Fortis Inc. (FTS): Marketing Mix Analysis [Dec-2025 Updated]

You're digging into the strategy of a regulated giant like Fortis Inc. as we hit late 2025, and honestly, trying to map the classic four P's onto a utility can feel like trying to fit a square peg in a round hole. Forget flashy ads; for Fortis Inc., the game is about infrastructure stability and predictable capital deployment across its massive footprint spanning 10 U.S. states and 5 Canadian provinces. We need to look past consumer noise to see that their 'Product' is essential service, their 'Promotion' is a commitment to a 4% to 6% dividend growth target, and their 'Price' is locked into regulatory returns, currently aiming for a 9% to 10.5% Return on Equity, all underpinned by a $25 billion five-year capital plan. Let's break down exactly how this essential service provider manages its market mix right now, because the numbers tell a very clear story.

Fortis Inc. (FTS) - Marketing Mix: Product

Fortis Inc. offers essential, non-discretionary utility services for residential and commercial customers across its North American footprint. The product is primarily the delivery of regulated energy, with ninety-four per cent of its assets dedicated to the transmission and distribution of electricity or natural gas.

The service offering encompasses regulated electricity generation, transmission, and distribution, alongside natural gas distribution and transmission services across North America. Fortis Inc. operates in sixteen jurisdictions, serving utility customers in five Canadian provinces, ten U.S. states, and the Caribbean.

The company is 100% regulated, which underpins the highly stable revenue streams derived from long-term regulatory contracts. As at September 30, 2025, Fortis Inc. reported total assets of $75 billion, with 2024 revenue at $12 billion. The Corporation's 9,600 employees support 3.5 million utility customers.

A significant portion of the product development strategy involves a focus on grid modernization and renewable energy integration projects. The recently announced 2026-2030 capital plan totals $28.8 billion, supporting an expected midyear rate base increase from $41.9 billion in 2025 to $57.9 billion by 2030, representing an annual growth rate of 7.0%. Capital expenditures expected for 2025 are approximately $5.6 billion.

Key product enhancements and projects supporting this focus include:

• Battery energy storage system at TEP, capable of storing 800 MW hours of energy.
• Agreement at TEP to provide ~300 MW to a data center.
• FortisBC Energy's investment in the Eagle Mountain Pipeline project.
• Tilbury LNG Storage Expansion Project, with CPCN application approved in October 2025.
• Fortis's commitment to reduce scope 1 greenhouse gas emissions by 50% by 2030 from a 2019 base year.

The regulated nature of the service means revenue stability is directly tied to the asset base supporting the delivery system. Here's a quick look at the scale and planned growth:

The product portfolio is designed for resilience, with a goal to have ninety-nine per cent of assets focused on energy delivery and renewable generation by 2035. The Wataynikaneyap Transmission Power project in Ontario represents a significant grid modernization effort, where Fortis's share of capital spending is 39%.

Fortis Inc. (FTS) - Marketing Mix: Place

You're looking at how Fortis Inc. physically delivers its essential services across its vast footprint. For a utility holding company like Fortis Inc., 'Place' isn't about shelf space; it's about miles of wire, pipelines, and the regulatory jurisdictions that govern them. The distribution strategy is entirely centered on owning and operating the physical infrastructure required to move energy to the end-user.

The geographic spread is a key feature of Fortis Inc.'s 'Place' strategy, designed to spread risk across different economies. Operations span 10 U.S. states, 5 Canadian provinces, and 3 Caribbean countries. This wide reach helps mitigate regional economic risks because a downturn in one area doesn't cripple the entire service base. As of late 2025, Fortis Inc. serves approximately 3.5 million utility customers across this entire footprint, delivering electricity and natural gas.

The core of the distribution network is managed through major regulated subsidiaries, each operating with local leadership and regulatory oversight. This decentralized model is fundamental to their place-based strategy.

The distribution channel for Fortis Inc. is exclusively the physical infrastructure itself; there are no retail storefronts for energy delivery. This means the 'place' is the grid and the pipeline network connecting the generation/supply source to the customer meter. Ninety-four per cent of Fortis Inc.'s assets are dedicated to the transmission and distribution of safe and reliable electricity and natural gas. This focus on essential delivery infrastructure underpins their low-risk investment profile.

The scale of this physical network is substantial, reflected in the balance sheet. As of September 30, 2025, Fortis Inc. reported total assets of $75 billion. Investment in this 'Place' is ongoing, with the Corporation's five-year capital plan for 2026-2030 set at $28.8 billion. This capital deployment is aimed at maintaining and expanding the physical assets that constitute their distribution network.

The geographic asset allocation as at December 31, 2024, shows the U.S. as the dominant location for physical assets:

• U.S. Asset Percentage: 66%
• Canadian Asset Percentage: 31%
• Caribbean Asset Percentage: 3%

The physical infrastructure is segmented across key operational areas, with specific customer reach noted for some major components:

• ITC: Operates high-voltage transmission in 8 U.S. states.
• UNS Energy (Arizona): Serves over 452,000 electricity customers.
• FortisBC: Delivers service to approximately 1.3 million customers in British Columbia.
• FortisAlberta: Services more than half a million customers across central and southern Alberta.

The rate base, which represents the value of the assets used for utility operations, is expected to grow from $41.9 billion (midyear 2025) to $57.9 billion by 2030, directly correlating to the continued investment in and expansion of this physical distribution 'Place'.

Fortis Inc. (FTS) - Marketing Mix: Promotion

You're looking at how Fortis Inc. communicates its value proposition, and honestly, for a utility this large, the promotion focus isn't on billboards; it's on the financial community. The primary promotional effort centers squarely on Investor Relations (IR) and maintaining confidence with analysts and shareholders.

For instance, the Q3 2025 financial results and the new five-year capital outlook for 2026-2030 were presented on November 4, 2025, via a teleconference and webcast. You could join the call using toll-free North America access at 1.833.821.0229, or check the archived webcast later on www.fortisinc.com/investor-relations/events-and-presentations. Stephanie Amaimo, Vice President, Investor Relations, is the key contact at 709.737.2900.

The dividend story is a cornerstone of the promotional narrative, signaling stability. Fortis Inc. is targeting consistent annual dividend growth of 4% to 6% through at least 2030. In November 2025, they announced a 4% increase to the dividend for common shareholders. The Q1 2025 dividend paid was $0.615 per common share, which was up 4.2% from the $0.59 paid in Q1 2024. This history of increases now spans 52 consecutive years.

Here's a quick look at how the capital plan supports that dividend guidance:

The emphasis on Environmental, Social, and Governance (ESG) reporting is substantial, directly supporting long-term investment appeal. Fortis has set a corporate-wide 2050 net-zero direct GHG emissions target. They have specific interim targets based on a 2019 base year:

• Scope 1 emissions reduction target of 50% by 2030.
• Scope 1 emissions reduction target of 75% by 2035.
• Commitment to achieving a coal-free generation mix by 2032.

To date, they have reduced direct GHG emissions by 34% from the 2019 base year. As of the Q3 2025 report, the Corporation's total assets stood at $73 billion.

Regulatory filings and public hearings are a formal communication requirement. You can find historical financial and regulatory reports on www.sedarplus.ca and www.sec.gov. The credit quality ratings on Fortis debt, which reflect governance and risk management, include S&P at A- with a negative outlook, DBRS at A (low) with a stable outlook, Moody's at Baa3 with a stable outlook, and Fitch at BBB+ with a stable outlook. This is defintely key for the financial community.

Consumer-facing promotion is minimal, as expected for a regulated utility. Communication here is largely focused on operational excellence and customer stewardship. For example, Fortis reported achieving top quartile reliability performance in 2024 for delivering energy to customers 99.9% of the time. Employee safety performance also exceeded industry benchmarks in 2024.

Fortis Inc. (FTS) - Marketing Mix: Price

You're looking at how Fortis Inc. (FTS) sets the price for its essential utility services. Unlike a typical consumer product where market competition dictates the final price, Fortis Inc.'s pricing is fundamentally different because it's a regulated utility.

Pricing for Fortis Inc. is determined by regulatory bodies, not by direct market competition. This structure ensures service reliability and a predictable return for investors, which is key to funding necessary infrastructure upgrades.

The core mechanism driving the price you see on the bill is the Regulated Return on Equity (ROE). This is the allowed profit margin regulators permit the company to earn on its investments in the utility assets (the rate base). For Fortis Inc., this target ROE typically sits in the 9% to 10.5% range, depending on the specific jurisdiction and regulatory filing period.

Rates are set through formal proceedings to allow Fortis Inc. to recover its operating costs-things like fuel, maintenance, and salaries-plus earn that fair return on its rate base. This process is about cost recovery plus a regulated profit.

Future rate increases are directly tied to the company's capital plan. The capital plan is the blueprint for future spending on infrastructure, and that spending increases the rate base, which in turn supports higher future revenue requirements. For instance, the 2025 capital expenditure is projected to be part of a larger $25 billion five-year plan. That's a significant commitment to system modernization and expansion.

This investment directly impacts the asset base used for rate calculations. The Rate base-the total value of assets on which the company is allowed to earn a return-is projected to grow at a compound annual growth rate (CAGR) of 6% through 2028. This growth is what underpins the expected revenue increases over the next few years.

Here's a quick look at the key financial drivers influencing the price structure:

The regulatory process requires Fortis Inc. to file detailed applications outlining these needs. You can expect to see specific components of the price structure detailed in these filings, which often include:

• Cost of Service (COS) components.
• Approved rate base values for the forecast period.
• Specific ROE and debt cost assumptions.
• Approved riders or surcharges for specific projects.

To be fair, while competition isn't the driver, the company still needs to manage its costs efficiently because regulators scrutinize operating expenses heavily. If operating costs rise faster than the allowed revenue increase, the ROE can be compressed, even if the rate base is growing. Finance: draft the Q4 2025 regulatory update summary by next Tuesday.