Emera (TSE:EMA) reported second-quarter adjusted earnings of C$212 million, or C$0.69 per share, as the utility advanced asset sales designed to strengthen its balance sheet and concentrate investment on its regulated businesses.
Year-to-date adjusted earnings totaled C$627 million, up C$12 million from the prior-year period, while adjusted earnings per share of C$2.06 were effectively unchanged from a year earlier. The company said it remains on track to deliver compound annual adjusted EPS growth above its 5% to 7% target range through 2026 and expects growth within that range through 2030.
New Mexico Gas Sale Expected to Close This Month
A key development was the New Mexico Public Regulation Commission’s July 30 approval of Emera’s sale of New Mexico Gas to Bernhard Capital Partners. Balfour said the transaction is expected to close later in August.
Emera expects after-tax proceeds of approximately C$650 million to C$700 million from the sale, which it expects to record in its third-quarter results. The company plans to use the funds to reduce holding-company debt and improve financial flexibility, supporting capital investment at its regulated utilities.
Balfour said the sale of New Mexico Gas, along with the completed sale of Grand Bahama Power Company on May 12, advances the company’s portfolio-optimization strategy. Grand Bahama Power’s sale was reflected in second-quarter financial results.
Chief Financial Officer Jared Green said the New Mexico Gas sale is expected to provide a sustained benefit of about 50 basis points to Emera’s operating cash flow-to-debt ratio. The company expects to exceed Moody’s 12% operating cash flow before working capital-to-debt threshold during calendar 2026.
“Probably the mid-12s is a good place,” Green said in response to an analyst question regarding the desired cushion above Moody’s threshold. “Being able to get to the higher 12s over the longer term would be a much better place to be.”
Moody’s revised Emera’s credit outlook to stable during the quarter. Green said the revised outlook and expected New Mexico Gas closing reflect progress in strengthening the company’s financial position.
Capital Program and Regulated Growth
Emera deployed more than C$1.7 billion of capital during the first half of 2026 and remains on pace to execute its approximately C$4 billion capital plan for the full year, its largest to date. The company is targeting annual rate-base growth of 7% to 8% through 2030 and plans to provide an updated capital plan with third-quarter results.
The company cited continued customer and economic growth in Florida, where Tampa Electric is investing in infrastructure to meet growing demand. Tampa Electric also is seeing continued activity related to data-center development in its service territory.
Under Florida Senate Bill 484, Tampa Electric plans to file a large-load customer tariff with the Florida Commission by Oct. 1. Balfour said the proposed tariff is intended to ensure large-load customers cover the costs of serving them, without shifting costs to existing customers.
He said the framework could help reduce rate pressure for Tampa Electric’s existing customers if new large-load development occurs. Effective Aug. 1, Tampa Electric residential rates declined approximately 11% to 12% following the removal of a storm surcharge associated with recovery from 2024 hurricanes.
In Nova Scotia, construction has begun on the Nova Scotia-New Brunswick transmission intertie after receipt of required approvals. Emera expects the project, intended to reinforce regional grid connections, support renewable-energy integration and improve reliability, to be completed in late 2028.
Nova Scotia Power is also working with the provincial government on a framework for securitizing retiring thermal assets. Balfour said the effort is intended to create long-term customer savings while supporting efforts to phase out coal-fired generation. A Nova Scotia Power representative said management remains encouraged by the progress toward completing the framework by year-end.
Earnings Drivers by Business
Green said first-half operating cash flow, excluding working capital, rose 8% from the same period last year. Emera Energy delivered year-to-date earnings more than C$40 million above the prior year, driven by favorable market conditions early in the year and execution across the business.
- Peoples Gas: Year-to-date results benefited from rates implemented Jan. 1 and higher off-system sales. Second-quarter earnings increased more than C$14 million year over year, although higher operating costs and depreciation partly offset the gains.
- Tampa Electric: Year-to-date earnings benefited from new rates, colder-than-normal weather early in the year and higher off-system sales. Higher depreciation, operations and maintenance costs, and interest expense partly offset those factors.
- New Mexico Gas: Earnings declined due primarily to higher operating and maintenance expenses, depreciation and lower revenue, as favorable weather experienced in the prior-year second quarter did not recur.
- Canadian electric operations: Earnings were lower year over year, primarily due to a lower income-tax recovery and regulatory lag caused by the delay in implementing new rates until May 1. Higher sales volumes and modestly favorable weather partly offset the decline.
- Caribbean Utilities: Lower income-tax expense was offset by lower revenue and the loss of earnings from Grand Bahama Power following its sale.
A stronger weighted-average Canadian dollar reduced year-to-date adjusted EPS by C$0.05, while a higher average share count also reduced adjusted EPS by C$0.05. During the second quarter, foreign exchange added C$0.01 per share, while the increased share count lowered adjusted EPS by C$0.02.
Potential Transmission Opportunities
During the question-and-answer portion of the call, Balfour said Emera is evaluating adjacent growth opportunities, particularly in transmission infrastructure.
He cited potential large-scale transmission development in Atlantic Canada to support offshore and onshore wind development and other cleaner-generation projects. Balfour also said Emera is engaged through a partnership in Ontario’s proposed high-voltage direct current connection between Darlington Nuclear Station and Toronto’s Portlands, noting the technology under consideration is similar to that used in Emera’s Maritime Link project.
Balfour said federal engagement in Atlantic Canadian transmission discussions has increased following the announcement of a major projects office and the identification of regional electric transmission as a potential project of national interest.
About Emera (TSE:EMA)
Emera (TSX/NYSE: EMA) is a leading North American provider of energy services headquartered in Halifax, Nova Scotia, with investments in regulated electric and natural gas utilities, and related businesses and assets. The Emera family of companies delivers safe, reliable energy to approximately 2.7 million customers in the United States, Canada and the Caribbean. Our team of 7,800 employees is committed to our purpose of energizing modern life and delivering a cleaner energy future for all. Emera’s common and preferred shares are listed and trade on the Toronto Stock Exchange and its common shares are listed and trade on the New York Stock Exchange.
