And we have identified about $750 million in run rate synergies, to be realized by the end of 2025. And you can think of the value that’s linked to these synergies as materializing in a couple of different ways. It could be capital reductions. It could be expense reductions, or even revenue enhancements. And generically, you could think about 50% of the savings is going to come from capital reductions, 40% from O&M reductions, and about 10% from revenues. But do keep in mind that as we file rate cases in our respective jurisdictions, a lot of this value is going to flow back to our customers. If you want, a little bit more detail around how we get to $750 million, I can offer a couple of proof points for you. For this year, for calendar year ’23, we’re on track to generate $130 million of in-year savings, which on an annual basis equates to about $185 million.
And we did this by things like reducing our IS spend by $50 million, to eliminate redundant or low value projects. We’ve eliminated or combined our technical center into the business. That saved $30 million. We reduced our legal and our insurance costs by $30 million. So, a lot of optimization on that front. Over the next two years, in 2024 and 2025, we see another $200 million of savings, primarily in our growth capital programs, but by changing the way we’re engineering our facilities, for example, and reducing our footprints. There’s another $85 million of reductions associated with our HIPE integrity program, $90 million of reductions in our maintenance capital projects, which will materialize starting in 2024 and is already baked into our 2024 forecast.
And as you think about the optimization from the organizational structure design, we think that there’s probably, about $50 million worth of synergies as we go through and integrate and optimize our gas businesses under one umbrella.
Rob Hope: Thanks for that. And then maybe just moving over to the NGTL system. There’s a toll settlement through the end of 2024. When do you expect to kind of engage customers there? Could we see a higher ROE there? And then how does that balance with the potential for a partner?
Francois Poirier: I’ll ask Greg to take that one.
Greg Grant: Yes, thanks, Rob. So yes, as a reminder, the NGTL settlement will end the end of December 31, 2024. Discussions with customers have started with the objective of defining a clear path towards another settlement mid-2024. While we are watching the market and ROE, I just mentioned ROE is not the only measure of value that we look at. We are looking to optimize the return on and of capital. There are many levers to do this. While we can maintain the competitive toll and service offerings. So things like Project Focus are helping us minimize toll increases, which will allow us to enhance that return on and of capital. Obviously, we won’t get into the details of confidential negotiation, but highly confident we can find win-win here, with our customers and likely won’t be able to share, more details on that until Q1 and Q2.
Rob Hope: Thank you.
Operator: Our next question comes from Robert Kwan of RBC Capital Markets. Please go ahead.
Robert Kwan: Thanks. Good morning. I’m going to start with the business. So you highlighted on the gas system strong deliveries and record deliveries on the number of the systems. You’ve got a bunch of projects under construction, you’ve got some new regulatory approvals. I’m just wondering as we look forward, as you look at the volumes on the system, are there new projects that are taking shape. And if there are, can you just talk about the magnitude of what that spending might look like, and over what timeframe the spending might unfold?
Francois Poirier: Yes, Robert, it’s Francois, Thanks for that question. I’ll take that one. Just remind you that we’re laser focused on our $6 billion to $7 billion a year going forward post 2024 on a net basis. And as – in our business, we have the benefit of a fair bit of visibility into capital spend all the way out really to the end of the decade. When you think about the fact that it takes a couple of years to commercially sanction the project and then a couple of years to get the requisite permitting and regulatory approvals. And then you have to order the long lead items and then you’re a year or two in the field doing construction. So as we look out to the end of the decade, our goal is not only to live within our $6 billion to $7 billion, but also not to have more than one large project at a time.
It’s something, one of the key learnings for us here, over the last couple of years is to manage the aggregate risk of the capital program annually, not just the risk of the individual projects. As we look at that program and our performance, and case in point, as I mentioned, we’ve got $5 billion we put into service so far this year, largely on budget, and that means singles and doubles. And those are very manageable from a risk standpoint. We know the regulators, we have relationships in the communities we know the ground. And so look to us executing as many of those singles and doubles as possible going forward, organic projects in corridor and a very select few, of those larger projects that would span many, many, years and large dollar amounts.
Robert Kwan: Okay. Got it. I guess just thinking about the CapEx shift and the FX impact, Have you talked to the rating agencies yet about this, just with respect to your FedEx rates hold? You’re going to get your debt marks this year at December 31, but your EBITDA is going to be trailing. So do you think that just with some of the outlook, you know, I guess at 2024, you’re still 4.75, but does it change anything here for you around the funding plan in the near term?
Joel Hunter: Yes, Robert. It’s Joel here. I would say to you that I had conversations with all four agencies as we do every quarter just to give them, provide them with an update and we provided them with this update as well. They’re looking through really to the end of next year, as it relates to getting our leverage metrics on-site to that 4.75 as we’ve mentioned and we do have a path to get there and we’re sticking to that plan. So despite that the cost being slightly higher here, and what we’re talking here is about a 4% increase from the midpoint when you think about the increase in our outlook for this year. But we’re also seeing stronger EBITDA as you’ve seen us guide our EBITDA to be 7% higher year-over-year at the upper end of the 5% to 7% range that we highlighted.
So, you know, as we go into year end, we don’t have a, we can’t say where the debt EBITDA will land, because there are still some moving parts with EBITDA, where the CAPEX ultimately lands and where FX lands. But really the objective here, Robert, is to get to the 4.75 as we exit 2024. We clearly have a plan to get there and the agencies know what our plan is and we’ll stick to it.
