Emera Incorporated (EMA) Q3 2025 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to the Emera Third Quarter 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Friday, November 7, 2025. I would now like to turn the conference over to Dave Bezanson. Please go ahead.

Thank you, Joanna, and thank you all for joining us this morning for Emera's Third Quarter 2025 Conference Call and Live Webcast. Emera's third quarter earnings release was distributed this morning via Newswire and the financial statements, management's discussion and analysis and the presentation being referenced on this call are available on our website at emera.com. Joining me for this morning's call are Scott Balfour, Emera's President and Chief Executive Officer; Greg Blunden, Emera's Chief Financial Officer; and other members of Emera's management team. Before we begin, I'd like to advise you that this morning's discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include reference to non-GAAP financial measures. You should refer to the appendix for a reconciliation of historical non-GAAP measures to the closest GAAP financial measure. And now I will turn things over to Scott.

Thank you, Dave, and good morning, everyone. Emera enters these last months of 2025 with solid momentum. Our third quarter marked our fifth consecutive quarter of strong adjusted earnings growth, which has been underpinned by disciplined execution and customer-focused investments and reflects both the strength of our strategy and the quality of our portfolio. With a record $3.6 billion in capital investment this year and a newly extended 7% to 8% rate base growth profile, and a $20 billion capital plan through 2030, we're confident in our ability to continue to deliver sustainable value for customers and shareholders alike. This morning, we reported third quarter adjusted earnings per share of $0.88, a nearly 9% increase over the same period in 2024. Year-to-date, adjusted earnings per share of $2.94 represents a 14% increase over the same period in 2024. The progress this year sets us up well to deliver on our 5% to 7% adjusted earnings per share growth guidance through 2027. In September, our Board of Directors approved a 1% dividend increase, our 19th consecutive year of annual increases. This continued growth in our dividend reflects our confidence in the strength of our premium asset portfolio and our ability to deliver consistent earnings and cash flow growth. We remain focused on delivering value to all stakeholders and we're delivering. We're on track to deliver our largest annual capital spend of $3.6 billion in 2025, with more than $2.6 billion already deployed across key projects, including solar and reliability investments at Tampa Electric, energy storage and transmission upgrades in Nova Scotia, and gas infrastructure at Peoples Gas, and we remain on track to fully execute on our full year plan. Looking forward, our 2026 to 2030 capital plan adds $20 billion of essential investment across our portfolio, enabling us to continue to deliver the reliable energy our customers expect. Like many across the sector, we see increased demand for core investments in reliability, resilience, modernization and generation capacity driven by key market conditions, such as accelerating demand growth, changing grid configuration, renewables integration and of course, electrification. Put simply, there is no shortage of investment opportunity across our portfolio. Our capital plan thoughtfully maintains our 7% to 8% rate base growth trajectory as we remain focused on pacing our capital investment in a way that best delivers value and manages cost impacts for customers while also delivering solid and sustainable growth for investors. Affordability for customers is an important consideration that we must balance with the need to invest in our systems to ensure we were able to reliably deliver the energy our customers need. Since our acquisition of Tampa Electric in 2016, Tampa Electric's rate base has grown by more than 8% annually, driven by investments to support the delivery of essential service to our customers. Over the same period, Tampa Electric's bill increases have remained below the national average. Our success in managing customer cost impacts is driven by prudent cost management, smart investments and a focus on strategic initiatives that deliver value for customers. For example, our solar investments in Florida have saved customers more than USD 350 million in avoided fuel costs. In Nova Scotia, investments required to meet growth in the province to maintain reliability in the face of increasing severe weather and to support government policies of closing coal plants are also driving rate base investment and growth. And we're working to find creative solutions to minimize the impact on customer rates. Last year, Nova Scotia Power is supported by both federal and provincial governments, we securitized more than $600 million in fuel costs and the recently filed consensus general rate application proposes an additional $700 million of securitization related to a portion of Nova Scotia Power's thermal generation assets. These steps are helping to minimize near-term customer cost impacts and demonstrate the thoughtful approach we continue to take in managing rates for customers. Florida continues to be a powerful engine of growth, with robust population and economic expansion driving increased demand for electricity and natural gas. In the last 5 years, Florida has experienced nearly 38% GDP growth. And in 2024, it was the #1 state for net migration and experienced the second highest population growth in the country. To support that growth, more than 80% of our capital plan will be deployed here. The influx of new customers has translated into increased demand for both electricity and natural gas across both residential and commercial sectors. At Tampa Electric's capacity needs grow as a result of economic development, our 2026 to 2030 capital plan includes approximately $1.2 billion of transmission expansion and capacity improvements, averaging approximately $240 million of investment per year. This is in addition to the more than $2 billion of anticipated ongoing spend on solar and complementary energy storage projects, which will result in 2,100 megawatts of solar to be in service by the end of 2028. At Peoples Gas, our investments will be targeted at bringing new customers online as we see continued growth in natural gas demand. In addition, our investments will continue to focus on hardening the system and increasing reliability for customers. As a direct result of the growth we continue to see in Florida, we expect rate base growth from our local utilities to outpace the average of our consolidated plan with these investments driving 8% to 9% rate base growth through 2030. And with the recently approved settlement of Peoples Gas and last year's Tampa Electric rate case, both of which include subsequent year adjustments, we are pleased to have regulatory clarity in support of our investment in rate base over the next 3 years. I'd like to acknowledge that a capital plan of this size is not just numbers on a page. It requires a team of dedicated professionals to execute on. I'm very proud of our teams across all our companies that year after year developed thoughtful plans to take our customers' current and future needs and government regulations and policies into consideration, anticipate what it will take to execute and then go out and deliver on these plans, safely and efficiently. We made a meaningful regulatory process in 2025. The Florida Public Service Commission approved the Peoples Gas settlement with USD 67 million of new rates to go into effect in 2026 and subsequent year adjustments of USD 25 million and USD 5 million in 2027 and 2028, respectively. The settlement agreement also reflects a 15 basis point increase in return on equity, bringing it to 10.3%. This agreement helps to manage regulatory lag and the recovery of investments and important reliability and distribution expansion needs across the state. Earlier this week, the FPSC formalized Tampa Electric's 2026 base rate increase of USD 88 million, which was approved as part of their 2024 decision. In Nova Scotia, the utility filed a consensus general rate application with the Nova Scotia Energy Board in September, requesting new rates for 2026 and 2027. This consensus GRA reflects agreement reached with all customer representatives following extensive engagement and constructive collaboration with key stakeholders across the province. The hearing has been scheduled for January 2026, and we expect a decision and new rates early next year. The GRA enables critical reliability and infrastructure investments necessary to support the needs of Nova Scotians, which are reflected in our updated capital plan. If approved as filed, the settlement provides Nova Scotia Power with a path to return to earning its approved ROE in 2026 and 2027. Finally, at New Mexico Gas, the sales process is proceeding. The regulatory hearing began earlier this week, and we remain confident in obtaining regulatory approval in early 2026. Before turning the call over to Greg, I wanted to highlight that while we extended our rate base growth forecast today through 2030, we've maintained our 5% to 7% adjusted earnings per share growth guidance through 2027. We plan to roll forward our EPS guidance on our fourth quarter call in February of 2026. And with that, I'll turn the call over to Greg.

Thank you, Scott and all of you for joining us this morning. Turning to our financial highlights. This morning, we reported third quarter adjusted earnings of $263 million and adjusted earnings per share of $0.88, compared to $236 million and $0.81 in the third quarter of 2024. This represents a 9% increase in our Q3 earnings per share. Year-to-date, we reported adjusted earnings of $878 million and adjusted earnings per share of $2.94, compared to $603 million and $2.10 per share in 2024, representing a 40% increase in earnings per share over the same period in 2024. The robust earnings growth the business has delivered so far has translated into a 23% increase in operating cash flow compared to the same period last year when normalized for fuel and storm deferrals. In addition, recently, we issued USD 750 million in hybrids, effectively replacing the expected proceeds from the sale of New Mexico Gas this year and derisking our hybrid maturity in 2026. This quarter's cash flow growth, in addition to the hybrid offering in late September has delivered an over 150 basis point improvement in our key credit metrics since this time last year, bringing us to 11.9% on a trailing 12-month basis for the must-watch Moody's metric. Turning to the drivers of our third quarter results. Adjusted earnings per share increased $0.07 to $0.88 compared to $0.81 in Q3 2024. At Tampa Electric, new rates in 2025, reflecting the level of capital we've invested on behalf of customers and continued customer growth increased contributions by $0.16 compared to the third quarter of 2024. Contributions from our other electric utilities modestly increased due to lower operating costs and a slightly stronger U.S. dollar increased adjusted earnings by $0.01 during the quarter, while a higher share count decreased adjusted earnings per share by $0.03 compared to 2024. Contributions from our Canadian Electric Utilities decreased $0.04 compared to the third quarter of 2024, primarily driven by higher operating costs and higher depreciation expense. Timing differences in the valuation of long-term compensation and related hedges primarily related to a large gain recognized in 2024 drove a $0.02 increase in corporate costs compared to the third quarter of 2024. And at Emera Energy, favorable weather conditions that led to higher natural gas prices and increased volatility, modestly increased contributions from marketing and trading, but this was offset by lower earnings at Bear Swamp due to an outage. And at our Gas Utilities, lower contributions from New Mexico Gas and Peoples Gas decreased earnings by $0.02 compared to the third quarter of last year. Year-to-date adjusted earnings per share is up $0.84 compared to the same period in 2024, many of the drivers for the quarter are the same as for the year, but there are a few items I'd like to highlight. In addition to new rates at Tampa Electric in 2025, driving increased earnings year-to-date, favorable weather conditions in Florida contributed $0.07 year-over-year. The timing differences in the valuation of long-term compensation related hedges and the reversal of a valuation allowance on deferred tax assets, also drove lower corporate costs. The weakening Canadian dollar increased the earnings contribution from our U.S. operations by $25 million for the year, contributing $0.09 year-to-date. Emera Energy's year-to-date performance reflects the record first quarter where cold weather in the Northeast early this year brought higher pricing and market volatility that the business was able to capitalize on. As a result, in the first quarter of this year, we adjusted Emera Energy's earnings guidance up to a range of USD 35 million to USD 45 million. And contributions from Canadian Electric Utilities benefit from the recognition of investment tax credits related to the ongoing energy storage projects and favorable weather in Nova Scotia in the first quarter of 2025. This was partially offset by the sale of our equity interest in Labrador Island Link in June of 2024. Our capital plan for 2026 to 2030 is similar in size to our previous capital plan, and that is true for our funding plan as well. The only change in our funding plan this year is the inclusion of the proposed asset securitization at Nova Scotia Power that Scott mentioned earlier. The largest source of funding for our new $20 billion capital plan will continue to be reinvested cash flows from our operations. We expect organic cash flow generation to provide 45% to 50% of our funding needs. We expect debt to be issued by our operating companies to support staying in line with the regulated capital structures. And at the holding company, we expect to maintain our holding company debt at 30% to 35% of total debt. As Scott mentioned in his regulatory update, a final decision on the sale of New Mexico Gas is expected in early 2026, and we remain confident in a constructive outcome. Proceeds from the sale will be used to fund approximately USD 700 million of our capital plan. And in addition, Nova Scotia, the expected securitization of thermal assets will contribute an additional CAD 700 million for our funding needs. We continue to expect to access equity markets through our DRIP and ATM programs for up to 10% of our funding needs, supporting the strong profile of organic growth reflected in our $20 billion capital plan. On average, this represents approximately $400 million of equity annually. And we believe hybrid capital has an important role to play in meeting our funding requirements and are pleased with the competitive rates we accessed in the hybrid market a few weeks ago. The 50-50 debt equity treatment by rating agencies makes them attractive tools that we will strategically access to fund up to 5% of our funding plan. And with that, I'll now turn it back over to Scott.

Thanks, Greg. Before I move into my closing remarks, I want to take a moment to acknowledge that after nearly 10 years, this will be Greg's last earnings call as CFO. On behalf of all of us at Emera, I'd like to thank Greg for his significant contributions over the last decade. Over his tenure, Greg helped the company to navigate a challenging macro environment, unexpected headwinds driven by policy changes and help to absorb our transformative acquisition of TECO. Thanks to Greg's leadership today, Emera is on solid financial footing and well positioned to execute on the organic growth we see ahead. And importantly, I'm pleased that Greg will continue to be part of the team in his new role of Executive Vice President, Finance for our U.S. Utilities supporting our largest and fastest-growing businesses. We also look forward to welcoming Jared Green to the Emera team as our CFO as of December 1. Greg will, of course, work closely with him to ensure a smooth and seamless transition of finance responsibilities, as Jared steps into his new leadership role at Emera. More broadly, for everyone in our industry, this is a critical time to invest in meeting growing demand while strengthening resilience and improving efficiency and, of course, being focused on affordability for customers. Emera will continue to build on our strong momentum, executing our customer-focused $20 billion capital plan at a pace that best manages cost impact for customers. With a strong foundation, premium portfolio of assets and expert teams, we will continue to deliver value for customers and shareholders alike and achieve our targeted adjusted per earnings per share growth. This concludes our formal presentation, and we now open the call for questions from our analysts.

[Operator Instructions] The first question comes from Rob Hope at Scotiabank.

And Greg, all the best. Thanks for all the years. Okay. Maybe just taking a look at the capital forecast. So if we compare the capital forecast that you put forward today versus your prior one, there seems to be a little bit of a different shape specifically a little bit less capital here in the next couple of years, looks like across the board and maybe a little bit more in kind of that '29, 2030 time frame. Can you maybe speak to kind of how some of the capital has been shifted as well as kind of what the key drivers are there?

Yes. Rob, it's Greg. I think there's a couple of things. One of the things that you may notice is that some of the planned capital at Tampa Electric for the '26 and '27 period. Some of that has been accelerated into 2025, in particular, around some of our solar investments and getting in front of some of the uncertainty that we see from a policy perspective a couple of years out. And secondly, as part of the rate settlement at Peoples Gas, there was an agreement with intervenors that some of the capital we had planned to spend, it would be better to profile that out over a little bit longer period of time. So that would be an example of a couple of things.

All right. Appreciate that. And then maybe once again on the capital forecast. What -- how do you think about your credit metrics as being a governor or maybe to ask us a different way, are you seeing potential upside to the forecast? And would you be willing to go there if it did require some incremental equity?

I think as Scott said, Rob, there's no shortage of opportunities to deploy capital in our business. I think it's a question of pace. And when we look at that, we look through all lenses in terms of the ability to execute the lead times on certain equipment, the impact on customer rates and whether there's any kind of regulatory lag associated with large capital projects and, of course, funding and credit metrics are part of that as well. But like I think many companies in our sector, we're not going to shy away from issuing equity if we need to, to fund accretive capital projects in our businesses.

Next question comes from John Mould at TD Cowen.

First, best wishes to Greg on the next step, and thanks very much for your assistance. I'd like to just start appreciating it's early days here, but starting with Wind West. It continues to be topical across political levels came up in the federal budget. I appreciate any involvement by yourselves would be on the transmission side. But wondering what conversations have you been a part of on this initiative? How are you thinking about potential scale and timing? And maybe just higher level comments on the broader opportunity for Emera that could come from this push on projects of national importance.

Yes, John, thanks for the question. And I may get Peter to add on to perspective you hear from me here. So first of all, obviously, it's still very early days on all of these projects of national interest that are all at various stages of planning activity, some -- as you know, the SMR program in Ontario is already under construction. And I think from a broad perspective, from Emera's perspective, we're here, we're interested in seeing how this progresses. We're cheering the premier on certainly for his bold vision as it relates to the Wind West initiative. I'm pleased that the federal government seems to have been captured with that vision and enthusiasm. But of course, it is still very early days, we'll be looking to support the premier's initiative in any way that we can. You're right, we would not naturally look to be participating in offshore wind development. That's not our game. But if we can be assisting those developers with subsea connection into Mainland Nova Scotia, we can be assisting and participate in the transmission build requiring to bring that energy to broader markets beyond Nova Scotia. Of course, we're interested to be doing that. We'll be paying attention, of course, to the Budget Implementation Act, which is expected in the coming weeks. It will increasingly provide more clarity. We will support the office of the -- that is organizing these projects of national interest led by Dan Farrell in any way we can. So at this point, we're early days. We're trying to be helpful to the parties that are there, and there's still a lot of questions to answer as to where this project sits and its timing. But overall, I think it's exciting to see that the focus of the federal government and many premiers is on enhancing and building national infrastructure in Canada, and we'll be pleased to play any part in that, that we can. Peter, anything you want to sort of add a little more Nova Scotia perspective within that?

I think you covered it really well, Scott. But I'd just say, I think the potential for that East-West transmission is real. We've looked at that in the past. I think it's an exciting opportunity getting a lot of attention at both the provincial and federal level. I think the opportunity to start optimizing generation resources through transmission links in the region is something we should look at. I think it's good for Nova Scotia, and I think it's good for Atlantic Canada. So we'll continue to stay close to the conversation and see what happens.

Okay. Great. And then just going back to the capital plan and the generation aspect in Florida, you commented earlier about the magnitude of customer savings that solar investments in Florida have brought through avoided fuel costs. Just curious, as you work through your capital plan, how did all the moving pieces with the federal tax credits and some of the [ FEEAC ] concerns or uncertainty effect where you landed in terms of the timing of generation spend and whether there's potential for further customer saving investments there if you do get further clarity on some pieces of that puzzle.

Yes, John, it's Greg. Yes, the fuel savings that Scott referred to, obviously, is related to the build of the solar in our service territory that is obviously economic for customers, and part of that is the availability of tax credits. And if I go back to my comments in response to Rob, that's one of the reasons why we've accelerated some of the otherwise planned solar investments for the next couple of years is to advance those projects, realize the savings for customers earlier and also just get in front of what could be some policy uncertainty in the next couple of years. So it hasn't changed our overall plans, but on solar, in particular, a little bit more sooner rather than later.

The next question comes from Maurice Choy at RBC Capital Markets.

Can I just start with the Nova Scotia rate case? I wanted to specifically ask about your engagement with the Nova Scotia government proceeding up to the settlement and even after the filing with the regulator, particularly given the government's public comments about the rate impact, and with that, what can be done to avoid the outcome that we saw in 2022?

Thanks, Maurice. It's Peter again. I think obviously, affordability is on a lot of people's minds, including our premier. I won't speak for the premier. But when we look at how we came to this filing, and I think it's important to underline that it's a consensus filing, as Scott mentioned, with all of the customer representatives. So we spent several months working with them. I think we found the path to balancing reliability and affordability through this rate case. So I think it's significant that it is a consensus agreement that was filed. And we're on a path to that hearing in early January. Obviously, you would imagine there have been ongoing discussions with provincial officials for months, those continue. We do have a productive relationship with officials inside the government, and we continue those discussions. I think it's important, too, that the premier statements, while he's concerned about affordability and I understand that, his statements have also been that they will become intervenors in the process, the regulatory process, which is normal, that the government does have a lawyer that participates in that. So that's our expectation. We'll continue to prepare for the hearing in January.

Maybe as a quick follow-up. Are you detecting any differences in, say, body language or engagement that would avoid the legislative intervention?

No, no. We continue to have those discussions with, I'd say, partners in government on a number of files, a number of issues. We'll stay close to that. But again, I think the strength of the filing in front of the regulator because we spent all of that time with all the customer representatives. I think, has struck that right balance between reliability and affordability.

That's great. And if I could just finish up with a discussion about credit metrics and payout ratio, I wasn't much mentioned here about credit metrics. And I remember, Greg, that previously, you mentioned that the funding plan supports about a 50 bps improvement annually in your cash flow to debt metrics as well as payout ratio towards 80% by 2027. Just thoughts on what the funding plan and CapEx plan today...

Yes, I think -- thanks for the question, Maurice. Yes, nothing has changed from our view with the funding plan is consistent with what we had before and with the soon to be closing of the sale of New Mexico and the securitization of the thermal plants or assets at Nova Scotia Power. We fully expect to continue to have that level of improvement in our credit metrics over the next couple of years. So we're very pleased about that. On a trailing 12-month basis, we are at our downgrade threshold or a threshold with Fitch now who has us at stable. We've got about 150-plus basis point cushion on our downgrade threshold at S&P, they have us at stable. And as I mentioned in my remarks, we are effectively at the 12% with Moody's as well. So albeit we're still on negative outlook. So all to say is we've accomplished what we needed to do and the path for further improvement over the next couple of years has not changed.

The next question comes from Eli Jossen at JPMorgan.

Just wanted to kind of start on the strategic leadership changes. Congrats to Greg on next steps and Jared and the rest of the team just top priorities going forward. I think the release highlighted a lot of the strategic goals for the business, but just from a very high level, how should we think about this leadership transition moving forward?

Yes. Eli, thanks for the question, and welcome to Emera. So yes, I mean, this is really just about continuing to strengthen the bench as we've shared with others in the past, Greg and I are within months of the same age and looking to bring Jared in and just continue to strengthen the bench. We're blessed with -- I'm blessed with working with a great team. And as I say, pleased that Greg can continue to contribute to the team and adding Jared on just continues to bring some fresh talent and fresh perspective and position us well for the future. And we've got great talent those that are on this call and their teams underneath them. We're, as I say, blessed with a team of really terrific people. We don't -- I don't use that term in the call script, expert teams lately, I really believe that we've got a deep bench and a strong team and just continue to think about ensuring that succession planning in the years ahead, continues to be thoughtful as we've navigated in the past with a number of executives retiring and not missing a beat and keeping the momentum that we've got a strong performance through the piece. So just looking to continue to do that.

Great. And then maybe just pivoting to some of the attractive growth that's been discussed on this call in Florida. So I guess, can we just talk a little bit about potential pockets of upside beyond the plan that you see, whether that's in the near or longer term? What do those look like from a mix shift industrial possible data center opportunities across your service territory?

Yes. I think Eli, I would say, first of all, I'd anchor back to the point that Greg made, which is there is no shortage of capital for us to invest. We could easily put forward a capital plan that saw significant more CapEx over the next couple of years. But we're working really hard to balance that capital investment profile with the impact on affordability for customers. And at the same time to make sure that we can execute it both safely, but also cost effectively and construction capacity and supply chains in this market are constrained. And so there's risk that in the ability to execute with excellence as I think we have over the years in our capital programs. And so that is sort of home base for us. Now as you mentioned, data centers, data centers have not yet been a part of our story. But I would say that we continue to see active interest in and by the data center side of things in our service territories, of course, particularly in Florida. And there's nothing material that we're in a place to share now, but it continue to be encouraged by the conversations. And I would like to think that we may see some opportunity to grow at the very least to make sure that we're sustaining that 7% to 8% rate base growth for durable time, which I continue to believe. But over time, we may see some opportunity to upside that. But as we sit today, we've continued to believe that 7% to 8% rate base growth profile is kind of the sweet spot, and data center growth may help to support the affordability impacts on broader customers if we can use some of that revenue generation from data centers to mitigate cost impacts for the broader system. This is all part of the equation that every utility I know is dealing with. And as we sit today, as I say, that 7% to 8% growth is home base for us, and we see that as durable for a long time.

The next question comes from Mark Jarvi at CIBC Capital Markets.

Scott, when you guys gave EPS guidance, I think you said you wanted walk before you run and weren't comfortable going out to sort of 5 years. As you think about rolling over guidance next year, is the plan to stay with that 3-year guidance? Or would you line that up with the capital plan to 5 years?

I mean, we haven't fully landed on that yet, Mark, but I would reasonably expect that we'll stick with the 3-year forecast for now.

Got it. And then just one question on Maritime Link. It's depreciating asset kind of a bit of a drag on the rate base CAGR. It doesn't require capital. But what's your view on that asset? Are you wedded to it? Is there a lot of strategic value when you think about potentially some of the transmission opportunities in the Atlantic provinces, just sort of long-term view on that asset?

Yes. It's a pretty strategic asset, I think. I mean it really is just an extension of Nova Scotia Power. It's regulated by the same regulator as Nova Scotia Power, all of that cost profile effectively it is, in a way, a generation source for Nova Scotia Power through import through the Maritime Link. So it really is tagged with Nova Scotia Power. And the only reason really it was separated into its own distinct entity was for financing purposes, and being able to secure the federal loan guarantee. The federal government was looking to ensure that, that asset was physically separated -- legally structurally separated from Nova Scotia Power. So I'd really think of it as an extension of Nova Scotia Power.

Would there be an opportunity to maybe do like a minority sale if you saw some other opportunities to continue to push rate base investments across your portfolio?

We've always got options like that, Mark, but not something that we're thinking of or pursuing at the current time.

[Operator Instructions] The next question comes from Ben Pham at BMO.

I have a follow-up question on the Mark's query on the EPS CAGR. I'm wondering from the Emera perspective, when you think about setting the CAGRs and that starting year, you roll forward. How do you guys thinking about '25 as a base just because you had the marketing trading benefit and Tampa rates going up, like it's a high starting point that it's tough to get a CAGR that looks similar to the last or the current CAGR that you have right now?

And I think -- sorry, go ahead Greg, if you want it.

Yes, Ben, I think if you think back to when we first established it, there was a couple of, I'd call it, baseline assumptions that was embedded on the 5% to 7%, and that was that Emera Energy would earn kind of their midpoint of their earnings range of $15 million to $30 million, and it was also based off a consistent foreign exchange rate over the period. So again, I don't want to get over our skis in terms of what we're thinking about for February. But I think it's fair to assume that when we talk about going forward, EPS guidance, it would be normalizing for some of those things that were a bit of a tailwind in 2025.

Okay. That makes sense. And what we're seeing from other companies as well. Can you talk about -- I'm not sure if on Nova Scotia Power, the rate base CAGR you have here, it's been quietly creeping up over the years in a good way. What's in that rate case? What's driving that? And I assume you note here, you're normalizing for the thermal securitization, it's apples-to-apples?

Yes. We are, Ben. The rate base investments going forward in Nova Scotia Power are really focused on reliability investments. And predominantly, if I take even a step back, transmission and distribution investments. And what I would include in that also is like battery projects, battery storage. So transmission upgrades between Nova Scotia and New Brunswick, strengthening the backbone of the transmission system in the province, more vegetation management and other distribution things all the things to support the transition to an ISO in New England and ultimately getting to our 2030 renewable energy targets in Nova Scotia.

Okay. Maybe just one last cleanup question. I know there's a -- I think I saw a positive contribution from BlockEnergy, which I thought your Emera shutdown a while back, is that different now in terms of where that business is?

No, we had a settlement on a contract that we had accrued last year as part of the wind up and the settlement was more favorable than we would have anticipated. So basically, just adjusting for an over accrual from 2024.

We have no further questions. I will turn the call back over for closing comments.

That concludes our call for today. Thank you all for joining us. Please reach out to the Investor Relations team if you have any further questions. Have a great weekend.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.