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TC Energy connects natural-gas production areas with utilities, power plants, industrial users and liquefied natural gas export terminals across Canada, the United States and Mexico. Customers pay to reserve pipeline capacity and move their gas; committed-capacity payments generally continue even when customers do not use that capacity. TC Energy does not own the gas it transports. Canadian and U.S. pipelines account for most revenue.
Regulated Canadian and U.S. tolls are designed to recover costs and provide a return on pipeline investment, but regulators review the rates and which costs may be recovered. U.S. pipelines generally bear differences between expected and actual revenue and costs between rate reviews. Contract renewals depend on customers continuing to need the routes and capacity offered, rather than directly on gas prices. In Mexico, the business relies primarily on CFE, the state-owned electric utility, under long-term, fixed-rate contracts.
A smaller business sells electricity and provides natural-gas storage, largely under long-term arrangements. Power generation is mainly nuclear, including TC Energy’s investment in Bruce Power, whose earnings depend on generation and plant availability. Storage customers pay to reserve space and inject or withdraw gas. The former liquids-pipeline business was spun off into South Bow and is no longer part of TC Energy’s operating business.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
TC Energy’s results depend mainly on regulated and long-term-contracted gas infrastructure, with Mexico’s state-owned CFE a key customer to watch because it concentrates counterparty exposure.
Kinder Morgan competes with TC Energy to transport and store customers’ natural gas across extensive U.S. networks connecting major producing areas with consuming markets. Its natural-gas transportation and storage business offers a comparison for TC Energy’s U.S. operations, rather than its broader terminals business.
Williams competes with TC Energy to transport and store natural gas for overlapping U.S. utility, power-plant and industrial customers. Watch its Transco pipeline, which connects the Gulf Coast with the New York City metropolitan area, as a concrete comparison for serving those gas markets.
Enbridge competes with TC Energy to carry customers’ natural gas from Canadian and U.S. producing areas to North American consuming markets. Its BC Pipeline supplies British Columbia and the U.S. Pacific Northwest, making that route more relevant to TC Energy’s gas business than Enbridge’s oil pipelines.
DT Midstream competes with TC Energy for utilities, power plants, industrial users and other pipelines that pay for natural-gas transportation and storage. Watch its Pipeline-segment revenue and available capacity: DT Midstream identifies capacity, connections to supplies and customers, and price as factors in winning this business.
Energy Transfer competes with TC Energy to transport and store customers’ natural gas in the United States, but also has substantial oil, natural-gas-liquids and refined-products businesses. Its gas transportation and storage operations are therefore the relevant comparison, not the whole company’s results.
PEMBINA PIPELINE CORPORATION’s Alliance route competes with TC Energy’s Northern Border route to carry western Canadian natural gas to U.S. Midwest customers. Alliance sends gas to the Channahon facility in Illinois, where natural-gas liquids are removed before the gas enters downstream pipelines serving the Midwest.
ONEOK competes with TC Energy to sell customers pipeline and storage capacity linking North American gas supplies with consuming markets. Watch its additions to those facilities: ONEOK says infrastructure projects can displace supply volumes from the Mid-Continent, Rocky Mountain regions and Permian Basin.
National Fuel Gas Co. both connects with and competes with TC Energy to transport and store customers’ Appalachian gas for northeastern U.S. and Canadian markets. Watch its pipeline expansions serving those markets: its connections with TC Energy give customers access to Canadian and other downstream markets.
Kinder Morgan, Inc. earningsKMI
Kinder Morgan’s report offers a comparison for TC Energy’s U.S. pipelines by showing how its natural-gas transportation and storage business is doing.
Focus on Kinder Morgan’s natural-gas transportation and storage business, not its other operations. Stronger results there would suggest customer demand or capacity economics across U.S. gas networks are supportive, which could also help TC Energy’s U.S. pipelines. Weaker results could point to softer demand or tougher competition, creating pressure for those pipelines. Kinder Morgan is a market comparison, not proof of TC Energy’s own volumes or earnings.
Fed Interest Rate Decision
The Fed’s decision tracks the US policy interest rate, which can change what TC Energy pays to finance floating-rate debt and new borrowing for its pipeline and power businesses.
Expected4.0%Last release4.0%
If it comes in above expectations
If the rate is above the estimate, higher borrowing costs may raise TC Energy’s interest expense on floating-rate debt and make funding projects or refinancing maturing debt more costly.
If it comes in below expectations
If the rate is below the estimate, lower borrowing costs may reduce TC Energy’s interest expense on floating-rate debt and ease the cost of funding projects or refinancing maturing debt.
National Fuel Gas Co. earningsNFG
National Fuel Gas Co.’s report can show, through its Appalachian pipeline expansions, demand for gas routes serving northeastern U.S. and Canadian markets.
Watch National Fuel Gas Co.’s pipeline expansions serving Appalachian gas markets and routes into northeastern U.S. and Canadian markets. Advancing expansions would suggest customers need more connections and transportation capacity, which could support demand in markets linked to TC Energy’s network; limited activity would be a weaker demand signal. Approvals and construction also affect project timing, so expansions alone cannot establish volumes on TC Energy’s own pipelines.
TC Energy Corporation earningsThis company
TC Energy’s report will show whether contracted pipeline earnings are holding up and how power results add to, or detract from, them.
Compare comparable EBITDA—a company-defined, non-GAAP measure of ongoing performance—for the Canadian, U.S. and Mexico pipelines with the Power and Energy Solutions segment, and against prior periods. Firm pipeline capacity contracts generally earn revenue over the contract term whether customers use the capacity or not, so stronger pipeline EBITDA points to a firmer balance of contract income and costs, not necessarily more gas flowing. Weaker pipeline EBITDA would mean costs, tolls, contracts or currency effects may be outweighing that income; if power results are weak too, generation is not offsetting the pressure. The figures show whether each of TC Energy’s contracted-pipeline and power businesses is supporting earnings.
