David Hutchens: Well, I think for sure we’re seeing some good positive results from one from the Fiscal Responsibility Act, as you’ll recall that they did some NEPA reforms as part of that, which will simplify and expedite the ability to permit transmission. I think some of the focus on timelines and coordination were really brought home last week when the Department of Energy announced its SCI TAP program, which stands for Coordinated Interagency Transmission Authorization and Permitting. And the whole focus there is to cut the timeline for permitting on federal projects in half to two years. So those are good positive signals. I should say that in ITC’s footprint, it’s not typically a lot of federal land that they have to get permits on.
So it won’t necessarily have a huge impact, at least as we look backwards on a forward going basis. It’s a good signal and hopefully can expedite those types of permits. But also there needs to be additional legislation too, because probably the biggest issue we get in delays is the fact that we get all these legal challenges. And the legal challenges can be brought up for very insignificant reasons. And those types of delays and hopefully some level of legislative solution for that will be what’s going to be key for us and everybody else who’s developing transmission in the U.S. to be able to get that done faster.
Rob Hope: Thanks for that and then just maybe moving over, like a number of your utilities here so far in Q1 have really been talking of kind of increasing load growth in their jurisdictions. When you take a look at your asset base, where are you seeing the greatest uptake in terms of load?
David Hutchens: Yes, so it’s mostly in the US and mostly in ITC and UNS, UNS of service territories. If you look at the hotspot map of where data centers are looking to locate, you’ll see Arizona is one of those spots. You’ll see a couple spots in the Midwest. I mentioned in the prepared remarks the data centers that are going in Iowa. If you’ve listened into other utilities calls like DT and CMS and how they’re getting a lot of data center interest in Michigan, well that’s our transmission that needs to be built to serve that type of load. So all of those that data center load has different, I mean we respond to it differently. Like in Arizona, we would be looking to supply any data center that came in one of our utilities there since we’re vertically integrated utilities.
We’d be looking at generation transmission and distribution, all three functions to serve them. In ITC it’s obviously only transmission, but there’s still a lot of growth opportunity out there, not just in data centers, but I think we’re starting to see a lot of conversations around manufacturing and siting. Again, good areas for that are at the Midwest that ITC serves in Arizona. Both big, good, strong growth economic development outlooks on a going forward basis.
Operator: And your next question comes from the line of Ben Pham from BMO. Your line is open.
Ben Pham: Hi, thanks good morning. Maybe to continue on the last question around load growth increasing on AI and data centers, do you expect that to have a meaningful impact on rate based growth going forward? When you think about that setup and then you also comment, I know you mentioned it sits more US, any comment on the Canadian opportunity for AI as well. Thank you.
David Hutchens: I’ll answer this in reverse. On the Canadian side, we’re not really seeing that same kind of conversation from a data center, AI perspective. We’re not we’re not hearing a lot of additional load growth or announcements in our service territories, at least in Canada. Also probably much less chatter around manufacturing. Although there’s there are in some areas quite a bit in Ontario, we’re not that we serve this load, but we’re seeing some of that economic development around electric vehicle plants and things like that. We did there’s just a lot more incentives to do it in the US because of the inflation reduction act and the incentives it has for local content. So there’s there’s some, additional drivers in the US that are pushing us.
So what the impact will be is still this is still early days. There’s a there’s obviously a lot of conversation. There’s a lot of, different data centers, these hyperscalers who are going around looking for places to site their data centers, which they have citing requirements, they want to be by fiber, they need power, right? So that’s the — that’s I think the biggest conversation right now is finding the power or there is that have power to be able to supply them. It’s it is early days. I think that they look at multiple sites before they decide on it. So it’s too early for us to really have a good feel for that load growth opportunities and the capital that will come with it. And actually, it might, frankly be a bit more time, through the end of this year even just to figure out where some of this stuff will land.
So it’ll be a while before we see that making its way through our resource planning process within our utilities and through other processes like LRTPs, etc. that we that my so goes through.
Ben Pham: Okay, thank you for that. And secondly, maybe on the Tranche 2, the product CapEx opportunity, anything you can provide directly in terms of making to the pie and anything you can be put in the CapEx and protection service states?
David Hutchens: Yes, no, it’s too early days. I mean, we’re still working with draft portfolios. Portfolios have to be finalized, they have to be approved. There’s still things moving around. There’s still studies to be done. So it’s far too early for us to put numbers out there.
Operator: [Operator instructions]. Your next question comes from the line of Linda Ezergailis from TD Cowen. Your line is open.
Linda Ezergailis: Sure, just wondering about your PBR-3 appeal in Alberta. Can you comment on any sort of ability to defer capital extended to teachers until there’s more certainty, whether a more prospective approach to capital programs can be taken or how to kind of mitigate some of the uncertainty there and maybe just talk more generally about some of the inflationary pressures in your capital program and whether they’re dissipating?
David Hutchens: Yes, so it was it was a bit disappointing and that in that latest PBR that we were using that historical look back of the prior years capital to set the forward rate, which is what we’re appealing and what we got to lead to appeal. So I think that was a that was a good result because it is important for us to make sure that we have that baseline capital set at that set at the right level on a going forward basis. I’ll kick it to Janine to add some conversation around inflationary impacts and some other things, but the team there understands what their current situation is, the capital plan that they have submitted. Obviously, that doesn’t mean we don’t look at additional opportunities and invest in additional infrastructure.
