Enbridge Inc. (ENB) delivered a robust financial performance in Q1 2025, surpassing both earnings and revenue forecasts. The company reported an earnings per share (EPS) of $1.03, exceeding the forecast of $0.94. Revenue reached $10.46 billion, surpassing expectations of $9.77 billion, contributing to an impressive 22.51% year-over-year revenue growth. Following these results, Enbridge’s stock price saw a modest increase of 0.26% in pre-market trading, reflecting investor confidence in the company’s growth trajectory. According to InvestingPro, the company has maintained dividend payments for 53 consecutive years, demonstrating remarkable financial stability.
Key Takeaways
- Enbridge reported a 12% increase in EPS year-over-year.
- Revenue exceeded expectations by nearly $700 million.
- The company’s performance was bolstered by strategic acquisitions and record volumes.
- Enbridge reaffirmed its 2025 financial guidance with plans for significant investment.
- Stock price increased by 0.26% in pre-market trading.
Company Performance
Enbridge’s Q1 2025 performance marked a record-setting quarter, driven by its strategic acquisition of US utilities and record volumes across its operations. With a substantial market capitalization of $99.85 billion, the company stands as a prominent player in the Oil, Gas & Consumable Fuels industry. The adjusted EBITDA rose by 18% year-over-year to $10.57 billion, highlighting the company’s ability to capitalize on growing energy demands. InvestingPro analysis reveals 8 additional key insights about Enbridge’s market position and growth potential, available to subscribers. Enbridge’s diversification strategy, with over 200 asset streams, continues to shield it from market volatility, with 98% of its EBITDA protected by regulated or take-or-pay frameworks.
Financial Highlights
- Revenue: $10.46 billion, up from $9.77 billion forecasted
- Earnings per share: $1.03, compared to a forecast of $0.94
- Distributable Cash Flow per share increased by 6%
- Record Mainline volumes at 3.2 million barrels per day
Earnings vs. Forecast
Enbridge’s earnings per share of $1.03 exceeded the forecast of $0.94, resulting in a positive earnings surprise of approximately 9.6%. This beat is significant compared to previous quarters, where the company generally met or slightly exceeded expectations. The revenue surprise was also notable, with actual figures surpassing forecasts by approximately 7.1%.
Market Reaction
Enbridge’s stock price increased by 0.26% in pre-market trading, reaching $45.90. This movement is relatively modest but reflects a positive market sentiment. The stock remains within its 52-week range, with a high of $47.08 and a low of $34.60, indicating stability amidst broader market fluctuations. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels. The company maintains an impressive dividend yield of 5.92% and has raised its dividend for 22 consecutive years, making it particularly attractive for income-focused investors.
Outlook & Guidance
Enbridge reaffirmed its 2025 financial guidance, aiming to deploy $8-9 billion annually in secured growth projects. The company targets a 5% annual business growth through the end of the decade, supported by continued investments in infrastructure and new project sanctions across all business units. With an overall Financial Health score of "FAIR" from InvestingPro, and six analysts revising their earnings estimates upward, the company’s growth trajectory appears well-supported. Discover comprehensive analysis and detailed financial metrics in InvestingPro’s exclusive Research Report, part of their coverage of over 1,400 top US stocks.
Executive Commentary
"Our industry-leading low risk business model delivers in all economic and commodity cycles," stated Greg Ebel, CEO of Enbridge. He emphasized the company’s minimal commodity price exposure and inflation-protected EBITDA, underscoring Enbridge’s resilience in fluctuating markets. Ebel also highlighted plans to support dividend growth through consistent business expansion.
Risks and Challenges
- Regulatory hurdles in permitting reforms in the US and Canada.
- Fluctuations in energy demand impacting long-term infrastructure investments.
- Potential geopolitical tensions affecting global energy markets.
- Competitive pressures from renewable energy sources.
- Supply chain disruptions impacting project timelines.
Q&A
During the earnings call, analysts inquired about Enbridge’s focus on the Permian Basin and its strategy for growth in data center power generation. The company reiterated its commitment to organic growth while exploring strategic mergers and acquisitions as opportunities arise.
Full transcript - Enbridge Inc (ENB) Q1 2025:
Rebecca Morley, Vice President of Investor Relations, Enbridge: morning, and welcome to the Enbridge first quarter ’20 ’20 ’5 financial results conference My name is Rebecca Morley, and I’m the vice president of investor relations. Joining me this morning are Greg Ebel, president and CEO Pat Murray, executive vice president and chief financial officer and the heads of each of our business units, Colin Grunding, liquids lines Cynthia Hanson, Gas Transmission Michelle Heritance, Gas Distribution and Storage and Matthew Ackman, Renewable Power. At this time, all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session for the investment community. If you would like to withdraw your question, simply press star followed by the number 1.
Please note that this conference is being recorded. As per usual, this call is being webcast, and I encourage those listening on the phone to follow along with the supporting slides. We’ll try to keep the call to roughly one hour. And in order to answer as many questions as possible, we’ll be limiting questions to one plus a single follow-up if necessary. We’ll be prioritizing questions from the investment community.
So if you’re a member of the media, please direct your inquiries to our communications team who will be happy to respond. As always, our investor relations team will be available following the call for any follow-up questions. On to slide two, where I’ll remind you that we’ll be referring to forward looking information on today’s presentation and question and answer period. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure filings. We’ll also be referring to non GAAP measures summarized below.
And with that, I’ll turn it over to Greg Ebel.
Greg Ebel, President and CEO, Enbridge: Thanks very much, Rebecca, and good morning, everyone. Thanks for joining us on the call today. As all of you know, markets have seen significant financial and commodity price volatility to start the year. But despite the unique challenges twenty twenty five has already presented, Enbridge is operating from a position of strength. We’re actively working with policymakers and regulators to advocate for new infrastructure on both sides of the border that will serve customers throughout North America and meet increasing global demand through growing exports.
Our large diversified footprint continues to deliver safe, reliable, and affordable energy to our customers. Our low risk utility like business model is driving predictable financial results, and I’m pleased to say that the first quarter was a record for Enbridge. We’re going to start today with a brief recap of our first quarter highlights. We will then review the team’s success on execution and continued growth. And from there, I’ll provide an update on each of our four core franchises, and then Pat will review our financial results and discuss our capital allocation priorities.
Lastly, I’ll close the presentation with a few comments on our first choice value proposition before we open the call for your questions. During the first quarter, we delivered record EBITDA DCF per share and earnings per share driven by contributions from The US utilities we acquired last year and strong volumes across the business overall. We don’t expect tariffs or global trade war to have a material impact on our current operations and are therefore very confident reaffirming our 2025 financial guidance. We remain committed to maintaining our debt to EBITDA metric between four and a half times to five times and expected that leverage ratio to improve throughout the year as we realize full year contributions from the acquired US utilities. Our assets were highly utilized during the quarter with records on the Mainline and at Ingleside.
We announced an open season on Flanagan South as part of the first phase of our mainline optimization plans, and we’re receiving strong shipper interest so far. We look forward to providing you an update on our progress in the coming months. In our renewables business, we brought the Orange Grove solar facility into service on time and on budget, showcasing the quick cycle capital efficient nature of our solar investments. And another growth front, we’ve agreed to acquire a 10% interest in the Matterhorn Express Pipeline, a two and a half BCF per day long haul pipeline connecting the Permian Basin to growing US Gulf Coast demand. We also sanctioned the Traverse pipeline earlier this quarter.
Upon completion in 2027, Traverse will offer bidirectional service between Katy and Aguatulci along the Gulf Coast. We are making great progress on the opportunity set we laid out for you at investor day and anticipate future announcements in 2025 and through 2026 to service growing natural gas demand from data centers, coal to gas generation switching, and LNG supply, similar to those we’ve announced these past few months. Now let’s put all of this together and talk about the great progress we’ve made executing on disciplined growth across our business. Strong demand for safe, reliable, and affordable energy has allowed us to secure $3,000,000,000 of accretive, low risk projects year to date. In addition to the projects I just mentioned, we also announced that we plan to invest up to $2,000,000,000 in the mainline to support operational efficiencies, system reliability, and extend the life of the asset.
And we sanctioned Birch Grove, which is an approximately a 80,000,000 cubic feet per day expansion on our T North system that will support West Coast LNG. I’m very happy with the progress we’ve made thus far this year as we’ve continued to sanction projects and add visibility to the growth outlook shared at our investor day in March. I think we are really seeing and will continue to see our low risk resilient business model shine. We have industry leading diversification and cash flow quality, which produces stable, predictable results in all economic and commodity cycles. Our strategically positioned demand pull assets are expected to remain highly utilized despite the ongoing global trade conflict, and we expect tariffs will have a negligible impact on our financial results.
We’ve not seen a material impact on our input costs for projects already sanctioned, and we’ll remain disciplined as we continue to monitor the evolving trade situation. The diversification of our business has been key to our success. With the addition of three premier US gas utilities and new assets placed into service, we now have over 200 asset streams and businesses generating steady, high quality cash flows. Our commercial structure has never been more low risk with over 98% of EBITDA protected by regulated or take or pay frameworks. That industry leading low risk model supports our balance sheet reflected in our investment grade credit rating and minimal counterparty risk.
We have negligible commodity price exposure, and over 80% of our EBITDA has inflation protection with built in escalators or regulatory means to recover. So with Enbridge, you get a safe and reliable investment with attractive growth opportunities. Now let’s jump into the business updates for the quarter. It was a strong start to the year in liquids with mainline delivering record first quarter volumes of almost 3,200,000 barrels per day. In order to keep the existing mainline as available and reliable as possible and at the same time extend its useful life, we’re planning to invest up to $2,000,000,000 to continue delivering first choice, customer service, and optimizing capacity.
That capital will earn a return under the mainline toll settlement framework within our 11 to 14% ROE collar, providing strong risk adjusted returns for Enbridge. We continue to advance mainline optimization initiatives and expect the first phase to reach FID later this year. That phase includes a 50,000 barrels a day of incremental capacity and includes a downstream expansion on Flanagan South, of which I spoke about earlier. As mentioned at Enbridge Day, we are also advancing other opportunities to build incremental egress out of the Western Canadian sedimentary basin as the growth outlook remains strong with approximately 1,000,000 barrels per day of supply expected to come on stream by 2035. South of the border, Ingleside recorded another quarterly volume record, benefiting from the increased operational capacity that came with the docks we acquired last year.
We will continue to develop the site and expect to place another 2,500,000 barrels of storage into service later this year. On the gas transmission front, our growing footprint puts us in an excellent position to serve increasing natural gas demand from new LNG facilities, coal to gas transitions, and data centers. We continue to build our Permian franchise with our announcements to acquire a 10% interest in the Matterhorn pipeline for cash consideration of approximately $300,000,000. This two and a half BCF per day operating asset is complementary to the Traverse pipeline we previously sanctioned with our partners in April. These announcements enhance our Permian super system and provide shippers with optionality to access the best demand markets across The US Gulf Coast.
Both pipelines are contracted under long term take or pay arrangements with investment grade counterparties. We received FERC approval for a Ridgeline expansion last month, enabling the coal to gas transition of the Kingston combined cycle facility in Tennessee with in service expected in 2027. We continue to experience strong demand for our US Gulf Coast gas storage assets and recently completed open seasons at Tres Palacios, Eagan, and Moss Bluff, and are engaging with customers around potential future growth opportunities. Lastly, we previously announced an expansion of our T North system to serve growing LNG demand off the Canadian West Coast. Now let me illustrate the growing Permian footprint that we’ve established since our initial investment only a year ago.
Today, our Permian natural gas franchise provides up to five Bcf per day of egress from the basin, with another two and a half Bcf per day expected to come online beginning in 2026 via the Blackcomb pipeline. The recently sanctioned bidirectional traverse pipeline will provide transportation between Katy, Texas and Agua Dulce by 2027, ensuring customers have optionality between key market hubs. The DBR system provides three and a half BCF a day of intra basin capacity and is a key supply conduit for Whistler and Matterhorn. We also have an interest in two BCF of operating storage capacity at Waha and are connected to Corpus Christi LNG through the ADCC pipeline. After we close Matterhorn, Enbridge will have acquired 2,000,000,000 of operating assets and added over a billion of growth projects, which are expected to be built at roughly six times EBITDA multiples.
And in 2026, after Blackcomb enters service, we expect to have an equity interest in 30% of all the Permian egress capacity. Our investment in this portfolio positions Enbridge to capture growing demand for Permian gas across The US Gulf Coast and provides even more embedded growth opportunities that will leverage our scale and existing footprint. Now let’s turn to our gas utility business. This is an exciting first year of us owning our US utilities, and we are in rate cases in the four major jurisdictions and look forward to working with all stakeholders to deliver safe, reliable, and affordable energy. As we continue to grow our utilities, constructive regulatory outcomes are very much informing our capital allocation strategy.
Given the increasingly rich opportunity set across all our business units, we will allocate capital based on the best risk adjusted returns, including the economic and regulatory environment. In Ontario, we recently received permission to begin construction on the Saint Laurent pipeline replacement program, which is expected to be completed in stages and will be fully in service by the end of twenty twenty six. Moving to The US, we expect to receive a decision on our Ohio rate case in the second half of this year, and we filed rate case applications in North Carolina and Utah in April and May respectively. We expect rates to be affected by year end, ensuring fair returns for our shareholders and supporting continued investment in critical energy infrastructure through the back half of the decade. Now let’s jump on to renewable power.
The 30 megawatt Orange Grove Solar recently entered service on time and on budget, and it’s now generating electricity for the ERCOT South Power Zone. Between Orange Grove and the first stage of Sequoia, we expect to place over 500 megawatts of solar into service this year, entirely backstopped by investment grade blue chip customers. Given the unprecedented demand for power generation across North America, we also anticipate further FID announcements over the next year driven by data center electricity needs. The policy landscape for renewables is dynamic, but we think we are well positioned with our portfolio of late stage development projects. As always, we’ll stick to our capital discipline and only approve projects that meet our risk and return hurdles.
In our European portfolio, Calvedo’s win continues to make progress with new pylon installations and technical work ongoing. Now I’ll pass it off to Pat to review our financial performance.
Pat Murray, Executive Vice President and CFO, Enbridge: Thanks, Greg, and good morning, everyone. 02/2025 is off to a great start. We posted new quarterly records across all metrics. Compared to the February, adjusted EBITDA is up 18%, DCF per share up 6%, and earnings per share is up 12%. In liquids, higher mainline volumes and annual toll escalators led to higher results versus 2024.
In gas transmission, revised rates at Algonquin, Texas Eastern and Maritimes Northeast drove higher contributions across our large U. S. Gas transmission pipes. Venice Extension entered service at the end of twenty twenty four, and the Whistler JV and DBR system acquisitions are also providing the expected incremental contributions year over year. Notably, gas transmission is up 13% from this time last year despite the absence of contributions from Alliance and Aux Sable, which were sold in 2024.
Our gas distribution segment realized a full quarter of contributions from all three U. S. Gas utilities acquired in 2024, driving the majority of the year over year increase within the business. In Ontario, customer growth and rate increases alongside colder weather resulted in $170,000,000 of EBITDA increase compared to the first quarter of twenty twenty four. In renewables, lower RIN resources at the European offshore assets were partially offset by stronger resources in North America, and we experienced similar levels of investment tax credits between those periods.
The strong U. S. Dollar resulted in larger hedging losses this quarter, but FX was overall still a net tailwind for EBITDA and DCF as the average exchange rate pre hedging was 1.44 for the quarter versus 1.35 in 2024. Below the line, higher financing costs, taxes, maintenance capital, and a slightly higher share count linked to The U. S.
Gas utility acquisitions partly offset the higher EBITDA contributions. I’m also pleased to reaffirm our 2025 guidance. Our resilient business model continues to demonstrate our ability to deliver predictable results in all cycles. And as Greg mentioned earlier, we’re not seeing any noticeable impacts from tariffs on our financial guidance. Strong first quarter performance positions us well to hit our financial guidance for the twentieth consecutive year.
In fact, I think the lack of arrows on this slide from a tailwind and headwind perspective speaks to the resilience of our assets. But as we look forward, the recent acquisition of an interest in Matterhorn and forward expectations for U. S.-Canadian exchange rate, which although fairly heavily hedged, could provide some uplift to results. We’re also keeping an eye on U. S.
Interest rates as they’re a bit higher than we had projected, but again not anticipated to be material. As a reminder, Q1 and Q4 are typically our strongest quarters and The U. S. Utilities further exaggerate that. Some of our other businesses also have seasonality built into them.
In our liquids business, we generally have heat restrictions on our pipes in the summers leading to lower volumes. In the winter months, gas transmission experiences far more peak days. And similarly, Enbridge Gas Ontario has the majority of its heating degree days leading to higher contributions in those same winter months. In our renewable segment, we typically experience higher wind resources in the winter months, which provide higher contributions from October to March. Now I’d like to reiterate our long held capital allocation priorities.
We’ll continue to maintain our balance sheet strength and target a debt to EBITDA range of 4.5 to five times. Sustainably returning capital to shareholders is key to our value proposition, and we expect to grow the dividend at a level within our annual DCF per share growth. When it comes to new growth, you can expect us to remain disciplined and prioritize low multiple brownfield opportunities and utility like projects. As we discussed at Enbridge Day, we can now self equity fund 9,000,000,000 to $10,000,000,000 of organic growth projects annually. Based on our current secured growth backlog of $28,000,000,000 we expect to deploy 8,000,000,000 to $9,000,000,000 per year towards that secured growth projects.
That leaves us with an additional 1,000,000,000 to $2,000,000,000 that can be opportunistically allocated, whether that be sanctioning new strategic projects, accretive tuck in M and A, such as the 10% acquisition of Matterhorn, or reducing debt. We’ll apply our rigorous investment criteria, letting the $50,000,000,000 of opportunities compete for that excess capacity and prioritizing the highest returning and most strategic projects. Before I wrap up, I wanna thank all of our team members for delivering yet another outstanding quarter. And with that, Greg, I can pass it back to you for closing comments.
Greg Ebel, President and CEO, Enbridge: Thanks very much, Pat. As you just pointed out, the consistency and resiliency of our business really came through this quarter with record financial results and execution on our disciplined growth strategy. Our industry leading low risk business model delivers in all economic and commodity cycles, and you saw that happen once again in the first quarter. I wanna highlight our first choice value proposition, which has delivered strong double digit shareholder returns over the past twenty years through thick and thin, up cycles, and down cycles. We continue to have a utility like business model that generates predictable cash flow that supports our investment grade balance sheet.
Our financial flexibility allows us to grow our business and sustainably return capital to shareholders. We’ve increased our dividend for thirty consecutive years, and I’m proud of being one of the only dividend aristocrats in our sector. We expect to support continued dividend growth by growing our business by five percent per year through the end of the decade. On a final note, we refreshed our indigenous reconciliation action plan, and we continue to progress our sustainability goals and long standing commitment to support the communities in which we operate. With that, I’d like to thank all of you for listening.
And operator, please open the line for your questions.
Speaker 3: Thank you. We will now begin the question and answer session. Your first question comes from the line of Aaron MacNeil from TD Cowen. Your line is open.
Speaker 4: Good morning all. Thanks for taking my questions. You mentioned your advocacy efforts in your prepared remarks, and we’ve got a new Canadian government promising to improve the Impact Assessment Act. We’ve also reached the one hundred day mark with the U. S.
Administration that’s also on permitting reform. Greg, are you encouraged by what you’re seeing and what needs to happen in your view to get your head around larger infrastructure development?
Greg Ebel, President and CEO, Enbridge: Well, morning, Aaron. Thanks very much for the question. I’m completely enthused about it. Just starting from the campaigns, just the basic conversation here in Canada, but also down south in The United States. And the fact that people are now talking about energy energy infrastructure, getting stuff done, that’s just a market change here in Canada.
The all of the above approach, which is, you know, we structured the company to succeed in that environment. It’s great. Now I think the big question is, is that all campaign rhetoric, or is that actually gonna play out into actually permitting reform? We’re starting to see some of that in The United States. You know, various projects put it on accelerated elements of approvals.
Obviously, very supportive of natural gas liquids, LNG exports, etcetera. And I’m gonna take the the prime minister in Canada at his word that he’s committed to building energy infrastructure in Canada, becoming a conventional and nonconventional energy superpower. So, you know, when you’re in 43 states, eight provinces, and five countries, of which the two big ones are The United States and Canada, that is a great spot to be. So I think you see that in our backlog. I think you see that in our execution.
So I’m excited. It’s just gotta turn into reality. Like, I mean, we’re ready to rock, I think, in Canada. It’s just that someone gonna put the policies in place so the industry can deliver for both consumers and investors.
Speaker 4: Maybe as a follow on, it’s obviously great to see that you’re continuing to progress towards an FID on the mainline optimization that you outlined at the Investor Day. What do you think is giving your counterparties the confidence to move ahead with the expansion given you know, just the broader economic uncertainty and recent OPEC production ads?
Greg Ebel, President and CEO, Enbridge: Well, I’ll give you a couple of thoughts, and then Colin’s here too. And I think when you said, call I think you mean our customers. Our customers, I think they’re looking longer term as well. Look. You’re gonna see ebbs and flows in pricing.
As we said in our opening comments, there’s a lot of volatility. But, those shorter shorter term swings, which we watch very closely, can have some impact on production, but they don’t change the long term view of energy demand and need. And that’s what we build for. Right? We build pipeline infrastructure and even power infrastructure, but pipelines on the gas and the oil side for what’s happening twelve, eighteen, thirty six months out.
And so we’ve got a system that can add on top of of what we have now with very permit light, relatively low multiple, and relatively modest increments of volume that really create the opportunity. So but specifically on on MLO 1 and and maybe the mainline capital. Colin, do you wanna speak to that?
Colin Grunding, Head of Liquids Lines, Enbridge: Yeah. Aaron, I think we’re we’re quite confident on the the prospects for mainline optimization. One, we have an open mark open season in the market right now, strong response. And underpinning that, to your question, is, you know, the all the the supply outlook by by customer in an aggregate. And remember that we’re we’re basically full today, and they’ve got a number of highly economic at at very low oil price, debottleneck, and, you know, smaller projects.
They’re they’re not requiring a big oil price to underpin a big massive new mine or anything. That’s that’s not what’s underpinning this next wave of of egress. And even in the worst case, I guess, you could think about that egress solution as insurance egress, right, protecting the price of the existing 5,000,000 barrels a day.
Speaker 4: Thanks both. Happy to turn it back.
Speaker 3: Your next question comes from the line of Jeremy Tonet from JPMorgan. Your line is open.
Speaker 6: Hi, good morning.
Greg Ebel, President and CEO, Enbridge: Good morning, Jeremy.
Speaker 6: Just want to start off with regards to the natural gas pipeline network and opportunities to service growth there. Thank you for the details provided. But just wondering if you could provide maybe incremental thoughts on the opportunities that to service growing power demand and even data center fuel demand behind that. Is this something timeline wise you think that can happen near term or do you think this takes more time Just wondering, you know, how you see, I guess, the opportunity to service natural gas fired power.
Greg Ebel, President and CEO, Enbridge: Yeah. Maybe to start with what we’ve already done. Right? So and we did talk during the our Analyst Day in March just a month ago about how we saw some opportunities in the next, six to eighteen months, which I’ll let Cynthia speak to. But let’s not forget that in the last less than a year, Enbridge has added five gigawatts or secured five gigawatts of of serving natural gas to power plants.
So you’ve got our Ridgeline project in GTM, North Carolina. The GDS business is serving Duke power plants there. Utah, direct connections to data centers, that’s another couple hundred megawatts. Ontario, there’s probably a a gigawatt of plants there. Ohio, a gigawatt there at the Trumbull plant.
So that’s five gigawatts just on its own. So this is actually ongoing and occurring real time right now, and I think we’ve got some great opportunities ahead of us. Do you wanna speak to that, Cynthia?
Cynthia Hanson, Head of Gas Transmission, Enbridge: Thanks, Greg. And, yeah, Jeremy, as we outlined at Enbridge Day, we do have a lot of opportunities in this space for power demand. So whether that’s coming from increased industrial demand, like coal to gas conversion or the data centers, we have 35 plus opportunities for about 11 BCF per day of that new electrical demand. So by 2032, that’s about $14,000,000,000 kind of opportunity set. And as we said, we’re focused on that near term in the six to eighteen months.
We probably see 1 to $2,000,000,000 worth of of opportunities there. And, you know, with those projects that we’re we’re having these great conversations with those our customers that have that increasing power need, and they’re at really attractive returns in that six to eight times multiple build multiple. So, you know, we can’t talk about all the details, obviously, right now because we’re in the midst of having those conversations, but you should look to see some announcements coming in that in that time frame. So it is exciting, and and we have capacity to support that.
Greg Ebel, President and CEO, Enbridge: And, Jeremy, just because Matthew Ackman’s in the room throwing a donut at me, we also set it up about two gigawatts of of power projects on the renewable side that are serving really big clients on the data center side as well. And you know those tech names, we’ve put them out there before, so we shouldn’t forget that either.
Speaker 6: Got it. That’s helpful. Thanks for that. And then maybe just shifting to results for the year seeing that the guide was reaffirmed here. And just wondering, I guess, how everything maybe within the year shaping up versus expectations.
And I appreciate the comments on seasonality as highlighted there. That’s helpful. But just the quarterly allocation in this deck versus prior looks a little bit different. So just wondering if there’s anything else that was shaping up in the quarter that in the year on a quarterly basis that we should be thinking about.
Greg Ebel, President and CEO, Enbridge: I’ll let Pat speak. I don’t think there’s anything different. I think we’re just trying to give you more insight. Obviously, add the new utilities. So so making sure that people fully understand our first and fourth quarter are the big quarters.
Speaker 8: Yeah. I think that’s right. The the the big change year over year would be the addition of all The US utilities. You know, they’re they’re not, exposed to weather like Ontario is, but they still have a significant profile into the kinda q one, q ’4 categories. We just want to make sure that people were, able to model that out appropriately.
I think, you know, your question on the strong first quarter, that’s how we think about it. It’s a really strong first quarter. Gets us really good into the year, as we talked about from a headwinds, tailwinds perspective, making sure that we’re, of course, always operating reliably. If we do that, we should be well within the guidance range we provided. There’s a potential upside around the new acquisition we just made.
If we can close that within the next month or two, we’ve got some FX upside as we talked about when we guided. But, again, we’re we’re fairly hedged there as, as part of our kinda methodical, process that we have there, but there could be some upside both on EBITDA and DCF there. And then always watching interest rates in a fairly volatile window right now. But, all in all, we’re feeling very good about how the year is shaping up and a great start.
Speaker 6: Got it. Thank you. I’ll leave it there.
Michelle Heritance, Head of Gas Distribution and Storage, Enbridge: Thanks, Jeremy.
Speaker 3: Your next question comes from the line of Robert Catellier from CIBC. Your line is open.
Greg Ebel, President and CEO, Enbridge0: Hey, good morning everyone. I’d like to go back to the permitting questions. There obviously there was an attempt to improve permitting in The U. S. With alternative arrangements for NEPA compliance.
I’m wondering what your take is on this, specifically if you have an appetite to elect to have any projects reviewed under that, those alternative arrangements? Or would you need to see something more concrete?
Greg Ebel, President and CEO, Enbridge: What’s a it’s a little bit of a mixed bag. Some of it, it’s it’s a very it’s a live discussion, I will tell you. Generally speaking, accelerated depreciation or depreciation at permitting is awesome. However, it depends how far you are already along on the project, whether you wanna go back and restart, you know, are there core challenges, etcetera. So, Robert, I’m not trying to obfuscate the question, but I think it it depends.
But there’s no doubt, you know, accelerated approvals, I would say, in general are a good thing. And you’ve seen some of our projects put on, say, the army corps accelerated element, but right across the board. And we’ve had discussions with the interior secretary and the energy secretary. And, you you know, so I I would expect on balance, accelerated permitting is great, but it doesn’t mean we’ll move every project to to restart the clock. I think equally, it may be more important, it’s just the policy stance and everything from being able to use gas appliances, if you will, on the GDS side to just the openness and acceptance and reality of the fact that United States, frankly, either can’t move forward without gas fired generation.
That’s a winner right across the the board for us. But on that side, you know, it’s not just about, say, NEPAs. It’s about accelerated approvals of transmission, electric transmission as well that’s gonna drive this. So I don’t think there’s any one simple answer to that question, unfortunately, Robert.
Greg Ebel, President and CEO, Enbridge0: No. That’s why I asked it. Next question. I just wanted to get your updated views on the Permian. There’s been a number of producers that have suggested the weak prices are curbing their capital investment.
Notwithstanding the record volumes at Ingleside this quarter, what is your outlook for Permian production in general and the impact on both Ingleside and your Permian gas system? And I’m curious if there’s alignment with the joint venture partners on pace in which you deploy capital in the particularly on the gas side.
Greg Ebel, President and CEO, Enbridge: Yeah. On on the first on your last question, and then maybe Colin can speak to some of the the Permian volume issues. I don’t think there’s any we wouldn’t have re reupped or picked up another piece of the asset in the Whitewater JV, Matterhorn, if there was misalignment. I think there’s absolute alignment on what needs to be done. Obviously, Matterhorn’s a project that’s that’s already in service.
But, you know, look, you’re seeing GORs go up in the Permian. The need for gas takeaway is absolute regardless in your view whether you think there’s gonna be a slowdown in production or a leveling out of production. And I will say the gas pricing is quite productive. No pun intended in terms of actually building takeaway and serving as a minor, but an important buffer to a weaker price on the outside as well. So but on the Permian, I mean, there’s no doubt we’ve we’re watching those those rig counts and what our producing customers are saying on the oil side.
Colin Grunding, Head of Liquids Lines, Enbridge: Yeah. Yeah, Robert. I can I can chime in here? And look listen. The Permian is a great basin and and and always will be.
It’s a critical basin. And, you know, we’ve got our ear to the ground just just as you are, and we’re seeing, you know, over the last couple of weeks. You’re probably a mixed bag from producers, some some holding firms, some dropping a rig or two or three. So so we’ll continue to follow that. The good news is is that our our business is built to be relatively insensitive to that price and to that indirect risk of volume risk.
We have a contracted business in the Permian. Ingleside and Gray Oak are are contracted, our cash flows are solid. Prices go up and down. We built the business intentionally to be resilient. And I think the question on on JV partners is maybe more Cynthia related, but we’re aligned with with our our team.
We’re we have we have some expansions coming online on Gray Oak and Ingleside here. So the next few years of cash flows look really good yet for for our business in the Permian.
Greg Ebel, President and CEO, Enbridge: Yeah. You know, OPEC plus actions, tariffs, all that, again, as Colin said, we watch really carefully. But this is exactly the environment that Enbridge was built for. Right? Size, diversity, serving the best demand markets in the most economic production, basins.
That’s really what makes Enbridge a winner. So, you know, we’re we’re watching that stuff carefully. We can react and build out small increments or large increments depending on what depending on what our customers want on a given point in time.
Greg Ebel, President and CEO, Enbridge0: That’s a lot of good color. Thanks so much.
Greg Ebel, President and CEO, Enbridge: K. Thanks, Robert.
Speaker 3: Your next Your next question comes from the line of Theresa Chen from Barclays. Your line is open.
Greg Ebel, President and CEO, Enbridge1: Good morning. Thank you for taking my questions. Maybe double clicking on the Permian to Gulf Coast gas transmission franchise. You’ve successfully participated in multiple minority interests across different assets here. And looking at your broader footprint, you seem very comfortable and maybe even prefer to wholly own and operate your assets.
How should we think about the strategic path forward for your gas transmission footprint from the Permian all the way through the Gulf Coast? How do you envision these assets ultimately fitting within your portfolio?
Greg Ebel, President and CEO, Enbridge: Yeah. I I think it’s a fair comment, Theresa, that we we generally like to, you know, like a lot of big companies, we like to control both strategically and commercially. But we have a lot of joint ventures right across the right across North America and and in Europe too, as you know. So we’re comfortable in that environment. It does allow us to participate in a greater number of locations because you spread out the capital that’s required, And it does give us insights with some of those partners.
When I think of some of our great partners, some of them are producing partners, some of them have upstream and and downstream activities, and sometimes they’re fellow midstreamers as well. So we get a lot of value from that. Ultimately, would we like to own significant elements of it and be in control and and strategy? I think that’s that’s that’s a fair comment, but we’re patient. A, it’s not absolutely necessary.
And as you know, we are not opportunity short. So this allows us to take the the the allows us to participate in as many opportunities as possible.
Greg Ebel, President and CEO, Enbridge1: Understood. Greg, going back, to the macro and the role of infrastructure across your footprint, the letter of intent you’ve signed to support WCSB egress, what are the near and medium term goals of the working group you’ve established? How do you view the path forward for the industry over time taking into account the learnings from recent geopolitical volatility and trade tensions?
Greg Ebel, President and CEO, Enbridge: Well, I think the first time first thing is just to engage with the new the new government here in Canada. We have not had an opportunity as a group or a subset of that group to sit down with the prime minister. You know, he’s been a little bit busy on both sides of the border and setting a cabinet when that happens. I think that’ll be the first thing. And I think it’s important, that the prime minister have an opportunity to hear from the industry, but, you know, you think about a third those 39 CEOs represent a lot of jobs, a lot of GDP, a lot of revenue.
So that’s one. Secondly, gotta address the the carbon tax, and emission caps issues. Third thing, gotta get rid of the ban on the West Coast, for tankers if there’s expected to be egress that way. And then I think that we’ve already made some progress on that front, but we have to execute on it. That would be indigenous loan guarantees and participation in infrastructure.
So that’s four or five things that we gotta pitter patter. Let’s get at it. I think the prime minister said he wants to do that, but those things can be done very quickly with either a stroke of the pen or some legislation. And, again, I don’t of the two this this is quickly turning into a two party country, and I think both parties had similar ideas, maybe different slightly different tactics on being able to build energy. So I would have thought that these things could be done rather quickly in a parliament that’s united on the need for that for Canada.
Greg Ebel, President and CEO, Enbridge1: Thank you very much.
Greg Ebel, President and CEO, Enbridge: Thanks, Theresa.
Speaker 3: Your next question comes from the line of Ben Pham from BMO Capital Markets. Your line is open.
Greg Ebel, President and CEO, Enbridge2: Hey, thanks. Good morning. On your earnings report, you mentioned almost $3,000,000,000 of projects you sanctioned year to date. Can you comment on the outlook on sanctioning projects going forward, where you’re seeing the most business activity, and do you do you anticipate the pace of those sanctions to sell rate?
Greg Ebel, President and CEO, Enbridge: Yeah. That’s a good question. First of all, I would say that you’re gonna see sanctioning of projects in every single one of our businesses, and that’s a that’s a that’s excellent. Alright? I mean, we as we said, we’ve we’re already executing on $2,728,000,000,000 dollars worth of projects and have $50,000,000,000 of opportunities.
I think you’ll continue to see that. I’m I’m looking around the room here at four business leaders that are pretty keen to to keep growing their businesses and create opportunities. So, I’m also looking at a CFO here that really likes the being able to choose from those projects that provide the greatest returns as quickly as possible for investors and, obviously, serving our customers. So I’m gonna say you’re probably gonna see the biggest sanctioning right out of the block on the liquid side, is which is somewhat different. On the gas side, both at GDS and GTM, you have a a variety as well.
I think the one that’s a bit of a question mark and, you know, mentioned in opening comments is what do we do on renewables just with the dynamic nature of policy there. But Matthew and his team have a number of late stage projects that could move forward, that don’t look like they will be caught up in either tariff or policy elements there. So it’s right across the board, Ben, which really gives us a lot of confidence on our long term growth prospects, not just the the positive year that’s shaping up through the first quarter anyways.
Greg Ebel, President and CEO, Enbridge2: Okay. Very good. And and I know it’s your shift here capital program just related question has been been ramping up steadily. And how do you I think with human capital human capital on a equation, is there a certain project roster that’s that’s too big for you relative to your your staffing? And do you think that could be a constraint on on just just moving forward to projects?
Greg Ebel, President and CEO, Enbridge: So far, we haven’t seen that, Ben. And it kinda goes back to Theresa’s question about JVs and stuff, like, take the Whitewater stuff. We are not the lead player from the build perspective, but we get to participate. I even look at some of our renewable activities. You know, say in Europe, that’s being we’re not the lead builder.
And we obviously have a major project team that looks at all projects, say, $50,000,000 as at an Enbridge size. So we haven’t seen it to date, but, obviously, I’m always concerned about Do we have enough people to deliver on it? But so far, so good from from that perspective. I guess the other one I’d point to is with fiber too.
We’re not actually building that one. We’re involved in helping them and providing counsel on what we know about marine activities and building pipes, etcetera. So so far so good, but I think you’re right to point out. We gotta make sure we stay on top of the the human capital element of this.
Speaker 8: Yeah. Maybe one thing I’ll just add to that is, you know, 20 as I said at Embers days, ’28, ’20 ’9 billion is a big number, but we’re a big company. If you go back a number of years ago, we had peaks in our capital programs like this in the past and have managed through them quite well. So I think we’ve got a track record of doing that. We’ve got the right skill sets.
A number of those people are still with the organization. So I think we feel really good about our our our not only our project group, our operational teams, and our, you know, supply chain management. So I think we’ll, as you’ve noted, continue to monitor it as we go forward. But at the moment, I don’t see any constraints there.
Greg Ebel, President and CEO, Enbridge2: Okay. Got it. Thank you.
Greg Ebel, President and CEO, Enbridge: Thanks, Ben.
Speaker 3: Your next question comes from the line of Manav Gupta from UBS. Your line is open.
Greg Ebel, President and CEO, Enbridge3: Good morning, guys, and congrats on a very strong quarter. I’m just trying to understand, it appears that the acquisition of the three utilities has gone even better than most expected or even you expected. So first, if you could talk a little bit about that, what have been the positive surprises? And then, you know, circling back a little bit into Jeremy’s question, if everything is so good and and the tariffs are also not a real headwind, then is the 2025 guide just conservative at this point?
Greg Ebel, President and CEO, Enbridge: Yeah. Well, look, we we give annual guidance. And, as Pat mentioned, you know, the first quarter, very nice to see a robust start, but, you know, the fourth quarter is a really important quarter for us. So, you know, I I I don’t wanna get ahead of ourselves. I think we are in a great spot.
Far better to have a nice launch than being behind the eight ball, and we’ve had a nice launch. And there’s a reason why we’ve hit guidance what looks like it’ll be twenty years in a row, and it’s because we’ve got relative stability plus and minus. So I feel very good about what we’ve put out there to the street to date and feel very good about some of the tailwinds. On the GDS side of things and the acquisition of The US utilities, I I think it’s going extremely well. Remember, we haven’t had some of these assets even in the house yet for a year.
So, obviously, integration is ongoing, disentanglement from Dominion, ongoing, all as planned. But you know? So that that’s still gotta get done before I’m willing to say big success. But from a macro perspective, I don’t think in let’s see. That would have been, you know, late to or early twenty three, mid ’20 ’3, that most people would have seen the uptick in demand in gas, the power side of things, data centers, etcetera.
All of that is an incremental macro benefit to to that acquisition. Regulatory environments continue to be along the lines we expected in the acquisition, and and the people are great. So I don’t I don’t know, Michelle, whether you’d add anything to that. Well, I
Michelle Heritance, Head of Gas Distribution and Storage, Enbridge: think you’ve got it, Greg. I mean, the growth that and I mentioned it at Enbridge Day is even stronger than we thought, where there’s a real tailwind around electrification, whether that’s data centers, power generation. We were the strength of the regulatory teams helped us close quickly, so we’re able to bring the utilities in a bit faster than we’d expected to and really start to integrate them. The integration’s going well. We actually did our first major system cut over earlier this week.
It went smoothly. And exactly as as Greg said, the people are excellent. The cultures are meshing well. So it’s we’re really pleased with where things are.
Greg Ebel, President and CEO, Enbridge: And we got optionality where we wanna put those regulated utility dollars. We get, you know, multiple jurisdictions and those that provide the greatest opportunities, for their own, customers, and also for our investors are the place we’re gonna put that, call it, roughly $3,000,000,000 of capital each year on the utility side. Exactly.
Greg Ebel, President and CEO, Enbridge3: Perfect. My quick follow-up here is, the benefits or the decision to move ahead with transfers pipeline and, additional 10% interest in MatHorn, what drove those decisions? Thank you.
Cynthia Hanson, Head of Gas Transmission, Enbridge: Yeah. Thanks, Manav. Obviously, we continue to really be excited about the joint venture opportunities we have. As we outlined, you know, we’ve invested the the 2,000,000,000 today in the the JV opportunities there, and we have about another billion dollars worth of growth projects that are out there. And these are in, obviously, that Permian Basin, and it ties into our existing infrastructure.
We are in that space with tech go, and we have the storage assets there too with trace. And and so, you know, as we look out to what that future is, we see the opportunity to continue to build out there with a really attractive build multiple around that six times.
Greg Ebel, President and CEO, Enbridge: Yeah. It’s it’s really that super system. Like, we built a super system on the liquid side column team there and to the export world. And I think Cynthia and the team is doing a great job of building another gas super system and serving all those LNG facilities and storage, etcetera. So it’s frankly a bit of a no brainer to keep building out that side of the system.
Greg Ebel, President and CEO, Enbridge3: Thank you so much, and congrats on a great quarter.
Greg Ebel, President and CEO, Enbridge: Thank you, Manav.
Speaker 3: Your next question comes from the line of Rob Hope from Scotiabank. Your line is open.
Greg Ebel, President and CEO, Enbridge4: Good morning, everyone. A follow-up to the last question. So at the recent Investor Day, you highlighted $2 to $3,000,000,000 of U. S. Gulf Coast expansions on the gas side that you can FID in the next, we’ll call it, couple of quarters here.
It looks like you’ve made some progress with Matterhorn. But looking forward, when you think about your kind of Permian and U. S. Gulf Coast super system, where are you seeing the best opportunities now? Is it more on the storage and LNG connectivity side?
Or do you need more kind of, we’ll call it, capacity out of the Permian?
Cynthia Hanson, Head of Gas Transmission, Enbridge: Yeah, I think it’s a combination, Rob. We see lots of opportunities coming in from the Permian still. That’s why we have these ongoing growth opportunities noted. But we have, obviously, with our tech ecosystem, that header system there along the Gulf Coast, There continues to be lots of announced expansion opportunities with the LNG exports. We’re connected to a % of the current operating LNG export facilities, so there’s lots of upside there.
We still have you know, on the storage side, we noted that we have just closed three open seasons, one for Trace, Eagan, Moss. So there’s going to be you know, we’re just reviewing those results. They closed the last one closed earlier this week. So we’re reviewing those results, but we still see a lot of opportunity to continue to build out that existing header storage super system there. So it’s gonna be a combination.
There’s some laterals. There’s some storage. There’s some specific projects tied to LNG expansion and new facilities. So it’s an exciting position to be in, and we’ll have to compete for capital with all these other projects that we have ongoing.
Greg Ebel, President and CEO, Enbridge: Yeah. I love the nature of the, you know, several hundred million dollars at a time. Not that there’s anything wrong with several billion at a time, but, obviously, it’s quicker deployment. We shouldn’t forget the power side too. There’s power opportunities along the Gulf Coast for the reasons you all know, whether it’s industrial or data centers.
So I’d watch for us to get our fair share of that too.
Greg Ebel, President and CEO, Enbridge4: Thanks for that. And then maybe just following Matterhorn, can you give an outlook of what the M and A environment is looking right now, just given all the volatility out there? Are you seeing some opportunities to transact at attractive pricing and for attractive assets like Matterhorn?
Greg Ebel, President and CEO, Enbridge: Well well, first of all, I think the important point is that we don’t need to
Pat Murray, Executive Vice President and CFO, Enbridge: do any m and a.
Greg Ebel, President and CEO, Enbridge: It has to really compete strongly against that $50,000,000,000 of opportunities that we see organic. Lee and, obviously, we’re delivering on $27,000,000,000 of growth that’s really gonna drive our growth outlook for the next several years. Traditionally, at this time of a of a cycle, opportunities do come up. People do need to get liquid. People and and tend to see valuations therefore come down.
So, you know, given the size of our company, we’re always seeing those opportunities. As we’ve said, we’ll we’ll look at tuck ins. But, yeah, they’re gonna have to be good deals. They’re gonna have to be accretive to our per share metrics. They’re gonna have to be neutral or better to the balance sheet, and they’ve gotta be better than the organic stuff that we have in front of us.
But we’ll always keep a wide open eye to that. I I haven’t seen that kind of stress really yet, though, Rob, so we’ll see what happens.
Greg Ebel, President and CEO, Enbridge2: Thank you.
Greg Ebel, President and CEO, Enbridge: Thank you.
Speaker 3: Your next question comes from the line of Praneeth Satish from Wells Fargo. Your line is open.
Greg Ebel, President and CEO, Enbridge5: Thanks. Great. Good morning. Maybe just going to Texas Eastern, can you help us understand if you could be involved with the Homer City data center project in Pennsylvania? Given the proximity of Texas Eastern, it’s pretty close to that planned data center.
Have you had discussions with them to supply the planned build out or future expansions? And if so, how much capacity exists in that region on your pipe? And would you have to make a meaningful investment to expand it?
Cynthia Hanson, Head of Gas Transmission, Enbridge: Yeah. Thanks, Praneesh. It’s Cynthia. As you noted, with that Homer City opportunity, our tech ecosystem is is close. You know, we’re not gonna talk to any specific negotiations that we have ongoing.
What I will say just in general is throughout that area, Texas Eastern has about 10 Bcf per day or equivalent of 60 gigawatts of energy equivalent underutilized receipt points that tie into that Marcellus supply region. So we do have some very economical pipeline expansion in Pennsylvania and and Ohio along our existing right away. So we are having lots of conversations with those developers, power gens, hyperscalers for data centers. That whole area is very active, and so it’s an exciting opportunity. And we’ll continue to, as, you know, I noted earlier, hopefully, we’ll continue to keep you updated for multiple announcements over the next period of time because we really do believe that we have that 1 to $2,000,000,000 worth of projects that we’ll be able to announce in the next six to eighteen months.
Greg Ebel, President and CEO, Enbridge: Yeah. And all that would be incremental to the five gigawatts of of gas we’re providing to serve five gigawatts of power. So, yeah, excited about it. We’ll we’ll see where we go. But you are correct.
We are in a good position.
Greg Ebel, President and CEO, Enbridge5: Got it. Okay. Well, stay tuned for that. And then I wanted to go back to the slide on on seasonality, slide 13. I know you mentioned the utilities business among other factors that’s kind of driving that quarterly cadence.
But it does look a little bit steeper, I think, than we would have anticipated if I just take the midpoint of the 2025 EBITDA guidance and assume 20%, this is for Q2, you end up with an EBITDA figure that’s quite a bit lower than consensus. So I just want to understand how to read this table. Should we shift more of the utility EBITDA towards Q4 and out of Q2? Or is this more kind of illustrative in nature rather than formal quarterly guidance? Thank you.
Greg Ebel, President and CEO, Enbridge: Yes. I mean, we’re not trying
Speaker 8: to give formal quarterly guidance here. We give annual guidance. We’re trying to help The street have a con have a discussion on how this new profile lands given that we do have the utilities. I think we can help you as we go through maybe detailed conversations on how the assets roll. But it was really just trying to highlight the fact that not only do we have the new U new US utilities and the Ontario utility that have both a front and back end weighted profile, but other parts of our business do that too.
You know? For example, on the mainline, you know, we we hit a record 3,200,000 barrels this quarter, and our our our forecast was three. We assume we’d be over three for the quarter, but not quite as high as the 3.2 because there is some seasonality there as well. And then go to Cynthia’s business in GTM and depending on weather and how interruptible service gets utilized. That usually happens in the winter months.
So really, again, just trying to help people understand their models. As we said, we’ve had a really good start to the year, but there’s still a bunch of year to go here. So that’s why we’re maintaining our guidance as we’ve noted. So
Speaker 6: Understood. Thank you.
Speaker 3: Your next question comes from the line of Maurice Choi from RBC Capital Markets. Your line is open.
Greg Ebel, President and CEO, Enbridge2: Thank you and good morning everyone. Just wanted to come
Greg Ebel, President and CEO, Enbridge6: back to an earlier discussion about U. S. Crude oil. I sense a rising value for assets with export solutions perhaps even acting as a strategic differentiator. So if we could zoom in to EIEC again, if you could share your updated outlook for the facility and just broadly The US crude oil export given the global trade landscapes.
Colin Grunding, Head of Liquids Lines, Enbridge: Hey, Maurice. It’s Colin. Yeah. So we remain bulls on exports generally, all commodities, even outside energy. Like, the continents along everything.
So and and having been involved now with Ingleside for three or four years, you know, I think we’ve furthered our knowledge and conviction in in in the thesis generally. And specifically, what advantages one marine facility from the next. And, obviously, the the facility has a number of advantages. I’m not gonna repeat them all, but it all translates. Each one of those advantages, you know, accumulates into nickels, dimes, quarters, even dollars of advantage.
So we’re trying to now grow that out, obviously. We’re expanding. There’s another phase under construction that’s contracted, and and we’re also trying to now port that all those advantages to similar commodities, whether it’s NGLs or we talked about LNG at some point or or low carbon. So that that thesis remains strong. And over time, generally, we’re trying to build a longer value chain like we talked about in gas five or six minutes ago, you know, further up and and and direct and help customers keep as much of that value chain as they can.
That’s the strategy. You know, we’re adding our marketing affiliate to that chain now in a in a modest way. So, yeah, we we we continue to believe in that, thesis. But but in a but in a contracted model, this is, you know, it’s a strong fundamental approach, but it’s also then underpinned, belt and suspenders, if you like, by a very differentiated, contracted model.
Greg Ebel, President and CEO, Enbridge: And you see us adding all elements. Right? We’re adding some more storage at Ingleside. We talked about the additional docks that we added. And, you know, in some respects, if as you see WTI being a little lighter on price, those export markets become even more important, you know, looking at Brent, say, in the $63 range.
I think I saw it this morning kind of thing versus to just 60. So we we wanna make sure we can provide every opportunity for our customers to maximize a, their growth, but also their netbacks. And the export side of that on the gas liquid side is absolutely critical.
Greg Ebel, President and CEO, Enbridge6: Perfect. That makes sense. And my one follow-up here is about an earlier comment about you spoke about allocating utility capital based on the best risk adjusted returns, including economic and regulatory environment. How do you view the Ontario regulators’ recent decision about cost of capital and jurisdictions’ competitiveness versus other parts of your portfolio?
Greg Ebel, President and CEO, Enbridge: Yes. I’ll let I’ll let Michelle speak to that. But, obviously, higher equity thickness and better returns are better than lower equity thickness and even the the same return. So I think that’s something they’ve gotta be thoughtful about. Some of their discussion on cost of capital and even change in ROE isn’t really impact doesn’t impact us till the end, but you you’re always making those decisions, Michelle.
Sure. So, I mean, our current ROE was set in
Michelle Heritance, Head of Gas Distribution and Storage, Enbridge: our rate case. It’s at 9.2%. It’s set there through to 2029. So the that decision really doesn’t impact us, and we can look at it then. But at that point in time, it’s great point.
So we’ll have an opportunity to discuss our equity thickness as well, which which was raised a couple points for the first time in a long time, in our last rate case. So the other thing I would say is in Ontario, we have the opportunity to earn to over earn rather on our ROE up to about a hundred basis points before we get into sharing, and we’re certainly targeting to to do that. I think, though, as Greg says, you have to look at the combination of a few things. You have to look at the ROEs. You have to look at the equity thickness.
So what’s your rate of return on this capital you invest? You have to look at how quickly you get that capital back. Ontario does have a good framework, but so do our US utilities. They have great riders where we we have very short quick cycle capital. And then I could say the most important thing beyond that is looking at the regulatory certainty.
What’s the consistency of what we get out of our regulators and PUCs across the board? And that’s something we look at very closely, and there’s definitely some differences with them. And we have some that it’s it’s very strong, very certain, and then there’s some where there’s some more questions. So we’re always gonna look to direct that capital where we have those good returns and that certainty for our shareholders.
Greg Ebel, President and CEO, Enbridge: Maurice, what I would say is I’m really pleased with both the premier of Ontario, premier Ford, and the minister of energy and mister Lechia about their commitment to gas. I mean, they and and the OEV obviously should be regulating in an independent fashion, but consistent the government’s policy. And the government’s policy is to provide access to gas to the maximum possibility to Ontario consumers and businesses. And that’s a really important signal. I look forward to seeing their natural gas, policy update here very soon, and I expect it to be very positive.
Greg Ebel, President and CEO, Enbridge6: Perfect. Thank you very much.
Speaker 3: And we have now reached the end of our question and answer session. I will now turn the call back over to Rebecca Morley for closing remarks.
Rebecca Morley, Vice President of Investor Relations, Enbridge: Great. Thank you. And we appreciate your ongoing interest in Enbridge. As always, our Investor Relations team is available following the call for any additional questions that you may have. Once again, thank you, and have a great day.
Speaker 3: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
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