TC Energy Corporation Earnings - Q1 2026 Analysis & Highlights
TC Energy reported strong Q1 2026 results driven by record EBITDA performance, strategic project sanctioning including the $1.5 billion Appalachia Supply Project, and robust demand across its North American pipeline and power assets, with management emphasizing disciplined capital allocation, execution excellence, and significant growth visibility through 2030 and beyond.
Key Financial Results
Comparable EBITDA grew 14% year-over-year, with the company generating over $3 billion in Q1 2026, marking the first time TC Energy generated more than CAD 3 billion of comparable EBITDA from continuing operations in a single quarter.
Record quarterly performance was led by growth in Mexico and US Natural Gas businesses, which placed over CAD 8 billion of new assets into service in 2025.
Canadian Natural Gas Pipelines benefited from higher flow through depreciation and NGTL incentive earnings, while Power and Energy Solutions saw higher contributions from Bruce Power.
Seven new all-time delivery records were set during the quarter across Canadian and US Natural Gas Pipeline businesses.
Bruce Power achieved 88% availability in the quarter, which is in line with the company's plan and includes the planned outage on Unit 8.
Alberta cogeneration fleet delivered exceptional performance, achieving 99.5% availability.
Business Segment Results
Canadian and US Natural Gas Pipeline businesses continued to perform exceptionally well, setting seven new all-time delivery records during the quarter.
Power and Energy Solutions business saw Bruce Power achieve 88% availability in Q1 2026, with the company expecting Bruce's availability to be in the low-90% range for full year 2026, consistent with 2025.
Mexico and US Natural Gas businesses led EBITDA growth, having placed over CAD 8 billion of new assets into service in 2025.
US Heartland region represents approximately three-quarters of US deliveries, with natural gas demand expected to grow an additional 40% through 2035, driven by diversified demand from power generation, including data centers, LDCs, and LNG exports.
Capital Allocation
Appalachia Supply Project sanctioned at $1.5 billion, supported by a long-term 20-year take-or-pay contract backed by an investment-grade utility, with an anticipated in-service date of 2030 and expected to deliver a 7.3 times build multiple.
Project portfolio includes CAD 23 billion in sanctioned projects, CAD 6 billion in pending approval, and CAD 15 billion in origination, with approximately CAD 2.2 billion of investment capital converted from pending approval into sanctioned with today's Appalachia Supply Project announcement.
Over CAD 15 billion of additional projects in origination are competing for capital allocation this decade.
Up to CAD 6 billion of annual net capital deployment is planned over the next couple of years, with the company remaining committed to maintaining 4.75 times leverage target.
Projects are tracking on schedule and on or under budget, with the company having placed over CAD 8 billion of projects into service in 2025 on time and 15% below budget.
Weighted average build multiple of 6.2 times across the US project portfolio, where the majority of investment activity is concentrated.
Industry Trends and Dynamics
Natural gas demand across Columbia Gas footprint has increased by approximately 50%, with an expectation of an additional 4 Bcf a day of incremental demand by 2035.
Ohio's projected natural gas demand growth of more than 30% over the next decade, the largest increase nationally outside of LNG exporting states, driven by power generation, industrial expansion, and grid reliability needs, including significant incremental load from more than 40 new data centers, positioning Ohio as a top five US data center market.
Accelerating power-related load growth is driving customer demand across TC Energy's footprint, reflected in the results of two most recent open seasons.
Columbus, Ohio open season was approximately 3 times oversubscribed, reflecting strong demand growth in the region.
Crossroads open season received similarly strong response, with bids exceeding 2.5 times the capacity offering.
About 5-plus Bcf per day of incremental gas demand across the Midwest corridor over the next 10 years, with power generation component of demand moving into the 5 to 8 Bcf range in the Midwest corridor.
Appalachia Supply Project corridor is a high-growth power corridor with gas demand growing in that region by about 4 Bcf through 2035.
Competitive Landscape
TC Energy operates more natural gas pipeline and storage in the US Heartland region than any other company, offering unmatched access to low-cost supply in key demand markets.
Over 27,000 miles of pipeline infrastructure in the US Heartland provides a clear competitive advantage.
Number one operator across several Midwest states with over 200 connections to electric and gas utilities in the ANR system specifically.
Unparalleled storage access in the Midwest region with over 532 Bcf of storage opportunities for customers.
Supply optionality is a critical competitive differentiator, with TC Energy able to access Appalachia, Gulf Coast, Midcontinent, Bakken, and WCSB supply to provide diversity to customers.
Strong competitive position in the Crossroads region with connectivity to over 200 electric and gas utility city gates providing a substantial competitive edge.
Macroeconomic Environment
Ongoing market and geopolitical volatility continues to impact the business, though the company delivered strong, stable results amid these conditions.
Tailwinds from governments' desire to accelerate infrastructure spending for affordability and energy security purposes are being observed in both Canada and the United States.
Growth Opportunities and Strategies
Appalachia Supply Project extends reach into high-demand corridor and creates a scalable platform for future growth, with capability to expand to up to 2 Bcf a day of total capacity through future expansions.
Strategic investment reinforces strength of Columbia Gas system while positioning TC Energy for several potential follow-on accretive opportunities.
Customer demand continues to validate strategy with consecutive open seasons in Ohio and on Crossroads system seeing strong response, supporting incremental growth visibility.
New commercial agreements for Coastal GasLink Phase 2 reached under a disciplined risk allocation framework, with LNG Canada leading project execution as execution manager while TC Energy provides technical advisory services.
Bruce Power MCR program execution remains firmly on track, with successive MCR costs coming down by applying lessons learned and using new tools like robotics.
By 2030, distributions from Bruce Power will begin to meaningfully exceed capital spend, and by 2032, Bruce is expected to generate approximately CAD 1 billion of annual free cash flow, increasing to approximately CAD 2 billion once the MCR program is complete in 2035.
NGTL open season launched with increased demand across the system, including incremental load growth in the Greater Edmonton area.
New investment framework discussions underway with NGTL customers to support competitive returns on invested capital for multi-year growth plan and future expansions beyond the existing settlement.
In-corridor expansion opportunities on established systems like Crossroads allow TC Energy to respond quickly to customer needs, deploy capital efficiently, and meaningfully reduce execution risk.
Intentionally strengthening connections across systems, linking assets with access to premium, low-cost supply such as Columbia Gas to systems serving high-quality, long-duration demand such as ANR.
Financial Guidance and Outlook
2026 comparable EBITDA outlook reaffirmed at CAD 11.6 billion to CAD 11.8 billion, representing roughly a 7% actual to midpoint increase relative to 2025 performance and an 8% actual to midpoint annualized increase relative to 2024.
2028 comparable EBITDA target of CAD 12.6 billion to CAD 13.1 billion, implying a 6% actual to midpoint three-year annualized growth rate fully underpinned by sanctioned projects advancing towards in-service dates.
Full year 2026 Bruce Power availability expected to be in the low-90% range, consistent with 2025.
Projects in the pipeline span various in-service dates anywhere from 2028 through 2031, with projects targeting sanctioning in the next year or two for earlier in-service dates around 2028, 2029, 2030 timeframe.
All projects in the CAD 21 billion pipeline are solidly within 5 to 7 times EBITDA build multiple range and in a 12% unlevered IRR after-tax range, consistent with what has been seen over the last couple of years.
Crossroads project expected to be sanctioned in 2026 within the 5 to 7 times build multiple range, with potential to upsize based on current discussions.
Revenue enhancement initiatives and cost and capital optimization programs across the organization have the potential to drive incremental upside to EBITDA outlook.
Project Execution and Operational Excellence
Best safety performance in six years was achieved in Q1 2026.
Project execution excellence is foundational to the company's ability to deliver financial outlook and reinforces confidence in both near-term forecasts and longer-term growth trajectory.
Discipline embedded in low-risk project selection process and strength of cross-functional project delivery capabilities support consistent execution.
Human capital identified as potential emerging limiter to durability of growth, with the company having conducted rigorous organizational readiness assessment and developed processes to have visibility on points of tightness in people, contractors, and supply chain.
Supply chain tightness is bit tighter in the United States than in Canada, with the company entering into strategic alliances and long-term agreements with OEMs and considering similar arrangements with construction firms.
Bruce Power and Nuclear Strategy
Bruce Power is INPO 1-rated with top decile operating efficiency and safety performance.
TC Energy is the only investor-owned owner and operator of nuclear in Canada.
Cooperation agreements entered into with Alberta and Saskatchewan, with ambitions over the next many decades to invest and allocate capital to nuclear across the country.
Immediate focus is safe delivery of remaining MCR program and driving Bruce expansion as the next nuclear facility in Canada.
Bruce C expansion is the next nuclear project TC Energy would like to see happen, given the existing footprint, infrastructure, highly skilled labor in place, and strong local support.
