Fortis TCI Ltd.

Overview Key strengths Key risks Low-risk, vertically integrated regulated utility operation. Limited regulatory and geographical diversification and exposure to weather, economic, and monetary risks. Timely recovery of full commodity costs from rate-payers. Regulatory structure less robust than that of peers. Moderately strategic relationship with parent Fortis Inc., which provides a one-notch uplift to the ratings. FTCI is a subsidiary of Fortis Inc., a large holding utility company. Its parent shares best practices, management experience, and expertise. FTCI also provides stable cash flow that aligns with Fortis' overall business strategy, and we expect support from the parent to persist. Thus, we consider FTCI to be moderately strategic to the Fortis group. This provides a one-notch uplift to FTCI's stand-alone credit profile

...Fortis TCI Ltd. (FTCI) benefits from being part of the Fortis group. FTCI is a subsidiary of Fortis Inc., a large holding utility company. Its parent shares best practices, management experience, and expertise. FTCI also provides stable cash flow that aligns with Fortis' overall business strategy, and we expect support from the parent to persist. Thus, we consider FTCI to be moderately strategic to the Fortis group. This provides a one-notch uplift to FTCI's stand-alone credit profile (SACP). FTCI's regulatory framework is less robust compared with peers. FTCI operates under a 50-year licensing agreement with rates based on a cost-of-service-style regulatory framework that increases regulatory lag. In addition, we consider the risk of political...

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