Hope evening and special piece of Michigan's history and automobile industry. Michigan is truly a great state. It has so much history and tradition and something greater. For those of you that are with us here today in person, we hope you get to see firsthand ITC's focus on performance, culture. Here at ITC, our focus on innovation holds promise and excitement and continues to drive who we are and what we do every day. Also today, you will get to see and experience more of our focus on operational performance with a tour of our state-of-the-art operational control center.
Thank you so much for taking the time out of your busy schedules to join us here at ITC.
Of electricity. You may not realize it, but in our increasingly electrified society, that's where transmission infrastructure matters most. Connecting consumers to energy resources is what we do. Our reliable energy delivery to withstand weather events and power modern society, when even a momentary outage can cost CAD millions. How do we harness renewable energy? We're on a pilot project to study how renewable energy and energy storage integrate with the transmission grid. Combining 1.5 acres of photovoltaic PV solar panels and a storage impact the grid in real time, and we'll monitor every aspect from our state-of-the-art operations control center. We'll study over 30 distinct datasets, including response times to multi-value projects, providing customer benefits across the Midwest. It's part of our DNA. Our system planners are looking at future outage data, medical and manufacturing centers that require constant reliability.
We are ensuring the greater grid can meet their energy needs now and long into the future.
Good morning, everyone. I love that term, the greater grid. That's our new lingo, right, Linda? I just want to thank Linda, first of all, for hosting the Fortis team here today for our investor day. We announced the ITC transaction back in February of 2016. We're about three and a half years from the announcement date, about three years from the closing. I think that day we were in Toronto. We came here the following day, and we met the employees of ITC that were in this facility, in this room. It was a pretty incredible couple of days. That first day, our stock was off 10%, I believe given the size of the transaction and when we were using our shares for half the consideration. I'm happy to report right now that our stock is up TSR of 70%, seven-zero, since that time.
Three and a half years later, if you had come into the stock on that day and kept it and reinvested your dividends, you'd be up 70%. I think that's pretty damn good. Thank you, Linda. Thank you to all the employees of ITC and of Fortis for a great three and a half years. I do want to welcome the people that are here in the room today, as well as the people that are joining us on webcast. We're excited about our new plan at Fortis and looking forward to digging into it here today. There are going to be a number of themes that you're going to hear about today. Innovation, growth, ESG, sustainability. These are the things that we are focused on right now. Before we go there, though, I just want to say a few comments about Hurricane Dorian.
Our industry is dealing with the aftermath of this storm at this point in time, both in the U.S. Southeast, in the Bahamas, in Eastern Canada, even our own utility in Prince Edward Island. We still have customers off at that utility, almost 18,000 customers. Our crews are working very hard to get those customers back on. Our colleagues at Emera in Nova Scotia are dealing with the storm both in the Bahamas and at Nova Scotia Power in Halifax, especially, have tens of thousands of customers off. Rest assured, we are doing everything we can to help out our industry partners. That's the nature of the utility industry. There's utility crews traveling from all over to help put the power back on in these regions. Our hearts obviously go out to, and prayers to the people of the Bahamas.
This island was heavily impacted, devastated, frankly, by Hurricane Dorian, and we hope that life will get restored to some normality over time in that jurisdiction. Let's get going. Forward-looking information, just a caution that we're going to talk about a lot of expectations here today over the next number of years. These events are based on a lot of assumptions, and they may or may not occur. I will caution you on that, and please read this information. Today, we're going to focus on four key areas. We're going to roll out our five-year plan. You probably have seen it in the press release already. Jocelyn is going to spend some time on our financial objectives. We're going to hopefully exhibit innovation. There's a big thing that's occurring in the sector these days. There's so much happening in our business.
It's the most exciting time that I can remember to be involved in the sector, and I think utilities generally, and especially here at Fortis, we're embracing this innovation, and we believe it's sort of the key to what will drive our future growth in the business. I also want you to really spend time with my management team members. We have the CEOs of our large subsidiaries here today. We also have our senior team from our corporate office and really try to get to know these folks because we have a very strong bench at Fortis, and our business model allows tremendous growth to occur in these individuals. I think we have one of the best teams in the business. Fortis, we are a geographically diverse energy delivery business.
We move electrons down lines, we move natural gas down pipelines, and we get paid for doing that. That's primarily what we are, a big energy infrastructure business. I believe we're probably the most diversified business in the continent at this point in time, both from a regulatory perspective and a geographic perspective. That reduces our overall business risk dramatically compared to many other, for instance, single state or region businesses. Quickly, 10 operations now, 99% regulated. We're basically a regulated business, with very little non-regulated assets. Again, that lowers our business risk overall, assuming you can effectively deal with regulation, and we've had a great reputation of doing that. Our rate base at this point is $28 billion. Last year, that number would have been $26 billion, so we've added $2 billion of rate base year-over-year, which is a sizable increase.
Serving now about 3.3 million customers, 2 million electric and a little over 1 million of gas, primarily in our British Columbia franchise. Again, back to that theme of an energy delivery business, 93% of the businesses, our assets are invested in the transmission and distribution business, that sort of wires and pipeline business. Because of this expansion that we've had into the U.S., buying 3, I would say, great franchises here in America, our Arizona business, our New York business, and most recently, this incredible company, ITC, we have now 66% of our earnings coming from our U.S. business. Fortis is dealing with the same key trends, issues, opportunities, whatever you want to describe them, that every other utility business is dealing with. As I mentioned, these are exciting times. This move to renewables.
We have the issues around natural gas for transportation, the opportunities there, battery storage, grid modernization. All these things are driving opportunities, investment in the sector. We also have regulatory change occurring, and we're really on the forefront of all of that and making sure that we continue to work well with our regulators in various jurisdictions. Last night, you saw the focus on electric vehicles at the GM Heritage Center with a couple of presenters, and that's such an exciting new trend, I guess you could say, that we all, I think, generally believe is going to come, and I think it will benefit the utility industry. It just remains to be seen how much. Is it the make ready as they describe it, or are we also owning the charging stations?
These are all exciting opportunities, and we are involved in them at Fortis. We're pretty excited about the prospects there. Our new five-year plan, CAD 18.3 billion of CapEx over the next five years. That's up CAD 1 billion from the previous plan. We're spending in this year and next in that CAD 4 billion area. My gut tells me that's our run rate, but as normal, we do have this sort of sliding off outer years, and we'll talk a little bit about that in some future slides here. Today, we're launching CAD 18.3 billion. That's going to allow us to grow rate base, the infrastructure that we own, by about 7% over the five-year period. It's a little higher in the first three years, and then it averages down to about 6.5% over the five-year period.
That's a pretty good growth rate, that supports our continued confidence in our dividend guidance that we can keep increasing our dividend at this 6% on average rate. As of this morning, as you know, we did raise our dividend effective December 1st by 6.1%. The strategy of Fortis hasn't really changed for several years now. We're really leveraging all these great businesses that we have and these local teams to find growth opportunities. Now that we're running at about 7% growth rate, the goal is to try to sustain at that level and invest the right amount of capital to serve our customers and to make sure that we're dealing with all the trends in the industry. Occasionally, we'll land a bigger project here and there that will hopefully add to that growth rate. Pretty comfortable that that's a good place to be.
Dividends are very important to the company. We still have a strong following from our Canadian shareholder base that really likes the dividend guidance that we provide. We continue to do that. Our focus for a number of years now has been on that organic growth story. We were once known as the company that just kept buying utilities. I hope by now we're getting known as the company that just continues to grow at 7%, without buying utilities. It's been a lot of heavy lifting by the team to get to this level that we're at, and it feels good at this point. The areas of focus, obviously executing that capital plan. We'll talk a little bit about that. We find that we're highly confident that we can execute on the capital.
The regulatory relationships are so important, and maintaining stable regulatory relationship, that respect and transparency with regulators is so important. Our Fortis team and our subsidiaries across North America, they know that that's their main priority. I would tell you that sustainability, the ESG area, is so important to Fortis. You're going to find today we are spending a lot of time on this because we're hearing it from our shareholders and other stakeholders that it's important to them. Fortunately, Fortis, we have put together a strong portfolio of assets that's focused on energy delivery, those poles, wires, and gas lines that have a relatively light environmental footprint. We are in a strong place. I think we can lead this entire area, and we're focused on that, along with Nora Duke, as our head of sustainability.
We're really spending a lot of time and effort in this area at this point. I just will skip to the end here a little bit and talk about investment-grade credit ratings. For me, for Fortis, and for the team, it's very important that we execute all of this while we maintain a strong balance sheet. Clearly, our push into the U.S., we did use our balance sheet a little bit. We are rebuilding from that, as well as U.S. tax reform. You'll see from Jocelyn that we expect to make pretty strong strides over the next five years to improve that balance sheet. Let's look back. It's been a busy 12 months, and I'll start with the box on the lower right-hand side here. Our market cap's up CAD 6 billion in 12 months.
If you had told me 12 months ago we're going to be up CAD 6 billion, then I'd be shocked. It's been an incredible 12 months for the company. The stock's up 34%, I think, in 12 months. Some of it's obviously macro-related. I think with low interest rates, that's been definitely a tailwind for the sector. If you look at how we've been executing, the dividend track record, the focus on sustainability, completing the asset sale that we had identified last year at a really attractive valuation. We had built this Waneta hydroelectric plant, and three years later, we sold it and doubled our money. It's a pretty incredible investment, and we executed well in selling that to a great buyer, our partner in that project. We used those funds to pay down some debt as part of our balance sheet improvement exercise.
The focus on cleaner energy is we've really announced some great projects in the last 12 months, the wind project in Arizona. We have the Energy Conservation Assistance Program that, working with our regulator, will be able to spend capital, put it in rate base to encourage the conservation of energy. That's frankly great partnership between the regulator and the company to do the right thing. Really proud of the initiatives there in British Columbia. Roger leads that company for us. You'll get to see him later today. Then one of the most amazing projects that we have ever been involved in is the Watay project up in northern Ontario to hook up a number of remote First Nation communities to the grid for the first time. I think, Gary, just this morning, we announced the contract for the construction of that line.
Quanta Services is the contractor. It is probably one of, if not the largest, hydro transmission contract issued in North America for a long time. It's 1,800 km of line and a very exciting project, and we're looking forward to Quanta doing a great job for us. Capital plan, we've increased the 2019 plan from CAD 3.7 billion to CAD 4.3 billion. Some of that obviously is related to those projects on the left there that we've now announced. Just a great increase in the year-over-year plan. A really strong 12 months, and that's I think supporting where the stock has gone in that period. What's interesting with Fortis is you can look at just about any time period over the last 20 years, and we've had great performance. What we show here are the Canadian statistics. These are Canadian returns.
On average for 20 years, we've delivered, per year, 13.9%, almost 14% return on average for 20 years. The TSX Cap Utility Index is about 10 for that period. The overall composite is about seven. We've doubled the composite index performance. By the way, I think the Dow Jones Utility Average for the 20 years is about seven or eight too. When we look at Fortis related to the U.S. utility set for that long period of time, we've also way outperformed. Some of that came in the first 10 years of the 20, but it's been incredible couple of decades for the business as we have grown across Canada and pushed into the U.S. Just really strong performance from a shareholder perspective. Let's move into one of the key areas today.
This is focused on sustainability, and it all starts with this business that we have, which is primarily delivering energy. We don't have a lot of large plants, coal plants, gas plants, that have emissions associated with them. We're really primarily a poles and wires and gas line company. For us, that is the business that we like the most and is where our attention is focused. We love our Arizona business too. It's an integrated utility, and we're doing great things in that business to improve, clean up the energy delivery. Overall, when you look at the company, we are primarily a transmission distribution company, and that puts us in a strong place from an environmental perspective. If you look at ESG generally, environment, social, governance, how do we rank? Governance has always been strong at Fortis.
We are ranked in the top decile. This is from a Canadian company perspective. If you look, The Globe and Mail does these board games where they rank all the public companies in Canada. We typically are in the top five, six, seven, eight companies in that group. It's a very comprehensive ranking. It's very important for our board to be on top of all the concerns of shareholders, and we, I think, do a good job in this area. One of the very big focuses of mine is on gender issues, and I'm very proud to say that Fortis is a leader in gender equality. 60% of our head office is female at this point in time. Our board is at 42% female.
I'm hoping that we can get there to gender parity on the board, just a couple more moves over the next two or three years can make us there, and that would be definitely a leader in Canada. In the U.S., there are a couple of boards that are already in that place. One-third of our executive team is female. I will say the industry generally does have a ways to go in terms of the entire workforce, especially given the trades that are in the industry. Even there, we're spending some time understanding our sort of gender equity pay and all of that stuff, and we're really hoping over time we'll make some progress there. In terms of giving back to community, we also are recognized very heavily for being involved in our local communities.
When you think about our model, these locally operated businesses, in states and provinces, they are, in most cases, the leaders in the communities that they operate in, and they participate in many of the local businesses. If a utility's not good on that social area, you should stay the hell away from it, because utilities should be leaders from that perspective, and Fortis and its subsidiaries are. Cleaner energy is important. We've made great strides reducing our carbon intensity, focused on renewable generation in Arizona, renewable natural gas in British Columbia, and just making a great progress there as well. Finally, but probably most importantly, safety and reliability. This area, we are a leader. We are outperforming the industry averages, but we still need to get better. Our all injury frequency rate is, you see on the chart, is running below 1.5.
The U.S. industry is 1.53, the Canadian Electricity Association is 1.9, so we're below those averages on a consolidated basis. In terms of outages, the duration, we're running about two hours on an annualized basis, where, from a Canadian perspective, in the U.S., the average is more in that four-hour area. I think these are metrics that we have to continue to improve on. We have some businesses that are in our group, like ITC here, who is in the top decile on safety statistics. We're increasingly making sure we're really understanding how these things happen in each of our business and sharing best practices across our groups.
I know Gary Smith and Jon Jipping are doing a bit of a cross-company tour soon to go around and visit some of our other businesses that maybe are not tracking at the average or better to see if there's things that we can be helping to implement to see if we can move some of these numbers. Overall, we are in really, really strong shape in these metrics. The path to cleaner energy. I would say two-thirds, three-quarters of the conversation in utilities these days is about cleaner energy and how do we continue to move down that path. We've been spending a lot of time at Fortis on this, and you can see some of the key initiatives that we're working on here. We do have a video that we're going to show shortly on this as well.
Just to summarize some of them, the renewable gas in British Columbia, this is landfill gas, agricultural waste. We are a leader in this area. I think we have, Roger, 10,000 customers approximately that are purchasing renewable gas. We're going to expand that program, I would say, greatly over the next number of years. Hopefully, we can actually find the renewable gas. There is a demand for it, and it really is, from a policy perspective, supported by the province of British Columbia, especially in cleaning up that natural gas. It's already pretty clean, this will make it even better. The investment we're making in the grid, the things that ITC are doing to hook up the wind farms in the Midwest is amazing. We're going to continue to do that.
The queue is so long for this. That's going to drive our capital plan for a long time. In Arizona, that shift away from fossil fuels, especially coal, over time, moving to solar and wind energy is occurring, and we're a big player in that. Last night, you heard about electric vehicle penetration. It's really not if, it's when and how quickly. It's really, from my perspective, I'm a big believer. Don't own an electric vehicle yet. I got to solve that problem, I think. David owns one. He's the pilot program, I think. I got to find one that tows a big boat, I think, to replace the Tahoe. Anyway, I do believe that it's going to drive opportunity for our sector.
In energy efficiency, the things we're doing across the group, this is always, in my view, the cheapest way to cleaner energy. If we can consume less, spread it over more uses, that's the best way of doing it, and we have some exciting programs, especially in British Columbia that I mentioned earlier. Let's go to the video. Throughout North America, our utilities are focused on delivering cleaner energy. We see FortisBC leading the way with renewable natural gas, as well as natural gas for transportation. Tucson Electric Power is being ambitious with its solar and wind initiatives. ITC, a transmission powerhouse, is enabling the connection of renewable energy each and every day. Let's hear from our CEOs as they tell you about the steps they're taking to make a sustainable future for all.
UNS Energy and its major affiliate, Tucson Electric Power, is spending a lot of time and effort developing a cleaner energy portfolio. When you look out into 2021, the amount of energy that we'll be providing our customers from renewable energy is 28%. That means we're almost at our 30% goal. That renewable energy that we currently have on our system is over 600 megawatts of wind and solar, which today provides over 15% of our customers' energy needs. We have the ability to greatly reduce the greenhouse gas intensity in every sector, and I think that's the critical role that we, as utilities, will play on a going-forward basis.
FortisBC is committed to leading the way to a low-carbon future. We're making progress on several fronts. Two areas of real growth for us are the broader adoption of renewable natural gas as a key initiative on decarbonization of the natural gas delivery system. We're working with policymakers to deliver on an ambitious target of having 15% of the natural gas we deliver to our customers come from sources such as landfills, agricultural waste, wood waste, and hydrogen. Both our gas and electric utilities have made a significant commitment to energy efficiency as well. We expect over the next four years to be in a position where we will close to triple the investment we are making in energy efficiency incentives to our customers.
At ITC, we have had many projects that are in direct response to the transition to a cleaner, greener future. For example, we have connected over 50 wind interconnection sites in Michigan and Iowa alone. Our expertise when it comes to renewable energy is really planning the transmission grid and then executing and building those transmission interconnections to those renewable resources. We have interconnected over 7,000 megawatts of renewable resources across our footprint, and that's enough to power over 5 million homes. The three words I would use to describe ITC's path to the future: excitement, enthusiasm, optimism.
As you've heard, we're excited about where we're headed. Our commitment to clean energy is clear. Our utilities are stepping up, being leaders, and doing what's right for the environment and our customers. Together, we're driving progress on delivering cleaner energy and creating a sustainable future for all. Just to keep going on this topic, you'll see this slide shows a number of the areas that we have operations in and the legislative commitments of the various governments to goals around cleaner energy. That's driving a lot of this move by the utility sector to invest in these areas.
I will say, if you look at ITC, some of the actual current legislation around renewables is many of the state utilities are large customers of ITC, CMS, DTE, and Alliant, for example, have set goals much higher than these levels in the 80% renewable on average range by 2040. We believe there's tremendous momentum in this area that's going to continue to create opportunity for our sector to invest. Just to continue on ITC, if you look at the opportunities that is in front of the company, they already have connected up 6,600 megawatts of wind energy, $8.5 billion invested since inception. You look at the other opportunities that are listed here, whether it be storage, the amount of wind that's in the queue, 82-91 gigawatts of additional renewable capacity in the MISO and SPP queue.
That's like 82,000 MW-91,000 MW of wind, and it's really a big number, and even if only half of that occurred, it's going to continue to drive the need for transmission in the business. Arizona, David Hutchens and his team have done an amazing job of cleaning up the portfolio of supply, of delivering on the targets on cleaner energy, and surpassing them quickly, 28% by 2021 renewable energy. We had a goal of 30% by 2030. He and his team have delivered that basically nine years ahead of schedule, and pretty excited about what the new plan may be for Arizona after we do a lot of our consultation.
I have to give David, and again, his team and the board there, really kudos because really working with local stakeholders to say what's the right approach for Tucson and surrounding areas in terms of goals in this area. He's collaborating with the University of Arizona's Institute of the Environment to work together to establish, is it reduction of greenhouse gases? Is it the amount of renewables? What's the right target for that business? I think all I know is that we will be better in Arizona going forward than we had anticipated to be. Better quicker, frankly, in my view, from this perspective. I think that business in Arizona will continue to benefit from that strategy.
In terms of BC, when I look at natural gas distribution franchises in North America, I'm biased, but I do believe that our franchise in British Columbia is the most exciting natural gas franchise in all of North America. The things that are occurring in that business, the opportunity set that we have, the alignment with government policy that we are achieving, is driving investment. We also have a small electric business there too, obviously, but three-quarters of our investment in British Columbia is on the natural gas side. I will tell you, there is just so much natural gas in British Columbia. It is an amazing resource. You've heard about the large-scale export opportunities that are occurring. We're not really involved in those, but we are involved in some smaller-scale stuff.
Some of these big initiatives on creating more renewable gas, using natural gas for road and marine transportation. We're already fueling some of the ferries in British Columbia, now looking at a bunkering opportunity as well. Some real exciting initiatives going on there. That's going to drive the growth of that company. It will be our fastest-growing Canadian business for the next number of years, for sure. Our capital plan, you'll see that it's CAD 18.3 billion. You can see the curve there starting with 2020. We're at CAD 4 billion and dropping to 2024, CAD 3.3 billion, a typical utility curve. That CAD 18.3 billion is, as I mentioned, CAD 1 billion higher than last year's plan. We're coming off 2019 now at CAD 4.3 billion. The investment is primarily, again, going, as you would expect, into the transmission and distribution area.
The other area is really technology, vehicles, fleets, that kind of thing, which support that T&D investment. Then just 7% on the generation side. Highly executable. When you look at it, 60% is sustaining, 27% growth related to customer growth, expansion of capacity, those kind of things. Canada, U.S., 41% Canada, 54% in the U.S. The neat pie here is the smaller projects versus bigger projects. 80% of that $18.3 billion is in small-sized projects, less than a couple hundred million dollars. Major projects, which usually come with a little more risk, are a very small part of our overall budget, and we'll talk more about that. Rate base growth, around 7%. You'll see the leader, Charles Freni from our New York business, is here. He gets the prize, 8.2%.
Really lots of great things happening in New York State, lots of investment going into the grid in the Hudson Valley, that's driving strong growth in that business. FortisBC, driven by the gas infrastructure, 6.8%. You see ITC and UNS obviously having strong growth as well. What's an interesting thing is that CAD 10.4 billion of rate base over the five years, we're basically adding CAD 1 billion of rate base every six months to the company. In my mind, when I first joined Fortis, we bought FortisAlberta and FortisBC, the electric franchises. That was CAD 1 billion of rate base back in 2003. It was almost like a bet-the-company transaction back then. I think we issued stock equivalent to two-thirds of a market cap. Now we're adding organically one of those every six months to the company. It's just an amazing story.
We do expect the growth to continue. Clearly, the big trends that are occurring is beyond that five-year plan, and maybe some of it starts to creep in in the outer years of that five-year plan. There's a lot happening across the sector, and we believe that's going to drive further investment. We've identified a few things on this slide 29 that sort of focuses on some of that. We're still working on a number of key things, and especially on the natural gas infrastructure side in British Columbia. There's a real focus on the resiliency of that natural gas network in that province, and I think that's going to drive some significant investment for Fortis, whether it be in more tank storage, more redundant pipe, bringing gas into the Lower Mainland.
These are some significant initiatives that we have underway now to fix the problem that was highlighted with the pipeline situation late last year when we had the explosion on the pipeline. I'm hopeful that over time, we'll be able to create a more resilient natural gas network in BC, and that will drive some further investment. We look at the larger businesses that we have, just to comment on some of the key areas where we think some incremental capital will go. Clearly, we've talked about ITC already. The shift to renewables is going to continue. I believe in the long-term trend, that there will be more renewables on the grid. We said it in the video, getting that power to the load center is going to drive the need for more transmission. Having these RTOs solve the seam problems.
FERC has to be more involved, and we're, I guess, big believers that over time we'll solve some of these issues, and that will drive further investment. The entire conversation around resiliency, we see now with the storms, the impacts that are there, and a lot of this we can solve. It just requires some investment, and when we build things in the Caribbean, when we put back the things that come down from the storms, the next time the storms, the things that are still standing are the things that we just put back. We can build it stronger. Obviously, there's cost, and we have to figure out how to do this without major impacts on our customers. Increasingly, this conversation around resiliency is there, and I think the grid will get stronger going forward, and that will drive more investment for utilities.
I already talked about BC. Clearly, we have expansion of our Tilbury LNG storage site. The Southern Crossing expansion is basically, we have a pipe that brings gas from Alberta into the Lower Mainland already. It's a small-diameter pipe. Is really expansion of that pipe to create another way to bring more gas into the Lower Mainland and to create a redundant supply. We're exploring that opportunity at this point in time. That would be a fairly sizable investment if it went forward. The renewable gas target of 15% will drive further investment. By the way, all this is regulated investment. Sometimes when people think about renewable gas or gas for transportation, some utilities are not doing that in the regulated compact. We are in British Columbia. It's part of the regulated business, so it has the same risk profile as our normal investment.
We still have this long-term goal to expand our Tilbury facility to supply Asian demand. It's a tidewater facility. We have the experience, the expertise in dealing with local regulation, First Nations, to make this work, and we continue to have good dialogue on that opportunity. It is not in our five-year plan. It would be a CAD 2 billion-CAD 3 billion kind of size project. I do believe that FortisBC will build that project at some point in time, and that's an exciting opportunity that we continue to pursue. In terms of UNS, we talk again about setting this new target. Maybe it's greenhouse gas, maybe it's renewables, but we're working through that now, and that will likely drive further investment in the grid, in renewables for Arizona. Stay tuned on that.
Go just have a look at their integrated resource plan that was filed with the regulator. It is some really good information on what the possibilities could be for that franchise. These sort of initiatives, these opportunities that are not in the plan, give us a lot of confidence that we're going to be able to continue to grow the business nicely over the next number of years into the second five years of our five-year plan or of our 10-year plan. Innovation. This is a buzzword that people are hearing a lot about these days. When I think about what's happening at Fortis, we went through a period of a lot of M&A activity, buying U.S. businesses. We went through a period of focusing on organic growth, and we've had great success in those two strategic initiatives, I'll call it.
Now there's just so much excitement in our company about innovation. There always were innovative folks in the business, but I would say it was in pockets throughout the company, and some folks were tucked away in corners kind of thing. Now it's really a front and center thing for our company, for the sector generally. The amount of capital that's flowing into ideas in the energy sector is amazing. This entire conversation on electrification of transportation, renewable gas, battery storage, all these areas are driving opportunity. The utility sector, we want to be part of that. Fortis is in that same place. We've actually invested in Energy Impact Partners. It's a private equity fund based in New York that is basically 14, 15 utilities providing capital to be invested in all the emerging ideas that are occurring in our sector.
You could say, "Well, why did Fortis invest in that?" We sort of had a choice. Do we build up some sort of internal team of scientists, engineers, R&D experts, or do we partner with others to work on this? Given our business model of keeping a very small corporate office, having local operations, we felt that this was the best choice for us, and we haven't been disappointed. They raised, I think, I'm going to get these numbers slightly wrong, but it's $600 million in the first fund. The second fund is soon to be announced, I think. It's going to be probably bigger than that fund. In fund 2, Fortis is playing a bigger role. We're seeing everything that's happening in our sector, whether it be cyber issues, batteries, all the big things.
The ideas that work for us, we take those ideas and bring them back to our utilities and implement them at our utilities. It's a great way of staying abreast of everything and seeing the innovation that's occurring in the sector. We have a video that talks a little bit more about it. I think that this focus on innovation is what's going to drive more growth in the business going forward.
Fortis has always had a great legacy of innovation. When we think about innovation, we think about opportunity.
Smart delivery of energy is a key part of the future of energy.
The three Ds: decarbonization, decentralization, and digitization. The shift to cleaner energy like natural gas, solar, and wind. Now we're taking that to a new level. The biggest opportunity we have in this country to improve our carbon footprint is to electrify the transportation sector. The secret sauce of Fortis is our unique business model. We are a family of 10 different utility companies, and we've created this Fortis Innovation Network. Individuals from each one of our operating companies, we call them innovation ambassadors.
The beauty of the Fortis model is that although we act locally, we can think globally on a much bigger scale, and we can take advantage of the best practices across all of our operating companies.
A couple of years ago, we made a very unique investment in a private equity fund called Energy Impact Partners LP.
Energy Impact Partners is a strategic private equity fund Fortis has invested in to accelerate our focus on innovation. We really see Energy Impact Partners at the nexus of our internal and our external focus on innovation.
There's so much opportunity to capitalize on. I really can sit back and say sky is the limit.
Now to one of a couple of my more favorite slides. Outperforming historical capital plans. You've heard us talk about this before. I just want to paint a picture. We closed ITC in October of 2016, I think it was. We released our third-quarter report in 2016, and we say that our five-year capital plan is going to be CAD 12.9 billion. Now when we look at that five-year plan, it's CAD 18.2 billion. Same business, these are the same store sale numbers, basically. Just imagine if we had announced CAD 18.2 billion back in October 2016, how much of a stronger reaction maybe we would've gotten from our shareholders, from investors at that point in time.
We've been focused for some time now on making sure that we do a lot of work around the full five years of our plan because trying to sort of slow down that gap, I'll call it. You can see the next year, we were CAD 14.5, and we actually now are at CAD 18.8. Last year's plan, we said CAD 17.3. If you overlay where we are the same years, we're actually at CAD 19.3, getting close to that magic CAD 20 billion number that I tend to talk about. When we look at our capital plan, that CAD 18.3, we talk about it with a lot of confidence because this trend of finding more opportunity in those outer years, it's been going for a long time. You could go back further here. These sort of trends are consistent for a long time.
Today, we're announcing this CAD 18.3 billion. We're confident we can execute on that amount of capital. If history proves us right, we will actually spend a fair bit more than that CAD 18.3 billion when we look back 5 years from now. Dividends. We all love dividends. We're all large shareholders of Fortis. Fortis had a track record of now 46 years of increasing its dividend. There's only one other company, I'll acknowledge them. I still think we're the leader, but we have this battle that goes on. It's Canadian Utilities in Alberta, the company that's controlled by the Southern family, and they maybe have a little stronger record. No other bank, no other public company in Canada has done this as long as Fortis.
I will say that when we have some U.S. shareholders say, "Why are you focused on dividends versus EPS guidance?" It's tough to move away, right? It's an important record for the company. We do still have a lot of retail shareholders, about 30% of our stock's held by retail shareholders. My phone's been going off all day saying, "Thank you very much for the dividend increase." To be honest, it's not large shareholders that are saying that. It's the people that own a few thousand shares in the company that it's a big part of their retirement income. This is an important metric for the business. I'm very proud that we've announced this 6.1% dividend increase again as of December 1st and look forward to continuing to be able to do that well into the future. With that, we're going to do a break.
We're going to do a five-minute break. Grab a coffee and please be back.
No, that's my water. My water. Okay, welcome back, folks. I won't say this is the best half of the show. That would be wrong for me to say, but I always say it's quite difficult to follow behind Barry because he's quite enthusiastic, certainly, about the plan that we've just released. My intention here today is to dive a little deeper into our capital program, just about the projects that we have included. Look also at the funding. We mentioned this, that the plan that we've put together from a funding perspective does strengthen our balance sheet, move us forward, which is certainly one of our objectives. Also, I'm going to look at the regulatory construct. I'm going to look at how that lines up with our capital plan that we have and how that lines up with our customers.
When you look at our objectives, I'm about with Fortis about one year now. Last year this time, we set out our objectives, and they really haven't changed. We are about delivering on our growth strategy, our internal organic growth strategy. Yes, I agree with Barry, we have actually consistently delivered more, but we remain focused on delivering this CAD 18.3 billion capital plan. Doing so, we're maintaining a strong credit profile, and we're actually strengthening our credit metrics as we go forward. Certainly, that is all in to deliver a 6% annual dividend growth. The strategy, the objectives are quite clear and quite simple. Looking back also from a financial perspective, again, this is during a period of acquisition, a period of U.S. tax reform. Not with some exciting times. We've performed.
We've delivered an 8% EPS five-year CAGR, and a 6% rate base CAGR. Quite impressive during a time that certainly, again, was busy for Fortis. Throughout that time, we delivered on a dividend payout ratio of 68%, and we have said clearly before that that's within the zone that we're comfortable with respect to our dividend payout ratio. When you look at the five-year capital plan, and Barry spent some time on our three biggest utilities moving the needle with respect to our capital plan. We're pushing almost 70% of our investments come from ITC, FortisBC, and UNS Energy. Again, 99% of all of our investments are regulated. We're seeing good growth from each of our utilities, not just the bigger utilities, and that's reflective of the CAD 1 billion increase that we just announced earlier this morning.
The rate base, and Barry's touched on this as well, currently at CAD 28 billion. Over the five years, we are growing the rate base to CAD 38.4 billion. In the early years, it looks like a 7.2% average growth rate, and over five is 6.5%. I would say, it's fairly consistent. We showed last year a 6.3% average CAGR. Again, in the same direction we've been for many years, we have consistently delivered more than what we thought. Again, we're now upping the capital program by CAD 1 billion. That's pushing this CAGR up to that 6.5% over five years. It's over CAD 10 billion, and we like repeating that, by the way, CAD 10 billion of rate base over the five years. Just taking a deeper dive into what's driving that CAD 1 billion. The drivers of the CAD 1 billion are coming from ITC, around CAD 300 million.
We have CAD 300 million from FortisBC, CAD 200 from the Caribbean, I'll touch on that, and CAD 200 in foreign exchange. Obviously, the foreign exchange rate will move depending on markets. Last year's plan was based on a rate of 1.28. We've converted this year's plan based on more current information at 1.32. When I look at the drivers of our capital, I feel that I have to mention, UNS is not on this slide yet. UNS is a big driver of our growth. It's just you remember, it was just last quarter we announced this. We raised our 2019's plan by CAD 600 million. UNS was actually a big reason for that growth. There's more timing as to when they're actually contributing to the growth over our previous plans.
I'm just going to take a look at some of the specifics as to what's driving these incremental investments. Ultimately, when you step back, it is the whole theme that we've discussed here today already around the path to cleaner energy. That's what's driving the incremental investments. As Barry said, there's probably more. Right now, there's CAD 1 billion more, so it's a good place. Looking at ITC, Barry talked about what was in the queue, and there's an incredible amount in the queue. When you look at what's in ITC's program, they're going from CAD 4.5 billion over five years to CAD 4.9 billion. Again, they're up CAD 400 million. CAD 100 million of that is foreign exchange. CAD 200 million of that is associated with interconnections of renewables onto the grid. They have around almost 2,000 MW of wind and 600 MW of solar.
That's what's in the plan incrementally now that we've added, and I believe from speaking with Linda, we probably have about 40% of that we already have interconnection agreements for. Feeling pretty confident about this incremental investment associated with hooking up more renewables onto the grid. Again, the queue is quite large, and the future in this area certainly is and continues to evolve for ITC. Again, there's some incremental investments of CAD 100 million, and that's all related to just grid strengthening, grid hardening, and supporting reliability initiatives at ITC. When we look at FortisBC, again, Barry spoke of some projects within BC, but certainly our Tilbury site is an exciting site and not just for export, but also for the local marine bunkering services. We currently provide, through our Tilbury 1A site, some truck-to-ship marine bunkering.
Obviously, the next level of this is the evolving marine bunkering. The project that we've added to our plan, and it's our only new, what we call, major capital project, just because it reaches that CAD 200 million threshold, is this particular project. It includes an additional liquefaction and some piping to the marine jetty. This is about having access to a marine loading jetty and doing the direct ship-to-ship bunkering. We have this in the plan for the latter part of the plan, and we believe by then that this market is evolving, and we believe that by then there will be a need to expand our Tilbury site.
There potentially could be even room for further expansion at the Tilbury site, as Barry mentioned, around any further opportunities with respect to LNG for export, which we currently do not have in our plan right now. In even focusing on not one of our bigger utilities, but even our smaller utilities, their capital program over the five years is increasing from CAD 400 million to CAD 600 million. Pretty significant for CUC. This is really centered around the government's push to have emissions reductions there as well. I think it's 60% by 2030. A big step forward for Grand Cayman was the regulator actually accepted an integrated resource plan that was essentially a roadmap on how they get to those emission reduction targets. It's about taking the island from diesel to more renewable solar, in particular, clearly.
The IRP itself calls for about 100 MW of renewables by 2025 within this roadmap. Within our plan, we've actually only included 50 MW of renewables, and we've only assumed 50% thus far in this plan that we presented today. The way the IRP works is that now you have to submit projects to be approved by the regulator, and you have to, of course, present why it's good for the customer, which we feel we have no issue doing, considering how we believe we can implement solar, per se, cheaper than we operate the diesel today. It is uncertain whether CUC will have to compete for this generation, which is why we've included only 50%. We're certainly going to be pursuing all renewables opportunities there because there is a big push on Grand Cayman to actually meet those emissions targets.
We feel we're ideally suited to provide that renewables options. With respect to the major capital projects, Barry touched on this, 80% is our regular business we've put aside, and only 20% is deemed the major capital projects. I have a short video here to just highly touch on the 10 projects that we do have, and certainly post the formal part of the presentation, we're having a roundtable, and we can certainly dig into these projects a little more. Here's the video. Just looking further beyond the major capital projects, Barry talked about this as well. When we look at how we're bringing in those investments or where the incremental investments are coming from, when you compare the same five years from 2019 to 2023, our capital is up incrementally by CAD 2 billion.
Again, we increased it by CAD 600 million in 2019, as you'll recall. A lot of the incremental growth that we are seeing is actually coming in the front end. I don't know if it's common, but you tend to see growth projected in the outer years. In our case, we're actually expecting this growth to come to fruition in the front end. If anything, it's our back end that's showing some curve downward. Again, all that plays into how we set ourself up to fund this capital growth plan. As we did last year, we outlined what the funding strategy was. To no surprise I'm sure, the bulk, given that 99% of our investments are regulated, that the substantial portion of this capital program is actually being funded with cash from operations from our regulated utilities, 73%.
The net debt refinancing is estimated at around 24%, and the majority of that is at our regulated subsidiaries. We are increasing our capital plan by CAD 1 billion. We did say, since we delivered our capital plan from the previous year, that if we were to increase our capital plan above that CAD 17.3 billion level, we would look to utilize our ATM program. We have outlined here today that we do plan on utilizing our ATM program for this five-year capital program. That's substantially funding the equity piece of this incremental CAD 1 billion. That clearly keeps us in a position to keep our balance sheet strong and continually improve our balance sheet as we move forward over the five years, which I'll show. Certainly, it is with the aim of maintaining our investment-grade credit ratings.
I will go further and say, because it would be the elephant in the room, we always look to improve the rating that we have from Moody's as well. I think the plan that we have put in place, it is strengthening our credit metrics. It improves our CFO to debt, it improves our holdco debt to total debt, and we're a highly diversified company. I believe all of those combined could lead us, at some point, to a further ratings review with Moody's. Contrary to Barry, we all have our favorite slides. This is my favorite slide, because this funding plan provides us with the strengthening that is clearly one of our objectives that we set at Fortis. Barry alluded to this, that we did use our balance sheet with ITC.
We did have U.S. tax reform. We have been working our way out of both. This funding plan certainly puts us in a good position. When I look at the capital plan, given that it's substantially regulated, given that we do not have an abundance of major projects that are highly risky projects, our risk profile is not changing. If anything, one of the credits we get from a ratings perspective is that we have a very strong business risk profile. I don't see that changing with the capital plan or the incremental investments that we're now proposing here today. When we look at what this is doing for us on the year gone by, again, as the heading says, recovering from U.S. tax reform, our CFO to debt was below that 11% threshold that we aim to achieve.
It was 10.5%, and holdco debt to total debt was 39%. In 2019, when you flip to the right, some of this is related to Waneta, some of this is related to we are tapping into the ATM. We are improving our CFO to debt to that approximate 11% threshold, and our holdco debt to total debt is decreasing to 36%. When we look beyond 2019, and we now look over the five-year period, our average CFO to debt is around that 12% mark. Again, these are the things that we were looking for within our funding strategy, is to set us up to actually continue to strengthen and put us in a position to maintain the great credit ratings that we have and potentially a ratings review by Moody's at some point. The holdco debt to total debt is actually decreasing to 32%.
These are not, in my opinion, insignificant reductions from 2018, where we started at 10.5 to 39, to actually be looking to on average, get to 12% over the planning period and to get holdco debt to 32%. These are what I call measurable strides in improving our credit profile, which is why this is my favorite slide. Then just looking at debt maturities, not much change here from what you have seen before. On average, about a five-year average is about CAD 1 billion annually. Certainly, within a manageable level. We have ample credit facilities at our regulated utilities and within our holding facility to operate the business as needed for our customers.
Again, all of this is rooted really and in terms of how we maintain a strong business risk profile by the rating agencies and how we have strong investment-grade credit ratings from all of our subsidiaries. Certainly, that's something that we set as an objective for all of our regulated utilities. Utilities need to be able to respond to good and bad times, and it's important that they have a strong credit profile as they operate a grid that's necessary for the safety of everyone. We look at, as you do in any business, some sensitivities that you would have, and Fortis is no different. What I always say, we're naturally hedged from a sensitivity perspective. We have 10 separate businesses, and that, by its nature, hedges us from any one impact throughout our business. Certainly, foreign exchange is one that we pay attention to.
We do have a hedging strategy where we see we're hedging around 30% of our cash flows. Ultimately, it results in a $0.05 change in the exchange rate, leads to about a $0.06 impact on EPS. It's been like that now for several years, and certainly one that we feel comfortable with. When we look at changes in ROE, we just chose two of our biggest utilities here to give perspective. Again, we're naturally hedged because it would have to happen in both utilities simultaneously to be additive to Fortis. A 25-basis point change in ROE at ITC is around a $0.03 impact on Fortis. 25 basis point change at UNS would be about a $0.02 impact on Fortis.
When we look at our five-year rate base CAGR, if we were to add an additional CAD 1 billion to our capital plan, it adds about 30 basis points to our average CAGR. That's the key sensitivities that we do have. We look at, I say delivering, and I believe it's Jim Lorito said it in the video, which he stole the verbiage from Mike Mosier, which he says it's the Fortis secret sauce. It is. It is how we're operated. We're locally managed, but we think much broader as a group. We can have access to a wide variety of talent, ideas, exposures, and we don't need to reinvent the wheel in certain cases at every utility all the time.
We get the benefit of working with a larger group and being able to not only deliver on our plan, but sometimes in the past, delivering more. I think it's important that that local management is preserved in each of our utilities. Our managements are close to customers, close to the regulator, close to governments, they're close to the economy. They make the right decisions for customers. Also, even when they put forward these capital plans, there's a lot of effort and a lot of work that is done within this capital planning process to make sure that we've considered all elements of safety, reliability, and customer service, and also the impact on customers. It's not you can spend.
I'm sure there's much more we could spend at, but it has to be balanced with the customer in mind and the impact that it has on customer rates. We've done a great job, in my opinion, right across all of our utilities at managing the impact that our investments have had on customer rates. Going forward, it's not lost on us that we have to maintain that focus, and our utilities feel they can deliver the capital program while not having a drastic impact on customer rates. When we turn to the regulatory outlook, not much new here from what we've discussed in our Q3 conference call. We are still awaiting a decision from FERC for the MISO base ROE. We are still anticipating and hopeful that we can get an order this year.
The notice of inquiries are still outstanding, and reply comments are due on the incentive NOI, I believe the end of September. That process is still running. I will reflect on one order that FERC issued, which was with respect to the independence adder. They actually reduced ITC's independence adder from about 50 basis points to 25 basis points, citing that they weren't totally independent. We asked for a rehearing on that. It was denied. It is very likely that we will appeal that decision. That'll be forthcoming soon. With respect to UNS, the rate case has been filed. We are still anticipating new rates in early 2020. That proceeding is filing as normal. We're answering RFIs and doing the normal course process, but new rates are expected in early 2020.
BC also filed a multi-year rate plan, that doesn't deal with cost of service, and it's more about just rate structure and just how the construct of the rates are embedded within FortisBC, and that was filed in early 2019. No change there either. When we sit back and reflect, and which we often do, and we show this slide quite often, to be frank. We do often compare our U.S. businesses with our Canadian businesses, and we do continue to try to understand the difference, particularly on the equity thickness of our U.S. utilities to our Canadian utilities. If we look at where we are, it's around 55% for the U.S., it's around 39% for Canada. It's not an insignificant difference. I guess my point on this one is that we remain focused on this. We try to understand it.
There's a need for us to continually work with regulators and the population at large to get under this, because we believe the divergence is certainly too large, and we need to start closing that gap. It is a focus of Fortis and a reflection that we have constantly. When I look at the regulatory calendar, again, this aligns with setting the utilities up to delivering on the capital program. Utilities have to go in front of the regulator to rebase rates, and again, as I said, in a balanced way with customers. When we look at the calendar, BC obviously has just set the multi-year rate plan that takes it out to 2024. TEP expects rates in 2020 but certainly anticipates that it will be in again in a couple of years for new rates around 2023.
When we look at Alberta, they intend to start a Cost of Capital Hearing around how to set cost of capital for years 2021 and onward. That has yet to really take any form just yet, but that will determine the look of Alberta, I suspect, going forward. We're very interested in that particular proceeding. Central Hudson expects new rates in 2021, and again on that three-year cycle as well. Back to Barry's slide on the winner of our rate base growth within Central Hudson, it's important that Central Hudson also get in front of the regulator and match up the capital investments with that of the customer rates and how we're going to implement that going forward. No, I would say that the regulatory calendar is not daunting.
It is, I say, normal course business, as we would say. Certainly, we have the local teams dealing with each of those proceedings. When I look at the highlights, yes, the CAD 1 billion increase from the previous year is certainly a push to CAD 18.3 billion. That's almost a 7% CAGR rate base, which is certainly a growth rate that we are happy with. Well, I say Barry will never be happy with the growth rate, but I'm going to say 7% is within industry norm. We are increasing rate base to CAD 38.4 billion. Again, part of my favorite slide. We are making measurable improvements from my perspective in our CFO to debt over 200 basis points. Our holdco debt to total debt improves over 700 basis points.
Again, not insignificant, one that we've been really focused on, and I think sets us up to maintain our strong credit ratings that we have. With that, I'm going to turn the floor back to Barry to close.
Thanks, Jocelyn. At Fortis, I believe our story is getting stronger. With Fortis, you get a group of well-run businesses. We're really highly diversified. We are focused on that important area of energy delivery, really spending a lot of time in innovation and growth these days. Created a great, I think, platform for the next five years now, growing our rate base by about 7%. Still really focused on the regulated space. That's our screen. Is it regulated? If it's not, we struggle to go there. ESG, it's becoming such a important factor of everything we do, and I think we are aligned very well with this theme, and we'll continue to spend a lot more time on ESG matters going forward and aim to be that ESG leader, frankly. To end up, our dividend guidance is important to us.
We have extended it for another year. We've raised our dividend again as of December 1st, and we're really excited about our ability to continue to return funds to our shareholders. Thank you very much. I believe we're going to go to a Q&A session, which is going to be coordinated by Stephanie.
This concludes the formal presentation. We'll start and open the floor to any questions that you might have here in the room. We'll bring a microphone over to you.
As I say at the AGM that we have in St. John's every year, where we have 300 or 400 shareholders show up, like it's a mini-Warren Buffett kind of thing that we have, there has to be questions. We need at least a few questions.
Oh, there we go. Linda Ezergailis with TD.
I know we have the round tables this afternoon and all that as well.
Maybe we can touch on your next likely opportunity to challenge this difference between U.S. regulated returns and Canadian regulated returns. It seems that the Alberta Generic Cost of Capital Proceeding would be an opportunity to rally your peers to advocate for that. Can you comment on what sort of conversations you might have had with your peers on this front, and how your approach in this proceeding might differ from prior generic cost of capital proceedings?
Well, definitely, peers are supportive. Why would they not be? It is a material difference in how Canadian businesses are treated in Canada versus how U.S. businesses are treated. There's a stark map that there's somewhere that shows the amount of capital that has flown from Canada, Canadian-based businesses into the U.S. versus what has come from America up into Canada in our sector. The northward flow is basically zero. One transaction, which is the Berkshire Hathaway purchase of the transmission system in Alberta a long time ago. We all know the amount of capital that has flown from Canada down into the U.S. That tells us something, right? American utilities are not that interested in buying Canadian businesses with that thin equity level. For Fortis, this is a big matter. We have about CAD 12 billion of rate base in Canada.
When you add the equity on that rate base and the difference in the allowed returns, it's about CAD 150 million a year in earnings and cash flow. These businesses are not producing the same amount of cash flow as our U.S. businesses. I think there's steps that we'll be taking over the next few years. This is not something we can change in a year. This has been developed over decades, these differences. We have to convince our regulators that this is the right thing to do. That means it's the right thing to do from a customer perspective. We're still spending time on it. We will use the different proceedings that we have in front of each of the provincial regulators to amplify the conversation.
I think rating agencies, to be honest, also have a role to play in terms of how they compare a Canadian-regulated business to a U.S.-regulated business and the quality of the regulation. I think there's a general thought that U.S. regulation is inferior to Canadian regulation, that it's not as consistent, there's more disallowances in the U.S. compared to Canada. I would argue that that's not true. It may have been true 10, 15 years ago, but if you look back at the last decade, many American businesses have improved their interaction with the regulators. They have created riders and pass-throughs that are similar to what we have in Canada. They've moved to forward test years. Yet we retain in the U.S. a very thick equity level. I think that argument is no longer true.
From a rating agency perspective, that’s an area I think that will probably evolve as well. We’re hopeful we’ll make progress over the next 5 to 10 years. From a shareholder perspective, this is an important topic. When you think about Canada, and this is a long answer, but Canada’s got some competitive issues in the energy sector generally, and we’re not maybe at times put in that sector. It’s more the midstream oil and gas, that kind of thing. This is a factor, right? From a competitive perspective, the country, we need to attract capital, and I think being that much different than America here is a place we cannot be long-term.
Great. It looks like we have another question here from Robert Kwan with RBC.
Thank you. Actually, a couple of questions. One for Barry and one for Jocelyn. Barry, just on the M&A front, you were very explicit a couple of years ago. No M&A, taking it out of the areas of focus. It is still not in the areas of focus. I am just wondering, are you continuing to make that statement here as we go forward?
Yeah, for sure, Robert. We know everything that's happening in the sector, the big stuff that's possible. None of it excites me. I have to say, listen, we've now been three and a half years since ITC, one could say, "Well, that's typical for Fortis. Now Fortis is going to go do something big." It's not the case. Really, when you look across the spectrum, we're not seeing that strong opportunity that would make strategic sense for us at this point in time. There are only a handful of businesses that would make sense. There's only 40 or so investor-owned utilities remaining in the U.S. Some are really small, some are really big. When you look in the middle there are only a handful of businesses. I've been saying for some time, the next opportunity in this area for Fortis has to have strong industrial logic.
I don't see us going off to the southeast and doing something. It's got to be connected, part of, overlapping to something that we already have. When I look at those opportunities, they're just not there. I will say that valuations are also high. We're benefiting from that as a company as well, obviously. When we bought into the U.S. business, our timing was really great, right? Valuations, even though folks said we paid a lot, valuations continued to go much higher, and we got in when the dollar, our Canadian dollar, was closer to par. Our timing was pretty damn good coming in. Those things are not in alignment right now either. We're fortunate. We have a great business that's growing well, and we can be really patient. If it takes five, 10, 15 years, it is what it is, right?
We will continue to be aware of what's happening in the market, and we're not actively seeking out that opportunity at this point.
Great. Thanks. Then Jocelyn, just on the funding side. You've outperformed historically on your capital spending, and Barry, you were talking about CAD 4 billion feels like the run rate. That could add a couple of billion almost to the plan. When you look at the funding plan, that 3% ATM wedge looks like roughly where your ATM is here. How do you look at if that unfolds? Is it the ATM? Is there some other financing? Do you look at asset monetizations? How would you look at, or is the trade-off just not to strengthen the credit metrics as much as you've talked about?
I think if we were to secure additional capital of CAD 2 billion, as you say, Robert, we would certainly look to potentially the equity market for that. We can reestablish the ATM program over that five years and tap into the ATM. It would depend on the timing of the project, how big the project is, but we would certainly look to finance a project where we continue to strengthen our metrics or maintain the metrics that I've shown here earlier today. We're not looking to go backwards with respect to where our balance sheet is. Depending on the timing and the amount, we would look to see the impact that it would have, and we would finance accordingly so that we maintain the vision that we have for where we want to be within our credit profile.
Would asset monetizations factor in going forward?
Yeah. I think last year we laid out that we anticipated we would do asset sales. We sold Waneta, as we said, and we said we were done with asset sales. I'll repeat Barry on this one. It all depends on value. We always would consider certain asset sales, but that depends on value, right? Right now, no asset sales, but never say never.
Is selling some of the smaller Canadians almost a way to back into that? Linda's original question, too, just to demonstrate that Canadian Utilities is not necessarily where you want to be allocating capital?
I'd rather solve it another way.
Yeah.
Okay. Thank you.
That's what we do, Robert. It is an issue, right? It's increasingly becoming an issue that we talk to our shareholders about. We get questions on it. I would say the utility industry is changing. One time, we didn't get challenged on capital allocation, and you'd push back and say, "No, we don't think about capital allocation." Increasingly, shareholders are concerned about where you're putting the capital. Do you need to own all the assets that you own? Should you rationalize? These are conversations that all big public companies are having on a regular basis, and Fortis is no different in that. As a management team and as a board, we have to be aware of that and on top of it and make sure we're running great businesses that are reflective of what we expect them to grow at.
That's why those capital plans are so important that we need to be able to show the business to our stakeholders as what we think it is, right? The fact that we have been under-reporting our capital plans historically, it's probably not a positive thing in a way, because that means probably the valuation for the business in those times wasn't at the right place. For me, it's always making sure that we present our company to our shareholders in the light of what we expect it to be in the next few years. Increasingly, the questions you're asking on funding and capital allocation are very pertinent and are front and center in our deliberations as we figure out how we fund our capital plans.
Andrew?
A multi-part question. You look at the skew of your smaller cap projects now at this stage in time, which is different than well in the past where you had some really large projects. Are you more confident in the quality of the earnings on a go-forward basis? Has that smaller project skew really helped transform the employee culture to be more entrepreneurial? The final part question is really when you look at BC, how much runway do you have on just gas distribution, enhancements, extensions, so on and so forth?
The answer to the first couple of questions is yes. I think historically, we've always had a majority of projects in the small category. We've always sort of differentiated ourself a little bit different than, I would say, the pipelines in Canada, the big companies who have these multi-year, multi-billion-dollar projects that are subject to a lot of permitting and that. Fortis has always not been in that category. We're happy that sort of quality is, we're maintaining it in the business. The innovation thing, yeah, I think, we challenge all of our teams to try to find opportunities to enhance their service to customers, do the things that are happening in the sector, share experiences across the group.
This sector is growing by 6%-7% a year. If you got a utility business that's only growing by 2% or 3% in a normal market, that's part of America or Canada, I think that's a problem, really. You got to really focus on that business. There's something likely that's not occurring in that business that everyone else is doing in the sector. We've spent a lot of time on that, making sure our teams really understand what each other is doing and are there gaps and why is Arizona spending in this area and maybe not Newfoundland Power, for example. That's helping a lot. I forget your last question.
The runway of CapEx in BC on the distribution side.
I would say, Roger will do a lot this afternoon in a roundtable and talking about this. Of all the businesses that we have, I'm probably just about the most excited about British Columbia right now, and especially on the natural gas side, the infrastructure side. I wish we had thicker equity there, obviously, but it's good. We added, Roger, what was it last year? 20-
20.
22,000 gas customers in the province, so 2% add rate for customer count. Pretty good for a utility business. BC economy has been strong for a long time, continues to be, I think, a standout in Canada. I think our FortisBC business is going to continue to benefit from that. Clearly, there's some policy issues there that we're all dealing with regards to natural gas and carbon, but we're finding our way to align with government policy to do the right thing and find ways to invest capital. I would say Roger and his team have been doing a marvelous job of doing that. It is a different environment than most of our other utility businesses, and especially the focus on the environment and carbon and all of that. We're really aligning ourselves with those policies and finding ways to grow the business.
We have Robert Hope with Scotiabank.
Hello. You've talked about the potential of the gap between the Canadian and U.S. ROEs narrowing. You're speaking to it from the potential that the Canadians go up. With rates where they are right now, could we see a larger effort from some stakeholders in trying to move down the U.S. ROEs?
I just don't think the tail wags the dog. America is America, right? It's a big jurisdiction. I remain of a view that there is a focus within the U.S. and what's happening in Canada is not going to drive what occurs in America. That being said, low interest rates, near zero interest rates for a prolonged period of time. We all have to be aware that conversations, I'm sure, will happen in all regulatory rooms over the next few years. If we continue to have persistently low rates, that's a macro issue that the industry will face. I can't say what the outcome will be. It does seem like U.S. returns get sticky around that mid-nines, 9.75%. The equity conversation, my view is American regulators want to have strong utility businesses, and it seems like that comes out around 50% equity thickness for a state-regulated utility.
There doesn't seem to be that much momentum to lower equity levels. I think the ROE conversation is where probably more time gets spent in the next rate cycles, I'll call it, if interest rates continue to be lower.
Just in terms of your Caribbean tick-up in CapEx there, the Caribbean's seen some good outcomes and some bad outcomes for the utilities. Can you just speak to your confidence on earning a return on enough capital as well as it's a large spend for the rate base? Is there a significant impact on customer bills, or are they going to benefit from the renewable versus diesel?
I'll answer the latter part of your question. The goal here is to do renewables in the Caribbean and lower customer bills, right? Customers in the Caribbean do pay a lot for their electricity. The cost of diesel into these small jurisdictions, the economies of scale, does cause rates to be high. In some cases, we have to barge diesel in because there's no port facilities that can bring in ships to deliver the fuel. There's added layers of cost. The goal here is to use that fuel cost that we're paying to pay for the renewables, but also hopefully generate on top of that a rate reduction. This is an exciting time for these island nations. We believe that we can achieve this. The Caribbean is obviously risky from a weather perspective. We all saw that with Hurricane Dorian.
I believe the two jurisdictions we have, Turks and Caicos and Grand Cayman, both have suffered over the last 20 years, Category 5 hurricanes, and had their systems significantly rebuilt. I believe both jurisdictions are in a good place right now. Not to say that another storm couldn't cause significant damage. I think, though, it would be less than prior because we've invested heavily in the businesses. We do earn fairly good returns in the business compared to our North American returns. We're into the low double-digit range on that sort of 50% equity level, and we've earned those returns fairly consistently over the years. They are good businesses, albeit with that weather risk in place there.
We'll take a question here from Ben Pham with BMO.
Hey, thanks. A question for you, Barry. You mentioned last fall about your valuation discount to the U.S., and maybe just give us an update on if you've achieved what you wanted to achieve, or if there's more room here on relative valuation.
The new challenge is we should be trading at a premium to the average U.S. utility, clearly, because the quality of our assets are definitely better than the average U.S. utility. When you think about the focus on wires business that we have, the growth rate of the business, the regulatory constructs that we have in place. I'm impressed as hell about the progress we've made to close that gap. We are trading around the average of a typical U.S. utility right now. When I look at the business that we have, the quality of our Arizona business, of ITC, New York, our BC business, the wires business in Alberta, these are great businesses. In my view, we need to start setting our sights a little higher. Our yield is still great for Canada. We're down to 3.3%.
A lot of U.S. utilities are into the twos, right? Canadian rates are actually lower than U.S. rates, treasuries. We should be trading down into the twos at this point in time. Listen, I'm happy where we are, but I think there's still some work to do, frankly, in telling our story. We're here in Nova today, the first time we've done an investor day out in one of our operations. I think more our shareholders see the quality of our business, the quality of our people. Hopefully, we'll start to trade at that more than that premium category.
Maybe just one more from me. Maybe a question on your positioning to two of the tailwinds you've mentioned. You have the interest rate tailwind, you have the 3Ds or cleaner energy thematic you've seen. I guess the first one, you basically leverage yourself the most, the first theme, 100% regulated assets. You have the most torque amongst your peers. On the second one, I'm curious, when you think about your positioning, the states, the provinces, do you think you're in the best position in terms of benefiting from decarbonization in North America?
I think our bigger business is we are, I would say, well-positioned. I think British Columbia, the work we're doing on renewable gas, natural gas for transportation, energy efficiency, I think are leading, basically. ITC, my God, it's the company that hooks up most of the damn wind in the Midwest, right? Solar, and if you wanted to own a business that was intertwined with this big shift to renewables that's occurring in America, ITC is it, and Fortis owns it. Then in Arizona, we have this opportunity to invest capital as we are thoughtful in our migration away from our coal-based assets.
We have that opportunity to invest in the grid, in natural gas generation, in renewables, and we have a team there that is totally aligned with the long-term trends that are occurring in the business and finding a way to do the right thing in that jurisdiction. Yeah, when I look at the way we're positioned, I think we're in strong shape. There's always, obviously, governments doing certain things in certain jurisdictions, and we're always working with that, but we are carving our own path. We're probably ahead in a lot of respects to some of the local regulatory/government initiatives and in terms of our own thinking about where the business needs to go.
Any further questions here in the room? Hearing none, I believe this concludes our Investor Day. Any final remarks, Barry?
Just to say thank you again to Linda and the team for hosting us here, thank you for everyone who's listened on the webcast and attended in person. We are excited about the next few years for Fortis and look forward to our continued engagement with you all. Thank you very much.