Robert Kwan: Understood. I guess that answered as a segue into the second question and on the other side, just if we are thinking about capital allocation in 2024, following the announcement of the Utah acquisition, you also acquired some other businesses, the German wind incremental sale or a state, Morrow, Fox Squirrel. Yes. Generically, are other acquisitions budgeted into guidance here, and I get that I’m trying to color code this to a degree, but anything else you do does kind of leave the dominion thing outstanding. So how are you thinking about acquisitions in 2024, given you’re still short.
Greg Ebel: Right. So first of all, there are no other acquisitions in our budget, right, or in our forecast that we’ve put out or in our budget for that matter, it’s the same. So that’s one. Two, if anything came along, as you can imagine, as a big player in the sector and throughout North America, we get to see things all the time. It would have to be tuck-in like first of all, so nowhere near like what we did last year. Secondly, we have to be immediately accretive to our share per share metrics. And thirdly, it would have to be neutral or accretive to our debt metrics as well. And when I think about different parts of the business, and I’m sure Colin will speak to this on Investor Day, we’ve got some great builds that can be done at low medium single digits.
So there’s — the competition for capital will be challenging given the position our base businesses are in today and the growth opportunities that they see. But we’ll have to look at it. So again, no M&A is in our forecast other than the ones that we’re closing today. It’s a high hurdle rate on the M&A front, and we’re very focused on integrating these new assets with excellent right across the board, whether it’s the renewable stuff that Matthew manages or whether it’s the Morro assets. And remember, we bought a couple of storage assets, making sure that’s all running exactly as we wanted to do is going to be a key focus.
Robert Kwan: That’s great. Thanks, Greg.
Greg Ebel: Thanks.
Operator: Your next question comes from the line of Linda Ezergailis from TD Cowen. Your line is open.
Linda Ezergailis: Thank you. This is a bit of a foundational question on just the regulatory compact in North America, or specifically the U.S. and it relates to the Chevron doctor and it’s been about 40 years since the Supreme Court decided that the court should defer to an agency — a federal agency’s reasonable interpretation of an ambiguous statute. If that gets discarded or removed this summer, what impact might that have on your business? And how might that inform your approach to, for example, a likely higher frequency of settlements in your gas transmission business, how you might see federal agencies maybe shifting their approach, and I think there could be a few moving parts there. If you could just comment on how you’re thinking of that evolving situation.
Greg Ebel: Yes, it’s a good question. It’s — we’ll probably have to give that some more consideration at Investor Day and walk through that a little bit. I mean, obviously, there are several pieces of this. It depends on which part of the business, as you point out, it’s probably a much more relevant issue to our utility businesses that are coming in, particularly in the United States because many of our other businesses, as you know, we are often seeking to settle, whether it’s Texas Estrem, whether it’s the mainline tolling settlement. We like to work with customers and get more of a deal in that regard. But as it is with the utilities, I’ll even go as far as things like incentive — long-term incentive deals like we’ve been able to do historically on Ontario.
I think that limits some of our exposure to some of the — if there’s a change in the Chevron [indiscernible]. But I think it’s a good point, Linda, and we should probably give it a more fulsome discussion and answer as we kind of move into Investor Day. I don’t know, Michele, do you want to add anything to that, or …?
Michele Harradence: Well, I think at the end of the day, a lot of what we deal with at the utilities is determined and is inside the jurisdiction at the state level. So in that sense, we’ll be looking to them. But I think we’d better take that one back.
Linda Ezergailis: Yes, I look forward to that because, yes, even renewable policy and stuff like that, could be a little good. But just maybe as a follow-on, just with respect to your appeal in motion in Ontario. Can you give us an update on how you’re partnering with the prudential government because they were — I think they had an intention to introduce legislation to overturn a certain aspect of the OEB decision as it related to eliminating amortization of new gas connections for homes and affordability. And then maybe you can just comment on the time line of these processes and when you expect them to be resolved? And if you’re fully successful, kind of what the upside is versus kind of the current decision as it stands?
Sure. I can cover a few of those things. So I wouldn’t say we’re partnering with the government of Ontario, but we certainly made our concerns clear to them, although as you saw by the pretty swift and decisive statements they made within hours of the release, they were well ahead of us on the concerns. I mean, — at the end of the day, obviously, we’re disappointed, but this is a case where the regulators made a decision that’s just simply not in keeping with the policies of the government. That’s exactly what Minister Smith said right away. We don’t expect it to be material to Enbridge’s overall 2024 financial guidance, but it’s frustrating and disappointing on a lot of fronts. I mean there’s a strong bias against natural gas in there. There’s a presuppose that we’ll rapidly electrify all the heating load and abandon the gas network.
And fundamentally, it limits access to affordable energy. I mean the fact of the matter is I think there’s short-term issues and there may be some short-term struggles here. But long-term, thyet te fact of the matter is Ontario is not going to meet its economic growth aspirations without the flexibility and affordability of the natural gas and natural gas infrastructure provides it. The government knows that. I mean they’ve said very clearly they need to build 1.5 million new homes in the next 10 years. There’s almost 3 million people expected to move to Ontario in the next decade. And I don’t know that folks fully recognize this, but our — for example, our industrial and contract market growth has been really strong in the last few years, and that’s coming from things like the electrical — the electric vehicle battery, the manufacturing sector.
I was just down looking at the Nexstar plant. They need our cost-effective natural gas to support their manufacturing processes. The greenhouse developers that we have in Southwestern Ontario absolutely rely on natural gas to provide their product affordably. And things like steelmaking, whether that’s Bosco and Hamilton or others need natural gas to reduce the carbon intensity of what they have. So — we are certainly working with the government of Ontaria, making sure they understand the full implications of this decision that it goes well beyond the revenue horizon piece. I mean, to state the obvious, that impacts our ability to deliver those homes, but that’s further reaching than that, over the long-term, should it stay in place. I mean, in the near-term, it’s about $300 million in capital that it pulls back this year for us.
But again, it remains to be seen what actions are taken. We, of course, have preserved our interest by filing a notice to appeal and a motion with the Ontario divisional courts and motion to review. The motion review would likely go first. That’s what the Ontario Energy Board itself or we would set out a number of things, including the fact that there are new facts on the table, the new facts pointing to the press release from the government that clarifies its policy, the energy and electrification transition panel that sort of thing will be out there. Typically, the time line for something like a review motion of this, can it be anywhere from 135 to 165 days. And we’ll go through those steps certainly. But as you said, the government has said that they will take action and take that action much more immediately.
The legislator is coming back, I think it’s February 20. And they certainly do understand that the immediacy of the issue that this impacts us right here and right now should we reduce those levels of capital and that it’s important to them to maintain Ontario is an attractive place to invest. So I’m pretty confident we’re going to get this one resolved. It’s always good to be on the side of where government wants to go in on the side of their policy. And in the meantime, like we talked about earlier, we’ve got lots of focus on to with finalizing the acquisitions of this three utilities in the U.S. and integrating them.
Pat Murray: Yes, Linda, I think the real milestone, as Michele said is let’s see what happens at the end of February — that’s a triggering event for us as to where things look like they’re going. As you said, it doesn’t really have an impact on ’24. The issue is from a long-term perspective, if they get this right and they want to see continued economic growth and reach their sustainability goals that means there’s going to be a greater rate base in the natural gas business, and that’s what it’s all about. And it’s kind of up that obviously, we saw this coming, but it’s kind of [indiscernible] for us that — there are three other jurisdictions that would love to have our investment opportunities and actually are very positively disposed and have legislation even giving the choice that we want Ontario consumers to have.
So I think from an Enbridge perspective, the net opportunity is still more rate base, more earnings opportunity and more growth. Hopefully, in 4 jurisdictions in North America and that’s kind of what we’re focused on achieving.
Linda Ezergailis: Thank you. Your next question comes from the line of Jeremy Tonet from JPMorgan. Your line is open.
Jeremy Tonet: Hi, good morning.
Greg Ebel: Good morning.
Jeremy Tonet: Just want to follow-up, I guess, on the last point as it relates to Enbridge Gas there. And wondering if you might be able to talk a little bit more about the time line, how things could unfold here in as you think about OEB Phase II, Phase III, just thoughts at this point given what’s transpired so far? And at the same time, what you’re touching on there as far as, I guess, when the Dominion acquisition concludes successfully, could you see kind of capital being pulled away towards those jurisdictions, given kind of what you’ve seen for regulatory outcomes so far.
Michele Harradence: Thank you. Yes. Like I said earlier, I mean, the real — and as Greg said, that really indicative point will be later this month when we see what the government of Ontario comes out with in terms of how they propose to rectify this issue and follow through on Minister Smiths statements. That being said, there is the motion to review process that I mentioned that will take a few months. I mean that would likely take till by summer for us to resolve things. But — that being said, there’s plenty of work for us to do in Ontario, and we’re continuing to certainly always focus on investing and ensuring the safety and the reliability of the assets we have and that they continue to flow and provide the gas that people [indiscernible] to want were big fans a set of customer choice.
And that’s really where, as Greg alluded to, that goes to the U.S. jurisdictions and the 3 utilities that we’ve acquired there. I mean they all have very strong equity thickness. They all have good ROEs and we’ll be looking to make sure that we understand exactly what the growth opportunities are. I mean, we’ve looked at it through our due diligence, of course, and we feel very good about the growth opportunities. I mean, Ohio has strong modernization program with very quick return on its capital. We see in Utah very strong customer growth. They’re also using a natural gas for some decarbonization activities. There’s a lot of commercial growth there. And then similarly, in North Carolina, very strong commercial and residential growth. And again, the determinization where they’re looking to move or reduce their intensity of their power production moving off of coal and into natural gas.
We’ve seen really good growth in our regulated business in Ontario. I think I’ve mentioned why I really believe we’ll continue to see really good growth in Ontario. Strong people are moving to Ontario, lots of homes wanting to be built. It’s got all the pieces. I mean, we’re towards the end of our modernization program in Ontario, but we still have lots of work to do to help industrials to reduce their intensity. But the fact is we currently have an equity thickness for the gas utility there that although it went up marginally a couple of percentage points with the decision of the OEB, it’s still one of the lowest in North America. And as LDCs, we need to compete for capital. That’s — whether that’s here within Enbridge or on a North American scale.
