Canadian Utilities (TSE:CU) executives highlighted what they called a “transformational year” in 2025, pointing to adjusted earnings growth despite multiple headwinds, a significantly expanded regulated capital plan, and progress on major infrastructure initiatives in Alberta and Australia during the company’s fourth-quarter earnings call.
2025 results and key headwinds
Management said Canadian Utilities delivered adjusted earnings of $658 million, or $2.42 per share, in 2025, up from $647 million in 2024. Chief Executive Officer Bob Myles said the company overcame $57 million of headwinds in the year, describing the performance as a reflection of discipline and resiliency.
- A decrease in 2025 return on equity and the completion of the efficiency carryover mechanism at the end of 2024, which she said created a $26 million gap.
- Changing government policy that management said resulted in a $12 million earnings deficit from its renewables portfolio.
- A “strategic decision” to redeploy capital following the sale of ATCO Energy, which Patrick characterized as an earnings obstacle versus 2024, though she said redeployment supported $36 million of Alberta utility rate base growth and other outperformance.
Patrick also cited offsets, including a $21 million contribution from a regulatory outcome and the move into Australia’s AA6 access arrangement, as well as $11 million of growth in the storage and industrial water segment, which she said represented a 30% increase over 2024.
Capital plan expands; rate base growth outlook increased
The company announced a $12 billion, five-year capital expenditure plan across its regulated utilities, calling it the largest plan in its history. Myles said spending is expected to rise notably in natural gas transmission in 2026 and 2027, driven by the Yellowhead Pipeline Project. While he noted 2028 spending would decline after Yellowhead’s completion, he emphasized that the 2028–2030 plan would remain above historical levels, focused on customer growth, system reliability and safety, and climate and technology.
Management said the plan increases its five-year regulated utility rate base compound annual growth rate (CAGR) to 6.9%, up from a previously announced three-year forecast of 5.4%. Executives also cautioned that the forecast does not include certain “prospective major projects” that could be approved to address capacity constraints on natural gas or electric transmission systems, or potential new interprovincial electric transmission lines.
In the question-and-answer session, Myles said the company sees potential to increase growth further but wants to be confident it can execute. He also described the capital plan as conservative, with projects included that the company is comfortable have been approved or effectively sanctioned.
Project updates: CETO, Alberta transmission opportunities, and Yellowhead
Canadian Utilities said its Central East Transfer Out (CETO) transmission project remains on time and on budget. The company described CETO as a $255 million investment and said the 85-kilometer transmission line is on track to be energized by June.
Myles also discussed additional Alberta transmission opportunities under review, including:
- Northwest Area Transmission Development, where the ISO has initiated needs identification work for reinforcements in the Grande Prairie area. Management cited a preliminary cost estimate of $500 million.
- McNeil Converter Station, described as the only intertie point between Alberta and Saskatchewan. Management said ISO-led work is underway for an end-of-life replacement and cited preliminary cost estimates of approximately $1 billion, with most costs expected to fall outside the current five-year capital plan.
- Two new substations approved by the Alberta Utilities Commission in Fort McMurray and Northwest Alberta, expected to enter service in late 2026 and the first half of 2027, respectively.
On the Yellowhead Pipeline Project, Myles said the project is intended to connect supply to demand growth while “debottlenecking” Alberta’s natural gas network and relieving pressure on the broader integrated system. He said milestones in 2025 included approval of the needs application, and that the company filed a facilities application with the AUC in late 2025. Management expects a decision by Q3 of this year, which would allow construction to begin.
Myles said the project is now 100% contracted. He also noted procurement milestones, including steel pipe and major compressor equipment. During Q&A, he said the company has a hearing date set with the regulator and is targeting construction in late Q3; if approvals slip, the in-service timeline could slip as well. The company filed an estimate of $2.9 billion ±20%, citing remaining design and schedule uncertainty.
Non-regulated portfolio: acquisition, hydrogen hub pause, and carbon storage progress
In the non-regulated businesses, management said it continues to focus on energy storage, generation, and cleaner fuels. Myles acknowledged “challenges” facing renewable generation in Alberta but said the company remains committed to the long-term strategic potential of power generation.
The company said it acquired a 100% ownership interest in Northstone Power Corporation in the fourth quarter, an 18.6 MW gas peaking facility near Grande Prairie, Alberta. Management said the facility supplies power during periods of low renewable generation and that the acquisition complements the company’s existing portfolio.
Canadian Utilities also said it has paused further work on the Alberta Hydrogen Hub after being unable to obtain Government of Canada support for rail infrastructure expansion. Myles said the company would reevaluate the project later if hydrogen economics and market conditions improve and if appropriate policy frameworks are in place.
On carbon capture and storage, Myles said the company is advancing the first phase of the Atlas Carbon Storage Hub with Shell Canada, stating construction has begun and commercial operations are expected in late 2028.
Funding and operational performance
Patrick said the company’s portion of the equity investment for Yellowhead is fully funded using a combination of hybrids, preferred shares, and cash from operations, and that the company did not need to issue common equity for that portion. The company said it continues to pursue partnership arrangements with Indigenous partners for up to 30% of the remainder of the project’s equity investment.
When asked about funding the broader five-year plan, management indicated Yellowhead’s near-term funding is in place, but said that further out there “probably will be the need for some form of capital recycling or equity component” to fund the $12 billion plan. Executives also said minority asset sales and non-core asset sales remain options.
On operations, Myles said Canadian Utilities maintained strong performance through a challenging wildfire season and cited improved year-over-year reliability in Alberta distribution utilities. He also said the company achieved zero recordable incidents across its non-regulated businesses in 2025.
Patrick added that cash flow from operating activities increased by $144 million in 2025 and said management expects further adjusted earnings growth in 2026 on a full-year basis.
About Canadian Utilities (TSE:CU)
Canadian Utilities Ltd, a subsidiary of holding company Atco, offers gas and electricity services. The company’s main divisions include electricity (generation, transmission, and distribution), pipelines & liquid (natural gas and water), and Retail Energy. Headquartered in Calgary, Alberta, the firm mainly operates in Canada and Australia, along with some operations in the United States and Mexico. Canadian Utilities launched a large venture called Atco Energy, which provides low-cost and sustainable energy solutions for Alberta.
