This article first appeared on GuruFocus.

Release Date: July 30, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Comparable EBITDA grew 12% year-over-year in Q2 2026, driven by strong asset performance across all business units.

Sanctioned approximately $3 billion of growth projects year-to-date with a weighted average unlevered after-tax IRR of about 12%.

Bruce Power returned Unit 3 to service more than 7 months ahead of schedule and 15% below the cost of Unit 6, demonstrating execution excellence.

Increased the late-stage pending approval project backlog to approximately $7 billion, up from $6 billion last quarter, including the Crossroads project.

Now targeting the upper end of the 2026 comparable EBITDA outlook range of $11.6 to $11.8 billion, reflecting strong operational performance and confidence in execution plans.

Negative Points

The long-term regulatory and return framework for future NGTL investments in Canada remains undetermined, creating uncertainty for project underwriting.

Funding for the anticipated growth capital ramp in 2029-2030 requires a bridge solution before Bruce Power’s cash flow inflection in 2031-2032.

The timing of final investment decisions (FID) on the $20 billion origination backlog remains dynamic and subject to customer and regulatory developments.

Data center development faces regional stakeholder pushback in some US states, which could slow the pace of project sanctioning.

Supply chain and contractor availability are being actively monitored, though no current issues are seen, the market could become more constrained as industry growth accelerates.

Q & A Highlights

Here are the key highlights from the TC Energy Corp (NYSE:TRP) Q2 2026 earnings call, presented as Q&A pairs.

Q: Can you elaborate on the demand you are seeing from customers in Alberta, particularly regarding data centers, LNG exports, and oil sands production, and how this impacts your ability to negotiate tolling structures?A: (Francois Poirier, President and CEO; Tina, Executive Vice President) The dynamic in Alberta mirrors the broader North American trend, with a growing portion of gas demand coming from power generation. We are seeing growth across multiple sectors, with an incremental demand of 8 to 10 Bcf/d. We have approximately half a dozen service offerings in the market totaling about 1 Bcf/d of capacity. The 2030 to 2032 phased expansion is expected to unlock over 1 Bcf of intra-basin and egress opportunities, and we are using this strong market data to inform the next phase of growth across Canada.

Q: Congratulations on the precedent agreements for the Crossroads project. Can you share any color on the ultimate size, economics, and subsequent expansion opportunities within the same corridor?A: (Tina, Executive Vice President) We are pleased to have signed precedent agreements with large anchor customers for the Crossroads expansion and expect to sanction the project in the fourth quarter of this year. We are seeing significant market activity across the Midwest, with about 5 to 6 Bcf of demand growth representing a 2 Bcf year-over-year expectation out to 2035. Our Columbia, Crossroads, Northern Border, and Great Lakes systems give us a highly advantaged footprint. The project will fall within our targeted 5 to 7 times build multiple.

Q: You increased the pending project backlog by about $1 billion and the potential origination backlog by $5 billion. Can you provide more detail on the type of projects being added and the geographic split?A: (Sean, CFO) The increase in the pending approval backlog is largely the Crossroads project, which is slightly north of $1 billion. The $20 billion origination backlog is growing quickly, with a large portion falling outside of 2030. About two-thirds of this backlog is power generation-related. Geographically, about two-thirds is in the US, and about one-third is penciled for the Canadian market, primarily on the NGTL system.

Q: Can you give an update on your AI initiatives, the results seen so far, and how we should think about scaling the pilot across the rest of the system?A: (Francois Poirier, President and CEO) We have proof-of-concept initiatives on small segments of pipe. We have a near-term target for 2026 of $100 million of AI-related incremental EBITDA and are on track, being about halfway there. We expect to be able to articulate the potential in more detail by our November timeframe, as teams compete for capital to implement AI solutions, which will inform the broader potential.

Q: You’ve launched several NGTL open seasons ahead of a long-term regulatory framework. Are customers underwriting projects based on a tentative new construct, or is the ultimate return framework still to be determined?A: (Francois Poirier, President and CEO) The ultimate return framework is still to be determined. The open seasons are to gauge the level of demand for service in a more detailed fashion. In parallel, we are having discussions with our customers about an investment framework. These discussions are in the early stages, but we hope to have some progress to report by the end of the year.

Q: What level of annual growth capital do you believe TC Energy could fund organically in 2029 and 2030 while maintaining your targeted leverage metrics?A: (Sean, CFO) Our funding framework has three parts. First is a firm commitment to our 4.75x leverage target. Second, the Bruce Power MCR program is critical, as it will unlock another $2 to $3 billion a year of growth capital in 2031 and 2032. This creates a 2-3 year window (2029-2031) to solve for funding before Bruce cash flow kicks in. The hierarchy of funding sources includes EBITDA gains, driving the best build multiples, and if there is a funding gap, we have levers like capital rotation. We have time to find the least-cost, best dollar-per-share solution.

Q: Given the attractive opportunities in the US, how does Canada compete for capital, and is there potential for improvement on ROE or equity weight to attract capital there?A: (Francois Poirier, President and CEO) We are in the middle of these conversations with our shippers. The regulatory framework in Canada is lower risk with protections around capital and cost of debt. We know we have to earn higher returns, so we are working with customers on ways to share cost savings to create a win-win. Importantly, we want portfolio diversification across economies and regulatory regimes, so we keep that balance in mind alongside the specific returns of projects.

Q: Can you speak to how the projects in your growing backlog are marching towards FID decisions, and is the target still to have $8 billion of projects sanctioned this year?A: (Francois Poirier, President and CEO; Tina, Executive Vice President) We typically sanction $3 to $4 billion a year. We are already at the bottom end of that range for the year. With the expected sanctioning of Crossroads in the fourth quarter, plus other irons in the fire in the US and Canada, there is a very good chance we will be in the $6 to $8 billion range for 2026, achieving our stretch goal. The process to get to FID is rigorous, involving detailed conversations with customers to ensure we drive the highest value for shareholders.

Q: You mentioned the strong 2Q results and the 2026 guidance commentary. Can you talk about the tailwinds framing up the 2028 guide?A: (Sean, CFO) The key tailwinds are the same year in and year out, primarily the operating leverage we get from high asset availability across our 94,000 km of pipe and 650 Bcf of storage, combined with fundamental demand growth. We are also seeing benefits from commercial optimization and innovation, where we can move capacity to support customer value capture. For 2028, the big driver is the continued placement of projects on time and at 5 to 7 times build multiples, which is a powerful lever for EBITDA growth.

QFor the complete transcript of the earnings call, please refer to the full earnings call transcript.