With leverage trending lower and balance sheet capacity opening up, is there room to scale CapEx towards $7 billion or $8 billion, or should a more conservative leverage target be assumed?

Francois Poirier stated the goal is to fill the $6 billion backlog by next year. The opportunity set allows for going above $6 billion, but human capital and maintaining the 4.75x debt-to-EBITDA target are critical. He noted they are not capital constrained and could potentially increase the $6 billion level by 2028 or 2029. “I think the opportunity set we have will give us the opportunity at that point to consider going above that $6 billion level.”

More color on the size and complexity of larger projects, and willingness to pursue them given the favorable regulatory outlook.

Tina Faraca and Francois Poirier clarified that while projects are getting 'larger,' they are still primarily in-corridor expansions, averaging $0.5 billion, with some potentially reaching $1 billion. They don't foresee increased execution complexity, but rather utility customers upsizing projects due to rapid demand growth, pushing out announcement timelines. “These are still in-corridor expansions. The average size of our projects in our backlog right now is about $0.5 billion.”

Why focus on transmission for data centers rather than competing in power generation, despite expertise?

Tina Faraca explained that their focus is on low-risk, compelling returns through interconnections with key utility customers. They haven't seen significant customer pull for behind-the-meter projects, and such requests often have limiting factors (contract term, long-lead items) inconsistent with their risk preferences. “We're actually not seeing a big pull from customers to develop behind-the-meter projects in the U.S.”

TRP

TC Energy (TRP) Q3 FY25 earnings call: guidance and Q&A

Earnings call· Sep 2025 (Q3 FY25)· Utilities· Nov 6, 2025

Source: earnings call transcript

Executive summary

TC Energy Q3 FY25 — Strong Project Execution and Increased Growth Outlook

TC Energy delivered strong Q3 FY25 results, driven by excellent project execution and a supportive policy environment across North America. The company successfully placed $8 billion of assets into service under budget and sanctioned an additional $700 million in new growth projects, primarily targeting power generation and data center demand. Management reiterated its commitment to financial discipline and expects to fill its $6 billion annual investment allocation target through 2030, maintaining a 4.75x debt-to-EBITDA target without requiring equity issuance.

Highlights

Safety incident rates continue to trend at 5-year lows.
Comparable EBITDA increased 8% year-over-year for the first 9 months.
Successfully placed $8 billion of assets into service on schedule and approximately 15% under budget.
Announced an additional $700 million in new growth projects at a weighted average build multiple of 5.9x, bringing total sanctioned projects to $5.1 billion over the last 12 months.
Reaffirmed 2025 comparable EBITDA growth of 7% to 9% and projected 6% to 8% growth for 2026.

Concerns

Project complexity and size
Supply chain constraints for hyperscalers
Industry backlogs and contractor availability
Human capital as a constraint for CapEx scaling

Guidance & targets

Category	Target	Timeline	Confidence
Net capital expenditures	low end of $5.5 billion to $6 billion range high materiality	FY25	High
Debt-to-EBITDA target	4.75x high materiality	long-term	High
EBITDA build multiples for new projects	5x to 7x range medium materiality	into 2026 · FY26	High
Comparable EBITDA growth	7% to 9% high materiality	FY25	High
Comparable EBITDA growth	6% to 8% high materiality	FY26	High
EBITDA growth	5% to 7% high materiality	through 2028 · FY28	High
Comparable EBITDA outlook	$12.6 billion to $13.1 billion high materiality	FY28	High
Annual investment allocation target	$6 billion high materiality	through 2030 · FY30	High
Remaining white space for investment	$3.5 billion medium materiality	through 2030 · FY30	High
Dividend growth rate	low end of 3% to 5% range high materiality	foreseeable future	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Natural Gas Pipelines Contributed to the overall 10% year-over-year comparable EBITDA growth.	—	13% increase	—	—
Power and Energy Solutions Partially offset the overall 10% year-over-year comparable EBITDA growth, primarily due to Bruce Power MCR outages.	—	18% reduction	—	—
Canada Gas EBITDA increased due to higher incentive earnings, higher depreciation, higher income taxes on the NGTL system, partially offset by lower flow-through financial charges.	—	—	—	$68 million increase
U.S. Natural Gas EBITDA increased primarily from the Columbia gas settlement, partially offset by higher O&M costs. Also saw incremental earnings from new customers and commercial innovations.	—	—	—	$60 million increase
Mexico Business EBITDA increased primarily due to Southeast Gateway, partially offset by lower equity earnings from certain payoffs as a result of the strengthening peso.	—	—	—	increased
Bruce Power Equity income was lower due to the start of the 2-unit MCR outage program earlier this year, compared to a single unit in Q3 2024. Execution of the dual MCR program is ahead of schedule. Availability: 94%	—	—	lower equity income quarter-over-quarter	—
Unregulated Natural Gas Storage (Alberta) EBITDA is benefiting from increased volatility in storage spreads in Alberta.	—	—	—	benefiting

TRP operating KPIs by quarter

TRP operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jun 2025 Q2 FY25	This call Sep 2025 Q3 FY25	Change vs prior quarter
Availability Bruce Power	98% On the bottom of the slide, in our Power and Energy Solutions business, Bruce achieved 98% availability in an exceptionally strong quarter while also receiving its annual price adjustment as of April 1. Source: earnings call transcript	94% In our Power and Energy Solutions business, Bruce Power achieved 94% availability, which includes the planned outages on Units 3 and 4 and is in line with our expected annual availability in the low 90% range for full year 2025. Source: earnings call transcript	-4 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total sanctioned projects $5.1 billion last 12 months

Currency assumed to be CAD, not explicitly stated in transcript.

Deals & partnerships

LNG Canada Potential expansion of LNG export facility, directly enabled by Coastal GasLink pipeline.

TC Energy is working closely with LNG Canada to evaluate Phase 2 and necessary pipeline expansion. FID rests with LNG Canada. LNG Canada Phase 2 is identified as a project of national interest by the federal government.

CFE (Mexico's national electricity provider) Long-standing relationship supporting Mexico's generation capacity expansion initiatives. 30-year relationship

CFE is the primary driver behind Mexico's generation capacity expansion, supported by TC Energy assets like Southeast Gateway.

Capital programs

Bruce Power Major Component Replacement (MCR) program underway

Period spend: $1 billion annually

Benefit:increase site capacity to over 7 gigawatts by 2033

Extends reactor life by at least 35 years per unit, improving availability. Unit 6 achieved over 99% availability in 2024 after MCR completion. Dual MCR program (Units 3 and 4) is ahead of schedule. Currency assumed to be CAD, not explicitly stated in transcript.

Ontario pump storage project proposed

Benefit:1,000-megawatt storage

Will provide critical fast response reliability to the grid and complements nuclear position in Ontario.

Bruce C project initiated federal impact assessment

Benefit:potential 4,800-megawatt

Creates optionality for long-term expansion; decision to advance a new build is still years away. Next tranche of funding is being worked with ISO.

Risks & headwinds

Project complexity and size

Projects are getting bigger and more complex

Mitigation:Still primarily in-corridor expansions, averaging $0.5 billion; no increased execution complexity expected. Utility customers upsizing projects due to demand, pushing out announcement timelines.

Supply chain constraints for hyperscalers

Limiting factors including contract term or requirements to procure long lead time items

Mitigation:Not pursuing behind-the-meter projects inconsistent with risk preferences; leveraging long-term relationships with suppliers for existing projects.

Industry backlogs and contractor availability

Industry backlogs building

Mitigation:Continuously monitoring suppliers and contractors; retaining top-tier suppliers through long-term relationships and contracting strategies; long-term portfolio attracts preferred contractors.

Human capital as a constraint for CapEx scaling

Human capital is the most important consideration for scaling above $6 billion annual CapEx

Mitigation:Focus on maintaining execution excellence and strong culture; not capital constrained, but prioritizing human capital and 4.75x debt-to-EBITDA target.

What to watch in Q4 FY25

Capital program filling to $6B target

By end of next year (2026)

Current $5.1 billion sanctioned in last 12 months, $3.5 billion white space remaining to fill $6 billion annual target through 2030.

Target $6 billion annual investment allocation target filled through 2030.

Why it matters

Demonstrates continued growth visibility and capital discipline, indicating future project pipeline strength.

By the end of next year, we expect to FID a series of projects that will fill out our $6 billion net annual investment allocation target through 2030

Find out whether TRP delivers this. Inve re-checks your case every morning.

Q&A highlights

Can the 5-7% CAGR be sustained past 2028, given the large backlog and increasing ROIC, especially with Bruce Power capacity opening up?

Sean O'Donnell stated that sustaining the growth depends on project returns remaining high (like the current 12.5% IRRs). Projects are getting larger and more complex, requiring more clarity, but if returns hold, the midpoint of growth could be maintained or improved.

“if these returns remain true, then I do think you'll see the same kind of midpoint of growth, if not potentially better, but the projects are just taking a little bit longer for us to have that degree of clarity.”

asked by Praneeth Satish · answered by Sean O'Donnell

2 min read 6 chapters

Detailed narrative

Project Execution Excellence

TC Energy highlighted its strong project execution, successfully placing $8 billion of assets into service on schedule and approximately 15% under budget. This performance is attributed to enhanced project risk reviews, strengthened front-end development discipline, and a focus on brownfield in-corridor expansions, minimizing execution risk and leveraging existing infrastructure.

The company delivered 23 out of 25 sanctioned projects on or ahead of schedule, demonstrating improved capital efficiency and cost management.

Demand Growth & Strategic Positioning

The company is benefiting from significant demand growth in natural gas, driven by widespread electrification, LNG exports, and the rapid expansion of data centers. TC Energy's extensive footprint across North America and Mexico, including its position as the only operator capable of delivering natural gas to every major LNG export shoreline, uniquely positions it to capture this growth.

The natural gas forecast has been revised 5 Bcf/d higher, calling for a 45 Bcf/d increase by 2035.

Capital Allocation & Financial Discipline

Management reiterated its disciplined approach to capital allocation, aiming to fill its $6 billion net annual investment allocation target through 2030 with projects yielding 5x to 7x EBITDA build multiples. The company expects to achieve its 4.75x debt-to-EBITDA target without requiring equity issuance, funding 80% of its $31 billion 3-year plan from operating cash flows, an improvement from 77% last year.

Bruce Power & Power Solutions

Bruce Power, a significant nuclear asset, is undergoing a Major Component Replacement (MCR) program to extend reactor life until at least 2064, with Unit 6 achieving over 99% availability post-MCR. Equity income from Bruce Power is projected to double from $750 million today to $1.6 billion by 2035, generating nearly $8 billion in net distributions, providing significant capital flexibility for future growth opportunities.

Regulatory Tailwinds & Policy Support

The policy environment across Canada, the U.S., and Mexico is becoming increasingly supportive of infrastructure projects. Developments include improved regulatory environments for projects of national interest in Canada (like LNG Canada Phase 2), streamlined permitting processes in the U.S., and Mexico's Plan Mexico 2030, which aims to attract $270 billion in investment for natural gas capacity, reinforcing the value of TC Energy's incumbent network.

Innovation and AI Adoption

TC Energy is leveraging technology and AI to enhance safety, reliability, and commercial potential. Initiatives include an integrity-focused AI platform for document verification, advanced methods for blowdown emissions reduction, and Agentic AI for capacity optimization and short-term marketing. These efforts aim to drive higher EBITDA contribution, improve throughput, and mitigate risk across operations and project development.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.