance Market. When we at UNS joined that Energy Imbalance Market, I don't think people really understand that the whole reason we were doing that was on the behalf of our customers. What we do is we get a better, more efficient generation dispatch. We save money, and we pass that directly through to our customers through the Purchased Power and Fuel Adjustment Clause that they have. So this is ways that we can hopefully help mitigate and, you know, maybe stabilize prices.
That, and hedging activities that we do at several of our subsidiaries, those are important for us to stabilize our customers' rates. And lastly, I'll leave you with this slide. We started with the video. This is something we're extremely, extremely proud of on that track record, but the whole point of this slide and the whole point of this conversation today is we're not done yet. So let me turn this over to Linda, and she's gonna talk about ITC.
Well, thank you, Dave, and good morning, everyone. It is great to be back in person for our Investor Day. For those of you that maybe perhaps aren't as familiar with ITC, let me just provide a little bit of background in terms of where our assets are and the size and scope of ITC. We are the nation's largest standalone independent transmission company, and our assets are in eight states, predominantly in the Midwest and Great Plains region, with the predominance of our assets in Michigan and Iowa. For ITC, you know, we are recognized as one of the largest transmission load-serving entities in the country. We serve almost 23,000 MW of peak energy demand, with almost 26,000 km of high-voltage electric transmission.
We're a little bit different than most public utilities that you may be familiar with, that may be, you know, regulated at the state or provincial level. ITC, because it is an independent, standalone transmission company, we're regulated from a rate perspective solely by the Federal Energy Regulatory Commission. We obviously enjoy a forward-looking formula rate that has an annual true-up mechanism, and so we obviously get recovery either of costs that we have under-recovered, or obviously, we refund back to customers in the event that we have over-recovered. From our perspective, our regulatory construct essentially provides us with real-time recovery of our expenditures and certainly is a premier model in terms of our ability to continue to recover the costs and make the needed investments in our transmission infrastructure.
Our MISO operating companies have a 10.77% ROE, and our ITC Great Plains subsidiary has an 11.41% return on equity. All of our operating companies have a 60% equity component. Before I jump into the details of our five-year plan, I thought it'd be important if I just maybe take a step back and sort of set the stage for our new five-year plan. You know, this five-year plan, it didn't just sort of happen, you know, several months ago when all of our planners and finance folks... This really is a culmination of years, if not a decade of work.
From our sort of holistic transmission planning perspective, to all of our regulatory and advocacy work that has helped to drive, you know, a constructive policy environment, you know, our five-year plan is really a reflection of all the hard work and effort of all of our employees, as well as our philosophy and mindset. But certainly, this plan also reflects, you know, a culmination of factors in the broader marketplace. Certainly, as we all know, transmission, as I say, it's a great time to be in the transmission business, you know, as we recognize that it is the key facilitator and enabler to our clean energy future.
And certainly, as we think about the policy reforms that I mentioned, you know, we're also seeing positive economic development in our footprints that are also driving the need for new transmission investment. And then, of course, the ongoing need for continued investment to focus on reliability, resiliency, and security of our grid. ITC prides itself on its ability to holistically plan and identify transmission opportunities. But more importantly, we pride ourselves on our ability to continue to execute and deliver on the plans that we put forth. Obviously, like any other business, we continue to be very focused on challenges that present themselves along the way. And this plan, this five-year plan, is no different. Obviously, we have a strong pipeline of transmission projects, both near-term and long-term, and sustaining our growth comes from delivering fundamental value to our customers and our shareholders.
But it's our ongoing capital projects, like our baseline reliability projects, our LRTPs, and our generator interconnections, that drive and comprise our new five-year plan. One of the things I think that, you know, we think of in terms of ITC is really our strategic footprint and geography. You know, we are located in sort of the, you know, wind-rich regions of the country. We participate in very constructive, progressive RTOs. As I said, you know, we're starting to realize a lot of economic development in our footprints that drive the need for transmission. And so when you take all of our y ou know, sort of take our geography, our membership, our holistic transmission planning perspective, you know, we see ourselves, you know, continuing to, you know, obviously propel ourselves into the future in terms of delivering on this country's energy goals.
Of course, you know, as we always do, you know, we're very focused on managing the current challenges and hurdles that present themselves. And for us, and obviously as we talk about our key for, of course, this five-year plan is going to continue to be on execution. But certainly, we have to continue to remain focused, remain vigilant, be proactive, in terms of continuing to manage the remaining open FERC matters that lie before us, managing our way through the ROFR issues, our competitive bidding, and obviously, as Dave talked about, too, customer affordability. Well, this is our moment, and I would say, certainly a wow moment, for ITC.
As Dave highlighted, you know, today we're rolling out ITC's largest capital plan ever, with $7.2 billion in capital investment over the five years. That equates to, on average, $1.4 billion a year in average annual capital spend. This plan is also a $1.4 billion increase over the prior year plan and reflects a 100% increase from the capital plan that we unveiled back in 2018. That is a wow moment, and certainly why we're so focused on being able to continue to execute and deliver. Consistent with prior plans, our capital plan is premised on similar drivers of growth: obviously, infrastructure investments, such as baseline reliability projects, upgrades, and asset renewals, generator and load interconnections, the LRTP Tranche 1 projects, and ultimately, and grid security.
This year-over-year increase in our capital plan primarily reflects increase in spend in three categories. It's a roll forward of our capital in our LRTP Tranche 1 projects, it's an increase in our baseline reliability projects, and it's increase in spend associated with our customer load interconnections. This $7.2 billion five-year plan reflects a 7% annual compounded growth rate in rate base and reflects a 100 basis point increase in the rate base CAGR over last year. Certainly, we're excited about this plan, and as I mentioned, all efforts are focused on continuing to execute this plan and deliver the value in this five-year plan. To break down the components of this five-year plan, let me take each of these sort of one by one.
As I talked about, sort of reliability and grid modernization, that category comprises $3.9 billion of our five-year plan. Oops, sorry about that. Jumping ahead. This is $3.9 billion of our five-year plan. Obviously, as I mentioned, you know, we continue to see significant needs on our system for day-to-day investment in terms of improving reliability, upgrading our infrastructure. As the system continues to change with interconnection of new generation, new demands, and certainly weather events, you know, we continue to see more and more needs for investment on our system at the baseline reliability level. As I mentioned, certainly from a weather perspective, obviously, we're all familiar with the significant weather events, and certainly our systems have not been immune to that.
You know, we have seen tornadoes, derechos, ice storms, wind storms, and certainly, as we think about the future and as we think about our five-year plan, and as we think about moving forward, you know, more and more of our focus is on how can we adapt our transmission planning standards. For example, you know, obviously accelerating wood pole replacements, as we think about different size or different type of conductors for the weather conditions, or perhaps needing to relocate substations out of flood-prone areas, just to name a few. So these types of perspectives, as we face the realities and the demands on our grid, will continue to be front and center as we continue to plan the grid at ITC.
As I mentioned, as we roll forward our Tranche 1, our MISO Tranche 1 projects, the MISO LRTP Tranche 1 reflects as, reflects... Sorry. The Canadian dollars are getting me. Reflects an increase of CAD 1.5 billion in these projects, my apologies, which is a CAD 600 million addition to the plan over last year's plan for the LRTP projects. If you recall, we've previously indicated that we anticipate that the total cost of the LRTP projects will be approximately $1.4 billion-$1.8 billion, and we still continue to maintain that forecast.
Our teams in Michigan and Iowa are hard at work and actively engaged in continuing to drive the deployment of these LRTP projects. We are still in the phases of siting, land acquisition, seeking regulatory approvals, and engineering work, but the teams are very much hard at work. The third key component of our plan is our renewable interconnections. This five-year plan includes CAD 900 million for renewable interconnections. Renewable energy deployment has seen unprecedented demand for generator interconnections, with almost a 100% increase in interconnection queues in our footprints over 2022. The renewable interconnections in our plan reflects approximately 7,000 megawatts of renewable integration across our footprint and reflects our customers' Integrated Resource Plans, signed interconnection agreements, and other anticipated interconnection agreements.
As I mentioned earlier, our geography is optimal for renewable energy deployment and already reflects 10,000 MW of interconnected renewable resources in our footprints. Given our independent transmission business model, we pride ourselves that we interconnect generators on average five months faster than any other transmission owner in the MISO region. Our final category of our plan reflects $600 million in capital investment associated with transmission to interconnect new industrial load. As I mentioned, both Michigan and Iowa are experiencing unprecedented economic development announcements and projects. Michigan is seeing major project and site announcements for EV battery investment and chip manufacturing to support, obviously, the auto industry transition to EVs. In Iowa, in our footprint, we are seeing economic development projects for data centers and to pursue green hydrogen investments. Clearly, we welcome these projects in our footprint.
These are the best types of capital investment that we can get because it helps to continue to drive load and ultimately spread the costs over more customers, so it helps to lower rates. So we're really excited about the economic development and obviously our participation in those processes. While we have a robust financial five-year plan, our work, our efforts, our focus does not stop there. As you all know, we have a proven track record of capital execution and a long-term pipeline of transmission investment to benefit our customers. As we think about opportunities beyond this five-year plan, in the near term, we're continued to be focused and participate and continue to pursue economic development opportunities like those that I mentioned.
Also, given obviously the impacts of the Inflation Reduction Act, as well as the generator interconnection queues, generator interconnection queue reform, you know, we anticipate that we will continue to see significant drive for more generator interconnections to connect more and more renewable resources. And obviously, we are well-poised and well-positioned to interconnect expeditiously on those projects. The MISO LRTP Tranche 2, we expect MISO to continue their study analysis with ultimately projects that will be announced or unveiled. It's difficult to know exactly when those will be announced. We anticipate either by year-end or early next year, and we continue to anticipate that the MISO Board will approve a Tranche 2 portfolio of projects in the middle of next year.
You know, MISO has indicated that they continue to believe that the Tranche 2 project portfolio will be 2x-3x times larger than Tranche 1. While it is premature for us to know exactly what projects might be in ITC footprints, we do anticipate that there will be some projects that will be located within our ITC footprints. Of course, out in the outer years, you know, we continue to, you know, based on our view, our holistic transmission planning efforts, we really do see opportunities to drive interregional transmission projects. These would be projects that intertie between RTOs, either for the benefit of regional transmission or in order to facilitate the interconnection of more renewables.
We're working diligently with both MISO and SPP on projects that are referred to as JTIQ projects, and that we are hopeful that the projects will be realized in the future with SPP. So we see those as longer-term opportunities. And then, of course, we're always opportunistic around other transmission opportunities, and we continue to remain diligent and focused on the marketplace and other opportunities that may transpire. Certainly, Dave touched on this, and certainly first and foremost on our mind at ITC is customer value and affordability. You know, ultimately, it's so easy to be focused on the cost of transmission on that side of the equation. But perhaps what's even more important is the value that investment in transmission brings to customers.
And so we have doubled down on our efforts this year to be focused on identifying, communicating, articulating, calculating, the value that investment in high-voltage transmission brings. We certainly know that obviously in, you know, having a robust, regional, reliable transmission infrastructure can enable access to lower-cost generation resources, as well as allow the dispatch of more efficient energy resources. And of course, that's an important part as you think about when you look at the total bill, that a customer receives, not just focused on the transmission component. And obviously, as we think about the MISO LRTP projects, based on MISO's modeling, LRTP Tranche 1 projects are expected to produce, you know, over $17 billion of avoided localized generation costs by bringing more efficient, cheaper generation online, and up to $37 billion in total benefits.
That's for a project portfolio that costs $10 billion, and so you can see the leveraging impact that the investment in transmission has. Also at ITC, we have our own innovative tool. We refer to it as our Market Analysis and Congestion Evaluation tool, and it monitors and mitigates congestion in our own footprints by, for example, looking at how we schedule outages, timing of outages, and how quickly we can restore service. So to date, we've experienced over $600 million in identified savings through this tool. But it just, I think, helps to demonstrate and amplify our continued need for investment in transmission to continue to drive value to customers. Obviously, at ITC, we're very focused on our cost management practices.
We are well under the inflation in terms of our O&M and A&G costs, and we continue to find every opportunity to save dollars and drive cost containment practices across our business. We're even looking for federal grant opportunities under the IIJA to help offset the cost of transmission for the benefit of our customers. As I mentioned, we're gonna continue to be actively engaged with all of our economic development agencies to find new opportunities for economic development. We're absolutely convinced that many of the plants, the announcements have been a result of our top quartile, and in some cases, top decile, operating performance in our footprints.
So with all of that being said, and in summary, let me just say is that as we embark on our largest, most aggressive five-year plan ever, I'm just also reminded of how critical and how significant our role is in meeting our future energy goals. Transmission is the key enabler, the key facilitator to realize our clean energy future. Transmission is the key for other industries and companies to achieve their clean energy goals. Transmission's the key to electrify our transportation sector, and every day, transmission's the key to delivering safe, secure, reliable, and affordable power. Certainly, our place and position is profound, and the opportunity and our ability to execute on this plan has never been so critical.
We are well-positioned now and into the future through our geography in wind-rich regions, are the favorable RTOs that we belong to, our economic development opportunities, our best-in-class performance, and our track record of execution, results, and performance. So with that, I'm gonna turn it over to Susan, and thank you so much.
Well, good morning, and thank you, Linda. Adjust the microphone here. Well, good morning. It's great to be here. Great to see everybody in person. This is my first Investor Day, so excited to be part of it. Do the slide here. So just to give an overview of UNS, we're a vertically integrated electric and gas utility in Arizona, and that includes our largest subsidiary, which is Tucson Electric Power, which is a vertically integrated electric utility. We also have two smaller utilities, UNS Electric and UNS Gas. We serve about 700,000 customers in Arizona, and we're largely regulated by the Arizona Corporation Commission, as well as which has, as you probably know, historical rate mechanisms. Also, our transmission assets are regulated by FERC.
So with a rate base that's expected to reach nearly $7.6 billion next year, that puts us at about 20% of the total Fortis rate base. At UNS, we are keenly focused on exiting coal, particularly at TEP, and transitioning to a clean energy future. But there's more to our story. I'd like to share how we're focusing on our core utility business through operational excellence, through promoting economic development in our service territory, by investing in infrastructure to ensure our reliable service, and maintaining a strong local community presence. All of these are key to our strategy.
Today, I'd like to share some of our key initiatives to talk about the drivers of our capital growth, as well as some of the trends we're seeing locally in terms of, of that growth, and also some regional economic development and the improving regulatory environment. I'd also like to talk about how the Inflation Reduction Act is going to benefit our utilities and our customers in Arizona. Over the next five years, UNS is investing $5.2 billion in our systems. Again, that's our, our largest capital plan at UNS as well. This capital plan includes over $2 billion for energy resources, which includes energy storage, renewables, and other investments that are associated with our exit from coal. Additionally, we have planned $1.4 billion of distribution infrastructure, which is focused on resiliency and modernization of our grid.
We're also expected to invest CAD 1 billion in transmission, with the remainder planned for IT, general, and other capital investments. So this CAD 5.2 billion capital plan represents a CAD 600 million increase over last year's plan, which is a 13% increase. And at a high level, the drivers are growth. We know we've seen some increased needs for energy resources as we're exiting coal, but also meeting new capacity needs, which I'll, I'll talk about later in terms of customer growth and economic development in the region. So in aggregate, we expect our rate base will increase from CAD 7.2 billion today to CAD 9.5 billion in 2028, which is a 6% average annual growth rate over the period.
While some of this rate base is subject to regulatory lag, over 90% of it is already in our 2023 rate base. Further, the $1 million that we'll be spending on transmission, of course, is subject to FERC regulation, which is not subject to regulatory lag. Let's talk about growth. We've seen some strong customer growth at TEP, with a trend upwards of over about 1%, and we're seeing strong regional growth for all of our utilities. TEP continues to experience growth in terms of peak demand, and we expect to see that going forward as well. We're also seeing regional economic growth, and at UNS, we're really focused on how we can facilitate economic development, how we can attract new businesses and expansion.
Part of that is making sure that we have the workforce that can accommodate that growth, and so investing in workforce development as well as regional partnerships. In fact, we're seeing a variety of segments that are augmenting the growth in this region, and that ranges from mining to battery manufacturing, to EVs, and other business segments that are really accelerated or supported by the Inflation Reduction Act. So as shown on this slide, we're highlighting some of our larger projects that are coming online. The American Battery Factory is a gigafactory that we're building in Tucson, and that's expected to be 100 megawatts of load. As well, we've got the Hermosa Mine down near the border in our UniSource Electric territory, and this is a mine that will provide zinc, lead, and silver to support all things of electrification.
So as we're seeing this customer growth trend and the regional economic development, we're recognizing that this is gonna require quite a bit of investment in our systems. So that's all of our systems: distribution, transmission, as well as our energy resources. So we talk about this clean energy future, and that's a big part of what we're focused on here at UNS, and TEP is certainly at the forefront of that. So while our current business plan is based on the 2020 Integrated Resource Plan, I'd like to highlight that we're in the works of finalizing our 2023 Integrated Resource Plan, which will be filed in November. But based on this 2020 Integrated Resource Plan, we're assuming that over the next five years, we're going to invest in 1,000 MW of owned generation.
Now, compared to the 2023 to 2027 capital plan, that represents a 600-MW increase in our owned generation. But this is subject to change, of course, as we finalize the 2023 plan, the Integrated Resource Plan, as well as all of our projects have to go through an all-source RFP process. So these investments will help ensure that we do make this exit from coal as we make our clean energy transition, which includes our next major coal plant closure, which is Springerville Unit 1, which is a 387-MW coal unit, and that will happen in 2027. But we wanna make sure that we're doing all of this in a way that supports safe, reliable, and affordable service for our customers throughout the transition. So let's talk about tax incentives.
We've seen with the passage of the Inflation Reduction Act in 2022, that there's been an extension and an expansion of tax credits that are really expected to be beneficial for our customers, and at the same time, have leveled the playing field for utilities so that we can compete and actually invest in some of these projects. So from a UNS perspective, we anticipate that the tax incentives are actually going to help us kind of fill that gap with regulatory lag, so that we can start recovering on our investments sooner, as well as overall, of course, lowering the taxes that we'll pay over the life of a project. Additionally, as I mentioned, we'll be able to compete for these projects because the build-to-own tax incentives are transferable.
From a customer lens, this is all great news because you've got the investment tax credits, which are available for battery storage, solar and wind projects, and the production tax credits for solar and wind projects. All of those tax incentives are going to help lower our customer bills. For the investment tax credits, we're expected to—it'll reduce the rate base, of course, as we build these projects. Take, for instance, a project that we're on the verge of signing contracts for. As part of this all source RFP process, we're signing a contract with an EPC to build out a 200 MW battery storage project for TEP, which will be owned and operated by TEP. As we build that project, it goes into service in mid-2025.
We expect by 2028 that we'll accumulate $100 million of investment tax credits that get passed, of course, to our customers. And with respect to the production tax credits, we'll be able to reduce the cost of service for the energy that we're providing to our customers. So, for example, our 250-MW Oso Grande Wind Project that went into service a couple of years ago, we're expecting to realize anywhere from $20 million-$25 million in production tax credits annually, which will be passed on as savings to our customers in reducing their bills. So what's next? Beyond this five-year capital plan, we're expecting to continue to see growth that's obviously supportive of our clean energy transition, and in meeting the demands of our customers and this growth that we're seeing in our territory.
So that growth will be sustainable through 2035. Notably, I mentioned our 2023 Integrated Resource Plan that we're gonna file in just a couple of months here. We're expecting to see additional capacity needs beyond what we've seen in our previous plans. And that's, you know, after we close Springerville Unit 1 in 2027, which is part of the original plan, but we're now seeing growth in the area as well as the market, the liquidity of the market just isn't there, and so we need to make up that difference. So while we're still assessing the impacts, our initial take is that it could be upwards of between 500 and 1,000 megawatts of incremental capacity that's gonna be required.
Our team's, of course, still evaluating the energy resource options and all of this in the framework of our commitment to provide safe, reliable, and affordable service for our customers. But beyond 2028, we see that there's an incremental investment opportunity between $2 billion and $4 billion through 2035. So in Arizona, as a fully regulated utility, we're cautiously optimistic about the positive regulatory tone that we've seen from our regulators. We've always had good relationships and achieved good outcomes or constructive outcomes with the ACC, but we're, you know, we're seeing some improvement on several fronts. So first, we're seeing timely decisions, which is so important.
We're also seeing support for timely recovery of our fuel and purchase power costs, as we saw through this last rate case and our purchase power and fuel adjustment clause was challenged, but ultimately supported in that decision. Last but not least, we received a balanced outcome for our rate case with TEP just a couple weeks ago. So just to talk about a few things that are, you know, the major components of that rate case, we had a $900 million rate base increase approved, and that translates into a $100 million of non-fuel revenue increase. We also saw our ROE go up from 9.15% to 9.55%, and an equity thickness of 54%, which is up a little bit from our last rate case.
So to conclude, we are a dynamically, vertically integrated utility. We have a really strong five-year capital plan. We're able to execute on that plan, and all of this is permitting us to make our clean energy transition, to exit from coal, and to meet our carbon reduction targets that we are strongly committed to. And we wanna do all of this in a way, of course, that we can provide safe, reliable service, and maintain affordability for our customers. So with that, I'll turn this over to Roger.
Thanks, Susan. Morning, everyone. Good to see so many faces after a few years away, and, special thanks for those on Vancouver time.
Who were up very early today and who are participating. Yes, Maurice, hopefully your flight was easy yesterday. So just, we'll quickly go through what's going on in BC. For those who don't know BC as well, though most of you do, it is a vertically integrated electric utility, as well as a gas utility, where about 75% of our customers and our assets are on the gas side and 25% on the electric side. On the gas side, we are both transmission and distribution as well. We have about 51,000 kilometers of natural gas transmission distribution lines and 7,300 kilometers of electric T&D lines. We also run two LNG facilities on Vancouver—one on Vancouver Island and one on the mainland of Vancouver.
And we are the largest energy provider, end-use energy provider in the province on an annualized basis. BCUC is our utility regulator in BC. So it is a dynamic jurisdiction on many fronts. We'll talk a little bit more in a bit on the policy direction of BC, but we do have a number of key initiatives over the next five years. Key to that is execution of our capital plan. We'll talk a little bit about that. We do have a fairly heavy regulatory agenda. We are working on filing our next multi-year rate plan, hopefully looking for a five-year rate plan there.
We have a number of major capital projects still in front of the regulator, the Okanagan Capacity Upgrade Project, as well as the Tilbury tank expansion, and obviously working with the government as they take the CleanBC policy and turn it into legislation and regulation over the next few years. And as well, BC is at the forefront of indigenous reconciliation, so we have a very big footprint working with a number of indigenous communities across our province. Again, we have a fairly strong growth plan, much of that focused on transition, energy transition to lower carbon solutions, but also quite a bit focused on reliability, resiliency, system adaptation. As well, we have a fairly big number of capital projects, major capital projects, including advancing some LNG opportunities.
As far as locally, what's going on in BC, again, CleanBC Roadmap, we'll talk a little bit more about that. That's a fairly, significant piece of policy in BC. We see a number of indigenous communities, focused on participating in, energy projects. We signed last year, an equity investment option with the Musqueam Indian Band for our expansion of our Tilbury LNG site. We have a number of, agreements across the province with indigenous communities who are participating in one way or the other on energy projects. We'll get into a little bit on the Electrify City of Kelowna case study, which I think is an interesting study to understand, energy transition from a jurisdictional perspective.
From a macro perspective, what we're seeing really, is much the same as everyone else is seeing: inflation, customer affordability, focus. As well, we are just over a year out from the next provincial election, which will focus the policymakers on these issues even more. Just quickly, we finally got our cost of capital outcome a couple of weeks ago. We were in that process for a couple of years. It was a generic cost of capital. It's got a number of stages to it. The first stage was dealing with the cost of capital for FortisBC Energy, as well as FortisBC Inc., the gas and electric utility. We got a good decision, I think, on the ROE front, 9.65% for both utilities.
That really reflects market conditions that we've seen over the last number of years. Equity thickness, a fairly good increase for FortisBC from 38.5% to 45%, and increase of 40%-41% for the electric side. That's really driven by the business risk that we're seeing in BC. On the gas side, it is with energy transition, we are at the forefront of significant change, so business risk from a policy perspective. But as well, for both gas and electric, energy transition is gonna require significant infrastructure investment. That's not getting any easier in BC, with indigenous rights and titles.
That is an opportunity, but it does add an additional risk, as well as just generally the pathway to get energy infrastructure projects approved have been becoming more difficult over time. So I think it's the regulator recognizing that there has been a shift in business risk, so I think it's a fair decision that reflects the operations, the operating context in BC. So just I'm gonna spend a little bit of time on the policy environment in BC, and I think it's really important to think about energy transition based on the jurisdiction that you operate in. I think a lot of times you hear about energy transition, you hear about how cheap solar and wind is, you hear about the role renewables is gonna play, and that's all true.
But I also think you have to understand the jurisdiction and the energy systems incumbent in that jurisdiction when you're talking about energy transition. So, in BC, if you take an annualized basis, BC Hydro and ourselves, gas and electric combined, we're similar in what we deliver over an annualized basis. We deliver a little bit more energy. But when you look at winter peak load, which BC is still a winter peaking system, taking two data points, December, coldest day in December of 2022, BC Hydro set an all-time winter peak on the hour of December 27,th it was about 10,900 megawatts. The gas system on an electric equivalent that same day, that same hour, delivered about 20,000 megawatts of energy equivalent.
You go to 2022, we had a fairly cold three-day period before Christmas. Pretty much everyone did, if you remember the winter storms of 2022 and trying to travel in that time frame. But, you know, BC Hydro set another peak record for winter. It was about 10,950 megawatts. It was about 40 megawatts-50 megawatts higher than the previous year's peak. At that same hour on December 24th, we delivered close to 21,000 megawatts in energy. It was about 1,000 megawatts more than the previous year's peak. So when you think about what you're trying to solve in energy transition, there is an energy aspect to it, but there's a significant capacity and peak energy aspect.
That's where, from our perspective, we're really focused on, you know, four ways to help decarbonize. One is, you know, broadly speaking, significant focus on energy conservation, bringing overall energy use down. We see the gas delivery system as critical to energy transition, so we're looking at expanding renewable and low-carbon energy offerings in the form of renewable natural gas, eventually hydrogen, syngas, lignin-based fuels. Obviously, a big focus on electric vehicles. BC, I think, is the fastest-growing... well, it's the highest rate of penetration of electric vehicles in Canada, up there, top three for sure in North America, as well as looking at options for RNG in transportation for heavy duty, as well as hydrogen, and then obviously, using LNG for marine fuel decarbonization.
So from our perspective, you know, we're really trying to look at how do you decarbonize energy, but make sure that the system is there for peak energy delivery, and that's something that is not as easy to transition away from when you think about how the system actually works. Our capital plan, CAD 4.9 billion. It's up CAD 300 million from the last capital plan. That CAD 300 million increase is really focused on three areas. We do have increase in some of our major projects just through, you know, project refinement as we get closer to building those projects. We've had an increase in some of our LNG projects around Tilbury, and we do have some more investment focused on lower carbon energy solutions.
The plan itself, just over half of it, about CAD 2.6 billion of it, is really focused on system reliability, resiliency, integrity, dealing with climate, adaptation, and mitigation. Then we have a significant component focused on LNG-related projects and then our sustainment capital. Overall, 6.5% growth rate on the capital plan. So just back to the policy environment. So CleanBC is the sort of flagship policy in British Columbia. It was introduced in October 2021, so just about two years ago. It hasn't yet been turned into specific regulation. There are a number of policy pieces coming out of CleanBC.
You know, BC, as a jurisdiction, has always been at the forefront of climate change, first jurisdiction in North America to have a carbon tax, one of the first to have legislated GHG reduction targets. So it's not something that's new for us in BC dealing with ambition on climate from policymakers. Clean BC is the so provincially, it's 40% reduction in 2030 compared to 2007 baseline levels, and then 80% by 2050. That 80% target, we expect to be moving to a net zero target with this government in the next year, but it has not yet been announced. But our focus right now with Clean BC is really just 2030. So Clean BC has introduced a number of pieces there to get to this level.
The main one for us is the Greenhouse Gas Reduction Standard, and it's really a cap on gas utility customer emissions. On a blend basis across the sectors we serve, it's about a 47% reduction by 2030. When that was announced in 2021, just previous to that, three months earlier in July or June or July of 2021, we worked with the government and announced the Greenhouse Gas Reduction Regulation, and that allowed us to acquire up to 15% of our gas throughput from renewable gases, RNG with landfill, wastewater treatment, agricultural waste, but also hydrogen, and syngas. So that's about 30 petajoules of throughput. By 2030, we're at around 18 petajoules, 31 agreements, so we're just over halfway there.
We've got some opportunities in the pipeline as well on future contracting, and we're starting to look at hydrogen. So paired up with an emissions cap, the government does recognize the value of the system, so looking for us to be able to bring on more and more lower carbon gaseous fuels. And I think any credible plan to 2050 does see gaseous energy as critical to energy transition. I think the challenge isn't so much 2050, it's really about what can you do in the next 6.5 years with 2030 targets coming at us very quickly. The last piece is you're hearing a lot about bans, for lack of a better word. In BC, they're not quite bans on natural gas.
There's been some municipalities who've raised that idea. What the BC government has done is introduced fairly aggressive building codes and standards, and they've deferred those to the municipalities to adopt those anytime before 2030. Some municipalities are moving that timeframe up, and effectively, it's a very low carbon intensity envelope for buildings. The way you get there is obviously electrification, but we're also looking at things like hybrid heating system. We're looking at renewable gas as the fuel to meet the carbon intensity level of the highest Step Code of the building standard. All that's to say is that we're fairly active with the government. Our pathway to address this again is expanded energy efficiency. We just filed an application with the BCUC.
The next four years, about CAD 600 million of energy efficiency spending in the gas utility. Again, focused on hitting that 30% renewable gas target by 2030. Further expansion in both electric vehicle, but also hard to decarbonize heavy-duty fleet with hydrogen, RNG, other gaseous energy. And finally, waiting for a decision on our Tilbury Jetty to expand our marine fueling opportunities with LNG in the Port of Vancouver. So as part of our proof point, if you will, on how we're going to approach clean energy transition, we are the gas and electric service provider in the city of Kelowna. So for those that don't know BC that well, it's a city of about 150,000 people in the interior of British Columbia. Again, we are the gas and electric service provider.
We have about 40,000 gas customers, which is a meter at a house, and about 66,000 electric customers. So basically cover the city. We have the consumption data for both gas and electric customers on a daily basis, so we overlay that into a single model, and we looked at the energy use based on temperature over a 365-day period. We then modelled heat pump efficiency at different temperature points based on the latest heat pump technology. And what we've seen, and this shouldn't surprise anybody who has a heat pump who lives in a cold climate. I see some people smiling as they grab their sweaters. You know, heat pumps are great, -10 degrees, -15 degrees , they still work fairly well.
But for those really cold days, which we have in BC., we had, you know, -26 degrees Celsius at the Kelowna Airport last year for three days. Heat pumps basically drop off, and they're, you know, they're a baseboard. So what we saw in our modeling is that on an annualized basis, heat pumps are great. They reduced our overall energy use. But in the city of Kelowna, our winter peak is about 350 megawatts. Our gas peak is closer to 900 megawatts on an equivalent basis. When you run this scenario with zero gas, you see the electric peak with current heat pump technology go from about 350 megawatts-400 megawatts closer to 1,300 megawatts , so a tripling. So when you think about an annualized energy basis, the energy transition is fine. It's a one-to-one.
When you look at a peak energy transition, it's more like 2x-3 x, and that's where infrastructure becomes critical to solving the energy transition issue. For us in Kelowna, you'd be looking at, you know, very preliminary estimates of infrastructure spending on generation, as well as transmission capacity, probably close to CAD 2 billion to solve this situation for, you know, a city of a couple hundred thousand people. So you extrapolate that across a jurisdiction, especially one that has a winter peaking system, you start to understand why infrastructure becomes critical. And we think that the gaseous energy system still has a critical role to play in energy transition.
Even though we may be having less throughput, we think the way we can manage the overall system needs, gas and electric, on an integrated basis, will be critical to meeting the provincial climate ambition. So just finally, last slide, just beyond the capital plan. Again, we are looking to expand renewable natural gas, then into hydrogen. We are looking at a couple of test sites for an industrial site, closed-loop system, as well as a small residential test site for hydrogen over the next couple of years. We are looking at potential further expansion of liquefaction at Tilbury for marine fueling. And then finally, the Pacific Northwest is becoming market-constrained for natural gas at the Sumas border.
So we are looking at whether there's an opportunity to expand transmission capacity in the region. That's still a few years off, but it's something that we went to the BCUC last year. We got a deferral account approved to allow us to spend some pre-feasibility work, consultation, analysis on what a new route might look like to bring gas into the Lower Mainland, into that constrained market. At that point, I'm going to invite Jocelyn up. Thank you.
Thank you, Roger, and welcome, everyone. Welcome to our province, and I don't want you to leave here thinking that this is typical September weather. We actually can have good weather some days, but you're going to get to enjoy this for now. There's some joys of going last at the podium. The team has done a great job of laying out what we plan to spend for the next five years and the capital plan that we have. So what I'm gonna touch on today is really focused on what financial supports we need to do this plan, and also a little bit on the regulatory backdrop as well. And to frame the discussion, you have heard me say a number of times about our objectives. They're really not changing as we look forward.
This is about being focused on doing what we say we're gonna do. Fortis has a long history of that. It's important. It might look easy, or easy to some, to actually implement this organic growth strategy, but it takes a big effort to execute on such a big capital program. We're doing it with the lens of staying laser-focused on our balance sheet. We think it's important in these market times, and we're setting ourselves up to maintain our investment-grade credit ratings, which we've always said is very important to us. None of that is changing. We've been doing it in the past, we're gonna continue to do it in the future, and all in all, to deliver the 4%-6% dividend growth guidance that David talked about earlier.
So you have to give me a moment and let me just walk back in history a little bit. And it's hard not to reflect on an Investor Day in 2018, just five years ago, when we were in front of you, talking about our capital program. It was CAD 17.3 billion, and today it, if you flip forward in terms of what we've actually spent, it's CAD 20.2 billion. So almost CAD 3 billion more from the 2018 Investor Day, what we've actually spent, a little bit of forecast in 2023. And so when you look at where this is coming from, this is coming from the transition side of the business, which Linda talked about. It is also coming from bits from Arizona, which Susan talked about in terms of now developing out the IRP.
We've also seen some additional investments in renewable gas that Roger talked about. All of that has been good pressure on a plan that we set five years ago. One of the big questions that I always get is: "So are we gonna keep outperforming our capital plan?" So I'll hit that one now. I do think, you know, we're all getting to better understand what it's taking for the clean energy transition. I think all of us are. So we're getting better at understanding, and we're starting to see movement, even on the regulatory side, with these plans in development of tangible projects. And as you know, the way we set our capital budgets is truly from the bottom up. We don't tell the utilities what they spend, they tell us based on what they see. But we do take a view that we're not speculative.
We only include in our capital plans what we believe we can actually get through from a regulated point of view, but also from an affordability point of view. So all of that is taken into consideration. So you're not gonna see Fortis put in big projects that they haven't truly vetted in terms of understanding how and when they can get it through the regulatory front. So we've had a very strong track record of delivering and outperforming, and we're quite proud of that. Again, looking back five years, so we've grown 6.8% over the last five years, but I would say a big part of the last five years as we've been growing, we've been, as I said, laser-focused on our balance sheet. Just last year, we put out an annual dividend growth guidance of 4%-6%.
That gave us flexibility to fund more internally, particularly in these markets. Focus on the balance sheet has been a center of a lot of discussions, and I know you know all of this, but we did sell Waneta, which is a part of our non-regulated asset base. We did an equity issuance in 2019. Just recently, we announced the Aitken Creek sale, which was one of the last bits of the non-regulated portfolio that we have, and that one is still scheduled to close by the end of the year. So we have been focused on moving our balance sheet to set us up to be in a good starting position as we embark on this CAD 25 billion capital plan. And from a credit metrics perspective, we have improved them by 100 basis points each.
And that's not an insignificant movement for a company the size of Fortis. So again, it's been a focus area where we're showing that we've made progress, and it's a good starting point as we now then pivot to looking forward. And so my point of showing this slide is when we look at where is the incremental capital coming from, we've talked about what is coming, this is about when it's coming. We are seeing, yes, that it's somewhat centered or focused to the latter part of the plan, and that's mainly associated with the LRTP that Linda talked about. But we are starting also to see some growth in the earlier years. Again, Susan mentioned a battery storage project that is coming to fruition in Arizona.
We're not it's not all dumped in the last year, it is spread out somewhat in the latter years, but we are starting in 2024. I'm also gonna mention here, 'cause Roger talked about it, briefly as well. This is a $25 billion capital plan, upon which for BC in particular, we now have to fund with a 45% equity in BC, which is we were, you know, we thought that that order was, I'm gonna say balanced. It was a good order, we think, for BC, and, you know, we do have to recapitalize BC. And that's a good thing.
We've been saying for a long time, particularly in Canada, that the equity layers are too low, and for the reasons Roger explained, we are seeing that the regulator now has sort of concur with that evidence and has raised its equity layer to 45%. We also are required to recapitalize BC as in the early years of the plan. That is effective for 2023. This is the slide. This is the funding slide, and we've been. We try to be very clear with respect to how we're gonna execute on our funding. If you look at the pie chart here, the ratios have changed slightly, nothing materially. I will tell you that there are times I wish I put a range on this because you can't pinpoint cash flows down to that point over five years.
But we have seen just a little bit of a tick down in cash from operations, and really that's, you know, we are paying more interest. That's no surprise to anyone. We are also subject to minimum tax, which we've talked about, and we are significantly growing, right? We're growing, and when you're growing, cash flows can move around, particularly in the regulatory setting with how and when we recover from customers. But looking at the pieces of the puzzle, they are very similar to what you would have seen last year. I'm gonna bring your attention, which is I know what we want to talk about, is the equity piece of this, which is about 11% of the capital plan, which is about CAD 2.7 billion.
We do have a fairly healthy DRIP program that's still in play, and we're getting about CAD 400 million from our DRIP program a year. We have seen DRIP participation vary anywhere from 33%-38%, but we have a very strong participation in our DRIP program. So as I say, we're getting about CAD 400 million from that. So without making assumptions on the future, you can get CAD 2 billion from your DRIP, and we have some employee share plans that can probably give you CAD 200 million. So looking at we have equity needs of CAD 2.7 billion. You will have seen from earlier today that we just put in play an ATM program. We had one in past years. We turned it off after we sold Waneta, and we did the equity issuance.
But we announced this morning that we have a CAD 500 million ATM program. So the big question is: how well do we plan to utilize this ATM program? So coupled with the slide I shown earlier with respect to, you know, we are seeing some capital, increased capital expenditures early in 2024. We are also having to put down potentially CAD 300 million-350 million of equity down into FortisBC. That doesn't all necessarily reflect all equity at Fortis, of course, but we have to provide that to FortisBC. So when you put all that together, we do plan to start utilizing our ATM in 2024. We estimate right now, and I'm using this word very boldly, approximately 100 million, and then we'll continue to go forward on that basis.
But we're gonna monitor DRIP, because DRIP can change, and as I said, we do have some flexibility within the DRIP. It ranged from 33%-38%. That can give you another CAD 100 million. Either way, the ATM is meant to be a supplement, and we're getting to CAD 2.7 billion. If we find that DRIP is very healthy and we're not having to use the ATM, then we will adjust. That's the beauty of an ATM program. It's very flexible and at our discretion with respect to how we use it. So, and when we look at, you know, how we sort of set those parameters, it was in the same vein of what I talked about earlier. This is about keeping our balance sheet whole.
When we're looking at whether it be recapitalizing BC or investing more in the grid, we're looking at keeping our balance sheet whole. So it's been a focus of ours, and we don't feel that in this environment, that we're creating more flexibility than we had in the past. We're still on this track. And I'll show it in a little while with respect to our metrics in terms of how they're improving, but it's all done with the vein of keeping our balance sheet whole. And then also, I will just quickly touch on the fact that that 4%-6% dividend guidance, we have the flexibility within that pie chart. It's not that wooden, I guess.
You know, whether it's four or six or in between, this is the approximate amount of equity that we need to support our balance sheet. It's not gonna materially change our funding strategy from one end of that range to the other. And then also, this dividend guidance also supports, and we've talked about this, the tapping down of our dividend payout ratio. We were pushing high 70s%, and we've said that with this dividend payout, we expect to, over time, particularly with this growth that we've talked about here today, we're gonna tap down that payout ratio, over time to more historical norms. So we're still on this path, and this funding plan gets us there. Quickly wanna touch on the investment-grade credit ratings that we currently have, and we have shared this plan with the rating agencies.
You know, I never speak for rating agencies, but there are no surprises in this plan, right? We're still on the organic growth strategy. Our metrics are similar to what we had shown them in the past, so we're not taking anything backwards. We're keeping our promises to what we have shown in prior plans. You do see I do wanna touch on this. You do see some tick down in, like, the Moody's CFO to debt. Again, this is our first year for the alternative minimum tax, which we said was about 10 basis points, and interest is also playing in, the higher interest cost is also playing into the metrics. But when we look forward.
I do feel very confident in our abilities to have the average Moody's CFO debt and the S&P FFO to debt around that 12% level. There is a bit of a grade up over the five years, but this is a full expectation based on the plan that we have, which is very executable, and a funding plan that we have that is very executable. No real surprises coming out of sort of our funding strategy and how we're set up for the future. Did wanna touch briefly on the debt maturities. This is a big topic, obviously, in this particular market, with the interest rates moving around. From a regulated utilities perspective, clearly, ultimately, over time, higher interest costs are recovered through customers, through regulatory mechanisms or through when they set their rates.
With respect to the holding company, of course, they are of more interest in terms of we don't recover those through, directly through to customers. When you look at the maturities profile that I've put on the screen here, you'll see that we do have limited debt maturities from a holding company perspective over 2024, 2025, 2023, 2024, and 2025. We have about $500 million that we believe is, that are in maturities. You'll recall that ITC had actually done a number of bigger financing earlier the year, which, in essence, pre-funded some of the maturities you're seeing in 2024. I guess the takeaway for this slide is that we've substantially cleared a lot of the debt maturities out through 2026, but at the tail end of 2026, we do have higher maturities coming due.
And we are paying very close attention to the market. We will be opportunistic. We are looking at options, and we know that we have these maturities coming, but we are, we're certainly watching the market. We do have preferred share dividend rate resets as well. Clearly, the rate reset rates will be higher, but they still and I can't be any clearer than this, they're still efficient for us. They are a part of our portfolio, and I accept they remain attractive for us today. So that's with the dividend rate resets. My point on this slide is to say it feels good to be here today with the TEP rate case behind us, with a positive outcome, and the GCOC proceeding in BC with a positive outcome.
So that clears away, two pretty big regulatory applications. We do have FortisAlberta that's left to come, before the end of this year, with the GCOC proceeding and a PBR proceeding, and we're still on track to get that order, by the end of the year. Central Hudson recently filed a rate case, but is in their normal three-year cadence, of a rate case. And ITC's applications remain ongoing with no news. But really good to stand here and to have two, with what we call positive outcomes behind us. And you gotta give me this slide as well, because I've been years in the other direction and talking about when will we start to see, a change in ROEs now that we're seeing a change in interest rates?
And so I just, I chose 2018, 'cause we've been going back five years. So you'll see that the weighted average allowed ROEs for us, based on our, as a percentage of regulated rate base, went from 9.7%-9.8%. Over that time period, ITC actually had a ROE decrease. So when you even compare to our ROE from last year, it was 9.5%-9.8%, and that is all driven by TEP and BC. The equity thickness, same thing. We've gone from 48.4%-50.9%, again, driven by TEP's decision and the BCUC's decision. So we're all waiting anxiously for other utilities to actually get in front of the regulators. Alberta's the next decision.
I mean, we can't, we can't say what the Alberta regulator is going to do, but clearly, there has been a shift. There's been a shift and a recognition of risk on the equity thickness side, but certainly the interest rate environment on the, the regulated returns that we're seeing. So I will conclude by just summing this up. We have a pretty impressive CAD 25 billion capital plan and a funding plan that supports maintaining our investment-grade credit ratings and supporting our 4%-6% dividend growth guidance. And it's w hile it's more of the same, CAD 2.7 billion is, is pretty substantial, and the teams have done a great job at reflecting on their plans and understanding the needs for the clean energy transition. So with that, I will turn the call back to no call.
I will turn the podium back to David. I'm used to quarterly earnings calls.
Thanks. Let me answer my favorite question: Why invest in Fortis? So let's review what we heard today. CAD 25 billion capital plan focused on the right type of investments, focused on organic growth for a cleaner energy future that drives a 6.3% rate base growth, and we know we can do that because we have the track record of execution. That rate base growth supports our dividend growth of 4%-6% guidance as we go all the way out to 2028. So you have that on one hand a nd on the other hand, you have a diversified, regulated portfolio of utilities that have a phenomenal ESG story and getting even better, and top-rung governance. You put all that together and that's a risk-return investment thesis that is, I'll say, more than compelling. It's enviable.
This is the exact spot that we wanna be in for not just today, but for the future. So with that, we're gonna close it up and have a Q&A here. For the folks in the room, if you'll remember to... If you have a question, we'll pass you the mic. Just announce who you are so the virtual attendees can hear you, and then, Stephanie will provide any questions to us that we hear from the virtual, the virtual group. And feel free to ask me, anyone in this room, except maybe each other, to answer some of these questions. So Rob, it looks like you're first up. Oh, sorry, I already busted it. You're supposed to announce who you are, Mr. Hope.
All right. Rob Hope from Scotiabank. Thanks for the day, everyone. It's been great. First question is on the financing plan. So we have the FortisBC decision behind us. The two variables I see in the financing plan would be what happens in Alberta, as well as what you want your credit metrics to be, because you do have the ability to accelerate that. So when you take a look at those two variables, how do you think the financing plan could change? And do you see value in accelerating the FFO to debt to that 12% earlier, which would come at the expense of some incremental dilution, but, you know, the market is paying for stronger balance sheets?
Well, Rob, I like your enthusiasm around the fact that Alberta could materially change our funding plan enough, right?
Variable.
Yeah. Yeah. So I'll be happy if that happens. I don't believe that it'll be material enough to change, but again, we'll wait to see the decision. And, you know, again, the beauty of the ATM is we can flex it if we need to or not need it, right? So that's why I like the ATM, particularly. So with respect to, you know, pushing forward our metrics faster, I don't see any benefit. I think I've said this publicly before when it comes to the Moody's rating. I think that's a factor of time, and we're doing the right things, and we've made leaps within that metric. When you look at the FFO metric for S&P, we're gonna get there, right? Like, this is not- we're not.
I haven't shown this, but we're not waiting until year five before we actually get that 100 basis points cushion, right, with, with that metric. So I don't feel the need to do any more, any faster. This is a plan, as I said, we shared with them. I, there's no surprises. We're fundamentally on track, and I, and I don't see any benefit of, of, expediting it.
Thank you. Then maybe as a follow-up for Dave, you know, you've been talking about the organic growth profile and the growth story for Fortis for a number of years. However, you know, the asset M&A market seems to have changed over the last couple of months or years here, with some transactions at, you know, we'll call it, lower valuations than before. You know, if the market does change, could we see M&A come back on the radar for Fortis, or is it still on the organic?
Well, clearly, our focus has been and will continue to be on organic growth, but we will always be opportunistic, looking for, you know, the right set of circumstances that make sense. I mean, we're fiduciaries, right? We're trying to find value, so we're always trying to find that value. It's hard to say, you know, and as markets have changed around so dramatically over the past couple of years, I think what we have done, and our focus on making sure that we're sticking to our knitting and doing that organic growth, has paid dividends, literally and figuratively, for our investors. So that will still be the focus, but we never take our eye off the ball or out of the markets.
Oh, sorry.
Go ahead.
Patrick Kenny, National Bank. Roger mentioned the change in risk profile for FortisBC. Dave, maybe you can just comment on which of your other utilities might be experiencing an uptick in risk profile as well, and then maybe a comment on how that might change your view on potentially selling down a minority interest in any of the utilities.
Yeah, so I'll put it differently than Roger did, because it's not changed. The risk profile itself has not changed. We know what the risk profile in BC is. And, you know, obviously, policy comes and goes and changes over time and ebbs and flows, et cetera. This just caught up. I mean, this wasn't, you know, that all of a sudden our company is more risky there. It's the recognition of what's, you know, been going on there and, you know, from a going-forward perspective. Remember, those ROEs and equity layers in both BC and Alberta were the lowest in Canada. So it was right that they should come up. That's obviously the, you know, they're and they're. And by the way, they're coming up to average North American equity thicknesses and ROEs.
This is not like recognizing that all of a sudden, you know, BC. environment is more risky than others. It's just recognizing that right level of risk. So we look at that. And of course, as I mentioned, you know, risk comes and goes, administrations come and go, policy comes and goes b ut we wanna make sure that we're always right down the middle of the fairway, and that's exactly how we're placing our FortisBC companies, making sure that we can stay right down the middle of that fairway, that we can, you know, no matter which way we, you know, ebb and flow in that conversation around natural gas and its role, we're finding a role. We're finding a role for that infrastructure, and we have to find a role for that infrastructure. That's infrastructure that has been paid for by our customers.
We need to wring as much value out of that. That capacity versus energy conversation that that Roger had is one that I, I know there's not a lot of people who get and understand that. You, you all the folks in this room and on this call, you know, understand that, but that's a principle that has to get out there in our sector, the importance of that peak capacity, that peak energy that we need. And to try to triple an electric system to get that last little bit will not make sense. We can get that last little bit through clean fuels and through clean molecules.
Yeah, sorry, as a lever for the funding plan, thinking about minority interest divestments versus additional equity.
So, as far t hat's, you know, we obviously have done or are in the process of doing Aitken Creek, but that's not in our, in our current five-year plan. Again, it's the, it's the opportunistic view. You know, if there's- if we find things that are of, of tremendous value, it's, of course, right to jump on. But right now, our, our funding plan is exactly, how Jocelyn laid it out.
Linda Ezergailis, TD Cowen. Just some follow-ups. I wanna drill down a little bit more. Maybe, Jocelyn, you can help me understand. Your holdco debt levels are currently 33%. If we continue to see equity thickness ratchet up at utilities, does that mean that holdco debt goes up versus maybe the cost of holdco debt going up, so you might wanna ratchet that down? Can you talk about how holdco debt plays into your consolidated views and what might be going on at the utility opcos?
Yeah, so we are we have seen, and I'm glad to see the change within BC. I'm not anticipating a whole lot of change in Fortis' consolidated cap structure, and over time. And we're actually expecting. As the utilities are growing, right? And they're investing, and they're borrowing to support their investments. We actually expect to see holding company debt to go to lower levels, right? So, and I would think, I would suggest also that we've made great progress, right? We've started at 40%, we're down to 33%. As we look over the next couple of years, we're down to 30%. So I'm not seeing much change expected. Maybe if there's a real paramount shift, right? The only other Canadian utility that I see left really is Alberta, right?
We'll probably start to see it in the smaller utilities, but they'll be hard to move Fortis' dial. ITC just had their cap structure, which is a big component of Fortis. They just had their cap structure solidified at 60%. We're not seeing that up for debate anytime soon, and we just solidified TEP, which is another big utility. I think, how we've laid out our thinking with respect to Fortis is what, you know, what we'll see for the next five years.
Thank you. And as a follow-up, in terms of your strategic outlook, Dave, recognizing that there's no need to, from a capital allocation perspective, to grow inorganically, could there be a case made for a strategic imperative to grow inorganically in terms of within your current geographies, facilitating energy transition through potentially unregulated investments that might not fit quite inside the utility rate base versus maybe JV partnerships, et cetera, to enable that? And also, to keep costs down for customers, might there be some opportunities to maybe acquire utilities within your existing footprints to see some cost synergies and planning synergies, quite frankly?
Yeah, so that's a good question. So from a strategic perspective and the organic growth that we're talking about, we have, and in fact, we've spent a lot of time, and this team will nod their heads when we talk about it. We spend a lot of time talking about what kind of assets should we be investing in, and we love the regulated assets. We call it the green box assets. Those are the ones where we know what we're doing. It's a regulated investment. It's got the right risk-return profile. When we get outside that on the edges, and of course, we look at things around the edges, it has to have that right risk return profile for us.
Not just for us, but what we think you all are looking for as investors. So we are very careful on what we would like to get involved in. That, you know, that means we look at things. Lake Erie Connector was a prime example of one that was actually an unregulated investment, kind of, you know, looked like a duck, quacked like a duck you know, all the things that made it look like a regulated investment, but it was not. That was something that we were comfortable in doing because it was part of our expertise. So there's other investments. We've talked periodically in BC about some unregulated LNG-type investments.
Those things still, you know, kind of, you know, bubble up around the edges, but unless they fit that risk profile that we're looking for, again, that we think you're looking for, they're gonna stay outside of where we really wanna make our core investments. As far as the M&A conversation, that's just more of a kind of a more detailed version on the general M&A. Are we looking at any M&A in particular, and, you know, what kind of synergies? Well, that would be part of the conversation. There's a whole laundry list of things that we would evaluate when we look at any type of acquisition, and it would have to be, you know, is there synergies? You know, obviously, there's a lot of things around ESG and business risk, and all those other pieces.
Those all go in it, but that doesn't make it any different from parked on the back burner than it, than it is right now. So while there's a lull, I just wanna m aybe there isn't a lull, but I'm gonna jump in. So I wanna tell you that that equity thickness in BC is a good thing. I know we're talking about funding, et cetera, overall. So it was a couple of years ago, I sat down with my CEOs and I said, "Here's what we, here's the plan." Jocelyn wasn't in the room, Stuart wasn't in the room. And I said, "Here's the plan: We need to grow to make their job difficult.
We need to be able to grow so that we have to look at, you know, where are some funding alternatives, because that's what we're supposed to do. We're supposed to grow. Having a thicker equity layer is overall a huge benefit for our company." So the i t seemed like we're getting caught up, and I know I don't want to steal your thunder about all the funding stuff, but that's just what we have to do to keep playing the game as well as we're playing it.
Hi, good morning. Maurice Choy from RBC . Maybe keeping with that theme about wanting to grow, but also amidst of a climate where cost of capital is more expensive these days, can you look parcel out the CAD 2.7 billion CapEx increase, and let us know what was the gross increase, and how much how many projects do you choose to defer or cancel for the name of affordability or, excuse me, capital preservation?
So of the CAD 2.7 billion increase, it was really. As I'm running through my head on all the different numbers, you know, the CAD 1.4 billion, that's ITC, all new stuff. I mean, that was net new increases there. The CAD 600 million was in, was a net new increase, at UNS. It wasn't. There, there wasn't, like, a bunch of other stuff that fell out of the end of the plan here. There's, you know, Central Hudson is all new stuff that. So this, there isn't a, there isn't, like, a net negative in here. Other than one, as projects roll off, the negative drop of, I think, it was about $200 million of Waneta because we did it last year, and there's only a little bit left this year. So that's the only thing that is.
There's not like, all of a sudden, this big reshuffling and a bunch of projects fell out, and these ones came in. All the existing projects, other than Waneta, which is going along its, its normal course, all the rest of them are still in there, and we just added additional projects.
So, I guess if more capital projects come along, and shifting a little bit to the funding plan here, I guess, is the ATM now viewed to be the preferred funding solution here, or are things like discrete equity combinations or asset monetizations also in the plan, or how should we look at this?
You want to say it or me?
No, I know. And I don't want to say everything goes on the table, but, Maurice, we, we have to do that, right? But right now, it is. I mean, even when we compare, you know, the pref market, hybrid market, I mean, we chose the ATM because it's more efficient for us right now. That could change, right? As if we, particularly, if we see, you know, more growth out into the future, that market may change. But everything goes back on the table, and we start over, and we evaluate what's in front of us. So, I hope it's a problem that I have again.
It's a good problem to have.
Yeah.
I think we've got a question online here.
Yes. So I'll ask, we have four questions that came through the webcast, so I'll ask them for the institutional shareholders or analysts that cover us that couldn't be here in person. So the first question comes from Kevin Kwan with JP Morgan. "So there's quite a large gap in your credit ratings between Moody's Baa3 and S&P A-. I understand S&P's A- is an issuer rating, while Moody's unsecured rating is B, BBB +. But if you could please walk us through some of the different credit rating methodologies here, and do you have a higher target for your Moody's rating? Thank you.
There's a lot of difference between the Moody's rating and the S&P rating. Well, they use different factors to calculate credit metrics. Like, Moody's will take into account more changes in the regulatory deferrals, whereas S&P are more concerned about actual interest costs and actual defined benefit pension plan costs and taxes. So they’re two different calculations. But all in all, I think you know the assessment of both S&P and Moody's by us, you know, I think they come to the same conclusions, but a nd I don't want to go back in history too far on the Moody's rating, but it did come we got the Moody's rating as we were doing a fairly large acquisition, and we were coming off of a pretty large acquisition trail.
At that particular time, Moody's, I guess, had, you know, it was a wait-and-see type game. I've said that with Moody's, that, you know, we had stretched our balance sheet when we bought ITC. We've made large improvements since then, but we're not as and we talked about earlier, about, is there a need to do any more on the metric side? No, there's not. And I feel comfortable, even with the S&P, S&P rating, that we've laid out these, these plans. The business risk profile of Fortis hasn't changed, and when you think about, their assessment of us, it is about that we are primarily regulated, we're primarily a T&D company. Those are the two checkboxes that you want. And so I do believe we get healthy ratings there.
S&P are like other, credit rating agencies. They, they are, they are looking at the, you know, the environment of utilities and, and the risk of utilities, but nothing specific to Fortis. So I think it's there's nothing obvious there, and, and certainly not, not driving to, to expedite any further increase in the metrics above and beyond the plan that we have.
Great, seeing that we have about six minutes left, so I'll be quick here. We have two from Valérie Cecchini with Borealis. The first question I'll read, 'cause they're two different topics. Could you share oh, my computer just went into silent mode. Okay, excuse me. Could you share your key assumptions regarding demand, given, one, the potential for a recession in 2024, and two, the impact of energy conservation efficiency initiatives across industries, and which capital plan would be adjusted first?
Yeah, so, those are parts of each and every individual forecast that our subsidiaries do. Energy efficiency, distributed generation, that's always been part of the forecast, on a load and demand perspective. One's a different, you know, obviously a different energy than a capacity, to get back to the prior commentary, conversation between those things. But we, we're not seeing necessarily any dips from an economic perspective.
Looking forward to, you know, if there's a recession at all, a little R, big R, whatever it might be, typically, what we're seeing across all of our jurisdictions is, in fact, higher load growth and higher economic development activity, and a lot of that's being driven by the Inflation Reduction Act and obviously some of the, you know, additional benefits we're getting for domestic content, as well as, you know, security, you know, geopolitical events, et cetera, on this, basically, call it reshoring conversation that we're having across North America, but in our, specific utilities in particular. So that's all built in here, so this is, this is all, based on that. Now, obviously, every year we get, you know, different and better assumptions, but that doesn't that isn't driving these capital decisions.
It's really just driving, you know, the sales denominator.
So the next question from Valérie: Could you please update us on your labor force, availability of talent, expertise versus future needs, retention, turnover challenges, salary and compensation, including labor agreements, and what are the top three issues and top three praises highlighted in the latest surveys of employees?
Oof, that's a
You're gonna l et me start, and then let me know if I hit all those. So this is a perfect question as we sit here today because tomorrow and the next day, we have all of our executive teams from across our entire footprint coming here to St. John's to talk about exactly these things, not just our strategy, but how do we maintain our great environment that we have for our workforce? How do we continuously improve that? How do we focus on that people and culture piece? So as you all know, we have a large majority I wouldn't say majority, but a large portion of our utilities have unionized workforces, and we have good relationships with all them.
Obviously, there's a lot of, you know, contracts that are up for renewal almost every year, given that we have 10 different utilities and then, you know, several unions within each of those utilities. But we have maintained our good relationships with those unions, and that has to be a hallmark of how we interact with our, with our individual teams, with our individual utilities. This is another one of those things that's squarely in the local bucket, where the management teams, the three that you see sitting before you, this is their responsibility to maintain those good union relationships. That's a message that I'm glad I got to practice it 'cause that's a message that's going out tomorrow, because we do see a lot of stress between union and management.
But that's, you know, those are, those are in cases, not in our company, but I mean, more broadly, because, you know, coming off of a pandemic, you know, all the inflation, and real cost of living increases that employees have seen. We've always made sure that we keep our employees fairly compensated, so we don't see that big blip, but we know we have to keep that squarely in focus. Any other pieces I'd want to jump on there?
I think that covers the most of it. In the spirit of time, we have one more online, and I think there might be one or two-
Okay
I n the room. So the next one comes from Dariusz Lozny with Bank of America: Under what circumstances would you use the full CAD 500 million of the ATM prior to its expiration in 2024? And do you plan to reauthorize the ATM after the current plan ends in December 2024?
I hope, I hope we are facing something that we don't know today with respect to why we could potentially use the CAD 500 million, 'cause I think it comes with growth, right? And I don't see growth transforming that quickly. And to answer the question on whether we plan to renew, yes. I mean, that would be the typical behavior of the ATM.
Again, equity pays for itself when you're growing like this.
Yeah. Mark Jarvi from CIBC. Questions for Linda. You know, you talked about, or on the regulatory slide, at least that Jocelyn had up there, about things out there from FERC. Seems like we're perpetually in a holding pattern around the number of items. Is there anything you can share with us today that feels like we're moving towards something? Any commentary around where if you had to update base ROEs today, given where those parameters are, does that help people get to a decision sooner than later?
Yeah, look, I certainly wish, like you, that I had sort of the crystal ball and I had more insight into these sort of pending regulatory matters. Look, I think the fact of the matter is, right, there's a four-member commission, two from each party, not that they vote on party lines. I think the challenge at FERC is, quite frankly, getting three votes for anything. You know, while we recently saw the Generator Interconnection NOPR, you know, with a 4-0 vote, which I think was promising, I know there was a lot of hard work and effort in the halls of FERC to get all of the commissioners to sign on to that action.
I think the other remaining items are much more challenging to get the necessary votes. But look, you know, I think in some cases, you know, whether it be on, on sort of, you know, maybe potentially the incentives NOPR, the RTO adder, certainly I think time has been on our side and on our benefit. I will tell you, we are not hearing anything that would suggest that particularly the ROE matters, the incentive NOPR is on FERC's priority list. What we have heard is that their next priority is on the Transmission Planning NOPR. And so certainly from our perspective, I think that's constructive, that's positive. We think that would be a great outcome.
You know, with respect to the other issues, you know, on ROE, you know, yeah, I mean, certainly for ourselves, the transmission owners at MISO, I mean, we're keenly aware of some of the mark-to-markets. You know, we have been somewhat waiting for FERC to take action on the MISO ROE docket, and I think because of the dynamics at FERC, we haven't seen that. You know, we are, you know, I would say we're ready and prepared to take action, and maybe perhaps it could be viewed as a little bit of a cat-and-mouse game to see who moves first.
But we are keenly aware of the current market dynamics, and you know, certainly, you know, we're sitting back, we're assessing and evaluating the broader landscape at FERC and all of the pending matters that sit before it. And therefore, I think that's why, you know, we're in sort of a sit-and-wait mode. So unfortunately, I don't have anything specific that I know or that I could share, but I do think it is all tied up in the composition and the dynamics at FERC right now.
Okay, so I think in order for us to end somewhat on time, that will be the last of the questions, and I want to thank you all for attending in person and, of course, those of you joining us online as well. So this will, this will wrap it up. Thanks very much.