6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2020

Commission File Number: 001-37915

Fortis Inc.

Fortis Place, Suite 1100

5 Springdale Street

St. John's, Newfoundland and Labrador

Canada, A1E 0E4

(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F: Form 20-F o Form 40-F þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

INCORPORATION BY REFERENCE

The registrant's unaudited condensed consolidated interim financial statements as at and for the six months ended June 30, 2020, together with the notes thereto, furnished as Exhibit 99.2 to this report on Form 6-K, and the registrant's management discussion and analysis of financial condition and results of operations for the same periods furnished as Exhibit 99.3 to this report on Form 6-K, are incorporated by reference into the following Registration Statements of the Registrant, as amended or supplemented: Form S-8 (File No. 333-215777); Form F-10 (File No. 333-228593); Form F-3D (File No. 333-218032); Form S-8 (File No. 333-226663); and Form S-8 (File No. 333-236213).

EXHIBITS

Exhibit	Description
99.1	Fortis Inc. Press Release dated July 30, 2020
99.2	Unaudited Condensed Consolidated Interim Financial Statements of Fortis Inc. as at and for the six months ended June 30, 2020, together with the notes thereto
99.3	Management Discussion and Analysis of financial condition and results of operations of Fortis Inc. as at and for the six months ended June 30, 2020

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Fortis Inc. (Registrant)
Date: July 30 2020	/s/ Jocelyn H. Perry
	By:	Jocelyn H. Perry
	Title:	Executive Vice President, Chief Financial Officer

EX-99.1

Exhibit 99.1

St. John's, NL - July 30, 2020

FORTIS INC. REPORTS SECOND QUARTER 2020 EARNINGS

Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS), a well-diversified leader in the North American regulated electric and gas utility industry, released its second quarter results¹ today.

Highlights

•Continued to deliver safe and reliable service throughout the pandemic

•Second quarter 2020 net earnings were $274 million, or $0.59 per common share

•Adjusted net earnings² of $0.56 per common share, up from $0.54 in the same quarter last year

•Capital expenditures of $2.0 billion, representing 47% of the 2020 annual capital plan, were completed in the first half of the year

•The Corporation's five-year capital plan of $18.8 billion and dividend growth guidance remain unchanged

•Announced a new 80% greenhouse gas ("GHG") emission reduction target in Arizona

"Our family of utilities delivered reliable service to our customers during the quarter while remaining focused on the safety of our employees and communities during the pandemic," said Barry Perry, President and Chief Executive Officer, Fortis. "We maintained operational and financial performance for the first half of 2020 as well as progressed key sustainability initiatives to deliver cleaner energy".

Net Earnings

The Corporation reported second quarter net earnings attributable to common equity shareholders of $274 million, or $0.59 per common share, compared to $720 million, or $1.66 per common share, for the same period in 2019. On a year-to-date basis, net earnings attributable to common equity shareholders were $586 million, or $1.26 per common share, compared to $1,031 million, or $2.39 per common share, for the same period in 2019.

Earnings for the quarter and year to date reflect significant one-time items: (i) a $484 million gain on the disposition of the Waneta Expansion hydroelectric generating facility ("Waneta Expansion") in April 2019; and (ii) the reversal of a $13 million tax recovery, originally recognized in 2019, due to the finalization of anti-hybrid regulations in April 2020 associated with U.S. tax reform; partially offset by (iii) a $27 million favourable base ROE adjustment at ITC reflecting the reversal of liabilities established in prior years as a result of a May 2020 Order issued by the Federal Energy Regulatory Commission ("FERC").

Notwithstanding the significant one-time items, the regulated utilities delivered improved financial results during the second quarter, increasing earnings per common share ("EPS") due to: (i) rate base growth, led by ITC; (ii) increased retail sales at UNS Energy, driven by weather; (iii) favourable foreign exchange; and (iv) the timing of operating expenses at FortisBC Energy. This growth was tempered by: (i) lower earnings in the Caribbean due to the impact of the COVID-19 pandemic on tourism-related activities; (ii) higher COVID-related costs, including credit losses, driven by Central Hudson; and (iii) a higher weighted average number of common shares outstanding.

On a year-to-date basis, EPS reflected the same factors discussed above for the quarter but was further tempered by lower earnings at Tucson Electric Power ("TEP"), which reflect higher costs associated with approximately $1 billion of utility infrastructure investments spent over the past few years that have not yet been reflected in rates and a decline in the market value of certain investments that support retirement benefits caused by financial market volatility. While later than expected, new rates at TEP that recover these investments are anticipated to be approved prior to the end of 2020.

_______________________

¹ Financial information is presented in Canadian dollars unless otherwise specified.

² Non-US GAAP Measures - Fortis uses financial measures that do not have a standardized meaning under generally accepted accounting principles in the United States of America and may not be comparable to similar measures presented by other entities. Fortis presents these non-US GAAP measures because management and external stakeholders use them in evaluating the Corporation's financial performance and prospects. Refer to the Non-US GAAP Reconciliation provided herein.

i

Adjusted Net Earnings²

On an adjusted basis, second quarter net earnings attributable to common equity shareholders were $258 million, or $0.56 per common share, compared to $235 million, or $0.54 per common share, for the same period in 2019.

Year-to-date adjusted net earnings attributable to common equity shareholders were $573 million, or $1.23 per common share, compared to $551 million, or $1.28 per common share, for the same period in 2019.

COVID-19 Pandemic

Fortis continues to monitor developments and take measures it believes are warranted to protect the health and safety of employees, customers and communities. In addition to the efforts across the Corporation to control costs throughout the pandemic, the Corporation's utilities have regulatory mechanisms that help stabilize cash flow and earnings which support the continued delivery of reliable service. The regulatory mechanisms function to protect approximately 63% of the Corporation's annual revenue from changes in sales. Of the remaining 37%, principally at UNS Energy and the Other Electric segment, approximately 19% is residential and 18% is commercial and industrial. During the second quarter of 2020, sales not protected by regulatory mechanisms increased approximately 3%, driven by higher residential sales as more people were working from home and warmer temperatures in Arizona.

Fortis is well positioned with strong liquidity due, in part, to a $1.2 billion common equity offering and the sale of the Waneta Expansion in 2019. As at June 30, 2020, total consolidated credit facilities were $5.9 billion with $4.8 billion unutilized. The Corporation's utilities have issued approximately $2 billion of long-term debt since March 2020. They are in a strong financial position and will continue to fund their capital plans and work with customers and their respective regulators to ensure reliable service during the pandemic.

Overall, the capital plan is progressing well with $2.0 billion, or 47% of the $4.3 billion 2020 annual capital plan, spent during the first six months. Currently, the Corporation does not expect any material change in the 2020 capital plan; however, the impact of the COVID-19 pandemic on forecast capital expenditures will continue to be evaluated. Depending on the length and severity of the pandemic, any change in 2020 capital expenditures is expected to be shifted to subsequent years with no change to the five-year capital plan anticipated.

Regulatory Proceedings

In May 2020 FERC issued an order establishing the Midcontinent Independent System Operator ("MISO") base rate of return on common equity ("ROE") for November 2013 through February 2015 and from September 2016 onward at 10.02%. Including existing incentive adders, this implies an all-in ROE of 10.77% for ITC's subsidiaries operating in the MISO region, up from 10.63% based on a November 2019 decision.

In June 2020 the British Columbia Utilities Commission ("BCUC") issued a decision on FortisBC Energy's and FortisBC Electric's multi-year rate plan applications for 2020 to 2024. The decision sets the rate-setting framework for the next five years, including: (i) the level of operation and maintenance expense and capital to be included in customer rates, subject to an incentive formula; (ii) the level of investment in gas innovation initiatives to be included in customer rates; and (iii) a 50/50 sharing between customers and the utilities of variances from the allowed ROE. During the third quarter of 2020, the FortisBC utilities will provide the BCUC with updated 2020 rate filings reflecting the terms of this decision. Current interim rates will remain in effect pending a final determination of 2020 rates by the BCUC.

Sustainability

Earlier this month, Fortis released its 2020 Sustainability Report which highlights the Corporation's focus on the regulated delivery of energy and the setting of ambitious emission reduction goals at two of the Corporation's largest utilities. In Arizona, TEP announced a new GHG reduction target to reduce its emissions by 80% by 2035, from 2005 levels. Renewable generation in Arizona is expected to comprise more than 70% of its generation mix by exiting coal-fired electricity generation and installing approximately 3,800 megawatts of wind and solar generation and battery storage. In British Columbia, FortisBC's 30BY30 goal aims to reduce GHG emissions associated with customer use by 30% by 2030.

During the second quarter, ITC received approval from the Iowa Utilities Board for the Cardinal-Hickory Creek Transmission Line Project. The 345-kilovolt transmission line will help expand system capacity and respond to consumer demands for more cost-effective renewable energy.

ii

Fortis recently joined senior business leaders from Canadian public companies in a pledge to take action to end systemic anti-Black racism. The pledge is part of the BlackNorth Initiative and the newly formed Canadian Council of Business Leaders Against Anti-Black Systemic Racism. During the second quarter, Fortis was also recognized by Corporate Knights as a Best 50 Corporate Citizen in Canada.

"At Fortis, every action we take is influenced by our respect for the environment, our desire to deliver cleaner energy and our dedication to employees and the communities we serve," said Mr. Perry. "Our safety and reliability performance during the pandemic and the steps we are taking to advance key sustainability initiatives are strong evidence that we are on the right path."

Outlook

While uncertainty exists due to the COVID-19 pandemic, the Corporation's long-term outlook is unchanged. Fortis continues to be well positioned to enhance shareholder value through the execution of its capital plan, the balance and strength of its diversified portfolio of utility businesses, and growth opportunities within and proximate to its service territories.

The Corporation's $18.8 billion five-year capital plan is expected to increase rate base from $28.0 billion in 2019 to $34.5 billion by 2022 and $38.4 billion by 2024, translating into three- and five-year compound annual growth rates of 7.2% and 6.5%, respectively. The capital plan reflects the continuation of key industry trends including grid modernization and the delivery of cleaner energy, which Fortis believes will continue to be drivers of investment over the planning period. Beyond the base capital plan, Fortis continues to pursue additional energy infrastructure opportunities. Key opportunities not yet included in the five-year capital plan include: further expansion of liquefied natural gas infrastructure in British Columbia; the fully permitted, cross-border, Lake Erie Connector electric transmission project in Ontario; and the acceleration of cleaner energy goals in Arizona.

Fortis expects long-term growth in rate base to support continuing growth in earnings and dividends. As such, the Corporation's dividend guidance remains unchanged. The continuation of dividend growth guidance is premised on the assumptions listed under "Forward-Looking Information" below, including the continued good performance of the Corporation's utilities, no material impact from the COVID-19 pandemic, the expectation of reasonable outcomes for regulatory proceedings and the successful execution of the five-year capital plan.

Non-US GAAP Reconciliation

Periods ended June 30	Quarter			Year-to-Date
($ millions, except earnings per share)	2020	2019	Variance	2020	2019	Variance
Common Equity Earnings	274	720	(446)	586	1,031	(445)
Adjusting Items:
May 2020 FERC Order (1)	(27)	—	(27)	(27)	—	(27)
Anti-hybrid tax regulations (2)	13	—	13	13	—	13
Unrealized (gain) loss on mark-to-						—
market of derivatives (3)	(2)	(1)	(1)	1	4	(3)
Gain on disposition (4)	—	(484)	484	—	(484)	484
Adjusted Common Equity Earnings	258	235	23	573	551	22
Adjusted Basic EPS ($)	0.56	0.54	0.02	1.23	1.28	(0.05)

⁽¹⁾ Reversal of regulatory liabilities accrued in prior years as a result of an order from FERC in May 2020 establishing a new base rate of return on common equity, included in the ITC segment

⁽²⁾ Reversal of a tax recovery, originally recognized in 2019, due to the finalization of anti-hybrid tax regulations in April 2020 associated with U.S. tax reform, included in the Corporate and Other segment

⁽³⁾ Represents timing differences related to the accounting of natural gas derivatives at Aitken Creek, included in the Energy Infrastructure segment

⁽⁴⁾ Gain on sale of the Waneta Expansion hydroelectric generating facility, net of expenses, in April 2019, included in the Corporate and Other segment

About Fortis

Fortis is a well-diversified leader in the North American regulated electric and gas utility industry, with 2019 revenue of $8.8 billion and total assets of $56 billion as at June 30, 2020. The Corporation's 9,000 employees serve utility customers in five Canadian provinces, nine U.S. states and three Caribbean countries.

iii

Forward-Looking Information

Fortis includes forward-looking information in this media release within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information"). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would and the negative of these terms and other similar terminology or expressions have been used to identify the forward-looking information, which includes, without limitation: forecast capital expenditures for the period from 2020 through 2024; targeted average annual dividend growth through 2024; the expectation that the Corporation's utilities will continue to fund the capital plan; the expectation that depending on the length and severity of the pandemic, any change in 2020 capital expenditures is expected to be shifted to subsequent years with no change to the five-year capital plan; the expected timing and outcome of regulatory decisions; TEP's carbon emissions reduction target, 2035 generation mix, and coal-fired generation retirements; FortisBC's 2030 greenhouse gas emissions and renewable gas targets; forecast rate base for 2022 and 2024; and the expectation that long-term growth in rate base will support continuing growth in earnings and dividends.

Forward-looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally, including those identified from time to time in the forward-looking information. Such factors or assumptions include, but are not limited to: no material impact from the COVID-19 pandemic; reasonable outcomes for regulatory proceedings and the expectation of regulatory stability; the successful execution of the five-year capital plan; no material capital project and financing cost overrun; sufficient human resources to deliver service and execute the capital plan; the realization of additional opportunities; the impact of fluctuations in foreign exchange; no significant variability in interest rates; and the Board exercising its discretion to declare dividends, taking into account the business performance and financial condition of the Corporation. Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. For additional information with respect to certain risk factors, reference should be made to the continuous disclosure materials filed from time to time by the Corporation with Canadian securities regulatory authorities and the Securities and Exchange Commission. All forward-looking information herein is given as of the date of this media release. Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

Teleconference to Discuss Second Quarter 2020 Results

A teleconference and webcast will be held on July 30, 2020 at 8:30 a.m. (Eastern). Barry Perry, President and Chief Executive Officer, and Jocelyn Perry, Executive Vice President, Chief Financial Officer, will discuss the Corporation's second quarter 2020 results.

Shareholders, analysts, members of the media and other interested parties in North America are invited to participate by calling 1.877.223.4471. International participants may participate by calling 647.788.4922. Please dial in 10 minutes prior to the start of the call. No pass code is required.

A live and archived audio webcast of the teleconference will be available on the Corporation's website, www.fortisinc.com.

A replay of the conference will be available two hours after the conclusion of the call until August 30, 2020. Please call 1.800.585.8367 or 416.621.4642 and enter pass code 5294849.

Additional Information

This media release should be read in conjunction with the Corporation's Management Discussion and Analysis and Consolidated Financial Statements. This and additional information can be accessed at www.fortisinc.com, www.sedar.com, or www.sec.gov.

For more information, please contact:

Investor Enquiries	Media Enquiries
Ms. Stephanie Amaimo	Ms. Karen McCarthy
Vice President, Investor Relations	Vice President, Communications & Corporate Affairs
Fortis Inc.	Fortis Inc.
248.946.3572	709.737.5323
investorrelations@fortisinc.com	media@fortisinc.com

iv

EX-99.2

Exhibit 99.2

FORTIS INC.

Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019

(Unaudited)

F - 1

FORTIS INC.
Condensed Consolidated Interim Balance Sheets (Unaudited)
As at
(in millions of Canadian dollars)
	June 30,		December 31,
	2020		2019
ASSETS
Current assets
Cash and cash equivalents	$	380	$	370
Accounts receivable and other current assets (Note 6)	1,229		1,297
Prepaid expenses	68		88
Inventories	409		394
Regulatory assets (Note 7)	395		425
Total current assets	2,481		2,574
Other assets	686		620
Regulatory assets (Note 7)	3,110		2,958
Property, plant and equipment, net	36,105		33,988
Intangible assets, net	1,341		1,260
Goodwill	12,482		12,004
Total assets	$	56,205	$	53,404
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings (Note 8)	$	25	$	512
Accounts payable and other current liabilities	1,956		2,378
Regulatory liabilities (Note 7)	428		572
Current installments of long-term debt (Note 8)	990		690
Current installments of finance leases	100		24
Total current liabilities	3,499		4,176
Other liabilities	1,524		1,446
Regulatory liabilities (Note 7)	2,891		2,786
Deferred income taxes	3,221		2,969
Long-term debt (Note 8)	23,561		21,501
Finance leases	326		413
Total liabilities	35,022		33,291
Commitments and contingencies (Note 16)
Equity
Common shares (1)	13,708		13,645
Preference shares (Note 9)	1,623		1,623
Additional paid-in capital	10		11
Accumulated other comprehensive income	905		336
Retained earnings	3,279		2,916
Shareholders' equity	19,525		18,531
Non-controlling interests	1,658		1,582
Total equity	21,183		20,113
Total liabilities and equity	$	56,205	$	53,404
(1) No par value. Unlimited authorized shares; 464.6 million and 463.3 million issued and outstanding as at June 30, 2020 and December 31, 2019, respectively
See accompanying Notes to Condensed Consolidated Interim Financial Statements

F - 2

FORTIS INC.
Condensed Consolidated Interim Statements of Earnings (Unaudited)
For the periods ended June 30
(in millions of Canadian dollars, except per share amounts)
	Quarter Ended				Year-to-Date
	2020		2019		2020		2019
Revenue	$	2,077	$	1,970	$	4,468	$	4,406
Expenses
Energy supply costs	514		496		1,264		1,329
Operating expenses	599		603		1,225		1,219
Depreciation and amortization	366		338		723		672
Total expenses	1,479		1,437		3,212		3,220
Gain on disposition (Note 11)	—		577		—		577
Operating income	598		1,110		1,256		1,763
Other income, net (Note 12)	47		43		56		81
Finance charges	263		263		519		532
Earnings before income tax expense	382		890		793		1,312
Income tax expense	58		125		116		191
Net earnings	$	324	$	765	$	677	$	1,121
Net earnings attributable to:
Non-controlling interests	$	33	$	28	$	58	$	56
Preference equity shareholders	17		17		33		34
Common equity shareholders	274		720		586		1,031
	$	324	$	765	$	677	$	1,121
Earnings per common share (Note 13)
Basic	$	0.59	$	1.66	$	1.26	$	2.39
Diluted	$	0.59	$	1.66	$	1.26	$	2.39
See accompanying Notes to Condensed Consolidated Interim Financial Statements

FORTIS INC.
Condensed Consolidated Interim Statements of Comprehensive Income (Unaudited)
For the periods ended June 30
(in millions of Canadian dollars)
	Quarter Ended				Year-to-Date
	2020		2019		2020		2019
Net earnings	$	324	$	765	$	677	$	1,121
Other comprehensive (loss) income
Unrealized foreign currency translation (losses) gains (1)	(545)		(257)		657		(523)
Other (2)	(1)		—		(22)		—
	(546)		(257)		635		(523)
Comprehensive (loss) income	$	(222)	$	508	$	1,312	$	598
Comprehensive (loss) income attributable to:
Non-controlling interests	$	(26)	$	(2)	$	124	$	(7)
Preference equity shareholders	17		17		33		34
Common equity shareholders	(213)		493		1,155		571
	$	(222)	$	508	$	1,312	$	598
(1) Net of hedging activities and income tax (expense) recovery of $(6) million and $6 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - $(4) million and $(9) million, respectively)
(2) Net of income tax recovery of $nil and $9 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - $nil and $nil, respectively)
See accompanying Notes to Condensed Consolidated Interim Financial Statements

F - 3

FORTIS INC.
Condensed Consolidated Interim Statements of Cash Flows (Unaudited)
For the periods ended June 30
(in millions of Canadian dollars)
		Quarter Ended				Year-to-Date
		2020		2019		2020		2019
Operating activities
Net earnings		$	324	$	765	$	677	$	1,121
Adjustments to reconcile net earnings to net cash from operating activities:
	Depreciation - property, plant and equipment	329		297		650		595
	Amortization - intangible assets	34		34		66		64
	Amortization - other	3		7		7		13
	Deferred income tax expense	60		88		119		111
	Equity component, allowance for funds used    during construction (Note 12)	(21)		(19)		(35)		(37)
	Gain on disposition (Note 11)	—		(583)		—		(583)
	Other	23		40		70		74
Change in long-term regulatory assets and liabilities		—		(36)		(58)		(86)
Change in working capital (Note 14)		(27)		38		(181)		(100)
Cash from operating activities		725		631		1,315		1,172
Investing activities
Capital expenditures - property, plant and equipment		(725)		(814)		(1,836)		(1,526)
Capital expenditures - intangible assets		(50)		(29)		(101)		(57)
Contributions in aid of construction		16		23		33		49
Proceeds on disposition (Note 11)		—		995		—		995
Other		(49)		(76)		(93)		(94)
Cash (used in) from investing activities		(808)		99		(1,997)		(633)
Financing activities
Proceeds from long-term debt, net of issuance costs		1,685		320		2,044		392
Repayments of long-term debt, net of extinguishment costs, and finance leases		(585)		(922)		(602)		(939)
Borrowings under committed credit facilities		1,251		2,221		3,007		3,684
Repayments under committed credit facilities		(1,491)		(2,545)		(2,754)		(3,963)
Net change in short-term borrowings		(394)		144		(526)		261
Issue of common shares, net of costs and dividends reinvested		10		164		44		196
Dividends
	Common shares, net of dividends reinvested	(211)		(118)		(424)		(236)
	Preference shares	(17)		(17)		(33)		(34)
	Subsidiary dividends paid to non-controlling interests	(9)		(19)		(34)		(51)
Other		(38)		(4)		(35)		8
Cash from (used in) financing activities		201		(776)		687		(682)
Effect of exchange rate changes on cash and cash equivalents		(10)		(5)		5		(13)
Change in cash and cash equivalents		108		(51)		10		(156)
Cash and change in cash associated with assets held for sale		—		9		—		15
Cash and cash equivalents, beginning of period		272		233		370		332
Cash and cash equivalents, end of period		$	380	$	191	$	380	$	191
Supplementary Cash Flow Information (Note 14)
See accompanying Notes to Condensed Consolidated Interim Financial Statements

F - 4

FORTIS INC.
Condensed Consolidated Interim Statements of Changes in Equity (Unaudited)
For the periods ended June 30
(in millions of Canadian dollars, except share numbers)
	Common Shares (# millions)	Common Shares		Preference Shares (Note 9)		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-Controlling Interests		Total Equity
As at March 31, 2020	464.2	$	13,688	$	1,623	$	10	$	1,392	$	3,005	$	1,701	$	21,419
Net earnings	—	—		—		—		—		291		33		324
Other comprehensive loss	—	—		—		—		(487)		—		(59)		(546)
Common shares issued	0.4	20		—		—		—		—		—		20
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(9)		(9)
Dividends on preference shares	—	—		—		—		—		(17)		—		(17)
Other	—	—		—		—		—		—		(8)		(8)
As at June 30, 2020	464.6	$	13,708	$	1,623	$	10	$	905	$	3,279	$	1,658	$	21,183
As at March 31, 2019	430.9	$	11,997	$	1,623	$	12	$	695	$	2,200	$	1,893	$	18,420
Net earnings	—	—		—		—		—		737		28		765
Other comprehensive loss	—	—		—		—		(227)		—		(30)		(257)
Common shares issued	4.9	241		—		(2)		—		—		—		239
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(19)		(19)
Dividends on preference shares	—	—		—		—		—		(17)		—		(17)
Disposition (Note 11)	—	—		—		—		—		—		(318)		(318)
Other	—	—		—		1		—		(1)		1		1
As at June 30, 2019	435.8	$	12,238	$	1,623	$	11	$	468	$	2,919	$	1,555	$	18,814
See accompanying Notes to Condensed Consolidated Interim Financial Statements

F - 5

FORTIS INC.
Condensed Consolidated Interim Statements of Changes in Equity (Unaudited)
For the periods ended June 30
(in millions of Canadian dollars, except share numbers)
	Common Shares (# millions)	Common Shares		Preference Shares (Note 9)		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-Controlling Interests		Total Equity
As at December 31, 2019	463.3	$	13,645	$	1,623	$	11	$	336	$	2,916	$	1,582	$	20,113
Net earnings	—	—		—		—		—		619		58		677
Other comprehensive income	—	—		—		—		569		—		66		635
Common shares issued	1.3	63		—		(2)		—		—		—		61
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(34)		(34)
Dividends declared on common shares ($0.4775 per share)	—	—		—		—		—		(223)		—		(223)
Dividends on preference shares	—	—		—		—		—		(33)		—		(33)
Other	—	—		—		1		—		—		(14)		(13)
As at June 30, 2020	464.6	$	13,708	$	1,623	$	10	$	905	$	3,279	$	1,658	$	21,183
As at December 31, 2018	428.5	$	11,889	$	1,623	$	11	$	928	$	2,082	$	1,923	$	18,456
Net earnings	—	—		—		—		—		1,065		56		1,121
Other comprehensive loss	—	—		—		—		(460)		—		(63)		(523)
Common shares issued	7.3	349		—		(4)		—		—		—		345
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(51)		(51)
Dividends declared on common shares ($0.45 per share)	—	—		—		—		—		(194)		—		(194)
Dividends on preference shares	—	—		—		—		—		(34)		—		(34)
Disposition (Note 11)	—	—		—		—		—		—		(318)		(318)
Other	—	—		—		4		—		—		8		12
As at June 30, 2019	435.8	$	12,238	$	1,623	$	11	$	468	$	2,919	$	1,555	$	18,814
See accompanying Notes to Condensed Consolidated Interim Financial Statements

F - 6

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

1. DESCRIPTION OF BUSINESS

Nature of Operations

Fortis Inc. ("Fortis" or the "Corporation") is a well-diversified North American regulated electric and gas utility holding company.

Earnings for interim periods may not be indicative of annual results due to the impact of seasonal weather conditions on customer demand and market pricing and the timing and recognition of regulatory decisions. Earnings of the gas utilities tend to be highest in the first and fourth quarters due to space-heating requirements. Earnings of the electric distribution utilities in the United States tend to be highest in the second and third quarters due to the use of air conditioning and other cooling equipment.

Entities within the reporting segments that follow operate with substantial autonomy.

Regulated Utilities

ITC: Comprised of ITC Investment Holdings Inc., ITC Holdings Corp. and the electric transmission operations of its regulated operating subsidiaries, which include International Transmission Company, Michigan Electric Transmission Company, LLC, ITC Midwest LLC and ITC Great Plains, LLC, all operating in the United States. Fortis owns 80.1% of ITC and an affiliate of GIC Private Limited owns a 19.9% minority interest.

UNS Energy: Comprised of UNS Energy Corporation, which primarily includes Tucson Electric Power Company ("TEP"), UNS Electric, Inc. and UNS Gas, Inc., all operating in the United States.

Central Hudson: Represents Central Hudson Gas & Electric Corporation, operating in the United States.

FortisBC Energy: Represents FortisBC Energy Inc., operating in Canada.

FortisAlberta: Represents FortisAlberta Inc., operating in Canada.

FortisBC Electric: Represents FortisBC Inc., operating in Canada.

Other Electric: Comprised of utilities in Eastern Canada and the Caribbean as follows: Newfoundland Power Inc. ("Newfoundland Power"); Maritime Electric Company, Limited; FortisOntario Inc.; a 39% equity investment in Wataynikaneyap Power Limited Partnership; an approximate 60% controlling interest in Caribbean Utilities Company, Ltd. ("Caribbean Utilities"); FortisTCI Limited and Turks and Caicos Utilities Limited (collectively "FortisTCI"); and a 33% equity investment in Belize Electricity Limited ("Belize Electricity").

Non-Regulated

Energy Infrastructure: Primarily comprised of long-term contracted generation assets in Belize and the Aitken Creek natural gas storage facility ("Aitken Creek") in British Columbia. The long-term contracted generation assets in British Columbia were sold on April 16, 2019 (Note 11).

Corporate and Other: Captures expenses and revenues not specifically related to any reportable segment and those business operations that are below the required threshold for segmented reporting, including net corporate expenses of Fortis.

F - 7

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

2. REGULATORY MATTERS

Regulation of the Corporation's utilities is generally consistent with that disclosed in the "Regulatory Matters" section of its 2019 annual audited consolidated financial statements ("2019 Annual Financial Statements"). A summary of significant regulatory developments year-to-date 2020 follows.

COVID-19 Pandemic Impacts

The novel coronavirus ("COVID-19") pandemic has resulted in several customer relief initiatives as well as the delay of several regulatory proceedings, as discussed below.

Customer Relief Initiatives

UNS Energy

Pursuant to the Arizona Corporation Commission's approval of the utility's customer relief initiatives, TEP refunded to customers approximately US$8 million of collected demand side management funds in excess of program costs.

Central Hudson

In March 2020, as agreed to with the New York Public Service Commission ("PSC"), Central Hudson postponed until July 1, 2021 the collection in customer rates of approximately US$3 million of deferred costs related mainly to environmental remediation.

FortisBC Energy and FortisBC Electric

In April 2020, pursuant to the British Columbia Utilities Commission's ("BCUC") approval of the utilities' customer relief initiatives, FortisBC Energy and FortisBC Electric implemented three-month bill deferrals for certain customer classes, the repayment of which is expected to commence in the third quarter of 2020. The BCUC also authorized the deferral of otherwise uncollectible revenue associated with providing the customer relief initiatives, the recovery of which will be determined through a future rate filing once the financial impact of the pandemic is known.

Delayed Regulatory Proceedings

UNS Energy

General Rate Application: In the first half of 2020, as part of TEP's general rate application, hearings were held to address the inclusion in customer rates of the Gila River natural gas generation station unit 2 and ten natural gas reciprocating internal combustion engine units. Prior to the COVID-19 pandemic, a decision had been expected earlier in 2020 with new rates effective May 1, 2020. TEP currently expects a decision approving new rates prior to the end of 2020.

Central Hudson

2020 Rates: In May 2020 the PSC approved Central Hudson's request to postpone scheduled electric and gas delivery rate increases, reflecting an increase in the equity component of its capital structure from 49% to 50%, from July 1, 2020 to October 1, 2020. The deferred revenue will be collected over the nine-month period from October 1, 2020 to June 30, 2021.

COVID-19 Proceeding: In June 2020 the PSC initiated a generic proceeding to identify and address the effects of the COVID-19 pandemic. The outcome of this proceeding and potential impacts, if any, are unknown at this time.

FortisAlberta

Generic Cost of Capital Proceeding: In December 2018 the Alberta Utilities Commission ("AUC") initiated a generic cost of capital proceeding and expert evidence was filed in January 2020. In March 2020, due to the COVID-19 pandemic, this proceeding was suspended indefinitely. In June 2020 the AUC provided five options to Alberta utilities to set the approved return on equity ("ROE") and capital structure for 2021 in lieu of resuming the proceeding. In July 2020 FortisAlberta elected an option that provides for the extension of the currently approved ROE and capital structure quarterly. This method will remain in effect until the AUC issues a decision on this proceeding and any resulting changes to ROE and/or capital structure will be implemented prospectively at the start of the following quarter.

F - 8

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

Other Electric

Caribbean Utilities: In June 2020 Caribbean Utilities requested the postponement of its scheduled annual rate adjustment effective June 1, 2020 to January 1, 2021, to provide customer relief from the effects of the COVID-19 pandemic.

FortisTCI: In February 2020 the Government of the Turks and Caicos Islands approved a 6.8% average increase in FortisTCI's electricity rates, effective April 1, 2020, including the recovery of hurricane-related costs incurred in 2017. In March 2020, to provide customer relief from the effects of the COVID-19 pandemic, the effective date was postponed to July 2020 and new rates became effective July 22, 2020.

Other Regulatory Matters

ITC

ROE Complaints: In May 2020 the Federal Energy Regulatory Commission ("FERC") issued an order on rehearing of its November 2019 decision on the MISO transmission owner ROE complaints ("May 2020 FERC Order") and set the base ROE for the periods of November 2013 through February 2015 and from September 2016 onward at 10.02%, up to a maximum of 12.62% with incentive adders. Including incentive adders, the May 2020 FERC Order implies an all-in ROE for ITC's subsidiaries operating in the Midcontinent Independent System Operator's region of 10.77%, up from 10.63% based on a November 2019 decision but down from 11.07% based on a September 2016 decision which was recognized during the first nine months of 2019.

A regulatory liability of $91 million (US$70 million) was recorded at December 31, 2019 to reflect the amounts due to customers under the terms of the November 2019 decision. The May 2020 FERC Order, in addition to the refund of $27 million (US$20 million) to customers in the first half of 2020, resulted in: (i) the reduction of the regulatory liability to $22 million (US$16 million) as at June 30, 2020; and (ii) an increase in revenue and a decrease in interest expense resulting in an increase in net earnings of $37 million of which Fortis' share was $29 million. The earnings increase was comprised of: (i) $27 million related to the reversal of liabilities established in prior periods; and (ii) $2 million related to the year-to-date impact of a higher ROE as compared to the ROE approved in November 2019.

Review of Transmission Incentives Policy: In March 2020 FERC issued a notice of proposed rulemaking ("NOPR") proposing to update its transmission incentives policy for transmission owners, including ITC, to grant incentives to projects based upon benefits to customers regarding reliability and cost savings through the reduction of transmission congestion. The NOPR follows a Notice of Inquiry, issued in March 2019, on FERC's transmission incentives policies. FERC proposed total ROE incentives of up to 250 basis points that would not be limited by the upper end of the base ROE zone of reasonableness. Comments from stakeholders, including ITC, were provided to FERC through July 1, 2020. The outcome may impact future incentive adders that are included in transmission rates charged by transmission owners, including ITC.

FortisBC Energy and FortisBC Electric

Multi-Year Rate Plan Applications: In June 2020 the BCUC issued a decision on FortisBC Energy's and FortisBC Electric's multi-year rate plan applications for 2020 to 2024. The decision sets the rate-setting framework for the next five years, including: (i) the level of operation and maintenance expense and capital to be included in customer rates, subject to an incentive formula; (ii) the level of investment in gas innovation initiatives to be included in customer rates; and (iii) a 50/50 sharing between customers and the utilities of variances from the allowed ROE. During the third quarter of 2020, FortisBC Energy and FortisBC Electric will provide the BCUC with updated 2020 rate filings reflecting the terms of this decision. Current interim rates will remain in effect pending a final determination of 2020 rates by the BCUC.

FortisAlberta

2018 Alberta Independent System Operator Tariff Application: In September 2019 the AUC issued a decision that addressed a proposal to change how the Alberta Independent System Operator's customer contribution policy functions between distribution facility owners, such as FortisAlberta, and transmission facility owners. Implementation of the order was suspended in October 2019 and in May 2020 the AUC confirmed that outstanding matters on the order will be determined through a written

F - 9

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

hearing. In July 2020 FortisAlberta filed expert evidence requested by the AUC and a decision is expected in the fourth quarter of 2020. The likely outcome of this process and potential impacts, if any, cannot be determined at this time.

Performance-Based Regulation: In May 2020 FortisAlberta filed an application for anomaly adjustments to rates based on new criteria established by the AUC in January 2020. A decision is expected in the fourth quarter of 2020.

3. ACCOUNTING POLICIES

These condensed consolidated interim financial statements ("Interim Financial Statements") have been prepared in accordance with accounting principles generally accepted in the United States of America for rate-regulated entities and are in Canadian dollars unless otherwise noted.

The Interim Financial Statements are comprised of the accounts of Fortis and its wholly owned subsidiaries and controlling ownership interests. All inter-company balances and transactions have been eliminated on consolidation, except as disclosed in Note 5.

These Interim Financial Statements do not include all of the disclosures required in the annual financial statements and should be read in conjunction with the Corporation's 2019 Annual Financial Statements. In management's opinion, these Interim Financial Statements include all adjustments that are of a normal recurring nature, necessary for fair presentation.

The preparation of the Interim Financial Statements requires management to make estimates and judgments, including those related to regulatory decisions, that affect the reported amounts of, and disclosures related to, assets, liabilities, revenues and expenses. Actual results could differ from estimates.

The accounting policies applied herein are consistent with those outlined in the Corporation's 2019 Annual Financial Statements, except as described below.

New Accounting Policies

Financial Instruments

Effective January 1, 2020, the Corporation adopted Accounting Standards Update ("ASU") No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires the use of reasonable and supportable forecasts in the estimate of credit losses and the recognition of expected losses upon initial recognition of a financial instrument, in addition to using past events and current conditions. The new guidance also requires quantitative and qualitative disclosures regarding the activity in the allowance for credit losses for financial assets within the scope of the guidance. Adoption did not have a material impact on the Interim Financial Statements.

Fortis and each subsidiary recognize an allowance for credit losses to reduce accounts receivable for amounts estimated to be uncollectible. The allowance is estimated based on historical collection patterns, sales, and current and forecast economic and other conditions. Accounts receivable are written off in the period in which they are deemed uncollectible (Note 6).

4. FUTURE ACCOUNTING PRONOUNCEMENTS

Income Taxes

ASU No. 2019-12, Simplifying the Accounting for Income Taxes, issued in December 2019, is effective for Fortis January 1, 2021, with early adoption permitted. Principally, it improves consistent application of, and clarifies, existing income tax guidance. Adoption will not have a material impact on the consolidated financial statements and related disclosures.

F - 10

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

5. SEGMENTED INFORMATION

General

Fortis segments its business based on regulatory jurisdiction and service territory, as well as the information used by its President and Chief Executive Officer in deciding how to allocate resources. Segment performance is evaluated principally on net earnings attributable to common equity shareholders.

Related-Party and Inter-Company Transactions

Related-party transactions are in the normal course of operations and are measured at the amount of consideration agreed to by the related parties. There were no material related-party transactions for the three and six months ended June 30, 2020 and 2019.

Inter-company balances, transactions and profit are eliminated on consolidation, except for certain inter-company transactions between non-regulated and regulated entities in accordance with accounting standards for rate-regulated entities, which are summarized below.

	Quarter Ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Lease of gas storage capacity and gas sales from Aitken Creek to FortisBC Energy	5	6	12	12
Sale of capacity from Waneta Expansion to FortisBC Electric (1)	—	1	—	17

⁽¹⁾ Reflects amounts to the April 16, 2019 disposition of the Waneta Expansion hydroelectric generating facility ("Waneta Expansion") (Note 11)

As at June 30, 2020, accounts receivable included approximately $13 million due from Belize Electricity (December 31, 2019 - $8 million).

The Corporation periodically provides short-term financing to subsidiaries to support capital expenditures, acquisitions and seasonal working capital requirements. As at June 30, 2020, there were inter-segment loans outstanding of $69 million (December 31, 2019 - $279 million), payable on demand with a weighted average interest rate of 1.1%. Total interest charged was $1 million and $2 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - less than $1 million).

F - 11

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

	REGULATED								NON-REGULATED
Quarter Ended									Energy		Inter-
June 30, 2020		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	477	546	206	249	150	91	345	2,064	13	—	—	2,077
Energy supply costs	—	184	51	66	—	15	198	514	—	—	—	514
Operating expenses	113	157	125	76	34	26	49	580	7	12	—	599
Depreciation and amortization	75	85	24	59	56	15	47	361	4	1	—	366
Operating income	289	120	6	48	60	35	51	609	2	(13)	—	598
Other income, net	13	16	8	2	—	1	2	42	—	5	—	47
Finance charges	79	34	12	35	25	18	21	224	—	39	—	263
Income tax expense	55	17	—	(2)	2	1	6	79	(1)	(20)	—	58
Net earnings	168	85	2	17	33	17	26	348	3	(27)	—	324
Non-controlling interests	30	—	—	1	—	—	2	33	—	—	—	33
Preference share dividends	—	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	138	85	2	16	33	17	24	315	3	(44)	—	274
Goodwill	8,332	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	21,251	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	232	176	91	95	83	30	65	772	3	—	—	775
Quarter Ended
June 30, 2019
($ millions)
Revenue	428	500	199	235	150	90	343	1,945	25	—	—	1,970
Energy supply costs	—	164	58	63	—	15	195	495	1	—	—	496
Operating expenses	132	161	107	78	36	27	46	587	9	7	—	603
Depreciation and amortization	68	74	19	59	53	15	44	332	5	1	—	338
Gain on disposition	—	—	—	—	—	—	—	—	—	577	—	577
Operating income	228	101	15	35	61	33	58	531	10	569	—	1,110
Other income, net	12	5	4	3	—	1	—	25	1	17	—	43
Finance charges	79	33	11	34	27	18	19	221	(1)	43	—	263
Income tax expense	39	13	1	(6)	—	1	6	54	1	70	—	125
Net earnings	122	60	7	10	34	15	33	281	11	473	—	765
Non-controlling interests	21	—	—	—	—	—	4	25	3	—	—	28
Preference share dividends	—	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	101	60	7	10	34	15	29	256	8	456	—	720
Goodwill	8,037	1,809	591	913	228	235	252	12,065	27	—	—	12,092
Total assets	19,533	9,884	3,574	6,885	4,732	2,267	4,085	50,960	671	187	(119)	51,699
Capital expenditures	301	156	78	104	95	26	68	828	7	8	—	843

F - 12

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

	REGULATED								NON-REGULATED
Year-to-Date									Energy		Inter-
June 30, 2020		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	910	1,019	486	715	302	205	793	4,430	38	—	—	4,468
Energy supply costs	—	351	129	226	—	54	503	1,263	1	—	—	1,264
Operating expenses	231	315	259	158	72	53	100	1,188	15	22	—	1,225
Depreciation and amortization	148	166	46	119	111	30	93	713	8	2	—	723
Operating income	531	187	52	212	119	68	97	1,266	14	(24)	—	1,256
Other income, net	17	13	17	3	1	2	5	58	—	(2)	—	56
Finance charges	159	62	24	71	51	36	40	443	—	76	—	519
Income tax expense	98	25	8	21	4	2	10	168	2	(54)	—	116
Net earnings	291	113	37	123	65	32	52	713	12	(48)	—	677
Non-controlling interests	52	—	—	1	—	—	5	58	—	—	—	58
Preference share dividends	—	—	—	—	—	—	—	—	—	33	—	33
Net earnings attributable to common equity shareholders	239	113	37	122	65	32	47	655	12	(81)	—	586
Goodwill	8,332	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	21,251	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	481	685	164	216	204	58	122	1,930	7	—	—	1,937
Year-to-Date
June 30, 2019
($ millions)
Revenue	836	1,043	476	720	295	209	769	4,348	61	—	(3)	4,406
Energy supply costs	—	396	150	244	—	55	482	1,327	2	—	—	1,329
Operating expenses	256	313	225	161	77	52	93	1,177	23	22	(3)	1,219
Depreciation and amortization	131	148	39	118	105	31	86	658	13	1	—	672
Gain on disposition	—	—	—	—	—	—	—	—	—	577	—	577
Operating income	449	186	62	197	113	71	108	1,186	23	554	—	1,763
Other income, net	22	14	8	6	1	2	1	54	2	25	—	81
Finance charges	156	66	22	69	52	36	39	440	—	92	—	532
Income tax expense	81	19	9	24	1	6	11	151	1	39	—	191
Net earnings	234	115	39	110	61	31	59	649	24	448	—	1,121
Non-controlling interests	41	—	—	—	—	—	7	48	8	—	—	56
Preference share dividends	—	—	—	—	—	—	—	—	—	34	—	34
Net earnings attributable to common equity shareholders	193	115	39	110	61	31	52	601	16	414	—	1,031
Goodwill	8,037	1,809	591	913	228	235	252	12,065	27	—	—	12,092
Total assets	19,533	9,884	3,574	6,885	4,732	2,267	4,085	50,960	671	187	(119)	51,699
Capital expenditures	537	323	142	174	202	51	124	1,553	13	17	—	1,583

F - 13

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

6. ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses balance (Note 3), which is netted against accounts receivable and other current assets, changed from December 31, 2019 as follows.

	June 30, 2020
($ millions)	Quarter ended	Year-to-Date
Beginning of period	(44)	(35)
Credit loss expensed	(5)	(14)
Credit loss deferred (1) (Note 2)	(8)	(8)
Write-offs, net of recoveries	3	6
Foreign exchange	1	(2)
End of period	(53)	(53)

⁽¹⁾ Comprised of FortisBC Energy and FortisBC Electric

The allowance for doubtful accounts balance, which was netted against accounts receivable and other current assets, changed from December 31, 2018 as follows.

	June 30, 2019
($ millions)	Quarter ended	Year-to-Date
Beginning of period	(33)	(33)
Bad debts expensed	(4)	(9)
Write-offs, net of recoveries	4	8
Foreign exchange	—	1
End of period	(33)	(33)

7. REGULATORY ASSETS AND LIABILITIES

Detailed information about the Corporation's regulatory assets and liabilities is provided in Note 9 to the 2019 Annual Financial Statements. A summary follows.

	As at
	June 30,	December 31,
($ millions)	2020	2019
Regulatory assets
Deferred income taxes	1,619	1,556
Employee future benefits	530	530
Deferred energy management costs	305	279
Rate stabilization and related accounts	237	208
Deferred lease costs	119	116
Manufactured gas plant site remediation deferral	116	81
Generation early retirement costs	87	88
Derivatives	86	119
Other regulatory assets	406	406
Total regulatory assets	3,505	3,383
Less: Current portion	(395)	(425)
Long-term regulatory assets	3,110	2,958

F - 14

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

	As at
	June 30,	December 31,
($ millions)	2020	2019
Regulatory liabilities
Deferred income taxes	1,483	1,440
Asset removal cost provision	1,235	1,187
Renewable energy surcharge	101	94
Rate stabilization and related accounts	100	166
Energy efficiency liability	95	101
Electric and gas moderator account	40	45
Employee future benefits	33	45
ROE complaints liability	22	91
Other regulatory liabilities	210	189
Total regulatory liabilities	3,319	3,358
Less: Current portion	(428)	(572)
Long-term regulatory liabilities	2,891	2,786

8. LONG-TERM DEBT

	As at
	June 30,	December 31,
($ millions)	2020	2019
Long-term debt	23,656	21,547
Fair value adjustment - ITC acquisition	133	133
Credit facility borrowings	909	640
Total long-term debt	24,698	22,320
Less: Deferred financing costs and debt discounts	(147)	(129)
Less: Current installments of long-term debt	(990)	(690)
	23,561	21,501

F - 15

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

The long-term debt issuances for the six months ended June 30, 2020 are summarized below.

		Interest
	Month	Rate					Use of
($ millions, except %)	Issued	(%)	Maturity	Amount			Proceeds
ITC
Unsecured term loan credit agreement	January	(1)	2021		US	75	(2)(3)
Unsecured term loan credit agreement (4)	January	(5)	2021		US	200	(4)
Unsecured senior notes	May	2.95	2030		US	700	(2)(3)(6)
UNS Energy
Unsecured senior notes	April	4.00	2050		US	350	(2)(3)
Central Hudson
Unsecured senior notes	May	3.42	2050		US	30	(3)
FortisBC Electric
Unsecured debentures	May	3.12	2050		75		(2)
Newfoundland Power
First mortgage sinking fund bonds	April	3.61	2060		100		(2)(3)
FortisTCI
Unsecured senior notes (7)	June	5.30	2035		US	15	(8)(9)

⁽¹⁾ Floating rate of a one-month LIBOR plus a spread of 0.45%

⁽²⁾ Repay credit facility borrowings

⁽³⁾ General corporate purposes

⁽⁴⁾ Maximum amount of borrowings under this agreement of US$400 million has been drawn; current period borrowings were used to repay an outstanding commercial paper balance.

⁽⁵⁾ Floating rate of a two-month LIBOR plus a spread of 0.60%

⁽⁶⁾ Early redemption of unsecured term loan credit agreement of US$400 million

⁽⁷⁾ Maximum amount of borrowings under this agreement is US$30 million.

⁽⁸⁾ Repay maturing long-term debt

⁽⁹⁾ Finance capital expenditures

In July 2020 ITC issued 31-year US$180 million first mortgage bonds at 3.13%. The net proceeds were used to repay credit facility borrowings, finance capital expenditures and for general corporate purposes.

In July 2020 Central Hudson issued 40-year US$30 million unsecured senior notes at 3.62%. The net proceeds were used to finance capital expenditures and for general corporate purposes.

In July 2020 FortisBC Energy issued 30-year $200 million unsecured debentures at 2.54%. The net proceeds were used to finance capital expenditures.

F - 16

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

Credit Facilities

			As at
	Regulated	Corporate	June 30,	December 31,
($ millions)	Utilities	and Other	2020	2019
Total credit facilities	3,982	1,881	5,863	5,590
Credit facilities utilized:
Short-term borrowings (1)	(25)	—	(25)	(512)
Long-term debt (including current portion) (2)	(909)	—	(909)	(640)
Letters of credit outstanding	(83)	(53)	(136)	(114)
Credit facilities unutilized	2,965	1,828	4,793	4,324

⁽¹⁾ The weighted average interest rate was approximately 1.9% (December 31, 2019 - 3.2%).

⁽²⁾ The weighted average interest rate was approximately 1.1% (December 31, 2019 - 2.4%). The current portion was $371 million (December 31, 2019 - $252 million).

Credit facilities are syndicated primarily with large banks in Canada and the United States, with no one bank holding more than 25% of the total facilities. Approximately $5.6 billion of the total credit facilities are committed facilities with maturities ranging from 2021 through 2025.

See Note 15 in the 2019 Annual Financial Statements for a description of the credit facilities as at December 31, 2019.

In January 2020 Caribbean Utilities amended its unsecured revolving committed credit facility resulting in an increase of US$20 million and an extension of the maturity date to January 2025.

In March 2020 FortisBC Energy entered into a $55 million two-year uncommitted letter of credit facility and FortisAlberta entered into a $150 million one-year non-revolving committed credit facility.

In April 2020 the Corporation entered into an unsecured $500 million one-year revolving term committed credit facility and UNS Energy terminated its US$225 million unsecured non-revolving uncommitted credit facility due to mature in December 2020.

In May 2020 and July 2020 Central Hudson's US$10 million uncommitted credit facility and its US$50 million unsecured revolving committed credit facility, respectively, expired and were not renewed.

9. PREFERENCE SHARES

On June 1, 2020, 267,341 First Preference Shares, Series H were converted on a one-for-one basis into First Preference Shares, Series I and 907,577 First Preference Shares, Series I were converted on a one-for-one basis into First Preference Shares, Series H.

Also on June 1, 2020, the annual fixed dividend per share for the First Preference Shares, Series H was reset from $0.6250 to $0.45875 for the five-year period up to but excluding June 1, 2025.

F - 17

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

10. EMPLOYEE FUTURE BENEFITS

The Corporation and its subsidiaries each maintain one or a combination of defined benefit pension plans and defined contribution pension plans, including group Registered Retirement Savings Plans and group 401(k) plans, for employees. The Corporation and certain subsidiaries also offer other post-employment benefit ("OPEB") plans for qualifying employees. The net benefit cost is detailed below.

	Defined Benefit Pension Plans		OPEB Plans
($ millions)	2020	2019	2020	2019
Quarter Ended June 30
Components of net benefit cost
Service costs	25	19	8	7
Interest costs	29	32	5	7
Expected return on plan assets	(44)	(40)	(5)	(4)
Amortization of actuarial losses (gains)	9	6	(2)	(1)
Amortization of past service credits/plan amendments	(1)	(1)	—	(2)
Regulatory adjustments	(1)	—	1	1
Net benefit cost	17	16	7	8
Year-to-Date June 30
Components of net benefit cost
Service costs	50	38	16	14
Interest costs	57	63	11	13
Expected return on plan assets	(88)	(80)	(10)	(8)
Amortization of actuarial losses (gains)	17	12	(3)	(2)
Amortization of past service credits/plan amendments	(1)	(1)	(1)	(4)
Regulatory adjustments	(2)	1	2	3
Net benefit cost	33	33	15	16

Defined contribution pension plan expense for the three and six months ended June 30, 2020 was $9 million and $22 million, respectively (three and six months ended June 30, 2019 - $10 million and $22 million, respectively).

11. DISPOSITION

On April 16, 2019, Fortis sold its 51% ownership interest in the 335-megawatt Waneta Expansion for proceeds of $995 million. A gain on disposition of $577 million ($484 million after tax), net of expenses, was recognized in the Corporate and Other segment, and the related non-controlling interest was removed from equity.

For the three and six months ended June 30, 2019, excluding the gain on disposition, Waneta Expansion contributed $7 million and $17 million, respectively, to earnings before income tax expense, of which Fortis' share was 51%.

F - 18

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

12. OTHER INCOME, NET

	Quarter ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Equity component, allowance for funds used during construction	21	19	35	37
Derivative gains	11	6	—	13
Interest income	3	4	8	8
Gain on repayment of debt	—	11	—	11
Other	12	3	13	12
	47	43	56	81

13. EARNINGS PER COMMON SHARE

Diluted earnings per share ("EPS") was calculated using the treasury stock method for stock options.

	2020			2019
	Net Earnings	Weighted		Net Earnings	Weighted
	to Common	Average		to Common	Average
	Shareholders	Shares	EPS	Shareholders	Shares	EPS
	($ millions)	(# millions)	($)	($ millions)	(# millions)	($)
Quarter Ended June 30
Basic EPS	274	464.6	0.59	720	433.1	1.66
Potential dilutive effect of stock options	—	0.6		—	0.6
Diluted EPS	274	465.2	0.59	720	433.7	1.66
Year-to-Date June 30
Basic EPS	586	464.2	1.26	1,031	431.3	2.39
Potential dilutive effect of stock options	—	0.6		—	0.6
Diluted EPS	586	464.8	1.26	1,031	431.9	2.39

F - 19

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

14. SUPPLEMENTARY CASH FLOW INFORMATION

	Quarter Ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Change in working capital
Accounts receivable and other current assets	69	237	107	135
Prepaid expenses	29	21	25	18
Inventories	(45)	(7)	(1)	16
Regulatory assets - current portion	14	(10)	28	(16)
Accounts payable and other current liabilities	14	(199)	(194)	(256)
Regulatory liabilities - current portion	(108)	(4)	(146)	3
	(27)	38	(181)	(100)
Non-cash investing and financing activities
Accrued capital expenditures	367	329	367	329
Common share dividends reinvested	10	76	18	151
Contributions in aid of construction	8	12	8	12
Exercise of stock options into common shares	—	2	2	4
Right-of-use assets obtained in exchange for operating lease liabilities	—	2	1	48

15. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Derivatives

The Corporation generally limits the use of derivatives to those that qualify as accounting, economic or cash flow hedges, or those that are approved for regulatory recovery.

The Corporation records all derivatives at fair value, with certain exceptions including those derivatives that qualify for the normal purchase and normal sale exception. Fair values reflect estimates based on current market information about the derivatives as at the balance sheet dates. The estimates cannot be determined with precision as they involve uncertainties and matters of judgment and, therefore, may not be relevant in predicting the Corporation's future consolidated earnings or cash flows.

Cash flows associated with the settlement of all derivatives are included in operating activities on the condensed consolidated interim statements of cash flows.

Energy Contracts Subject to Regulatory Deferral

UNS Energy holds electricity power purchase contracts, customer supply contracts and gas swap contracts to reduce its exposure to energy price risk. Fair values were measured primarily under the market approach using independent third-party information, where possible. When published prices are not available, adjustments are applied based on historical price curve relationships, transmission costs and line losses.

Central Hudson holds swap contracts for electricity and natural gas to minimize price volatility by fixing the effective purchase price. Fair values were measured using forward pricing provided by independent third-party information.

FortisBC Energy holds gas supply contracts to fix the effective purchase price of natural gas. Fair values reflect the present value of future cash flows based on published market prices and forward natural gas curves. All commodity swaps expired in the first quarter of 2020.

F - 20

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

Unrealized gains or losses associated with changes in the fair value of these energy contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates, as permitted by the regulators. As at June 30, 2020, unrealized losses of $86 million (December 31, 2019 - $119 million) were recognized as regulatory assets.

Energy Contracts Not Subject to Regulatory Deferral

UNS Energy holds wholesale trading contracts to fix power prices and realize potential margin, of which 10% of any realized gains are shared with customers through rate stabilization accounts. Fair values were measured using a market approach incorporating, where possible, independent third-party information.

Aitken Creek holds gas swap contracts to manage its exposure to changes in natural gas prices, capture natural gas price spreads, and manage the financial risk posed by physical transactions. Fair values were measured using forward pricing from published market sources.

Unrealized gains or losses associated with changes in the fair value of these energy contracts are recognized in revenue and were not material for the three and six months ended June 30, 2020 and 2019.

Total Return Swaps

The Corporation holds total return swaps to manage the cash flow risk associated with forecasted future cash settlements of certain stock-based compensation obligations. The swaps have a combined notional amount of $113 million and terms of one to three years expiring in January 2021, 2022 and 2023. Fair value was measured using an income valuation approach based on forward pricing curves. Unrealized gains and losses associated with changes in the fair value of the total return swaps are recognized in other income, net and were not material for the three and six months ended June 30, 2020 and 2019.

Foreign Exchange Contracts

The Corporation holds US dollar foreign exchange contracts to help mitigate exposure to volatility of foreign exchange rates. The contracts expire between 2020 and 2022 and have a combined notional amount of $380 million. Fair value was measured using independent third-party information. Unrealized gains and losses associated with changes in fair value are recognized in other income, net and were not material for the three and six months ended June 30, 2020 and 2019.

Interest Rate Swaps

ITC entered into forward-starting interest rate swaps to manage the interest rate risk associated with planned borrowings. The swaps, which had a combined notional value of $611 million, were terminated in May 2020 with the issuance of US$700 million senior notes and realized losses of $31 million were recognized in other comprehensive income, which will be reclassified to earnings as a component of interest expense over five years.

Other Investments

ITC, UNS Energy and Central Hudson hold investments in trust associated with supplemental retirement benefit plans for select employees. These investments consist of mutual funds and money market accounts, which are recorded at fair value based on quoted market prices in active markets. Gains and losses on these funds are recognized in other income, net and were not material for the three and six months ended June 30, 2020 and 2019.

F - 21

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

Recurring Fair Value Measures

The following table presents the fair value of assets and liabilities that are accounted for at fair value on a recurring basis.

($ millions)	Level 1 (1)	Level 2 (1)	Level 3 (1)	Total
As at June 30, 2020
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	32	—	32
Energy contracts not subject to regulatory deferral (2)	—	12	—	12
Foreign exchange contracts and total return swaps (2)	7	—	—	7
Other investments (4)	129	—	—	129
	136	44	—	180
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	—	(109)	—	(109)
Energy contracts not subject to regulatory deferral (5)	—	(16)	—	(16)
	—	(125)	—	(125)

($ millions)	Level 1 (1)	Level 2 (1)	Level 3 (1)	Total
As at December 31, 2019
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	22	—	22
Energy contracts not subject to regulatory deferral (2)	—	8	—	8
Foreign exchange contracts, interest rate and total   return swaps (2)	14	4	—	18
Other investments (4)	121	—	—	121
	135	34	—	169
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	(1)	(138)	—	(139)
Energy contracts not subject to regulatory deferral (5)	—	(12)	—	(12)
	(1)	(150)	—	(151)

⁽¹⁾Under the hierarchy, fair value is determined using: (i) level 1 - unadjusted quoted prices in active markets; (ii) level 2 - other pricing inputs directly or indirectly observable in the marketplace; and (iii) level 3 - unobservable inputs, used when observable inputs are not available. Classifications reflect the lowest level of input that is significant to the fair value measurement.

⁽²⁾Included in accounts receivable and other current assets or other assets

⁽³⁾Unrealized gains and losses arising from changes in fair value of these contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates as permitted by the regulators, with the exception of long-term wholesale trading contracts and certain gas swap contracts.

⁽⁴⁾Included in other assets

⁽⁵⁾Included in accounts payable and other current liabilities or other liabilities

F - 22

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

The Corporation has elected gross presentation for its derivative contracts under master netting agreements and collateral positions, which apply only to its energy contracts. The following table presents the potential offset of counterparty netting.

Energy Contracts	Gross
	Amount	Counterparty	Cash
	Recognized	Netting of	Collateral
	on Balance	Energy	Received/
($ millions)	Sheet	Contracts	Posted	Net Amount
As at June 30, 2020
Derivative assets	44	30	10	4
Derivative liabilities	(125)	(30)	—	(95)

As at December 31, 2019
Derivative assets	30	22	10	(2)
Derivative liabilities	(151)	(22)	(2)	(127)

Volume of Derivative Activity

As at June 30, 2020, the Corporation had various energy contracts that will settle on various dates through 2029. The volumes related to electricity and natural gas derivatives are outlined below.

	As at
	June 30,	December 31,
	2020	2019
Energy contracts subject to regulatory deferral (1)
Electricity swap contracts (GWh)	341	628
Electricity power purchase contracts (GWh)	3,172	3,198
Gas swap contracts (PJ)	143	168
Gas supply contract premiums (PJ)	231	241
Energy contracts not subject to regulatory deferral (1)
Wholesale trading contracts (GWh)	2,559	1,855
Gas swap contracts (PJ)	35	43

⁽¹⁾GWh means gigawatt hours and PJ means petajoules.

Credit Risk

For cash equivalents, accounts receivable and other current assets, and long-term other receivables, credit risk is generally limited to the carrying value on the consolidated balance sheets. The Corporation's subsidiaries generally have a large and diversified customer base, which minimizes the concentration of credit risk. Policies in place to minimize credit risk include requiring customer deposits, prepayments and/or credit checks for certain customers, performing disconnections and/or using third-party collection agencies for overdue accounts. As a result of the impact of the COVID-19 pandemic, certain of the Corporation's utilities have temporarily suspended non-payment disconnects.

ITC has a concentration of credit risk as approximately 65% of its revenue is derived from three customers. The customers have investment-grade credit ratings and credit risk is further managed by requiring a letter of credit or cash deposit equal to the credit exposure, which is determined by a credit-scoring model and other factors.

FortisAlberta has a concentration of credit risk as distribution service billings are to a relatively small group of retailers. Credit risk is managed by obtaining from the retailers either a cash deposit, letter of credit, an investment-grade credit rating, or a financial guarantee from an entity with an investment-grade credit rating.

F - 23

FORTIS INC.

Notes to Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2020 and 2019 (Unaudited)

UNS Energy, Central Hudson, FortisBC Energy, Aitken Creek and the Corporation may be exposed to credit risk in the event of non-performance by counterparties to derivatives. Credit risk is managed by net settling payments, when possible, and dealing only with counterparties that have investment-grade credit ratings. At UNS Energy and Central Hudson, certain contractual arrangements require counterparties to post collateral.

The value of derivatives in net liability positions under contracts with credit risk-related contingent features that, if triggered, could require the posting of a like amount of collateral was $109 million as at June 30, 2020 (December 31, 2019 - $161 million).

As at June 30, 2020 the impact of the COVID-19 pandemic on the carrying values of accounts receivable and other current assets, and long-term other receivables or the fair value of derivatives was not material.

Hedge of Foreign Net Investments

The reporting currency of ITC, UNS Energy, Central Hudson, Caribbean Utilities, FortisTCI and Belize Electric Company Limited and Belize Electricity is, or is pegged to, the US dollar. The earnings and cash flow from, and net investments in, these entities are exposed to fluctuations in the US dollar-to-Canadian dollar exchange rate. The Corporation has limited this exposure through hedging.

As at June 30, 2020, US$2.2 billion (December 31, 2019 - US$2.2 billion) of corporately issued US dollar-denominated long-term debt has been designated as an effective hedge of net investments, leaving approximately US$10.0 billion (December 31, 2019 - US$9.7 billion) unhedged. Exchange rate fluctuations associated with the hedged net investment in foreign subsidiaries and the debt serving as the hedge are recognized in accumulated other comprehensive income.

Financial Instruments Not Carried at Fair Value

Excluding long-term debt, the consolidated carrying value of the Corporation's remaining financial instruments approximates fair value, reflecting their short-term maturity, normal trade credit terms and/or nature.

As at June 30, 2020, the carrying value of long-term debt, including current portion, was $24.7 billion (December 31, 2019 - $22.3 billion) compared to an estimated fair value of $28.9 billion (December 31, 2019 - $25.3 billion).

16. COMMITMENTS AND CONTINGENCIES

Commitments

There were no material changes in commitments from that disclosed in the Corporation's 2019 Annual Financial Statements.

Contingencies

In April 2013 FHI and Fortis were named as defendants in an action in the Supreme Court of British Columbia by the Coldwater Indian Band ("Band") regarding interests in a pipeline right of way on reserve lands. The pipeline was transferred by FHI (then Terasen Inc.) to Kinder Morgan Inc. in April 2007. The Band seeks cancellation of the right of way and damages for wrongful interference with the Band's use and enjoyment of reserve lands. In May 2016 the Federal Court dismissed the Band's application for judicial review of the ministerial consent. In September 2017 the Federal Court of Appeal set aside the minister's consent and returned the matter to the minister for redetermination. No amount has been accrued in the Interim Financial Statements as the outcome cannot yet be reasonably determined.

F - 24

EX-99.3

Exhibit 99.3

Interim Management Discussion and Analysis

For the three and six months ended June 30, 2020

Dated July 29, 2020

TABLE OF CONTENTS
About Fortis	1	Liquidity and Capital Resources	14
Significant Item	1	Cash Flow Requirements	14
Performance at a Glance	3	Cash Flow Summary	16
Business Unit Performance	6	Contractual Obligations	18
ITC	6	Capital Structure and Credit Ratings	18
UNS Energy	7	Capital Plan	19
Central Hudson	8	Business Risks	20
FortisBC Energy	8	Accounting Matters	21
FortisAlberta	9	Financial Instruments	22
FortisBC Electric	9	Summary of Quarterly Results	22
Other Electric	10	Related-Party and Inter-Company Transactions	23
Energy Infrastructure	10	Outlook	23
Corporate and Other	11	Forward-Looking Information	24
Non-US GAAP Financial Measures	11	Glossary	25
Regulatory Highlights	12	Condensed Consolidated Interim Financial Statements (Unaudited)	F-1
Financial Position	14

This Interim MD&A has been prepared in accordance with National Instrument 51-102 - Continuous Disclosure Obligations. It should be read in conjunction with the Interim Financial Statements, the 2019 Annual Financial Statements and the 2019 Annual MD&A and is subject to the cautionary statement and disclaimer provided under "Forward-Looking Information" on page 24. Further information about Fortis, including its Annual Information Form filed on SEDAR, can be accessed at www.fortisinc.com, www.sedar.com, or www.sec.gov.

Financial information herein has been prepared in accordance with US GAAP (except for indicated Non-US GAAP Financial Measures) and, unless otherwise specified, is presented in Canadian dollars based, as applicable, on the following US-to-Canadian dollar exchange rates: (i) average of 1.39 and 1.34 for the quarters ended June 30, 2020 and 2019, respectively; (ii) average of 1.37 and 1.33 year-to-date June 30, 2020 and 2019, respectively; (iii) 1.36 and 1.31 as at June 30, 2020 and 2019, respectively; (iv) 1.30 as at December 31, 2019; and (v) 1.32 for all forecast periods. Certain terms used in this Interim MD&A are defined in the "Glossary" on page 25.

ABOUT FORTIS

Fortis (TSX/NYSE: FTS) is a well-diversified leader in the North American regulated electric and gas utility industry, with 2019 revenue of $8.8 billion and total assets of $56 billion as at June 30, 2020. The Corporation's 9,000 employees serve 3.3 million utility customers in five Canadian provinces, nine US states and three Caribbean countries.

For additional information on the Corporation's operations, reportable segments and strategy, refer to the "About Fortis" section of the 2019 Annual MD&A and Note 1 to the Interim Financial Statements.

SIGNIFICANT ITEM

COVID-19 Pandemic

The Corporation's utilities continue to reliably deliver an essential service during the COVID-19 Pandemic. Developments are continuously monitored with commensurate measures being taken. The Corporation's utilities have prioritized capital expenditures to mitigate supply chain risk and other potential impacts of the pandemic to ensure that they continue providing safe, reliable service while supporting public health. To date, capital expenditures and supply chains have not been materially impacted.

MANAGEMENT DISCUSSION AND ANALYSIS 1 June 30, 2020

The ongoing uncertainty surrounding the evolution of the pandemic makes it difficult to predict the ultimate operational and financial impacts on Fortis. Potential impacts are discussed under "Business Risks" on page 20. Depending on the severity and length of the pandemic, such impacts could have Material Adverse Effects and affect the Corporation’s ability to execute business strategies and initiatives in the expected time frames. Excluding the impact of the delayed rate case at TEP (see "Regulatory Highlights" on page 12), the impacts on Fortis have not been material and relate primarily to reduced sales at the Caribbean utilities as well as higher direct expenses, including credit losses, driven by Central Hudson.

The potential key impact areas could include revenue, capital expenditures, liquidity, regulatory matters and pension plans. The Corporation's current assessment of these areas is summarized below.

Revenue

Energy sales across all of the Corporation's utilities have been impacted by the temporary closure, and subsequent reopening, of non-essential businesses along with stay-at-home orders and other economic impacts related to the COVID-19 Pandemic. Generally, work-from-home practices have caused an increase in residential sales while commercial and industrial sales have decreased.

Regulatory mechanisms function to protect approximately 63% of the Corporation's annual revenue from changes in sales. Of the remaining 37%, principally at UNS Energy and the Other Electric segment, approximately 19% is residential and 18% is commercial and industrial, and revenue from industrial customers typically has a low contribution margin. Overall, approximately 82% of revenues are either protected by regulatory mechanisms or derived from residential sales.

The estimated annual impact on EPS of a 1% change in sales at UNS Energy and the Other Electric segment is summarized below.

Sensitivity Analysis	1% change in annual sales
(absolute annual EPS impact)	UNS Energy	Other Electric
Residential	$0.008	$0.006
Commercial and Industrial	$0.008	$0.004

During the second quarter of 2020, residential sales at UNS Energy increased approximately 24%, due mainly to warmer temperatures and work-from-home practices, while commercial and industrial sales decreased approximately 3%, due mainly to the temporary closure of non-essential businesses, resulting in an overall increase of approximately 9%, driven by weather. Excluding weather, retail sales increased 2%.

During the second quarter of 2020, sales at the Other Electric segment decreased 3%. Residential sales increased approximately 4% while commercial sales decreased approximately 11%, due largely to reduced tourism-related activities in the Caribbean.

On a consolidated basis, earnings were not materially impacted by the effect of the COVID-19 Pandemic on sales.

Capital Expenditures

While the Corporation currently does not expect the COVID-19 Pandemic to impact its overall five-year capital plan, it is possible that certain capital expenditures planned for 2020 may be shifted to subsequent years within the five-year plan period. See "Capital Plan" on page 19.

Liquidity

Fortis is well positioned with strong liquidity due, in part, to a $1.2 billion common equity offering and the sale of the Waneta Expansion in 2019. As at June 30, 2020, total consolidated credit facilities were $5.9 billion with $4.8 billion unutilized.

Fortis continues to be successful in accessing capital markets with approximately $2 billion of long-term debt issued since March 2020. See "Liquidity and Capital Resources" on page 14.

MANAGEMENT DISCUSSION AND ANALYSIS 2 June 30, 2020

The ongoing economic impact of the pandemic may affect customers' ability to pay their energy bills with commensurate short-term working capital impacts. On a consolidated basis, unfavourable impacts on cash flow associated with the slower collection of older balances from customers have been tempered by other working capital variances. The Corporation's utilities have instituted various customer relief initiatives, including the suspension of non-payment disconnects and late fees for certain customer classes, and payment deferral programs. As at June 30, 2020, the Corporation's allowance for credit losses was not materially impacted. See Note 6 in the Interim Financial Statements.

Regulatory Matters

Regulator and other stakeholder work schedule disruptions are causing delays or postponements for various regulatory proceedings. See "Regulatory Highlights" on page 12.

Pension Plans

The Corporation's exposure to changes in pension expense is limited by regulatory mechanisms which cover approximately 80% of defined benefit plan assets. The remaining 20% relates primarily to UNS Energy and its exposure is largely attributable to the use of a historical test year in setting rates.

Pension expense and funding is based on asset valuations as of December 31. Therefore, the ultimate impact of changes in pension asset values on future pension expense and funding is uncertain at this time. As at June 30, 2020, pension asset values had substantially recovered from the temporary decline experienced earlier in 2020.

PERFORMANCE AT A GLANCE

Key Financial Metrics
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2020	2019	Variance	2020	2019	Variance
Revenue	2,077	1,970	107	4,468	4,406	62
Common Equity Earnings
Actual	274	720	(446)	586	1,031	(445)
Adjusted (1)	258	235	23	573	551	22
Basic EPS ($)
Actual	0.59	1.66	(1.07)	1.26	2.39	(1.13)
Adjusted (1)	0.56	0.54	0.02	1.23	1.28	(0.05)
Dividends Paid per Common Share ($)	0.4775	0.4500	0.0275	0.9550	0.9000	0.0550
Weighted Average Number of Common Shares Outstanding (# millions)	464.6	433.1	31.5	464.2	431.3	32.9
Operating Cash Flow	725	631	94	1,315	1,172	143
Capital Expenditures	827	843	(16)	2,001	1,583	418

⁽¹⁾ See "Non-US GAAP Financial Measures" on page 11.

Revenue

The $107 million increase in revenue for the quarter was due primarily to: (i) favourable foreign exchange of $48 million; (ii) a $40 million favourable base ROE adjustment reflecting the reversal of liabilities established in prior years as a result of the May 2020 FERC Order (see "Regulatory Highlights" on page 12); (iii) Rate Base growth at the regulated utilities; and (iv) the impact of favourable weather in Arizona. The increase was partially offset by: (i) lower short-term wholesale sales at UNS Energy; and (ii) lower revenue contribution from the Energy Infrastructure segment, due primarily to the disposition of the Waneta Expansion in April 2019.

The $62 million increase in year-to-date revenue was due primarily to: (i) favourable foreign exchange of $64 million; (ii) Rate Base growth at the regulated utilities; (iii) the $40 million favourable base ROE adjustment as a result of the May 2020 FERC Order, discussed above; and (iv) the impact of favourable weather in Arizona. The increase was partially offset by: (i) lower short-term wholesale sales at UNS Energy; and (ii) lower revenue contribution from the Energy Infrastructure segment, discussed above.

MANAGEMENT DISCUSSION AND ANALYSIS 3 June 30, 2020

Earnings and EPS

Earnings for the quarter and year to date reflect significant one-time items: (i) a $484 million gain on the disposition of the Waneta Expansion in April 2019; and (ii) the reversal of a $13 million tax recovery, originally recognized in 2019, due to the finalization in April 2020 of anti-hybrid regulations associated with US tax reform; partially offset by (iii) a $27 million favourable base ROE adjustment as a result of the May 2020 FERC Order reflecting the reversal of liabilities accrued in prior years (see "Regulatory Highlights" on page 12).

Notwithstanding the significant one-time items, the regulated utilities delivered improved financial results during the second quarter of 2020 reflecting: (i) Rate Base growth; (ii) increased retail sales at UNS Energy, driven largely by weather; (iii) favourable foreign exchange; and (iv) timing of operating expenses at FortisBC Energy. This growth was tempered by lower sales in the Caribbean due to a decline in tourism-related activities and higher COVID-related expenses, including credit losses, driven by Central Hudson.

On a year-to-date basis, earnings reflect the same factors discussed above for the quarter but were further tempered by lower earnings at UNS Energy, which reflect higher costs associated with approximately $1 billion of utility infrastructure investments spent over the past few years that have not yet been reflected in customer rates, and a decline in the market value of certain investments that support retirement benefits caused by financial market volatility. While later than expected, new rates at TEP that recover the above noted investments are anticipated to be approved prior to the end of 2020.

An increase in the weighted average number of common shares outstanding, mainly associated with the Corporation's $1.2 billion common equity issuance in the fourth quarter of 2019, resulted in a decrease in basic EPS for the quarter and year to date of $0.04 and $0.09, respectively.

For the quarter and year to date: (i) Adjusted Common Equity Earnings increased by $23 million and$22 million, respectively; and (ii) Adjusted Basic EPS increased by $0.02 and decreased by $0.05, respectively. Refer to "Non-US GAAP Financial Measures" on page 11 for a reconciliation of these measures. The changes in Adjusted Basic EPS are illustrated in the charts below.

(1) UNS Energy and Central Hudson. Higher earnings due to higher retail sales driven by favourable weather in Arizona, partially offset by negative impacts of the COVID-19 Pandemic at Central Hudson

(2) FortisBC Energy, FortisBC Electric and FortisAlberta. Primarily reflects Rate Base/customer growth and timing of operating expenses at FortisBC Energy

(3) Primarily reflects Rate Base growth and lower business development costs

(4) Average FX of $1.39 in 2020 compared to $1.34 in 2019

(5) Primarily reflects lower sales and higher operating expenses in the Caribbean due to the impacts of the COVID-19 Pandemic, partially offset by higher equity income from Belize Electricity

(6) Primarily reflects gain on repayment of debt recognized in 2019, partially offset by lower finance charges

(7) Weighted average shares of 464.6 million in 2020 compared to 433.1 million in 2019

MANAGEMENT DISCUSSION AND ANALYSIS 4 June 30, 2020

(1) FortisBC Energy, FortisBC Electric and FortisAlberta. Primarily reflects Rate Base/customer growth and lower operating expenses, partly due to timing at FortisBC Energy.

(2) Primarily reflects Rate Base growth and lower business development costs, partially offset by a lower ROE compared to 2019

(3) Average FX of $1.37 in 2020 compared to $1.33 in 2019

(4) UNS Energy and Central Hudson. Earnings at UNS Energy reflect higher costs associated with Rate Base growth not yet reflected in customer rates and a decline in the market value of certain retirement-benefit investments due to financial market volatility, partially offset by higher retail sales driven by favourable weather in Arizona. The negative earnings impacts of the COVID-19 Pandemic at Central Hudson were largely offset by Rate Base growth.

(5) Primarily reflects lower sales and higher operating expenses, mainly in the Caribbean due to the impacts of the COVID-19 Pandemic, partially offset by higher equity income from Belize Electricity

(6) Primarily reflects gain on repayment of debt recognized in 2019, partially offset by lower finance charges

(7) Weighted average shares of 464.2 million in 2020 compared to 431.3 million in 2019

Dividends and TSR

Dividends paid per common share in the second quarter of 2020 were $0.4775, up 6% from the same period in 2019.

Fortis has increased its common share dividend for 46 consecutive years. The Corporation's targeted average annual dividend growth of approximately 6% through 2024 remains unchanged.

Growth of dividends and the market price of the Corporation's common shares have together yielded 1-year, 5-year, 10-year and 20-year annualized TSRs of 3.3%, 12.1%, 10.7% and 13.8%, respectively.

Operating Cash Flow

The $94 million and $143 million increases in Operating Cash Flow for the quarter and year to date, respectively, reflect overall higher net cash earnings, driven by Rate Base growth at the regulated utilities and favourable changes in long-term regulatory deferrals, due primarily to the normal operation of rate stabilization accounts at ITC. The increases were partially offset by unfavourable changes in working capital reflecting slower collections from customers and timing differences related to current regulatory deferrals, tempered by the deferred payment of carbon and provincial sales tax at FortisBC Energy.

Capital Expenditures

Capital expenditures were $2.0 billion year-to-date 2020, up $0.4 billion compared to the same period in 2019, representing 47% of the 2020 annual capital plan of $4.3 billion.

Depending on the length and severity of the COVID-19 Pandemic, it is possible that certain capital expenditures planned for the remainder of 2020 could be delayed. However, the Corporation currently expects no overall change to its $18.8 billion five-year capital plan. See "Significant Item" on page 1, "Capital Plan" on page 19, and "Business Risks" on page 20.

MANAGEMENT DISCUSSION AND ANALYSIS 5 June 30, 2020

BUSINESS UNIT PERFORMANCE

Common Equity Earnings	Quarter				Year-to-Date
Periods Ended June 30			Variance				Variance
($ millions)	2020	2019	FX (1)	Other	2020	2019	FX (1)	Other
Regulated Utilities
ITC	138	101	5	32	239	193	6	40
UNS Energy	85	60	3	22	113	115	3	(5)
Central Hudson	2	7	—	(5)	37	39	—	(2)
FortisBC Energy	16	10	—	6	122	110	—	12
FortisAlberta	33	34	—	(1)	65	61	—	4
FortisBC Electric	17	15	—	2	32	31	—	1
Other Electric (2)	24	29	—	(5)	47	52	—	(5)
	315	256	8	51	655	601	9	45
Non-Regulated
Energy Infrastructure (3)	3	8	—	(5)	12	16	—	(4)
Corporate and Other (4)	(44)	456	(2)	(498)	(81)	414	(4)	(491)
Common Equity Earnings	274	720	6	(452)	586	1,031	5	(450)

⁽¹⁾ The reporting currency of ITC, UNS Energy, Central Hudson, Caribbean Utilities, FortisTCI and BECOL is the US dollar. The reporting currency of Belize Electricity is the Belizean dollar, which is pegged to the US dollar at BZ$2.00=US$1.00. The Corporate and Other segment includes certain transactions denominated in US dollars.

⁽²⁾ Comprised of the utility operations in eastern Canada and the Caribbean: Newfoundland Power; Maritime Electric; FortisOntario; Wataynikaneyap Partnership; Caribbean Utilities; FortisTCI; and Belize Electricity^.

⁽³⁾  Primarily comprised of long-term contracted generation assets in Belize, Aitken Creek in British Columbia and, until its April 16, 2019 disposition, the Waneta Expansion

⁽⁴⁾ Includes Fortis net corporate expenses and non-regulated holding company expenses

ITC	Quarter				Year-to-Date
Periods Ended June 30			Variance				Variance
($ millions)	2020	2019	FX	Other	2020	2019	FX	Other
Revenue (1)	477	428	17	32	910	836	22	52
Earnings (1)	138	101	5	32	239	193	6	40

⁽¹⁾Revenue represents 100% of ITC. Earnings represent the Corporation's 80.1% controlling ownership interest in ITC and reflect consolidated purchase price accounting adjustments.

Revenue

The increases in revenue for the quarter and year to date, net of foreign exchange, were due primarily to: (i) a $40 million favourable base ROE adjustment related to prior periods as a result of the May 2020 FERC Order, partially offset by a reduction in the base ROE established for 2020, in the same order, as compared to the base ROE in effect for the corresponding periods last year (see "Regulatory Highlights" on page 12); and (ii) growth in Rate Base. The increases were partially offset by lower recoverable operating expenses due to cost saving measures implemented as a result of the COVID-19 Pandemic.

Earnings

The increases in earnings for the quarter and year to date, net of foreign exchange, reflect a $27 million favourable base ROE adjustment related to prior periods as a result of the May 2020 FERC Order, partially offset by a lower base ROE as compared to last year, discussed above. Growth in Rate Base and lower business development costs also contributed to the increase in earnings.

MANAGEMENT DISCUSSION AND ANALYSIS 6 June 30, 2020

UNS ENERGY	Quarter				Year-to-Date
Periods Ended June 30			Variance				Variance
	2020	2019	FX	Other	2020	2019	FX	Other
Retail electricity sales (GWh)	2,735	2,503	—	232	4,903	4,713	—	190
Wholesale electricity sales (GWh) (1)	1,201	1,729	—	(528)	2,531	3,948	—	(1,417)
Gas volumes (PJ)	2	2	—	—	8	9	—	(1)
Revenue ($ millions)	546	500	20	26	1,019	1,043	27	(51)
Earnings ($ millions)	85	60	3	22	113	115	3	(5)

⁽¹⁾ Primarily short-term wholesale sales

Sales

The increases in retail electricity sales for the quarter and year to date were due primarily to higher air conditioning load as a result of warmer temperatures in 2020 as compared to unseasonably cool temperatures in 2019. The COVID-19 Pandemic has not had a material impact on sales as the decrease in consumption by commercial and industrial customers, due to the temporary closure of non-essential businesses, was more than offset by an increase in consumption by residential customers, due to work-from-home practices.

The decreases in wholesale electricity sales for the quarter and year to date were due primarily to the expiration of a short-term capacity sales transaction, which was established to offset costs associated with a Gila River Unit 2 tolling PPA during 2019. The capacity sales transaction ended in December 2019 with the purchase of Gila River Unit 2. Revenue from short-term wholesale sales is primarily returned to customers through regulatory deferral mechanisms and, therefore, does not materially impact earnings.

Gas volumes for the quarter and year to date were comparable to the same periods in 2019.

Revenue

The increase in revenue, net of foreign exchange, for the quarter was due primarily to higher retail sales and higher revenue related to the recovery of fuel and non-fuel costs through the normal operation of regulatory mechanisms, partially offset by lower short-term wholesale sales.

The decrease in revenue, net of foreign exchange, year to date was due primarily to lower short-term wholesale sales, partially offset by higher retail sales and higher revenue related to the recovery of fuel and non-fuel costs through the normal operation of regulatory mechanisms.

Earnings

The increase in earnings, net of foreign exchange, for the quarter was due primarily to higher retail sales, higher recovery of non-fuel costs, and a partial recovery of the market value of certain investments that support retirement benefits. The increase was partially offset by higher costs associated with Rate Base growth not yet reflected in customer rates. New customer rates at TEP were expected to be effective May 1, 2020 but were delayed due to the pandemic (see "Regulatory Highlights" on page 12).

The decrease in earnings, net of foreign exchange, year to date was due primarily to: (i) higher costs associated with Rate Base growth not yet reflected in customer rates, due in part to the delay in TEP's general rate application discussed above; and (ii) an overall reduction in the market value of certain investments that support retirement benefits. The decrease was partially offset by higher retail sales and the recovery of non-fuel costs.

Changes in the market value of investments that support retirement benefits in the quarter and year to date were driven by financial market volatility associated with the COVID-19 Pandemic.

MANAGEMENT DISCUSSION AND ANALYSIS 7 June 30, 2020

CENTRAL HUDSON	Quarter				Year-to-Date
Periods Ended June 30			Variance				Variance
	2020	2019	FX	Other	2020	2019	FX	Other
Electricity sales (GWh)	1,105	1,112	—	(7)	2,348	2,401	—	(53)
Gas volumes (PJ)	4	3	—	1	12	13	—	(1)
Revenue ($ millions)	206	199	8	(1)	486	476	11	(1)
Earnings ($ millions)	2	7	—	(5)	37	39	—	(2)

Sales

The decrease in electricity sales for the quarter was due primarily to lower average consumption by commercial customers associated with the impact of the COVID-19 Pandemic. The decrease in electricity sales year to date was due primarily to reduced heating load in the first quarter as a result of warmer temperatures compared to 2019.

Gas volumes for the quarter were comparable to the same period in 2019. The decrease in gas volumes year to date was due primarily to reduced heating load in the first quarter as a result of warmer temperatures compared to 2019.

Changes in electricity sales and gas volumes at Central Hudson are subject to regulatory revenue decoupling mechanisms and, therefore, do not materially impact earnings.

Revenue

Revenue, net of foreign exchange, was comparable to the same periods in 2019. An increase due to Rate Base growth, as reflected in the increase in gas and electric delivery rates effective July 1, 2019, was offset by the flow through of lower energy supply costs.

Earnings

The decreases in earnings for the quarter and year to date were due primarily to higher operating expenses associated with the COVID-19 Pandemic, including a year-to-date increase in the allowance for credit losses, partially offset by Rate Base growth, discussed above. Timing of operating expenses related to vegetation management and storm restoration costs in the second quarter of 2020 also contributed to the decrease in earnings.

FORTISBC ENERGY	Quarter			Year-to-Date
Periods Ended June 30	2020	2019	Variance	2020	2019	Variance
Gas volumes (PJ)	41	40	1	123	123	—
Revenue ($ millions)	249	235	14	715	720	(5)
Earnings ($ millions)	16	10	6	122	110	12

Sales

Gas sales for the quarter and year to date were comparable to the same periods in 2019. Higher heating load in the second quarter of 2020, due to cooler temperatures compared to the same period in 2019, was offset by lower average consumption by industrial customers, due partly to the impact of the COVID-19 Pandemic.

Revenue

The increase in revenue for the quarter was due primarily to the normal operation of regulatory deferrals, a higher cost of natural gas recovered from customers, and Rate Base growth.

The decrease in revenue year to date was due primarily to a lower cost of natural gas recovered from customers, partially offset by Rate Base growth and the normal operation of regulatory deferrals.

Earnings

The increases in earnings for the quarter and year to date were due primarily to Rate Base growth and the timing of operating expenses, mainly associated with the MRP decision (see "Regulatory Highlights" on page 12).

MANAGEMENT DISCUSSION AND ANALYSIS 8 June 30, 2020

FortisBC Energy earns approximately the same margin regardless of whether a customer contracts for the purchase and delivery of natural gas or only for the delivery. Due to regulatory deferral mechanisms, changes in consumption levels and commodity costs do not materially impact earnings.

FORTISALBERTA	Quarter			Year-to-Date
Periods Ended June 30	2020	2019	Variance	2020	2019	Variance
Energy deliveries(GWh)	3,628	3,969	(341)	8,181	8,611	(430)
Revenue ($ millions)	150	150	—	302	295	7
Earnings ($ millions)	33	34	(1)	65	61	4

Deliveries

The decreases in energy deliveries for the quarter and year to date were due to lower average consumption by oil and gas and commercial customers, largely associated with the impact of the COVID-19 Pandemic but also due to the downturn in the oil and gas sector.

As more than 85% of FortisAlberta's revenue is derived from fixed or largely fixed billing determinants, changes in quantities of energy delivered are not entirely correlated with changes in revenue. Revenue is a function of numerous variables, many of which are independent of actual energy deliveries.

Revenue

Revenue for the quarter was comparable to the same period in 2019. The increase due to Rate Base growth and customer additions was offset by lower energy deliveries, discussed above, and the recognition of revenue in 2019 associated with the PBR efficiency carry-over mechanism.

The increase in revenue year to date was due primarily to Rate Base growth and customer additions, partially offset by lower energy deliveries and the impact of the PBR efficiency carry-over mechanism.

Earnings

The decrease in earnings for the quarter was due primarily to a higher effective tax rate associated with lower current period deductions related to AESO contributions and the impact of the PBR efficiency carry-over mechanism, discussed above. The decrease was partially offset by Rate Base growth.

The increase in earnings year to date was due primarily to Rate Base growth and the timing of operating expenses, partially offset by a higher effective tax rate and the impact of the PBR efficiency carry-over mechanism.

FORTISBC ELECTRIC	Quarter			Year-to-Date
Periods Ended June 30	2020	2019	Variance	2020	2019	Variance
Electricity sales (GWh)	691	725	(34)	1,606	1,674	(68)
Revenue ($ millions)	91	90	1	205	209	(4)
Earnings ($ millions)	17	15	2	32	31	1

Sales

The decreases in electricity sales for the quarter and year to date were due primarily to lower average consumption by commercial and industrial customers due, in part, to the impact of the COVID-19 Pandemic and higher heating load in the first quarter of 2019 as a result of colder temperatures compared to 2020.

Revenue

The increase in revenue for the quarter was due primarily to Rate Base growth. The decrease due to lower electricity sales was tempered by the normal operation of regulatory deferrals.

The decrease in revenue year to date was due primarily to: (i) lower electricity sales, tempered by the normal operation of regulatory deferrals; (ii) the absence of revenue associated with the provision of operating, maintenance and management services to the Waneta Expansion, which was sold in April 2019; and (iii) lower surplus power sales. The decrease was partially offset by Rate Base growth.

MANAGEMENT DISCUSSION AND ANALYSIS 9 June 30, 2020

Earnings

The increases in earnings for the quarter and year to date were due primarily to Rate Base growth. The year-to-date increase was partially offset by the sale of the Waneta Expansion.

Due to regulatory deferral mechanisms, changes in consumption levels do not materially impact earnings.

OTHER ELECTRIC	Quarter				Year-to-Date
Periods Ended June 30			Variance				Variance
	2020	2019	FX	Other	2020	2019	FX	Other
Electricity sales (GWh)	2,109	2,174	—	(65)	5,047	5,157	—	(110)
Revenue($ millions)	345	343	3	(1)	793	769	4	20
Earnings ($ millions)	24	29	—	(5)	47	52	—	(5)

Sales

The decreases in electricity sales for the quarter and year to date were due primarily to overall lower average consumption, partially offset by customer additions. Electricity sales for the second quarter were negatively impacted by the COVID-19 Pandemic, reflecting the temporary closure of non-essential businesses and border closures affecting tourism-related sales in the Caribbean.

Revenue

The decrease in revenue, net of foreign exchange, for the quarter was primarily due to lower sales, partially offset by the flow through of overall higher energy supply costs.

The increase in revenue, net of foreign exchange, year to date was due primarily to the flow through of overall higher energy supply costs, partially offset by lower sales.

Earnings

The decreases in earnings for the quarter and year to date were due primarily to: (i) the impact of the COVID-19 Pandemic, particularly lower sales and higher operating expenses in the Caribbean; and (ii) the timing of purchased power costs at Newfoundland Power. The decreases were partially offset by higher equity income from Belize Electricity.

ENERGY INFRASTRUCTURE	Quarter			Year-to-Date
Periods Ended June 30	2020	2019	Variance	2020	2019	Variance
Energy sales (GWh)	34	69	(35)	50	119	(69)
Revenue ($ millions)	13	25	(12)	38	61	(23)
Earnings ($ millions)	3	8	(5)	12	16	(4)

Sales

The Waneta Expansion disposition decreased sales by 54 GWh and 80 GWh for the quarter and year to date, respectively. The remaining increase reflects increased hydroelectric production in Belize due to higher rainfall levels.

Revenue and Earnings

The decreases in revenue and earnings for the quarter and year to date reflect: (i) the noted sales reduction; and (ii) lower realized margins at Aitken Creek, tempered by higher volumes of natural gas sold. The decreases were partially offset by: (i) the favourable changes in the mark-to-market accounting of natural gas derivatives at Aitken Creek, with unrealized gains of $2 million during the second quarter of 2020 compared to $1 million during the second quarter of 2019 and unrealized losses of $1 million year to date compared to $4 million in 2019; and (ii) increased hydroelectric production in Belize.

Aitken Creek is subject to commodity price risk, as it purchases and holds natural gas in storage to earn a profit margin from its ultimate sale. Aitken Creek mitigates this risk by using derivatives to materially lock in the profit margin that will be realized upon the sale of natural gas. The fair value accounting of these derivatives creates timing differences and the resultant earnings volatility can be significant.

MANAGEMENT DISCUSSION AND ANALYSIS 10 June 30, 2020

CORPORATE AND OTHER	Quarter				Year-to-Date
Periods Ended June 30			Variance				Variance
($ millions)	2020	2019	FX	Other	2020	2019	FX	Other
Net (expenses) income	(44)	456	(2)	(498)	(81)	414	(4)	(491)

The increases in net expenses, net of foreign exchange, for the quarter and year to date were driven primarily by: (i) the net after-tax gain of $484 million on the April 2019 disposition of the Waneta Expansion; (ii) a gain on the repayment of debt recognized in 2019; and (iii) the 2020 reversal of a $13 million tax recovery, originally recognized in 2019, due to the finalization of anti-hybrid tax regulations associated with US tax reform. The increases were partially offset by lower finance charges.

NON-US GAAP FINANCIAL MEASURES

Adjusted Common Equity Earnings and Adjusted Basic EPS are Non-US GAAP Financial Measures and may not be comparable with similar measures used by other entities. They are presented because management and external stakeholders use them in evaluating the Corporation's financial performance and prospects.

Net earnings attributable to common equity shareholders (i.e., Common Equity Earnings) and basic EPS are the most directly comparable US GAAP measures to Adjusted Common Equity Earnings and Adjusted Basic EPS, respectively.

Adjusted Common Equity Earnings and Adjusted Basic EPS reflect items that management excludes in its key decision-making processes and evaluation of operating results, and are reconciled as follows.

Non-US GAAP Reconciliation
Periods Ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2020	2019	Variance	2020	2019	Variance
Common Equity Earnings	274	720	(446)	586	1,031	(445)
Adjusting items:
May 2020 FERC Order (1)	(27)	—	(27)	(27)	—	(27)
Anti-hybrid tax regulations (2)	13	—	13	13	—	13
Unrealized (gain) loss on mark-to
market of derivatives (3)	(2)	(1)	(1)	1	4	(3)
Gain on disposition (4)	—	(484)	484	—	(484)	484
Adjusted Common Equity Earnings	258	235	23	573	551	22
Adjusted Basic EPS ($)	0.56	0.54	0.02	1.23	1.28	(0.05)

⁽¹⁾ See "Regulatory Highlights" on page 12, included in the ITC segment

⁽²⁾ Reversal of a tax recovery, originally recognized in 2019, due to the finalization of anti-hybrid tax regulations in April 2020 associated with US Tax Reform, included in the Corporate and Other segment

⁽³⁾ Represents timing differences related to the accounting of natural gas derivatives at Aitken Creek, included in the Energy Infrastructure segment

⁽⁴⁾ Gain on sale of the Waneta Expansion, net of expenses, in April 2019, included in the Corporate and Other segment

MANAGEMENT DISCUSSION AND ANALYSIS 11 June 30, 2020

REGULATORY HIGHLIGHTS

COVID-19 Pandemic Impacts

The COVID-19 Pandemic has resulted in several customer relief initiatives as well as the delay of several regulatory proceedings, as discussed below.

Customer Relief Initiatives

UNS Energy

Pursuant to the ACC's approval of the utility's customer relief initiatives, TEP refunded to customers approximately US$8 million of collected demand side management funds in excess of program costs.

Central Hudson

In March 2020, as agreed to with the PSC, Central Hudson postponed until July 1, 2021 the collection in customer rates of approximately US$3 million of deferred costs related mainly to environmental remediation.

FortisBC Energy and FortisBC Electric

In April 2020, pursuant to the BCUC's approval of the utilities' customer relief initiatives, FortisBC Energy and FortisBC Electric implemented three-month bill deferrals for certain customer classes, the repayment of which is expected to commence in the third quarter of 2020. The BCUC also authorized the deferral of otherwise uncollectible revenue associated with providing the customer relief initiatives, the recovery of which will be determined through a future rate filing once the financial impact of the pandemic is known.

Delayed Regulatory Proceedings

UNS Energy

General Rate Application: In the first half of 2020, as part of TEP's general rate application, hearings were held to address the inclusion in customer rates of Gila River Unit 2 and ten RICE Units. Prior to the COVID-19 Pandemic, a decision had been expected earlier in 2020 with new rates effective May 1, 2020. TEP currently expects a decision approving new rates prior to the end of 2020.

Central Hudson

2020 Rates: In May 2020 the PSC approved Central Hudson's request to postpone scheduled electric and gas delivery rate increases, reflecting an increase in the equity component of its capital structure from 49% to 50%, from July 1, 2020 to October 1, 2020. The deferred revenue will be collected over the nine-month period from October 1, 2020 to June 30, 2021.

COVID-19 Proceeding: In June 2020 the PSC initiated a generic proceeding to identify and address the effects of the COVID-19 Pandemic. The outcome of this proceeding and potential impacts, if any, are unknown at this time.

FortisAlberta

Generic Cost of Capital Proceeding: In December 2018 the AUC initiated a generic cost of capital proceeding and expert evidence was filed in January 2020. In March 2020, due to the COVID-19 Pandemic, this proceeding was suspended indefinitely. In June 2020 the AUC provided five options to Alberta utilities to set the approved ROE and capital structure for 2021 in lieu of resuming the proceeding. In July 2020 FortisAlberta elected an option that provides for the extension of the currently approved ROE and capital structure quarterly. This method will remain in effect until the AUC issues a decision on this proceeding and any resulting changes to ROE and/or capital structure will be implemented prospectively at the start of the following quarter.

Other Electric

Caribbean Utilities: In June 2020 Caribbean Utilities requested the postponement of its scheduled annual rate adjustment effective June 1, 2020 to January 1, 2021, to provide customer relief from the effects of the COVID-19 Pandemic.

FortisTCI: In February 2020 the Government of the Turks and Caicos Islands approved a 6.8% average increase in FortisTCI's electricity rates, effective April 1, 2020, including the recovery of hurricane-related costs incurred in 2017. In March 2020, to provide customer relief from the effects of the COVID-19 Pandemic, the effective date was postponed to July 2020 and new rates became effective July 22, 2020.

MANAGEMENT DISCUSSION AND ANALYSIS 12 June 30, 2020

Other Regulatory Matters

ITC

ROE Complaints: In May 2020 FERC issued an order on rehearing of its November 2019 decision on the MISO transmission owner ROE complaints and set the base ROE for the periods of November 2013 through February 2015 and from September 2016 onward at 10.02%, up to a maximum of 12.62% with incentive adders. Including incentive adders, the May 2020 FERC Order implies an all-in ROE for ITC's MISO Subsidiaries of 10.77%, up from 10.63% based on a November 2019 decision but down from 11.07% based on a September 2016 decision which was recognized during the first nine months of 2019.

A regulatory liability of $91 million (US$70 million) was recorded at December 31, 2019 to reflect the amounts due to customers under the terms of the November 2019 decision. The May 2020 FERC Order, in addition to the refund of $27 million (US$20 million) to customers in the first half of 2020, resulted in: (i) the reduction of the regulatory liability to $22 million (US$16 million) as at June 30, 2020; and (ii) an increase in revenue and a decrease in interest expense resulting in an increase in net earnings of $37 million of which Fortis' share was $29 million. The earnings increase was comprised of: (i) $27 million related to the reversal of liabilities established in prior periods; and (ii) $2 million related to the year-to-date impact of a higher ROE as compared to the ROE approved in November 2019.

Review of Transmission Incentives Policy: In March 2020 FERC issued a NOPR proposing to update its transmission incentives policy for transmission owners, including ITC, to grant incentives to projects based upon benefits to customers regarding reliability and cost savings through the reduction of transmission congestion. The NOPR follows a Notice of Inquiry, issued in March 2019, on FERC's transmission incentives policies. FERC proposed total ROE incentives of up to 250 basis points that would not be limited by the upper end of the base ROE zone of reasonableness. Comments from stakeholders, including ITC, were provided to FERC through July 1, 2020. The outcome may impact future incentive adders that are included in transmission rates charged by transmission owners, including ITC.

FortisBC Energy and FortisBC Electric

MRP Applications: In June 2020 the BCUC issued a decision on FortisBC Energy's and FortisBC Electric's MRP applications for 2020 to 2024. The decision sets the rate-setting framework for the next five years, including: (i) the level of operation and maintenance expense and capital to be included in customer rates, subject to an incentive formula; (ii) the level of investment in gas innovation initiatives to be included in customer rates; and (iii) a 50/50 sharing between customers and the utilities of variances from the allowed ROE. During the third quarter of 2020, FortisBC Energy and FortisBC Electric will provide the BCUC with updated 2020 rate filings reflecting the terms of this decision. Current interim rates will remain in effect pending a final determination of 2020 rates by the BCUC.

FortisAlberta

2018 Alberta Independent System Operator Tariff Application: In September 2019 the AUC issued a decision that addressed a proposal to change how the AESO's customer contribution policy functions between distribution facility owners, such as FortisAlberta, and transmission facility owners. Implementation of the order was suspended in October 2019 and in May 2020 the AUC confirmed that outstanding matters on the order will be determined through a written hearing. In July 2020 FortisAlberta filed expert evidence requested by the AUC and a decision is expected in the fourth quarter of 2020. The likely outcome of this process and potential impacts, if any, cannot be determined at this time.

Performance-Based Regulation: In May 2020 FortisAlberta filed an application for anomaly adjustments to rates based on new criteria established by the AUC in January 2020. A decision is expected in the fourth quarter of 2020.

MANAGEMENT DISCUSSION AND ANALYSIS 13 June 30, 2020

FINANCIAL POSITION

Significant Changes between June 30, 2020 and December 31, 2019
	Increase/(Decrease)
	FX	Other
Balance Sheet Account	($ millions)	($ millions)	Explanation
Regulatory assets (including current and long-term)	57	65	Due to deferred income taxes, the operation of rate stabilization accounts at ITC, and higher manufactured gas plant site remediation deferrals at Central Hudson, partially offset by lower derivative loss deferrals at UNS Energy.
Property, plant and equipment, net	955	1,162	Due primarily to capital expenditures, partially offset by depreciation.
Goodwill	478	—
Short-term borrowings	23	(510)	Due primarily to the repayment of commercial paper at ITC and short-term borrowings at UNS Energy.
Accounts payable and other current liabilities	51	(473)	Due to the timing of the declaration of common share dividends, seasonal fluctuations in the amounts owing for energy supply costs and timing of transmission cost payments at FortisAlberta.
Deferred income tax liabilities	76	176	Due primarily to timing differences related to capital expenditures.
Long-term debt (including current portion)	667	1,693	Due to debt issuances at the regulated utilities, primarily ITC and UNS Energy, and higher net borrowings under committed credit facilities, partially offset by debt repayments at ITC.
Shareholders' equity	586	408	Due primarily to: (i) Common Equity Earnings for the six months ended June 30, 2020, less dividends declared on common shares; and (ii) the issuance of common shares.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW REQUIREMENTS

At the subsidiary level, it is expected that operating expenses and interest costs will be paid from Operating Cash Flows, with varying levels of residual cash flows available for capital expenditures and/or dividend payments to Fortis. Capital expenditures are expected to be financed primarily from borrowings under credit facilities, long-term debt offerings and equity injections from Fortis. Borrowings under credit facilities may be required periodically to support seasonal working capital requirements and there could be higher-than-normal working capital deficiencies in the short-term, as the ongoing impacts of the COVID-19 Pandemic affects customers' ability to pay their energy bills. See "Business Risks" on page 20.

Cash required of Fortis to support subsidiary capital expenditures is generally derived from borrowings under the Corporation's committed credit facility, proceeds from the DRIP and issuances of common shares, preference shares and long-term debt. The ability to access cash through capital markets may be impacted by the COVID-19 Pandemic. Depending on the timing of subsidiary dividend receipts, borrowings under the Corporation's committed credit facility may be required periodically to support debt servicing and payment of dividends.

Within this dynamic, the subsidiaries pay dividends to Fortis and receive equity injections from Fortis when required, and both Fortis and its subsidiaries initially borrow through their committed credit facilities and periodically replace these borrowings with long-term debt. Financing needs also arise periodically for acquisitions.

MANAGEMENT DISCUSSION AND ANALYSIS 14 June 30, 2020

The Corporation's ability to service debt and pay dividends is dependent on the financial results of, and the related cash payments from, its subsidiaries. Certain regulated subsidiaries are subject to restrictions that limit their ability to distribute cash to Fortis, including restrictions by certain regulators limiting annual dividends and restrictions by certain lenders limiting debt to total capitalization. There are also practical limitations on using the net assets of the regulated subsidiaries to pay dividends, based on management's intent to maintain the subsidiaries' regulator-approved capital structures. Fortis does not expect that maintaining such capital structures will impact its ability to pay dividends in the foreseeable future.

As at June 30, 2020: (i) consolidated fixed-term debt maturities/repayments are expected to average $943 million annually over the next five years; (ii) approximately 80% of the Corporation's consolidated long-term debt, excluding credit facility borrowings, had maturities beyond five years; and (iii) available credit facilities were $5.9 billion with $4.8 billion unutilized.

Credit facilities are syndicated primarily with large banks in Canada and the US, with no one bank holding more than 25% of the total facilities. Approximately $5.6 billion of the total credit facilities are committed with maturities ranging from 2021 through 2025. Available credit facilities are summarized in the following table.

Credit Facilities			As at
	Regulated Utilities	Corporate and Other	June 30, 2020	December 31, 2019
($ millions)
Total credit facilities (1)	3,982	1,881	5,863	5,590
Credit facilities utilized:
Short-term borrowings	(25)	—	(25)	(512)
Long-term debt (including current portion)	(909)	—	(909)	(640)
Letters of credit outstanding	(83)	(53)	(136)	(114)
Credit facilities unutilized	2,965	1,828	4,793	4,324

⁽¹⁾ See Note 15 in the 2019 Annual Financial Statements for a description of the credit facilities as at December 31, 2019.

In January 2020 Caribbean Utilities amended its unsecured revolving committed credit facility resulting in an increase of US$20 million and an extension of the maturity date to January 2025.

In March 2020 FortisBC Energy entered into a $55 million two-year uncommitted letter of credit facility and FortisAlberta entered into a $150 million one-year non-revolving committed credit facility.

In April 2020 the Corporation entered into an unsecured $500 million one-year revolving term committed credit facility and UNS Energy terminated its US$225 million unsecured non-revolving uncommitted credit facility due to mature in December 2020.

In May 2020 and July 2020 Central Hudson's US$10 million uncommitted credit facility and its US$50 million unsecured revolving committed credit facility, respectively, expired and were not renewed.

While the ultimate impact of the COVID-19 Pandemic on the Corporation's cash flows remains uncertain, Fortis is well positioned with strong liquidity due, in part, to its $1.2 billion common equity offering and sale of the Waneta Expansion in 2019.

In December 2018 Fortis filed a short-form base shelf prospectus with a 25-month life under which it may issue common or preference shares, subscription receipts or debt securities in an aggregate principal amount of up to $2.5 billion. As at June 30, 2020, $1.1 billion remained available under the short-form base shelf prospectus.

Fortis and its subsidiaries were in compliance with debt covenants as at June 30, 2020 and are expected to remain compliant throughout 2020.

MANAGEMENT DISCUSSION AND ANALYSIS 15 June 30, 2020

CASH FLOW SUMMARY

Summary of Cash Flows
Periods Ended June 30	Quarter			Year-to-Date
($ millions)	2020	2019	Variance	2020	2019	Variance
Cash, beginning of period	272	233	39	370	332	38
Cash provided by (used in):
Operating activities	725	631	94	1,315	1,172	143
Investing activities	(808)	99	(907)	(1,997)	(633)	(1,364)
Financing activities	201	(776)	977	687	(682)	1,369
Foreign exchange	(10)	(5)	(5)	5	(13)	18
Change in cash associated with assets held for sale	—	9	(9)	—	15	(15)
Cash, end of period	380	191	189	380	191	189

Operating Activities

See "Performance at a Glance - Operating Cash Flow" on page 5.

Investing Activities

Cash used in investing activities reflects a higher capital spending level in 2020. See "Performance at a Glance - Capital Expenditures" on page 5 and "Capital Plan" on page 19. Cash used in investing activities in 2019, for the quarter and year to date, were partially offset by proceeds from the Waneta Expansion disposition.

Financing Activities

Cash flows related to financing activities fluctuate largely as a result of changes in the subsidiaries' capital expenditures and the amount of Operating Cash Flows available to fund those capital expenditures, which together impact the amount of funding required from debt and common equity issuances. See "Cash Flow Requirements" on page 14.

In 2019 net proceeds from the Waneta Expansion disposition were used to repay credit facility borrowings and repurchase US$400 million of Corporate debt.

MANAGEMENT DISCUSSION AND ANALYSIS 16 June 30, 2020

Debt Financing

Long-Term Debt Issuances		Interest
Year-to-date June 30, 2020	Month	Rate					Use of
($ millions, except %)	Issued	(%)	Maturity	Amount			Proceeds
ITC
Unsecured term loan credit agreement	January	(1)	2021		US	75	(2)(3)
Unsecured term loan credit agreement (4)	January	(5)	2021		US	200	(4)
Unsecured senior notes	May	2.95	2030		US	700	(2)(3)(6)
UNS Energy
Unsecured senior notes	April	4.00	2050		US	350	(2)(3)
Central Hudson
Unsecured senior notes	May	3.42	2050		US	30	(3)
FortisBC Electric
Unsecured debentures	May	3.12	2050		75		(2)
Newfoundland Power
First mortgage sinking fund bonds	April	3.61	2060		100		(2)(3)
FortisTCI
Unsecured senior notes (7)	June	5.30	2035		US	15	(8)(9)

⁽¹⁾ Floating rate of a one-month LIBOR plus a spread of 0.45%

⁽²⁾ Repay credit facility borrowings

⁽³⁾ General corporate purposes

⁽⁴⁾ Maximum amount of borrowings under this agreement of US$400 million has been drawn; current period borrowings were used to repay an outstanding commercial paper balance.

⁽⁵⁾ Floating rate of a two-month LIBOR plus a spread of 0.60%

⁽⁶⁾ Early redemption of unsecured term loan credit agreement of US$400 million

⁽⁷⁾ Maximum amount of borrowings under this agreement is US$30 million.

⁽⁸⁾ Repay maturing long-term debt

⁽⁹⁾ Finance capital expenditures

In July 2020 ITC issued 31-year US$180 million first mortgage bonds at 3.13%. The net proceeds were used to repay credit facility borrowings, finance capital expenditures and for general corporate purposes.

In July 2020 Central Hudson issued 40-year US$30 million unsecured senior notes at 3.62%. The net proceeds were used to finance capital expenditures and for general corporate purposes.

In July 2020 FortisBC Energy issued 30-year $200 million unsecured debentures at 2.54%. The net proceeds were used to finance capital expenditures.

MANAGEMENT DISCUSSION AND ANALYSIS 17 June 30, 2020

Common Equity Financing

Common Equity Issuances and Dividends Paid
Periods Ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2020	2019	Variance	2020	2019	Variance
Common shares issued:
Cash (1)	10	164	(154)	44	196	(152)
Non-cash (2)	10	77	(67)	19	153	(134)
Total common shares issued	20	241	(221)	63	349	(286)
Number of common shares issued (# millions)	0.4	4.9	(4.5)	1.3	7.3	(6.0)
Common share dividends paid:
Cash	(211)	(118)	(93)	(424)	(236)	(188)
Non-cash (3)	(10)	(76)	66	(18)	(151)	133
Total common share dividends paid	(221)	(194)	(27)	(442)	(387)	(55)
Dividends paid per common share ($)	0.4775	0.4500	0.0275	0.955	0.900	0.055

⁽¹⁾ Common shares issued under stock options, employee share purchase plans and in 2019 the ATM program.

⁽²⁾ Common shares issued under the DRIP. Effective March 1, 2020, the 2% discount offered on common share issuances under the DRIP was terminated. See "Cash Flow Requirements" on page 14 for further information.

⁽³⁾ Common share dividends reinvested under the DRIP.

On February 12, 2020 and July 29, 2020, Fortis declared a dividend of $0.4775 per common share payable on June 1, 2020 and September 1, 2020, respectively. The payment of dividends is at the discretion of the Board of Directors and depends on the Corporation's financial condition and other factors.

CONTRACTUAL OBLIGATIONS

There were no material changes to the contractual obligations disclosed in the 2019 Annual MD&A, except issuances of long-term debt and credit facility utilization. See "Cash Flow Summary" on page 16.

Off-Balance Sheet Arrangements

There were no significant changes to off-balance sheet arrangements from those disclosed in the 2019 Annual MD&A.

CAPITAL STRUCTURE AND CREDIT RATINGS

Fortis requires ongoing access to capital and, therefore, targets a consolidated long-term capital structure that will enable it to maintain investment-grade credit ratings. The regulated utilities maintain their own capital structures in line with those reflected in customer rates.

Consolidated Capital Structure	As at
	June 30,	December 31,
(%)	2020	2019
Debt (1)	53.8	53.1
Preference shares	3.5	3.8
Common shareholders' equity and minority interest (2)	42.7	43.1
	100.0	100.0

⁽¹⁾ Includes long-term debt and finance leases, including current portion, and short-term borrowings, net of cash

⁽²⁾ Includes minority interest of 3.6% as at June 30, 2020 (December 31, 2019 - 3.7%)

MANAGEMENT DISCUSSION AND ANALYSIS 18 June 30, 2020

Outstanding Share Data

As at July 29, 2020, the Corporation had issued and outstanding 464.6 million common shares; and the following First Preference Shares: 5.0 million Series F; 9.2 million Series G; 7.7 million Series H; 2.3 million Series I; 8.0 million Series J; 10.0 million Series K; and 24.0 million Series M.

Only the common shares of the Corporation have voting rights. The Corporation's first preference shares do not have voting rights unless and until Fortis fails to pay eight quarterly dividends, whether or not consecutive or declared.

If all outstanding stock options were converted as at July 29, 2020, an additional 3.4 million common shares would be issued and outstanding.

Credit Ratings

The Corporation's credit ratings shown below reflect its low-risk profile, diversity of operations, stand-alone nature and financial separation of each regulated subsidiary, and level of holding company debt.

Credit Ratings
As at June 30, 2020	Rating	Type	Outlook
S&P	A-	Corporate	Negative
	BBB+	Unsecured debt
DBRS Morningstar	BBB (high)	Corporate	Positive
	BBB (high)	Unsecured debt
Moody's	Baa3	Issuer	Stable
	Baa3	Unsecured debt

In March 2020 S&P affirmed the Corporation's credit ratings and outlook, recognizing the steps the Corporation took in 2019 to strengthen its financial position. The continued negative outlook reflects uncertainty due to the COVID-19 Pandemic. The negative outlook is consistent with S&P's outlook for the North American regulated utility industry.

In March 2020 S&P also revised its outlook on Caribbean Utilities to negative from stable due to the severe impact that the COVID-19 Pandemic could have on tourism-related activities.

In May 2020 DBRS Morningstar affirmed the Corporation's credit ratings and revised its trend to positive from stable, also recognizing the Corporation's steps to strengthen its financial position in 2019 and its continued strong business risk profile.

CAPITAL PLAN

Currently, the Corporation does not expect any material change in the 2020 annual capital plan. While certain of the Corporation's utilities are experiencing some slight delays in construction related to the impact of the COVID-19 Pandemic, the amount is not expected to be material on a consolidated basis and it is largely offset by favourable foreign exchange. The composition of the 2020 annual capital plan remains unchanged with 25% related to growth, 62% sustaining and 13% for other areas.

The impact of the COVID-19 Pandemic on forecast capital expenditures will continue to be evaluated and, depending on the length and severity of the pandemic, any change in 2020 capital expenditures is expected to be shifted to subsequent years. The Corporation expects no material changes to the overall expected level, nature and timing of the Corporation’s five-year capital plan from that disclosed in the 2019 Annual MD&A. See "Performance at a Glance - Capital Expenditures" on page 5, "Business Risks" on page 20 and "Outlook" on page 23.

2020 Capital Plan

Of the $4.3 billion annual capital plan, $2.0 billion has been spent year to date.

MANAGEMENT DISCUSSION AND ANALYSIS 19 June 30, 2020

Consolidated Capital Expenditures (1)
Year-to-date June 30, 2020
($ millions)
	Regulated							Total
		UNS	Central	FortisBC	Fortis	FortisBC	Other	Regulated	Non-
	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Utilities	Regulated (2)	Total
Total	481	685	164	216	204	58	186	1,994	7	2,001

⁽¹⁾ Reflects cash outlay for property, plant and equipment and intangible assets as shown on the consolidated statements of cash flows in the Interim Financial Statements, as well as Fortis' share of development costs and capital spending for the Wataynikaneyap Transmission Power Project of $64 million included in the Other Electric segment.

⁽²⁾ Includes Energy Infrastructure and Corporate and Other segments

Five-Year Capital Plan

The Corporation's five-year 2020-2024 capital plan is targeted at $18.8 billion, which includes $4.3 billion in 2020 and an average of $3.6 billion in each of the remaining four years of the plan. The capital plan is low risk and highly executable, with 99% of planned expenditures to occur at the regulated utilities and only 20% relating to Major Capital Projects.

Planned capital expenditures are based on detailed forecasts of energy sales, labour and material costs, general economic conditions, foreign exchange rates and other factors. These could change for many reasons, including the COVID-19 Pandemic, and cause actual expenditures to differ from forecast.

Major Capital Projects Updates

Eagle Mountain Woodfibre Gas Line Project

This project consists of a pipeline expansion to a proposed LNG site in Squamish, British Columbia. In March 2020 Woodfibre LNG Limited, the owner of the proposed LNG facility, requested an extension to its British Columbia Environmental Assessment Certificate due to production and supply chain disruptions resulting, in part, from the COVID-19 Pandemic.

FortisBC Energy's proposed pipeline expansion remains contingent on Woodfibre LNG Limited making a final decision to proceed with construction of the LNG facility. At this time, should the project proceed, the earliest construction start date expected is mid-2021.

Tilbury 1B Project

This project consists of construction of additional liquefaction and dispensing in support of optimizing the existing investment in Tilbury Phase 1A Expansion Project at FortisBC Energy. In February 2020 an initial project scope was filed with regulators to begin the federal impact assessment and provincial environmental assessment required to further expand the Tilbury site.

BUSINESS RISKS

The Corporation's business risks remain substantially unchanged from those disclosed in its 2019 Annual MD&A, except as described below. Also see "Regulatory Highlights" on page 12 and "Capital Structure and Credit Ratings" on page 18 for applicable updates.

Pandemics and Public Health Crises, including the COVID-19 Pandemic

The Corporation could be negatively impacted by the widespread outbreak of communicable diseases or other public health crises that cause economic and/or other disruptions. The COVID-19 Pandemic is an evolving situation that has caused volatility in capital markets and adversely impacted economic activity and conditions around the world, including the Corporation's service territories. Efforts to reduce the health impacts and control the spread of the virus have led many jurisdictions around the world, including Canada, the US and Caribbean, to institute restrictions on travel, public gatherings and business operations. Certain risks and uncertainties that could be expected as a result of the COVID-19 Pandemic are outlined in the "Business Risks" section of the 2019 Annual MD&A. The Corporation is monitoring the "General Economic Conditions" business risk, which states that a "severe and prolonged economic downturn could have a Material Adverse Effect despite compensatory regulatory measures, including making it more difficult for customers to pay their bills". While the Corporation and its utilities have been subjected to government and regulatory action in response to the COVID-19 Pandemic, including restrictions on business operations, customer deferrals and suspension of disconnections, other potential impacts on the Corporation's operations are currently

MANAGEMENT DISCUSSION AND ANALYSIS 20 June 30, 2020

unknown but may include reduced labour availability and productivity, disruptions to capital markets leading to share price volatility and liquidity issues, supply chain disruptions, and a prolonged reduction in economic activity. An extended slowdown of economic activity and growth will likely reduce electricity sales and adversely impact the ability of customers, contractors and suppliers to fulfill their obligations and could disrupt operations and capital expenditure programs or cause impairment of goodwill.

The ultimate impact of the COVID-19 Pandemic on the Corporation's operational and financial performance, including the ability to execute business strategies and initiatives in the expected time frames, remains uncertain. Despite the Corporation's efforts to manage these impacts, including the activation of business continuity plans by it and each of its subsidiaries, the overall impact will depend on the duration and severity of the pandemic, potential government actions to mitigate public health effects or aid economic recovery, and other factors beyond the Corporation's control. An extended period of economic disruption could have a Material Adverse Effect.

ACCOUNTING MATTERS

New Accounting Policies

The Interim Financial Statements have been prepared following the same accounting policies and methods as those used to prepare the 2019 Annual Financial Statements, except as described below.

Financial Instruments

Effective January 1, 2020, the Corporation adopted ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires the use of reasonable and supportable forecasts in the estimate of credit losses and the recognition of expectedlosses upon initial recognition of a financial instrument, in addition to using past events and current conditions. The new guidance also requires quantitative and qualitative disclosures regarding the activity in the allowance for credit losses for financial assets within the scope of the guidance. Adoption did not have a material impact on the Interim Financial Statements.

Fortis and each subsidiary recognize an allowance for credit losses to reduce accounts receivable for amounts estimated to be uncollectible. The allowance is estimated based on historical collection patterns, sales, and current and forecast economic and other conditions. Accounts receivable are written off in the period in which they are deemed uncollectible.

Future Accounting Pronouncements

Income Taxes

ASU No. 2019-12, Simplifying the Accounting for Income Taxes, issued in December 2019, is effective for Fortis January 1, 2021, with early adoption permitted. Principally, it improves consistent application of, and clarifies, existing income tax guidance. Adoption will not have a material impact on the consolidated financial statements and related disclosures.

Critical Accounting Estimates

The preparation of the Interim Financial Statements requires management to make estimates and judgments that affect the reported amounts of, and disclosures related to, assets, liabilities, revenues, expenses and contingencies. Actual results could differ materially from estimates.

There were no material changes to the nature of the Corporation's critical accounting estimates or contingencies, notwithstanding the impact of the COVID-19 Pandemic, from that disclosed in the 2019 Annual MD&A. See "Business Risks" on page 20.

Allowance for Credit Losses

The amount of estimation and judgment involved in the Corporation's allowance for expected credit losses has increased as the impact that the COVID-19 Pandemic has on forecast economic and other conditions continues to evolve. However, the overall impact to date has not been material.

Goodwill Impairment

As at June 30, 2020, the Corporation performed a qualitative assessment of its reporting units due to the COVID-19 Pandemic, and determined it is not more-likely-than-not that goodwill is impaired. Therefore, a quantitative assessment was not required.

MANAGEMENT DISCUSSION AND ANALYSIS 21 June 30, 2020

FINANCIAL INSTRUMENTS

Long-Term Debt and Other

As at June 30, 2020, the carrying value of long-term debt, including current portion, was $24.7 billion (December 31, 2019 - $22.3 billion) compared to an estimated fair value of $28.9 billion (December 31, 2019 - $25.3 billion). Since Fortis does not intend to settle long-term debt prior to maturity, the excess of fair value over carrying value does not represent an actual liability.

The consolidated carrying value of the remaining financial instruments, other than derivatives, approximates fair value, reflecting their short-term maturity, normal trade credit terms and/or nature.

Derivatives

Derivatives are recorded at fair value, with certain exceptions including those derivatives that qualify for the normal purchase and normal sale exception.

There were no material changes with respect to the nature and purpose, methodologies for fair value determination, and carrying values of the Corporation's derivatives from that disclosed in the 2019 Annual MD&A. Additional details are provided in Note 15 to the Interim Financial Statements.

SUMMARY OF QUARTERLY RESULTS

		Common Equity
	Revenue	Earnings	Basic EPS	Diluted EPS
Quarter Ended	($ millions)	($ millions)	($)	($)
June 30, 2020	2,077	274	0.59	0.59
March 31, 2020	2,391	312	0.67	0.67
December 31, 2019	2,326	346	0.77	0.77
September 30, 2019	2,051	278	0.64	0.63
June 30, 2019	1,970	720	1.66	1.66
March 31, 2019	2,436	311	0.72	0.72
December 31, 2018	2,206	261	0.61	0.61
September 30, 2018	2,040	276	0.65	0.65

Generally, within each calendar year, quarterly results fluctuate primarily in accordance with seasonality. Given the diversified nature of the Corporation's subsidiaries, seasonality varies. Most of the annual earnings of the gas utilities are realized in the first and fourth quarters due to space-heating requirements. Earnings of the electric distribution utilities in the US are generally highest in the second and third quarters due to the use of air conditioning and other cooling equipment.

Generally, from one calendar year to the next, quarterly results reflect: (i) continued organic growth driven by the Corporation's capital plan; (ii) acquisitions and dispositions; (iii) any significant temperature fluctuations from seasonal norms; (iv) the timing and significance of any regulatory decisions; (v) for revenue, the flow through in customer rates of commodity costs; and (vi) for EPS, increases in the weighted average number of common shares outstanding.

June 2020/June 2019:

See "Performance at a Glance" on page 3.

March 2020/March 2019:

Common Equity Earnings were comparable with 2019. Rate Base growth at the regulated utilities, lower non-recoverable operating expenses at ITC, and lower expenses in the Corporate and Other segment were tempered by: (i) higher costs associated with Rate Base growth at UNS Energy not yet reflected in rates; (ii) financial market volatility that caused a decline in the market value of certain investments that support retirement benefits at UNS Energy; and (iii) unrealized losses on foreign exchange contracts in the Corporate and Other segment. The decrease in EPS was due primarily to an increase in the weighted average number of common shares outstanding, mainly associated with the Corporation's $1.2 billion common equity offering in the fourth quarter of 2019.

MANAGEMENT DISCUSSION AND ANALYSIS 22 June 30, 2020

December 2019/December 2018:

Common Equity Earnings increased by $85 million and basic EPS increased by $0.16 due primarily to the November 2019 FERC Order at ITC and Rate Base growth at the regulated utilities. The increase in EPS was tempered by a 19.6 million increase in the weighted average number of common shares outstanding associated with the Corporation's $1.2 billion common equity offering in the fourth quarter of 2019, DRIP and ATM Program.

September 2019/September 2018:

Common Equity Earnings increased by $2 million and basic EPS decreased by $0.01, due mainly to Rate Base growth at the regulated utilities, led by ITC, tempered by: (i) the unfavourable impact of the mark-to-market accounting of natural gas derivatives at Aitken Creek; (ii) lower hydroelectric production in Belize; and (iii) for EPS, an 11.8 million increase in the weighted average number of common shares outstanding due to the ATM Program and DRIP.

RELATED-PARTY AND INTER-COMPANY TRANSACTIONS

Related-party transactions are in the normal course of operations and are measured at the amount of consideration agreed to by the related parties. There were no material related-party transactions for the three and six months ended June 30, 2020 and 2019.

The Corporation periodically provides short-term financing to subsidiaries to support capital expenditures, acquisitions and seasonal working capital requirements. As at June 30, 2020, there were inter-segment loans outstanding of $69 million (December 31, 2019 - $279 million), payable on demand with a weighted average interest rate of 1.1%. Total interest charged was $1 million and $2 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - less than $1 million).

Additional details are provided in Note 5 to the Interim Financial Statements.

OUTLOOK

While uncertainty exists due to the COVID-19 Pandemic, the Corporation's long-term outlook is unchanged. Fortis continues to be well positioned to enhance shareholder value through the execution of its capital plan, the balance and strength of its diversified portfolio of utility businesses, and growth opportunities within and proximate to its service territories.

The Corporation's $18.8 billion five-year capital plan is expected to increase Rate Base from $28.0 billion in 2019 to $34.5 billion by 2022 and $38.4 billion by 2024, translating into three- and five-year CAGRs of 7.2% and 6.5%, respectively. The capital plan reflects the continuation of key industry trends including grid modernization and the delivery of cleaner energy, which Fortis believes will continue to be drivers of investment over the planning period. Beyond the base capital plan, Fortis continues to pursue additional energy infrastructure opportunities. Key opportunities not yet included in the five-year capital plan include: further expansion of LNG infrastructure in British Columbia; the fully permitted, cross-border, Lake Erie Connector electric transmission project in Ontario; and the acceleration of cleaner energy goals in Arizona.

Fortis expects long-term growth in Rate Base to support continuing growth in earnings and dividends. As such, the Corporation's dividend guidance targeting average annual dividend growth of approximately 6% through 2024 remains unchanged. The continuation of dividend growth guidance is premised on the assumptions listed under "Forward-Looking Information" below, including the continued good performance of the Corporation's utilities, no material impact from the COVID-19 Pandemic, the expectation of reasonable outcomes for regulatory proceedings, and the successful execution of the five-year capital plan.

MANAGEMENT DISCUSSION AND ANALYSIS 23 June 30, 2020

FORWARD-LOOKING INFORMATION

Fortis includes forward-looking information in the MD&A within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995, (collectively referred to as "forward-looking information"). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would and the negative of these terms and other similar terminology or expressions have been used to identify the forward-looking information, which includes, without limitation: the expectation that depending on the severity and length of the pandemic, potential impacts could have Material Adverse Effects and affect the Corporation's ability to execute business strategies and initiatives in the expected time frames; the expectation that any change in 2020 capital expenditures associated with the COVID-19 Pandemic is expected to be shifted to subsequent years with no material change to the five-year capital plan; targeted average annual dividend growth through 2024; forecast capital expenditures for 2020 and the period 2020 through 2024; expected timing, outcome and impact of regulatory filings and decisions, including the expectation that new rates will be approved at TEP prior to the end of 2020; expected or potential funding sources for operating expenses, interest costs and capital plans; the expectation that there could be higher-than-normal working capital deficiencies in the short-term as the ongoing impacts of the COVID-19 Pandemic affects customers' ability to pay their energy bills; the expectation that the ability to access cash through capital markets may be impacted by the COVID-19 Pandemic; the expectation that maintaining existing capital structures will not impact the Corporation's ability to pay dividends; forecast debt maturities for the period 2020 through 2024; the expectation that the Corporation and its subsidiaries will remain compliant with debt covenants throughout 2020; the nature, timing, benefits and expected costs of certain capital projects including the Eagle Mountain Woodfibre Gas Line Project; the expectation that the adoption of future accounting pronouncements will not have a material impact on the consolidated financial statements and related disclosures; forecast Rate Base for 2022 and 2024; and the expectation that long-term growth in Rate Base will support continuing growth in earnings and dividends.

Forward-looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information, including, without limitation: no material impact from the COVID-19 Pandemic; reasonable outcomes for regulatory proceedings and the expectation of regulatory stability; the successful execution of the five-year capital plan; no material capital project or financing cost overrun; sufficient human resources to deliver service and execute the capital plan; the realization of additional opportunities; no significant variability in interest rates; the Board exercising its discretion to declare dividends, taking into account the financial performance and condition of the Corporation; no significant operational disruptions or environmental liability or upset; the continued ability to maintain the performance of the electricity and gas systems; no severe and prolonged economic downturn; sufficient liquidity and capital resources; the ability to hedge exposures to fluctuations in foreign exchange rates, natural gas prices and electricity prices; the continued availability of natural gas, fuel, coal and electricity supply; continuation of power supply and capacity purchase contracts; no significant changes in government energy plans, environmental laws and regulations that could have a material negative impact; maintenance of adequate insurance coverage; the ability to obtain and maintain licences and permits; retention of existing service areas; no significant changes in tax laws and the continued tax deferred treatment of earnings from the Corporation's foreign operations; continued maintenance of information technology infrastructure and no material breach of cybersecurity; continued favourable relations with Indigenous Peoples; and favourable labour relations.

Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from those discussed or implied in the forward-looking information. These factors should be considered carefully and undue reliance should not be placed on the forward-looking information. Risk factors which could cause results or events to differ from current expectations are detailed under the heading "Business Risks" in this Interim MD&A, in the 2019 Annual MD&A and in other continuous disclosure materials filed from time to time with Canadian securities regulatory authorities and the Securities and Exchange Commission.

All forward-looking information herein is given as of July 29, 2020. Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

MANAGEMENT DISCUSSION AND ANALYSIS 24 June 30, 2020

GLOSSARY

2019 Annual Financial Statements: the Corporation's audited consolidated financial statements and notes thereto for the year ended December 31, 2019

2019 Annual MD&A: the Corporation's management discussion and analysis for the year ended December 31, 2019

ACC: Arizona Corporation Commission

Adjusted Basic EPS: Adjusted Common Equity Earnings divided by the basic weighted average number of common shares outstanding

Adjusted Common Equity Earnings: net earnings attributable to common equity shareholders adjusted as shown under "Non-US GAAP Financial Measures" on page 11

AESO: Alberta Electric System Operator

ACGS: Aitken Creek Gas Storage ULC, and indirect wholly owned subsidiary of Fortis

Aitken Creek: Aitken Creek natural gas storage facility in which Fortis holds a 93.8% ownership interest through ACGS

ASU: Accounting Standards Update

ATM Program: at-the-market common equity program utilized in 2019

AUC: Alberta Utilities Commission

BCUC: British Columbia Utilities Commission

BECOL: Belize Electric Company Limited, an indirect wholly owned subsidiary of Fortis

Belize Electricity: Belize Electricity Limited, in which Fortis indirectly holds a 33% equity interest

CAGR(s): compound average growth rate of a particular item. CAGR = (EV/BV) ^1-N -1, where: (i) EV is the ending value of the item; (ii) BV is the beginning value of the item; and (iii) N is the number of periods

Caribbean Utilities: Caribbean Utilities Company, Ltd., an indirect approximately 60%-owned (as at March 31, 2020) subsidiary of Fortis, together with its subsidiary

Central Hudson: CH Energy Group Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries, including Central Hudson Gas & Electric Corporation

Common Equity Earnings: net earnings attributable to common equity shareholders

Corporation: Fortis Inc.

COVID-19 Pandemic: declared by the World Health Organization in March 2020 as a result of a novel coronavirus

DBRS Morningstar: DBRS Limited

DRIP: dividend reinvestment plan

EPS: earnings per common share

FERC: Federal Energy Regulatory Commission

Fortis: Fortis Inc.

FortisAlberta: FortisAlberta Inc., an indirect wholly owned subsidiary of Fortis

FortisBC Electric: FortisBC Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries

FortisBC Energy: FortisBC Energy Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries

FortisOntario: FortisOntario Inc., a direct wholly owned subsidiary of Fortis, together with its subsidiaries

FortisTCI: FortisTCI Limited, an indirect wholly owned subsidiary of Fortis, together with its subsidiary

FX: foreign exchange associated with the translation of US dollar-denominated amounts

GWh: gigawatt hour(s)

Gila River Unit 2: UNS Energy's Gila River natural gas generation station unit 2

Interim Financial Statements: the Corporation's unaudited condensed consoli-dated interim financial statements and notes thereto for the three and six months ended June 30, 2020

MANAGEMENT DISCUSSION AND ANALYSIS 25 June 30, 2020

Interim MD&A: the Corporation's manage-ment discussion and analysis for the three and six months ended June 30, 2020

ITC: ITC Investment Holdings Inc., an indirect 80.1%-owned subsidiary of Fortis, together with its subsidiaries, including International Transmission Company, Michigan Electric Transmission Company, LLC, ITC Midwest LLC, and ITC Great Plains, LLC

ITC's MISO Subsidiaries: International Transmission Company, Michigan Electric Transmission Company, LLC, and ITC Midwest LLC

LIBOR: London Interbank Offered Rate

LNG: liquefied natural gas

Major Capital Projects: projects, other than ongoing maintenance projects, individually costing $200 million or more

Maritime Electric: Maritime Electric Company, Limited, an indirect wholly owned subsidiary of Fortis

Material Adverse Effect: a material adverse effect on the Corporation's business, results of operations, financial position or liquidity, on a consolidated basis

May 2020 FERC Order: a FERC order issued in May 2020, on rehearing of the FERC's November 2019 decision, increasing the base ROE for ITC's MISO Subsidiaries from that determined in November 2019

MISO: Midcontinent Independent System Operator, Inc.

MRP: Multi-Year Rate Plan

Moody's: Moody's Investor Services, Inc.

Newfoundland Power: Newfoundland Power Inc., a direct wholly owned subsidiary of Fortis

Non-US GAAP Financial Measures: financial measures that do not have a standardized meaning prescribed by US GAAP

NOPR: notice of proposed rulemaking

NYSE: New York Stock Exchange

Operating Cash Flow(s): cash from operating activities

PBR: performance-based rate-setting

PJ: petajoule(s)

PPA: power purchase agreement

PSC: New York Public Service Commission

Rate Base: the stated value of property on which a regulated utility is permitted to earn a specified return in accordance with its regulatory construct

RICE Units: natural gas reciprocating internal combustion engine units

ROE: return on common equity

S&P: Standard & Poor's Financial Services LLC

SEDAR: Canadian System for Electronic Document Analysis and Retrieval

TEP: Tucson Electric Power Company, a direct wholly owned subsidiary of UNS Energy

TSR: total shareholder return, which is a measure of the return to common equity shareholders in the form of share price appreciation and dividends (assuming reinvestment) over a specified time period in relation to the share price at the beginning of the period

TSX: Toronto Stock Exchange

UNS Energy: UNS Energy Corporation, an indirect wholly owned subsidiary of Fortis, together with its subsidiaries, including TEP, UNS Electric, Inc. and UNS Gas, Inc.

US: United States of America

US GAAP: accounting principles generally accepted in the US

Waneta Expansion: Waneta Expansion hydroelectric generation facility, in which Fortis held a 51% controlling interest prior to April 2019

Wataynikaneyap Partnership: Watayni-kaneyap Power Limited Partnership, in which Fortis indirectly holds a 39% equity interest

MANAGEMENT DISCUSSION AND ANALYSIS 26 June 30, 2020

XML

Cover Page	6 Months Ended
	Jun. 30, 2020
Cover [Abstract]
Document Type	6-K
Entity Registrant Name	Fortis Inc.
Entity Central Index Key	0001666175
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Interim Balance Sheets (Unaudited) - CAD ($) $ in Millions		Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents		$ 380	$ 370
Accounts receivable and other current assets (Note 6)		1,229	1,297
Prepaid expenses		68	88
Inventories		409	394
Regulatory assets (Note 7)		395	425
Total current assets		2,481	2,574
Other assets		686	620
Regulatory assets (Note 7)		3,110	2,958
Property, plant and equipment, net		36,105	33,988
Intangible assets, net		1,341	1,260
Goodwill		12,482	12,004
Total assets		56,205	53,404
Current liabilities
Short-term borrowings (Note 8)		25	512
Accounts payable and other current liabilities		1,956	2,378
Regulatory liabilities (Note 7)		428	572
Current installments of long-term debt (Note 8)		990	690
Current installments of finance leases		100	24
Total current liabilities		3,499	4,176
Other liabilities		1,524	1,446
Regulatory liabilities (Note 7)		2,891	2,786
Deferred income taxes		3,221	2,969
Long-term debt (Note 8)		23,561	21,501
Finance leases		326	413
Total liabilities		35,022	33,291
Commitments and contingencies (Note 16)
Equity
Common shares	[1]	13,708	13,645
Preference shares (Note 9)		1,623	1,623
Additional paid-in capital		10	11
Accumulated other comprehensive income		905	336
Retained earnings		3,279	2,916
Shareholders' equity		19,525	18,531
Non-controlling interests		1,658	1,582
Total equity		21,183	20,113
Total liabilities and equity		$ 56,205	$ 53,404

[1] ⁽¹⁾ No par value. Unlimited authorized shares; 464.6 million and 463.3 million issued and outstanding as at June 30, 2020 and December 31, 2019, respectively

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Condensed Consolidated Interim Balance Sheets (Unaudited) (Parenthetical) - shares shares in Millions	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Issued (shares)	464.6	463.3
Outstanding (shares)	464.6	463.3

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Condensed Consolidated Interim Statements of Earnings (Unaudited) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Revenue	$ 2,077	$ 1,970	$ 4,468	$ 4,406
Expenses
Energy supply costs	514	496	1,264	1,329
Operating expenses	599	603	1,225	1,219
Depreciation and amortization	366	338	723	672
Total expenses	1,479	1,437	3,212	3,220
Gain on disposition (Note 11)	0	577	0	577
Operating income	598	1,110	1,256	1,763
Other income, net (Note 12)	47	43	56	81
Finance charges	263	263	519	532
Earnings before income tax expense	382	890	793	1,312
Income tax expense	58	125	116	191
Net earnings	324	765	677	1,121
Net earnings attributable to:
Non-controlling interests	33	28	58	56
Preference equity shareholders	17	17	33	34
Common equity shareholders	274	720	586	1,031
Net earnings	$ 324	$ 765	$ 677	$ 1,121
Earnings per common share (Note 13)
Basic (CAD per share)	$ 0.59	$ 1.66	$ 1.26	$ 2.39
Diluted (CAD per share)	$ 0.59	$ 1.66	$ 1.26	$ 2.39

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Condensed Consolidated Interim Statements of Comprehensive Income (Unaudited) - CAD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net earnings		$ 324	$ 765	$ 677	$ 1,121
Other comprehensive (loss) income
Unrealized foreign currency translation (losses) gains	[1]	(545)	(257)	657	(523)
Other	[2]	(1)	0	(22)	0
Other comprehensive (loss) income		(546)	(257)	635	(523)
Comprehensive (loss) income		(222)	508	1,312	598
Comprehensive (loss) income attributable to:
Non-controlling interests		(26)	(2)	124	(7)
Preference equity shareholders		17	17	33	34
Common equity shareholders		(213)	493	1,155	571
Comprehensive (loss) income		$ (222)	$ 508	$ 1,312	$ 598

[1] Net of hedging activities and income tax (expense) recovery of $(6) million and $6 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - $(4) million and $(9) million, respectively)

[2] Net of income tax recovery of $nil and $9 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - $nil and $nil, respectively)

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Condensed Consolidated Interim Statements of Comprehensive Income (Unaudited) (Parenthetical) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Unrealized foreign currency translation, tax (expense) recovery	$ (6)	$ (4)	$ 6	$ (9)
Other, tax recovery	$ 0	$ 0	$ 9	$ 0

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Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net earnings	$ 324	$ 765	$ 677	$ 1,121
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation - property, plant and equipment	329	297	650	595
Amortization - intangible assets	34	34	66	64
Amortization - other	3	7	7	13
Deferred income tax expense	60	88	119	111
Equity component, allowance for funds used during construction (Note 12)	(21)	(19)	(35)	(37)
Gain on disposition (Note 11)	0	(583)	0	(583)
Other	23	40	70	74
Change in long-term regulatory assets and liabilities	0	(36)	(58)	(86)
Change in working capital (Note 14)	(27)	38	(181)	(100)
Cash from operating activities	725	631	1,315	1,172
Investing activities
Capital expenditures - property, plant and equipment	(725)	(814)	(1,836)	(1,526)
Capital expenditures - intangible assets	(50)	(29)	(101)	(57)
Contributions in aid of construction	16	23	33	49
Proceeds on disposition (Note 11)	0	995	0	995
Other	(49)	(76)	(93)	(94)
Cash (used in) from investing activities	(808)	99	(1,997)	(633)
Financing activities
Proceeds from long-term debt, net of issuance costs	1,685	320	2,044	392
Repayments of long-term debt, net of extinguishment costs, and finance leases	(585)	(922)	(602)	(939)
Borrowings under committed credit facilities	1,251	2,221	3,007	3,684
Repayments under committed credit facilities	(1,491)	(2,545)	(2,754)	(3,963)
Net change in short-term borrowings	(394)	144	(526)	261
Issue of common shares, net of costs and dividends reinvested	10	164	44	196
Dividends
Common shares, net of dividends reinvested	(211)	(118)	(424)	(236)
Preference shares	(17)	(17)	(33)	(34)
Subsidiary dividends paid to non-controlling interests	(9)	(19)	(34)	(51)
Other	(38)	(4)	(35)	8
Cash from (used in) financing activities	201	(776)	687	(682)
Effect of exchange rate changes on cash and cash equivalents	(10)	(5)	5	(13)
Change in cash and cash equivalents	108	(51)	10	(156)
Cash and change in cash associated with assets held for sale	0	9	0	15
Cash and cash equivalents, beginning of period	272	233	370	332
Cash and cash equivalents, end of period	$ 380	$ 191	$ 380	$ 191

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Condensed Consolidated Interim Statements of Changes in Equity (Unaudited) - CAD ($) shares in Millions, $ in Millions	Total	Common Shares	Preference Shares (Note 9)	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Non-Controlling Interests
Balance, beginning of period at Dec. 31, 2018	$ 18,456	$ 11,889	$ 1,623	$ 11	$ 928	$ 2,082	$ 1,923
Balance, beginning of period (shares) at Dec. 31, 2018		428.5
Increase (Decrease) in Equity [Roll Forward]
Net earnings	1,121					1,065	56
Other comprehensive income (loss)	(523)				(460)		(63)
Common shares issued	345	$ 349		(4)
Common shares issued (shares)		7.3
Subsidiary dividends paid to non-controlling interests	(51)						(51)
Dividends declared on common shares	(194)					(194)
Dividends on preference shares	(34)					(34)
Disposition (Note 11)	(318)						(318)
Other	12			4			8
Balance, end of period at Jun. 30, 2019	18,814	$ 12,238	1,623	11	468	2,919	1,555
Balance, end of period (shares) at Jun. 30, 2019		435.8
Balance, beginning of period at Mar. 31, 2019	18,420	$ 11,997	1,623	12	695	2,200	1,893
Balance, beginning of period (shares) at Mar. 31, 2019		430.9
Increase (Decrease) in Equity [Roll Forward]
Net earnings	765					737	28
Other comprehensive income (loss)	(257)				(227)		(30)
Common shares issued	239	$ 241		(2)
Common shares issued (shares)		4.9
Subsidiary dividends paid to non-controlling interests	(19)						(19)
Dividends on preference shares	(17)					(17)
Disposition (Note 11)	(318)						(318)
Other	1			1		(1)	1
Balance, end of period at Jun. 30, 2019	18,814	$ 12,238	1,623	11	468	2,919	1,555
Balance, end of period (shares) at Jun. 30, 2019		435.8
Balance, beginning of period at Dec. 31, 2019	20,113	$ 13,645	1,623	11	336	2,916	1,582
Balance, beginning of period (shares) at Dec. 31, 2019		463.3
Increase (Decrease) in Equity [Roll Forward]
Net earnings	677					619	58
Other comprehensive income (loss)	635				569		66
Common shares issued	61	$ 63		(2)
Common shares issued (shares)		1.3
Subsidiary dividends paid to non-controlling interests	(34)						(34)
Dividends declared on common shares	(223)					(223)
Dividends on preference shares	(33)					(33)
Other	(13)			1			(14)
Balance, end of period at Jun. 30, 2020	21,183	$ 13,708	1,623	10	905	3,279	1,658
Balance, end of period (shares) at Jun. 30, 2020		464.6
Balance, beginning of period at Mar. 31, 2020	21,419	$ 13,688	1,623	10	1,392	3,005	1,701
Balance, beginning of period (shares) at Mar. 31, 2020		464.2
Increase (Decrease) in Equity [Roll Forward]
Net earnings	324					291	33
Other comprehensive income (loss)	(546)				(487)		(59)
Common shares issued	20	$ 20		0
Common shares issued (shares)		0.4
Subsidiary dividends paid to non-controlling interests	(9)						(9)
Dividends on preference shares	(17)					(17)
Other	(8)			0			(8)
Balance, end of period at Jun. 30, 2020	$ 21,183	$ 13,708	$ 1,623	$ 10	$ 905	$ 3,279	$ 1,658
Balance, end of period (shares) at Jun. 30, 2020		464.6

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Condensed Consolidated Interim Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Statement of Stockholders' Equity [Abstract]
Dividends declared on common shares (CAD per share)	$ 0.4775	$ 0.45

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Description of Business

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

DESCRIPTION OF BUSINESS

Nature of Operations

Fortis Inc. ("Fortis" or the "Corporation") is a well-diversified North American regulated electric and gas utility holding company.

Earnings for interim periods may not be indicative of annual results due to the impact of seasonal weather conditions on customer demand and market pricing and the timing and recognition of regulatory decisions. Earnings of the gas utilities tend to be highest in the first and fourth quarters due to space-heating requirements. Earnings of the electric distribution utilities in the United States tend to be highest in the second and third quarters due to the use of air conditioning and other cooling equipment.

Entities within the reporting segments that follow operate with substantial autonomy.

Regulated Utilities

ITC: Comprised of ITC Investment Holdings Inc., ITC Holdings Corp. and the electric transmission operations of its regulated operating subsidiaries, which include International Transmission Company, Michigan Electric Transmission Company, LLC, ITC Midwest LLC and ITC Great Plains, LLC, all operating in the United States. Fortis owns 80.1% of ITC and an affiliate of GIC Private Limited owns a 19.9% minority interest.

UNS Energy: Comprised of UNS Energy Corporation, which primarily includes Tucson Electric Power Company ("TEP"), UNS Electric, Inc. and UNS Gas, Inc., all operating in the United States.

Central Hudson: Represents Central Hudson Gas & Electric Corporation, operating in the United States.

FortisBC Energy: Represents FortisBC Energy Inc., operating in Canada.

FortisAlberta: Represents FortisAlberta Inc., operating in Canada.

FortisBC Electric: Represents FortisBC Inc., operating in Canada.

Other Electric: Comprised of utilities in Eastern Canada and the Caribbean as follows: Newfoundland Power Inc. ("Newfoundland Power"); Maritime Electric Company, Limited; FortisOntario Inc.; a 39% equity investment in Wataynikaneyap Power Limited Partnership; an approximate 60% controlling interest in Caribbean Utilities Company, Ltd. ("Caribbean Utilities"); FortisTCI Limited and Turks and Caicos Utilities Limited (collectively "FortisTCI"); and a 33% equity investment in Belize Electricity Limited ("Belize Electricity").

Non-Regulated

Energy Infrastructure: Primarily comprised of long-term contracted generation assets in Belize and the Aitken Creek natural gas storage facility ("Aitken Creek") in British Columbia. The long-term contracted generation assets in British Columbia were sold on April 16, 2019 (Note 11).

Corporate and Other: Captures expenses and revenues not specifically related to any reportable segment and those business operations that are below the required threshold for segmented reporting, including net corporate expenses of Fortis.

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Regulatory Matters

6 Months Ended

Jun. 30, 2020

Regulated Operations [Abstract]

Regulatory Matters

REGULATORY MATTERS

Regulation of the Corporation's utilities is generally consistent with that disclosed in the "Regulatory Matters" section of its 2019 annual audited consolidated financial statements ("2019 Annual Financial Statements"). A summary of significant regulatory developments year-to-date 2020 follows.

COVID-19 Pandemic Impacts

The novel coronavirus ("COVID-19") pandemic has resulted in several customer relief initiatives as well as the delay of several regulatory proceedings, as discussed below.

Customer Relief Initiatives

UNS Energy

Pursuant to the Arizona Corporation Commission's approval of the utility's customer relief initiatives, TEP refunded to customers approximately US$8 million of collected demand side management funds in excess of program costs.

Central Hudson

In March 2020, as agreed to with the New York Public Service Commission ("PSC"), Central Hudson postponed until July 1, 2021 the collection in customer rates of approximately US$3 million of deferred costs related mainly to environmental remediation.

FortisBC Energy and FortisBC Electric

In April 2020, pursuant to the British Columbia Utilities Commission's ("BCUC") approval of the utilities' customer relief initiatives, FortisBC Energy and FortisBC Electric implemented three-month bill deferrals for certain customer classes, the repayment of which is expected to commence in the third quarter of 2020. The BCUC also authorized the deferral of otherwise uncollectible revenue associated with providing the customer relief initiatives, the recovery of which will be determined through a future rate filing once the financial impact of the pandemic is known.

Delayed Regulatory Proceedings

UNS Energy

General Rate Application: In the first half of 2020, as part of TEP's general rate application, hearings were held to address the inclusion in customer rates of the Gila River natural gas generation station unit 2 and ten natural gas reciprocating internal combustion engine units. Prior to the COVID-19 pandemic, a decision had been expected earlier in 2020 with new rates effective May 1, 2020. TEP currently expects a decision approving new rates prior to the end of 2020.

Central Hudson

2020 Rates: In May 2020 the PSC approved Central Hudson's request to postpone scheduled electric and gas delivery rate increases, reflecting an increase in the equity component of its capital structure from 49% to 50%, from July 1, 2020 to October 1, 2020. The deferred revenue will be collected over the nine-month period from October 1, 2020 to June 30, 2021.

COVID-19 Proceeding: In June 2020 the PSC initiated a generic proceeding to identify and address the effects of the COVID-19 pandemic. The outcome of this proceeding and potential impacts, if any, are unknown at this time.

FortisAlberta

Generic Cost of Capital Proceeding: In December 2018 the Alberta Utilities Commission ("AUC") initiated a generic cost of capital proceeding and expert evidence was filed in January 2020. In March 2020, due to the COVID-19 pandemic, this proceeding was suspended indefinitely. In June 2020 the AUC provided five options to Alberta utilities to set the approved return on equity ("ROE") and capital structure for 2021 in lieu of resuming the proceeding. In July 2020 FortisAlberta elected an option that provides for the extension of the currently approved ROE and capital structure quarterly. This method will remain in effect until the AUC issues a decision on this proceeding and any resulting changes to ROE and/or capital structure will be implemented prospectively at the start of the following quarter.

Other Electric

Caribbean Utilities: In June 2020 Caribbean Utilities requested the postponement of its scheduled annual rate adjustment effective June 1, 2020 to January 1, 2021, to provide customer relief from the effects of the COVID-19 pandemic.

FortisTCI: In February 2020 the Government of the Turks and Caicos Islands approved a 6.8% average increase in FortisTCI's electricity rates, effective April 1, 2020, including the recovery of hurricane-related costs incurred in 2017. In March 2020, to provide customer relief from the effects of the COVID-19 pandemic, the effective date was postponed to July 2020 and new rates became effective July 22, 2020.

Other Regulatory Matters

ITC

ROE Complaints: In May 2020 the Federal Energy Regulatory Commission ("FERC") issued an order on rehearing of its November 2019 decision on the MISO transmission owner ROE complaints ("May 2020 FERC Order") and set the base ROE for the periods of November 2013 through February 2015 and from September 2016 onward at 10.02%, up to a maximum of 12.62% with incentive adders. Including incentive adders, the May 2020 FERC Order implies an all-in ROE for ITC's subsidiaries operating in the Midcontinent Independent System Operator's region of 10.77%, up from 10.63% based on a November 2019 decision but down from 11.07% based on a September 2016 decision which was recognized during the first nine months of 2019.

A regulatory liability of $91 million (US$70 million) was recorded at December 31, 2019 to reflect the amounts due to customers under the terms of the November 2019 decision. The May 2020 FERC Order, in addition to the refund of $27 million (US$20 million) to customers in the first half of 2020, resulted in: (i) the reduction of the regulatory liability to $22 million (US$16 million) as at June 30, 2020; and (ii) an increase in revenue and a decrease in interest expense resulting in an increase in net earnings of $37 million of which Fortis' share was $29 million. The earnings increase was comprised of: (i) $27 million related to the reversal of liabilities established in prior periods; and (ii) $2 million related to the year-to-date impact of a higher ROE as compared to the ROE approved in November 2019.

Review of Transmission Incentives Policy: In March 2020 FERC issued a notice of proposed rulemaking ("NOPR") proposing to update its transmission incentives policy for transmission owners, including ITC, to grant incentives to projects based upon benefits to customers regarding reliability and cost savings through the reduction of transmission congestion. The NOPR follows a Notice of Inquiry, issued in March 2019, on FERC's transmission incentives policies. FERC proposed total ROE incentives of up to 250 basis points that would not be limited by the upper end of the base ROE zone of reasonableness. Comments from stakeholders, including ITC, were provided to FERC through July 1, 2020. The outcome may impact future incentive adders that are included in transmission rates charged by transmission owners, including ITC.

FortisBC Energy and FortisBC Electric

Multi-Year Rate Plan Applications: In June 2020 the BCUC issued a decision on FortisBC Energy's and FortisBC Electric's multi-year rate plan applications for 2020 to 2024. The decision sets the rate-setting framework for the next five years, including: (i) the level of operation and maintenance expense and capital to be included in customer rates, subject to an incentive formula; (ii) the level of investment in gas innovation initiatives to be included in customer rates; and (iii) a 50/50 sharing between customers and the utilities of variances from the allowed ROE. During the third quarter of 2020, FortisBC Energy and FortisBC Electric will provide the BCUC with updated 2020 rate filings reflecting the terms of this decision. Current interim rates will remain in effect pending a final determination of 2020 rates by the BCUC.

FortisAlberta

2018 Alberta Independent System Operator Tariff Application: In September 2019 the AUC issued a decision that addressed a proposal to change how the Alberta Independent System Operator's customer contribution policy functions between distribution facility owners, such as FortisAlberta, and transmission facility owners. Implementation of the order was suspended in October 2019 and in May 2020 the AUC confirmed that outstanding matters on the order will be determined through a written

hearing. In July 2020 FortisAlberta filed expert evidence requested by the AUC and a decision is expected in the fourth quarter of 2020. The likely outcome of this process and potential impacts, if any, cannot be determined at this time.

Performance-Based Regulation: In May 2020 FortisAlberta filed an application for anomaly adjustments to rates based on new criteria established by the AUC in January 2020. A decision is expected in the fourth quarter of 2020.

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Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Accounting Policies

ACCOUNTING POLICIES

These condensed consolidated interim financial statements ("Interim Financial Statements") have been prepared in accordance with accounting principles generally accepted in the United States of America for rate-regulated entities and are in Canadian dollars unless otherwise noted.

The Interim Financial Statements are comprised of the accounts of Fortis and its wholly owned subsidiaries and controlling ownership interests. All inter-company balances and transactions have been eliminated on consolidation, except as disclosed in Note 5.

These Interim Financial Statements do not include all of the disclosures required in the annual financial statements and should be read in conjunction with the Corporation's 2019 Annual Financial Statements. In management's opinion, these Interim Financial Statements include all adjustments that are of a normal recurring nature, necessary for fair presentation.

The preparation of the Interim Financial Statements requires management to make estimates and judgments, including those related to regulatory decisions, that affect the reported amounts of, and disclosures related to, assets, liabilities, revenues and expenses. Actual results could differ from estimates.

The accounting policies applied herein are consistent with those outlined in the Corporation's 2019 Annual Financial Statements, except as described below.

New Accounting Policies

Financial Instruments

Effective January 1, 2020, the Corporation adopted Accounting Standards Update ("ASU") No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires the use of reasonable and supportable forecasts in the estimate of credit losses and the recognition of expected losses upon initial recognition of a financial instrument, in addition to using past events and current conditions. The new guidance also requires quantitative and qualitative disclosures regarding the activity in the allowance for credit losses for financial assets within the scope of the guidance. Adoption did not have a material impact on the Interim Financial Statements.

Fortis and each subsidiary recognize an allowance for credit losses to reduce accounts receivable for amounts estimated to be uncollectible. The allowance is estimated based on historical collection patterns, sales, and current and forecast economic and other conditions. Accounts receivable are written off in the period in which they are deemed uncollectible (Note 6).

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Future Accounting Pronouncements

6 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Future Accounting Pronouncements

FUTURE ACCOUNTING PRONOUNCEMENTS

Income Taxes

ASU No. 2019-12, Simplifying the Accounting for Income Taxes, issued in December 2019, is effective for Fortis January 1, 2021, with early adoption permitted. Principally, it improves consistent application of, and clarifies, existing income tax guidance. Adoption will not have a material impact on the consolidated financial statements and related disclosures.

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Segmented Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segmented Information

SEGMENTED INFORMATION

General

Fortis segments its business based on regulatory jurisdiction and service territory, as well as the information used by its President and Chief Executive Officer in deciding how to allocate resources. Segment performance is evaluated principally on net earnings attributable to common equity shareholders.

Related-Party and Inter-Company Transactions

Related-party transactions are in the normal course of operations and are measured at the amount of consideration agreed to by the related parties. There were no material related-party transactions for the three and six months ended June 30, 2020 and 2019.

Inter-company balances, transactions and profit are eliminated on consolidation, except for certain inter-company transactions between non-regulated and regulated entities in accordance with accounting standards for rate-regulated entities, which are summarized below.

	Quarter Ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Lease of gas storage capacity and gas sales from Aitken Creek to FortisBC Energy	5	6	12	12
Sale of capacity from Waneta Expansion to FortisBC Electric (1)	—	1	—	17

⁽¹⁾ Reflects amounts to the April 16, 2019 disposition of the Waneta Expansion hydroelectric generating facility ("Waneta Expansion") (Note 11)

As at June 30, 2020, accounts receivable included approximately $13 million due from Belize Electricity (December 31, 2019 - $8 million).

The Corporation periodically provides short-term financing to subsidiaries to support capital expenditures, acquisitions and seasonal working capital requirements. As at June 30, 2020, there were inter-segment loans outstanding of $69 million (December 31, 2019 - $279 million), payable on demand with a weighted average interest rate of 1.1%. Total interest charged was $1 million and $2 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019 - less than $1 million).

	REGULATED								NON-REGULATED
Quarter Ended									Energy		Inter-
June 30, 2020		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	477	546	206	249	150	91	345	2,064	13	—	—	2,077
Energy supply costs	—	184	51	66	—	15	198	514	—	—	—	514
Operating expenses	113	157	125	76	34	26	49	580	7	12	—	599
Depreciation and amortization	75	85	24	59	56	15	47	361	4	1	—	366
Operating income	289	120	6	48	60	35	51	609	2	(13)	—	598
Other income, net	13	16	8	2	—	1	2	42	—	5	—	47
Finance charges	79	34	12	35	25	18	21	224	—	39	—	263
Income tax expense	55	17	—	(2)	2	1	6	79	(1)	(20)	—	58
Net earnings	168	85	2	17	33	17	26	348	3	(27)	—	324
Non-controlling interests	30	—	—	1	—	—	2	33	—	—	—	33
Preference share dividends	—	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	138	85	2	16	33	17	24	315	3	(44)	—	274
Goodwill	8,332	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	21,251	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	232	176	91	95	83	30	65	772	3	—	—	775
Quarter Ended
June 30, 2019
($ millions)
Revenue	428	500	199	235	150	90	343	1,945	25	—	—	1,970
Energy supply costs	—	164	58	63	—	15	195	495	1	—	—	496
Operating expenses	132	161	107	78	36	27	46	587	9	7	—	603
Depreciation and amortization	68	74	19	59	53	15	44	332	5	1	—	338
Gain on disposition	—	—	—	—	—	—	—	—	—	577	—	577
Operating income	228	101	15	35	61	33	58	531	10	569	—	1,110
Other income, net	12	5	4	3	—	1	—	25	1	17	—	43
Finance charges	79	33	11	34	27	18	19	221	(1)	43	—	263
Income tax expense	39	13	1	(6)	—	1	6	54	1	70	—	125
Net earnings	122	60	7	10	34	15	33	281	11	473	—	765
Non-controlling interests	21	—	—	—	—	—	4	25	3	—	—	28
Preference share dividends	—	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	101	60	7	10	34	15	29	256	8	456	—	720
Goodwill	8,037	1,809	591	913	228	235	252	12,065	27	—	—	12,092
Total assets	19,533	9,884	3,574	6,885	4,732	2,267	4,085	50,960	671	187	(119)	51,699
Capital expenditures	301	156	78	104	95	26	68	828	7	8	—	843

	REGULATED								NON-REGULATED
Year-to-Date									Energy		Inter-
June 30, 2020		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	910	1,019	486	715	302	205	793	4,430	38	—	—	4,468
Energy supply costs	—	351	129	226	—	54	503	1,263	1	—	—	1,264
Operating expenses	231	315	259	158	72	53	100	1,188	15	22	—	1,225
Depreciation and amortization	148	166	46	119	111	30	93	713	8	2	—	723
Operating income	531	187	52	212	119	68	97	1,266	14	(24)	—	1,256
Other income, net	17	13	17	3	1	2	5	58	—	(2)	—	56
Finance charges	159	62	24	71	51	36	40	443	—	76	—	519
Income tax expense	98	25	8	21	4	2	10	168	2	(54)	—	116
Net earnings	291	113	37	123	65	32	52	713	12	(48)	—	677
Non-controlling interests	52	—	—	1	—	—	5	58	—	—	—	58
Preference share dividends	—	—	—	—	—	—	—	—	—	33	—	33
Net earnings attributable to common equity shareholders	239	113	37	122	65	32	47	655	12	(81)	—	586
Goodwill	8,332	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	21,251	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	481	685	164	216	204	58	122	1,930	7	—	—	1,937
Year-to-Date
June 30, 2019
($ millions)
Revenue	836	1,043	476	720	295	209	769	4,348	61	—	(3)	4,406
Energy supply costs	—	396	150	244	—	55	482	1,327	2	—	—	1,329
Operating expenses	256	313	225	161	77	52	93	1,177	23	22	(3)	1,219
Depreciation and amortization	131	148	39	118	105	31	86	658	13	1	—	672
Gain on disposition	—	—	—	—	—	—	—	—	—	577	—	577
Operating income	449	186	62	197	113	71	108	1,186	23	554	—	1,763
Other income, net	22	14	8	6	1	2	1	54	2	25	—	81
Finance charges	156	66	22	69	52	36	39	440	—	92	—	532
Income tax expense	81	19	9	24	1	6	11	151	1	39	—	191
Net earnings	234	115	39	110	61	31	59	649	24	448	—	1,121
Non-controlling interests	41	—	—	—	—	—	7	48	8	—	—	56
Preference share dividends	—	—	—	—	—	—	—	—	—	34	—	34
Net earnings attributable to common equity shareholders	193	115	39	110	61	31	52	601	16	414	—	1,031
Goodwill	8,037	1,809	591	913	228	235	252	12,065	27	—	—	12,092
Total assets	19,533	9,884	3,574	6,885	4,732	2,267	4,085	50,960	671	187	(119)	51,699
Capital expenditures	537	323	142	174	202	51	124	1,553	13	17	—	1,583

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Allowance for Credit Losses

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Allowance for Credit Losses

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses balance (Note 3), which is netted against accounts receivable and other current assets, changed from December 31, 2019 as follows.

	June 30, 2020
($ millions)	Quarter ended	Year-to-Date
Beginning of period	(44)	(35)
Credit loss expensed	(5)	(14)
Credit loss deferred (1) (Note 2)	(8)	(8)
Write-offs, net of recoveries	3	6
Foreign exchange	1	(2)
End of period	(53)	(53)

⁽¹⁾ Comprised of FortisBC Energy and FortisBC Electric

The allowance for doubtful accounts balance, which was netted against accounts receivable and other current assets, changed from December 31, 2018 as follows.

	June 30, 2019
($ millions)	Quarter ended	Year-to-Date
Beginning of period	(33)	(33)
Bad debts expensed	(4)	(9)
Write-offs, net of recoveries	4	8
Foreign exchange	—	1
End of period	(33)	(33)

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Regulatory Assets and Liabilities

6 Months Ended

Jun. 30, 2020

Regulated Operations [Abstract]

Regulatory Assets and Liabilities

REGULATORY ASSETS AND LIABILITIES

Detailed information about the Corporation's regulatory assets and liabilities is provided in Note 9 to the 2019 Annual Financial Statements. A summary follows.

	As at
	June 30,	December 31,
($ millions)	2020	2019
Regulatory assets
Deferred income taxes	1,619	1,556
Employee future benefits	530	530
Deferred energy management costs	305	279
Rate stabilization and related accounts	237	208
Deferred lease costs	119	116
Manufactured gas plant site remediation deferral	116	81
Generation early retirement costs	87	88
Derivatives	86	119
Other regulatory assets	406	406
Total regulatory assets	3,505	3,383
Less: Current portion	(395)	(425)
Long-term regulatory assets	3,110	2,958

	As at
	June 30,	December 31,
($ millions)	2020	2019
Regulatory liabilities
Deferred income taxes	1,483	1,440
Asset removal cost provision	1,235	1,187
Renewable energy surcharge	101	94
Rate stabilization and related accounts	100	166
Energy efficiency liability	95	101
Electric and gas moderator account	40	45
Employee future benefits	33	45
ROE complaints liability	22	91
Other regulatory liabilities	210	189
Total regulatory liabilities	3,319	3,358
Less: Current portion	(428)	(572)
Long-term regulatory liabilities	2,891	2,786

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Long-Term Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long-Term Debt

LONG-TERM DEBT

	As at
	June 30,	December 31,
($ millions)	2020	2019
Long-term debt	23,656	21,547
Fair value adjustment - ITC acquisition	133	133
Credit facility borrowings	909	640
Total long-term debt	24,698	22,320
Less: Deferred financing costs and debt discounts	(147)	(129)
Less: Current installments of long-term debt	(990)	(690)
	23,561	21,501

The long-term debt issuances for the six months ended June 30, 2020 are summarized below.

		Interest
	Month	Rate					Use of
($ millions, except %)	Issued	(%)	Maturity	Amount			Proceeds
ITC
Unsecured term loan credit agreement	January	(1)	2021		US	75	(2)(3)
Unsecured term loan credit agreement (4)	January	(5)	2021		US	200	(4)
Unsecured senior notes	May	2.95	2030		US	700	(2)(3)(6)
UNS Energy
Unsecured senior notes	April	4.00	2050		US	350	(2)(3)
Central Hudson
Unsecured senior notes	May	3.42	2050		US	30	(3)
FortisBC Electric
Unsecured debentures	May	3.12	2050		75		(2)
Newfoundland Power
First mortgage sinking fund bonds	April	3.61	2060		100		(2)(3)
FortisTCI
Unsecured senior notes (7)	June	5.30	2035		US	15	(8)(9)

⁽¹⁾ Floating rate of a one-month LIBOR plus a spread of 0.45%

⁽²⁾ Repay credit facility borrowings

⁽³⁾ General corporate purposes

⁽⁴⁾ Maximum amount of borrowings under this agreement of US$400 million has been drawn; current period borrowings were used to repay an outstanding commercial paper balance.

⁽⁵⁾ Floating rate of a two-month LIBOR plus a spread of 0.60%

⁽⁶⁾ Early redemption of unsecured term loan credit agreement of US$400 million

⁽⁷⁾ Maximum amount of borrowings under this agreement is US$30 million.

⁽⁸⁾ Repay maturing long-term debt

⁽⁹⁾ Finance capital expenditures

In July 2020 ITC issued 31-year US$180 million first mortgage bonds at 3.13%. The net proceeds were used to repay credit facility borrowings, finance capital expenditures and for general corporate purposes.

In July 2020 Central Hudson issued 40-year US$30 million unsecured senior notes at 3.62%. The net proceeds were used to finance capital expenditures and for general corporate purposes.

In July 2020 FortisBC Energy issued 30-year $200 million unsecured debentures at 2.54%. The net proceeds were used to finance capital expenditures.

Credit Facilities

			As at
	Regulated	Corporate	June 30,	December 31,
($ millions)	Utilities	and Other	2020	2019
Total credit facilities	3,982	1,881	5,863	5,590
Credit facilities utilized:
Short-term borrowings (1)	(25)	—	(25)	(512)
Long-term debt (including current portion) (2)	(909)	—	(909)	(640)
Letters of credit outstanding	(83)	(53)	(136)	(114)
Credit facilities unutilized	2,965	1,828	4,793	4,324

⁽¹⁾ The weighted average interest rate was approximately 1.9% (December 31, 2019 - 3.2%).

⁽²⁾ The weighted average interest rate was approximately 1.1% (December 31, 2019 - 2.4%). The current portion was $371 million (December 31, 2019 - $252 million).

Credit facilities are syndicated primarily with large banks in Canada and the United States, with no one bank holding more than 25% of the total facilities. Approximately $5.6 billion of the total credit facilities are committed facilities with maturities ranging from 2021 through 2025.

See Note 15 in the 2019 Annual Financial Statements for a description of the credit facilities as at December 31, 2019.

In January 2020 Caribbean Utilities amended its unsecured revolving committed credit facility resulting in an increase of US$20 million and an extension of the maturity date to January 2025.

In March 2020 FortisBC Energy entered into a $55 million two-year uncommitted letter of credit facility and FortisAlberta entered into a $150 million one-year non-revolving committed credit facility.

In April 2020 the Corporation entered into an unsecured $500 million one-year revolving term committed credit facility and UNS Energy terminated its US$225 million unsecured non-revolving uncommitted credit facility due to mature in December 2020.

In May 2020 and July 2020 Central Hudson's US$10 million uncommitted credit facility and its US$50 million unsecured revolving committed credit facility, respectively, expired and were not renewed.

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Preference Shares

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Preference Shares

PREFERENCE SHARES

On June 1, 2020, 267,341 First Preference Shares, Series H were converted on a one-for-one basis into First Preference Shares, Series I and 907,577 First Preference Shares, Series I were converted on a one-for-one basis into First Preference Shares, Series H.

Also on June 1, 2020, the annual fixed dividend per share for the First Preference Shares, Series H was reset from $0.6250 to $0.45875 for the five-year period up to but excluding June 1, 2025.

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Employee Future Benefits

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Employee Future Benefits

EMPLOYEE FUTURE BENEFITS

The Corporation and its subsidiaries each maintain one or a combination of defined benefit pension plans and defined contribution pension plans, including group Registered Retirement Savings Plans and group 401(k) plans, for employees. The Corporation and certain subsidiaries also offer other post-employment benefit ("OPEB") plans for qualifying employees. The net benefit cost is detailed below.

	Defined Benefit Pension Plans		OPEB Plans
($ millions)	2020	2019	2020	2019
Quarter Ended June 30
Components of net benefit cost
Service costs	25	19	8	7
Interest costs	29	32	5	7
Expected return on plan assets	(44)	(40)	(5)	(4)
Amortization of actuarial losses (gains)	9	6	(2)	(1)
Amortization of past service credits/plan amendments	(1)	(1)	—	(2)
Regulatory adjustments	(1)	—	1	1
Net benefit cost	17	16	7	8
Year-to-Date June 30
Components of net benefit cost
Service costs	50	38	16	14
Interest costs	57	63	11	13
Expected return on plan assets	(88)	(80)	(10)	(8)
Amortization of actuarial losses (gains)	17	12	(3)	(2)
Amortization of past service credits/plan amendments	(1)	(1)	(1)	(4)
Regulatory adjustments	(2)	1	2	3
Net benefit cost	33	33	15	16

Defined contribution pension plan expense for the three and six months ended June 30, 2020 was $9 million and $22 million, respectively (three and six months ended June 30, 2019 - $10 million and $22 million, respectively).

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Disposition

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Disposition

DISPOSITION

On April 16, 2019, Fortis sold its 51% ownership interest in the 335-megawatt Waneta Expansion for proceeds of $995 million. A gain on disposition of $577 million ($484 million after tax), net of expenses, was recognized in the Corporate and Other segment, and the related non-controlling interest was removed from equity.

For the three and six months ended June 30, 2019, excluding the gain on disposition, Waneta Expansion contributed $7 million and $17 million, respectively, to earnings before income tax expense, of which Fortis' share was 51%.

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Other Income, Net

6 Months Ended

Jun. 30, 2020

Other Income and Expenses [Abstract]

Other Income, Net

OTHER INCOME, NET

	Quarter ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Equity component, allowance for funds used during construction	21	19	35	37
Derivative gains	11	6	—	13
Interest income	3	4	8	8
Gain on repayment of debt	—	11	—	11
Other	12	3	13	12
	47	43	56	81

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Common Share

EARNINGS PER COMMON SHARE

Diluted earnings per share ("EPS") was calculated using the treasury stock method for stock options.

	2020			2019
	Net Earnings	Weighted		Net Earnings	Weighted
	to Common	Average		to Common	Average
	Shareholders	Shares	EPS	Shareholders	Shares	EPS
	($ millions)	(# millions)	($)	($ millions)	(# millions)	($)
Quarter Ended June 30
Basic EPS	274	464.6	0.59	720	433.1	1.66
Potential dilutive effect of stock options	—	0.6		—	0.6
Diluted EPS	274	465.2	0.59	720	433.7	1.66
Year-to-Date June 30
Basic EPS	586	464.2	1.26	1,031	431.3	2.39
Potential dilutive effect of stock options	—	0.6		—	0.6
Diluted EPS	586	464.8	1.26	1,031	431.9	2.39

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Supplementary Cash Flow Information

6 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Supplementary Cash Flow Information

SUPPLEMENTARY CASH FLOW INFORMATION

	Quarter Ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Change in working capital
Accounts receivable and other current assets	69	237	107	135
Prepaid expenses	29	21	25	18
Inventories	(45)	(7)	(1)	16
Regulatory assets - current portion	14	(10)	28	(16)
Accounts payable and other current liabilities	14	(199)	(194)	(256)
Regulatory liabilities - current portion	(108)	(4)	(146)	3
	(27)	38	(181)	(100)
Non-cash investing and financing activities
Accrued capital expenditures	367	329	367	329
Common share dividends reinvested	10	76	18	151
Contributions in aid of construction	8	12	8	12
Exercise of stock options into common shares	—	2	2	4
Right-of-use assets obtained in exchange for operating lease liabilities	—	2	1	48

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Fair Value of Financial Instruments and Risk Management

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments and Risk Management

FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Derivatives

The Corporation generally limits the use of derivatives to those that qualify as accounting, economic or cash flow hedges, or those that are approved for regulatory recovery.

The Corporation records all derivatives at fair value, with certain exceptions including those derivatives that qualify for the normal purchase and normal sale exception. Fair values reflect estimates based on current market information about the derivatives as at the balance sheet dates. The estimates cannot be determined with precision as they involve uncertainties and matters of judgment and, therefore, may not be relevant in predicting the Corporation's future consolidated earnings or cash flows.

Cash flows associated with the settlement of all derivatives are included in operating activities on the condensed consolidated interim statements of cash flows.

Energy Contracts Subject to Regulatory Deferral

UNS Energy holds electricity power purchase contracts, customer supply contracts and gas swap contracts to reduce its exposure to energy price risk. Fair values were measured primarily under the market approach using independent third-party information, where possible. When published prices are not available, adjustments are applied based on historical price curve relationships, transmission costs and line losses.

Central Hudson holds swap contracts for electricity and natural gas to minimize price volatility by fixing the effective purchase price. Fair values were measured using forward pricing provided by independent third-party information.

FortisBC Energy holds gas supply contracts to fix the effective purchase price of natural gas. Fair values reflect the present value of future cash flows based on published market prices and forward natural gas curves. All commodity swaps expired in the first quarter of 2020.

Unrealized gains or losses associated with changes in the fair value of these energy contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates, as permitted by the regulators. As at June 30, 2020, unrealized losses of $86 million (December 31, 2019 - $119 million) were recognized as regulatory assets.

Energy Contracts Not Subject to Regulatory Deferral

UNS Energy holds wholesale trading contracts to fix power prices and realize potential margin, of which 10% of any realized gains are shared with customers through rate stabilization accounts. Fair values were measured using a market approach incorporating, where possible, independent third-party information.

Aitken Creek holds gas swap contracts to manage its exposure to changes in natural gas prices, capture natural gas price spreads, and manage the financial risk posed by physical transactions. Fair values were measured using forward pricing from published market sources.

Unrealized gains or losses associated with changes in the fair value of these energy contracts are recognized in revenue and were not material for the three and six months ended June 30, 2020 and 2019.

Total Return Swaps

The Corporation holds total return swaps to manage the cash flow risk associated with forecasted future cash settlements of certain stock-based compensation obligations. The swaps have a combined notional amount of $113 million and terms of one to three years expiring in January 2021, 2022 and 2023. Fair value was measured using an income valuation approach based on forward pricing curves. Unrealized gains and losses associated with changes in the fair value of the total return swaps are recognized in other income, net and were not material for the three and six months ended June 30, 2020 and 2019.

Foreign Exchange Contracts

The Corporation holds US dollar foreign exchange contracts to help mitigate exposure to volatility of foreign exchange rates. The contracts expire between 2020 and 2022 and have a combined notional amount of $380 million. Fair value was measured using independent third-party information. Unrealized gains and losses associated with changes in fair value are recognized in other income, net and were not material for the three and six months ended June 30, 2020 and 2019.

Interest Rate Swaps

ITC entered into forward-starting interest rate swaps to manage the interest rate risk associated with planned borrowings. The swaps, which had a combined notional value of $611 million, were terminated in May 2020 with the issuance of US$700 million senior notes and realized losses of $31 million were recognized in other comprehensive income, which will be reclassified to earnings as a component of interest expense over five years.

Other Investments

ITC, UNS Energy and Central Hudson hold investments in trust associated with supplemental retirement benefit plans for select employees. These investments consist of mutual funds and money market accounts, which are recorded at fair value based on quoted market prices in active markets. Gains and losses on these funds are recognized in other income, net and were not material for the three and six months ended June 30, 2020 and 2019.

Recurring Fair Value Measures

The following table presents the fair value of assets and liabilities that are accounted for at fair value on a recurring basis.

($ millions)	Level 1 (1)	Level 2 (1)	Level 3 (1)	Total
As at June 30, 2020
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	32	—	32
Energy contracts not subject to regulatory deferral (2)	—	12	—	12
Foreign exchange contracts and total return swaps (2)	7	—	—	7
Other investments (4)	129	—	—	129
	136	44	—	180
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	—	(109)	—	(109)
Energy contracts not subject to regulatory deferral (5)	—	(16)	—	(16)
	—	(125)	—	(125)

($ millions)	Level 1 (1)	Level 2 (1)	Level 3 (1)	Total
As at December 31, 2019
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	22	—	22
Energy contracts not subject to regulatory deferral (2)	—	8	—	8
Foreign exchange contracts, interest rate and total   return swaps (2)	14	4	—	18
Other investments (4)	121	—	—	121
	135	34	—	169
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	(1)	(138)	—	(139)
Energy contracts not subject to regulatory deferral (5)	—	(12)	—	(12)
	(1)	(150)	—	(151)

⁽¹⁾Under the hierarchy, fair value is determined using: (i) level 1 - unadjusted quoted prices in active markets; (ii) level 2 - other pricing inputs directly or indirectly observable in the marketplace; and (iii) level 3 - unobservable inputs, used when observable inputs are not available. Classifications reflect the lowest level of input that is significant to the fair value measurement.

⁽²⁾Included in accounts receivable and other current assets or other assets

⁽³⁾Unrealized gains and losses arising from changes in fair value of these contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates as permitted by the regulators, with the exception of long-term wholesale trading contracts and certain gas swap contracts.

⁽⁴⁾Included in other assets

⁽⁵⁾Included in accounts payable and other current liabilities or other liabilities

The Corporation has elected gross presentation for its derivative contracts under master netting agreements and collateral positions, which apply only to its energy contracts. The following table presents the potential offset of counterparty netting.

Energy Contracts	Gross
	Amount	Counterparty	Cash
	Recognized	Netting of	Collateral
	on Balance	Energy	Received/
($ millions)	Sheet	Contracts	Posted	Net Amount
As at June 30, 2020
Derivative assets	44	30	10	4
Derivative liabilities	(125)	(30)	—	(95)

As at December 31, 2019
Derivative assets	30	22	10	(2)
Derivative liabilities	(151)	(22)	(2)	(127)

Volume of Derivative Activity

As at June 30, 2020, the Corporation had various energy contracts that will settle on various dates through 2029. The volumes related to electricity and natural gas derivatives are outlined below.

	As at
	June 30,	December 31,
	2020	2019
Energy contracts subject to regulatory deferral (1)
Electricity swap contracts (GWh)	341	628
Electricity power purchase contracts (GWh)	3,172	3,198
Gas swap contracts (PJ)	143	168
Gas supply contract premiums (PJ)	231	241
Energy contracts not subject to regulatory deferral (1)
Wholesale trading contracts (GWh)	2,559	1,855
Gas swap contracts (PJ)	35	43

⁽¹⁾GWh means gigawatt hours and PJ means petajoules.

Credit Risk

For cash equivalents, accounts receivable and other current assets, and long-term other receivables, credit risk is generally limited to the carrying value on the consolidated balance sheets. The Corporation's subsidiaries generally have a large and diversified customer base, which minimizes the concentration of credit risk. Policies in place to minimize credit risk include requiring customer deposits, prepayments and/or credit checks for certain customers, performing disconnections and/or using third-party collection agencies for overdue accounts. As a result of the impact of the COVID-19 pandemic, certain of the Corporation's utilities have temporarily suspended non-payment disconnects.

ITC has a concentration of credit risk as approximately 65% of its revenue is derived from three customers. The customers have investment-grade credit ratings and credit risk is further managed by requiring a letter of credit or cash deposit equal to the credit exposure, which is determined by a credit-scoring model and other factors.

FortisAlberta has a concentration of credit risk as distribution service billings are to a relatively small group of retailers. Credit risk is managed by obtaining from the retailers either a cash deposit, letter of credit, an investment-grade credit rating, or a financial guarantee from an entity with an investment-grade credit rating.

UNS Energy, Central Hudson, FortisBC Energy, Aitken Creek and the Corporation may be exposed to credit risk in the event of non-performance by counterparties to derivatives. Credit risk is managed by net settling payments, when possible, and dealing only with counterparties that have investment-grade credit ratings. At UNS Energy and Central Hudson, certain contractual arrangements require counterparties to post collateral.

The value of derivatives in net liability positions under contracts with credit risk-related contingent features that, if triggered, could require the posting of a like amount of collateral was $109 million as at June 30, 2020 (December 31, 2019 - $161 million).

As at June 30, 2020 the impact of the COVID-19 pandemic on the carrying values of accounts receivable and other current assets, and long-term other receivables or the fair value of derivatives was not material.

Hedge of Foreign Net Investments

The reporting currency of ITC, UNS Energy, Central Hudson, Caribbean Utilities, FortisTCI and Belize Electric Company Limited and Belize Electricity is, or is pegged to, the US dollar. The earnings and cash flow from, and net investments in, these entities are exposed to fluctuations in the US dollar-to-Canadian dollar exchange rate. The Corporation has limited this exposure through hedging.

As at June 30, 2020, US$2.2 billion (December 31, 2019 - US$2.2 billion) of corporately issued US dollar-denominated long-term debt has been designated as an effective hedge of net investments, leaving approximately US$10.0 billion (December 31, 2019 - US$9.7 billion) unhedged. Exchange rate fluctuations associated with the hedged net investment in foreign subsidiaries and the debt serving as the hedge are recognized in accumulated other comprehensive income.

Financial Instruments Not Carried at Fair Value

Excluding long-term debt, the consolidated carrying value of the Corporation's remaining financial instruments approximates fair value, reflecting their short-term maturity, normal trade credit terms and/or nature.

As at June 30, 2020, the carrying value of long-term debt, including current portion, was $24.7 billion (December 31, 2019 - $22.3 billion) compared to an estimated fair value of $28.9 billion (December 31, 2019 - $25.3 billion).

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Commitments

There were no material changes in commitments from that disclosed in the Corporation's 2019 Annual Financial Statements.

Contingencies

In April 2013 FHI and Fortis were named as defendants in an action in the Supreme Court of British Columbia by the Coldwater Indian Band ("Band") regarding interests in a pipeline right of way on reserve lands. The pipeline was transferred by FHI (then Terasen Inc.) to Kinder Morgan Inc. in April 2007. The Band seeks cancellation of the right of way and damages for wrongful interference with the Band's use and enjoyment of reserve lands. In May 2016 the Federal Court dismissed the Band's application for judicial review of the ministerial consent. In September 2017 the Federal Court of Appeal set aside the minister's consent and returned the matter to the minister for redetermination. No amount has been accrued in the Interim Financial Statements as the outcome cannot yet be reasonably determined.

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Accounting

These condensed consolidated interim financial statements ("Interim Financial Statements") have been prepared in accordance with accounting principles generally accepted in the United States of America for rate-regulated entities and are in Canadian dollars unless otherwise noted.

Consolidation

The Interim Financial Statements are comprised of the accounts of Fortis and its wholly owned subsidiaries and controlling ownership interests. All inter-company balances and transactions have been eliminated on consolidation, except as disclosed in Note 5.

Use of Accounting Estimates

The preparation of the Interim Financial Statements requires management to make estimates and judgments, including those related to regulatory decisions, that affect the reported amounts of, and disclosures related to, assets, liabilities, revenues and expenses. Actual results could differ from estimates.

New Accounting Policies and Future Accounting Policies

Financial Instruments

Effective January 1, 2020, the Corporation adopted Accounting Standards Update ("ASU") No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires the use of reasonable and supportable forecasts in the estimate of credit losses and the recognition of expected losses upon initial recognition of a financial instrument, in addition to using past events and current conditions. The new guidance also requires quantitative and qualitative disclosures regarding the activity in the allowance for credit losses for financial assets within the scope of the guidance. Adoption did not have a material impact on the Interim Financial Statements.

Fortis and each subsidiary recognize an allowance for credit losses to reduce accounts receivable for amounts estimated to be uncollectible. The allowance is estimated based on historical collection patterns, sales, and current and forecast economic and other conditions. Accounts receivable are written off in the period in which they are deemed uncollectible (Note 6).

Income Taxes

ASU No. 2019-12, Simplifying the Accounting for Income Taxes, issued in December 2019, is effective for Fortis January 1, 2021, with early adoption permitted. Principally, it improves consistent application of, and clarifies, existing income tax guidance. Adoption will not have a material impact on the consolidated financial statements and related disclosures.

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Segmented Information (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Significant Inter-company Transactions

Inter-company balances, transactions and profit are eliminated on consolidation, except for certain inter-company transactions between non-regulated and regulated entities in accordance with accounting standards for rate-regulated entities, which are summarized below.

	Quarter Ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Lease of gas storage capacity and gas sales from Aitken Creek to FortisBC Energy	5	6	12	12
Sale of capacity from Waneta Expansion to FortisBC Electric (1)	—	1	—	17

(1) Reflects amounts to the April 16, 2019 disposition of the Waneta Expansion hydroelectric generating facility ("Waneta Expansion") (Note 11)

Schedule of Information by Reportable Segment

	REGULATED								NON-REGULATED
Quarter Ended									Energy		Inter-
June 30, 2020		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	477	546	206	249	150	91	345	2,064	13	—	—	2,077
Energy supply costs	—	184	51	66	—	15	198	514	—	—	—	514
Operating expenses	113	157	125	76	34	26	49	580	7	12	—	599
Depreciation and amortization	75	85	24	59	56	15	47	361	4	1	—	366
Operating income	289	120	6	48	60	35	51	609	2	(13)	—	598
Other income, net	13	16	8	2	—	1	2	42	—	5	—	47
Finance charges	79	34	12	35	25	18	21	224	—	39	—	263
Income tax expense	55	17	—	(2)	2	1	6	79	(1)	(20)	—	58
Net earnings	168	85	2	17	33	17	26	348	3	(27)	—	324
Non-controlling interests	30	—	—	1	—	—	2	33	—	—	—	33
Preference share dividends	—	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	138	85	2	16	33	17	24	315	3	(44)	—	274
Goodwill	8,332	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	21,251	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	232	176	91	95	83	30	65	772	3	—	—	775
Quarter Ended
June 30, 2019
($ millions)
Revenue	428	500	199	235	150	90	343	1,945	25	—	—	1,970
Energy supply costs	—	164	58	63	—	15	195	495	1	—	—	496
Operating expenses	132	161	107	78	36	27	46	587	9	7	—	603
Depreciation and amortization	68	74	19	59	53	15	44	332	5	1	—	338
Gain on disposition	—	—	—	—	—	—	—	—	—	577	—	577
Operating income	228	101	15	35	61	33	58	531	10	569	—	1,110
Other income, net	12	5	4	3	—	1	—	25	1	17	—	43
Finance charges	79	33	11	34	27	18	19	221	(1)	43	—	263
Income tax expense	39	13	1	(6)	—	1	6	54	1	70	—	125
Net earnings	122	60	7	10	34	15	33	281	11	473	—	765
Non-controlling interests	21	—	—	—	—	—	4	25	3	—	—	28
Preference share dividends	—	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	101	60	7	10	34	15	29	256	8	456	—	720
Goodwill	8,037	1,809	591	913	228	235	252	12,065	27	—	—	12,092
Total assets	19,533	9,884	3,574	6,885	4,732	2,267	4,085	50,960	671	187	(119)	51,699
Capital expenditures	301	156	78	104	95	26	68	828	7	8	—	843

	REGULATED								NON-REGULATED
Year-to-Date									Energy		Inter-
June 30, 2020		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	910	1,019	486	715	302	205	793	4,430	38	—	—	4,468
Energy supply costs	—	351	129	226	—	54	503	1,263	1	—	—	1,264
Operating expenses	231	315	259	158	72	53	100	1,188	15	22	—	1,225
Depreciation and amortization	148	166	46	119	111	30	93	713	8	2	—	723
Operating income	531	187	52	212	119	68	97	1,266	14	(24)	—	1,256
Other income, net	17	13	17	3	1	2	5	58	—	(2)	—	56
Finance charges	159	62	24	71	51	36	40	443	—	76	—	519
Income tax expense	98	25	8	21	4	2	10	168	2	(54)	—	116
Net earnings	291	113	37	123	65	32	52	713	12	(48)	—	677
Non-controlling interests	52	—	—	1	—	—	5	58	—	—	—	58
Preference share dividends	—	—	—	—	—	—	—	—	—	33	—	33
Net earnings attributable to common equity shareholders	239	113	37	122	65	32	47	655	12	(81)	—	586
Goodwill	8,332	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	21,251	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	481	685	164	216	204	58	122	1,930	7	—	—	1,937
Year-to-Date
June 30, 2019
($ millions)
Revenue	836	1,043	476	720	295	209	769	4,348	61	—	(3)	4,406
Energy supply costs	—	396	150	244	—	55	482	1,327	2	—	—	1,329
Operating expenses	256	313	225	161	77	52	93	1,177	23	22	(3)	1,219
Depreciation and amortization	131	148	39	118	105	31	86	658	13	1	—	672
Gain on disposition	—	—	—	—	—	—	—	—	—	577	—	577
Operating income	449	186	62	197	113	71	108	1,186	23	554	—	1,763
Other income, net	22	14	8	6	1	2	1	54	2	25	—	81
Finance charges	156	66	22	69	52	36	39	440	—	92	—	532
Income tax expense	81	19	9	24	1	6	11	151	1	39	—	191
Net earnings	234	115	39	110	61	31	59	649	24	448	—	1,121
Non-controlling interests	41	—	—	—	—	—	7	48	8	—	—	56
Preference share dividends	—	—	—	—	—	—	—	—	—	34	—	34
Net earnings attributable to common equity shareholders	193	115	39	110	61	31	52	601	16	414	—	1,031
Goodwill	8,037	1,809	591	913	228	235	252	12,065	27	—	—	12,092
Total assets	19,533	9,884	3,574	6,885	4,732	2,267	4,085	50,960	671	187	(119)	51,699
Capital expenditures	537	323	142	174	202	51	124	1,553	13	17	—	1,583

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Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Schedule of Allowance for Credit Losses and Doubtful Accounts

The allowance for credit losses balance (Note 3), which is netted against accounts receivable and other current assets, changed from December 31, 2019 as follows.

	June 30, 2020
($ millions)	Quarter ended	Year-to-Date
Beginning of period	(44)	(35)
Credit loss expensed	(5)	(14)
Credit loss deferred (1) (Note 2)	(8)	(8)
Write-offs, net of recoveries	3	6
Foreign exchange	1	(2)
End of period	(53)	(53)

⁽¹⁾ Comprised of FortisBC Energy and FortisBC Electric

The allowance for doubtful accounts balance, which was netted against accounts receivable and other current assets, changed from December 31, 2018 as follows.

	June 30, 2019
($ millions)	Quarter ended	Year-to-Date
Beginning of period	(33)	(33)
Bad debts expensed	(4)	(9)
Write-offs, net of recoveries	4	8
Foreign exchange	—	1
End of period	(33)	(33)

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Regulatory Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2020

Regulated Operations [Abstract]

Schedule of Regulatory Assets

Detailed information about the Corporation's regulatory assets and liabilities is provided in Note 9 to the 2019 Annual Financial Statements. A summary follows.

	As at
	June 30,	December 31,
($ millions)	2020	2019
Regulatory assets
Deferred income taxes	1,619	1,556
Employee future benefits	530	530
Deferred energy management costs	305	279
Rate stabilization and related accounts	237	208
Deferred lease costs	119	116
Manufactured gas plant site remediation deferral	116	81
Generation early retirement costs	87	88
Derivatives	86	119
Other regulatory assets	406	406
Total regulatory assets	3,505	3,383
Less: Current portion	(395)	(425)
Long-term regulatory assets	3,110	2,958

Schedule of Regulatory Liabilities

	As at
	June 30,	December 31,
($ millions)	2020	2019
Regulatory liabilities
Deferred income taxes	1,483	1,440
Asset removal cost provision	1,235	1,187
Renewable energy surcharge	101	94
Rate stabilization and related accounts	100	166
Energy efficiency liability	95	101
Electric and gas moderator account	40	45
Employee future benefits	33	45
ROE complaints liability	22	91
Other regulatory liabilities	210	189
Total regulatory liabilities	3,319	3,358
Less: Current portion	(428)	(572)
Long-term regulatory liabilities	2,891	2,786

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

	As at
	June 30,	December 31,
($ millions)	2020	2019
Long-term debt	23,656	21,547
Fair value adjustment - ITC acquisition	133	133
Credit facility borrowings	909	640
Total long-term debt	24,698	22,320
Less: Deferred financing costs and debt discounts	(147)	(129)
Less: Current installments of long-term debt	(990)	(690)
	23,561	21,501

The long-term debt issuances for the six months ended June 30, 2020 are summarized below.

		Interest
	Month	Rate					Use of
($ millions, except %)	Issued	(%)	Maturity	Amount			Proceeds
ITC
Unsecured term loan credit agreement	January	(1)	2021		US	75	(2)(3)
Unsecured term loan credit agreement (4)	January	(5)	2021		US	200	(4)
Unsecured senior notes	May	2.95	2030		US	700	(2)(3)(6)
UNS Energy
Unsecured senior notes	April	4.00	2050		US	350	(2)(3)
Central Hudson
Unsecured senior notes	May	3.42	2050		US	30	(3)
FortisBC Electric
Unsecured debentures	May	3.12	2050		75		(2)
Newfoundland Power
First mortgage sinking fund bonds	April	3.61	2060		100		(2)(3)
FortisTCI
Unsecured senior notes (7)	June	5.30	2035		US	15	(8)(9)

⁽¹⁾ Floating rate of a one-month LIBOR plus a spread of 0.45%

⁽²⁾ Repay credit facility borrowings

⁽³⁾ General corporate purposes

⁽⁴⁾ Maximum amount of borrowings under this agreement of US$400 million has been drawn; current period borrowings were used to repay an outstanding commercial paper balance.

⁽⁵⁾ Floating rate of a two-month LIBOR plus a spread of 0.60%

⁽⁶⁾ Early redemption of unsecured term loan credit agreement of US$400 million

⁽⁷⁾ Maximum amount of borrowings under this agreement is US$30 million.

⁽⁸⁾ Repay maturing long-term debt

⁽⁹⁾ Finance capital expenditures

Schedule of Credit Facilities

			As at
	Regulated	Corporate	June 30,	December 31,
($ millions)	Utilities	and Other	2020	2019
Total credit facilities	3,982	1,881	5,863	5,590
Credit facilities utilized:
Short-term borrowings (1)	(25)	—	(25)	(512)
Long-term debt (including current portion) (2)	(909)	—	(909)	(640)
Letters of credit outstanding	(83)	(53)	(136)	(114)
Credit facilities unutilized	2,965	1,828	4,793	4,324

⁽¹⁾ The weighted average interest rate was approximately 1.9% (December 31, 2019 - 3.2%).

(2) The weighted average interest rate was approximately 1.1% (December 31, 2019 - 2.4%). The current portion was $371 million (December 31, 2019 - $252 million).

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Employee Future Benefits (Tables)

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The net benefit cost is detailed below.

	Defined Benefit Pension Plans		OPEB Plans
($ millions)	2020	2019	2020	2019
Quarter Ended June 30
Components of net benefit cost
Service costs	25	19	8	7
Interest costs	29	32	5	7
Expected return on plan assets	(44)	(40)	(5)	(4)
Amortization of actuarial losses (gains)	9	6	(2)	(1)
Amortization of past service credits/plan amendments	(1)	(1)	—	(2)
Regulatory adjustments	(1)	—	1	1
Net benefit cost	17	16	7	8
Year-to-Date June 30
Components of net benefit cost
Service costs	50	38	16	14
Interest costs	57	63	11	13
Expected return on plan assets	(88)	(80)	(10)	(8)
Amortization of actuarial losses (gains)	17	12	(3)	(2)
Amortization of past service credits/plan amendments	(1)	(1)	(1)	(4)
Regulatory adjustments	(2)	1	2	3
Net benefit cost	33	33	15	16

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Other Income, Net (Tables)

6 Months Ended

Jun. 30, 2020

Other Income and Expenses [Abstract]

Schedule of Other Income, Net

	Quarter ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Equity component, allowance for funds used during construction	21	19	35	37
Derivative gains	11	6	—	13
Interest income	3	4	8	8
Gain on repayment of debt	—	11	—	11
Other	12	3	13	12
	47	43	56	81

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Net Earnings to Common Shareholders

Diluted earnings per share ("EPS") was calculated using the treasury stock method for stock options.

	2020			2019
	Net Earnings	Weighted		Net Earnings	Weighted
	to Common	Average		to Common	Average
	Shareholders	Shares	EPS	Shareholders	Shares	EPS
	($ millions)	(# millions)	($)	($ millions)	(# millions)	($)
Quarter Ended June 30
Basic EPS	274	464.6	0.59	720	433.1	1.66
Potential dilutive effect of stock options	—	0.6		—	0.6
Diluted EPS	274	465.2	0.59	720	433.7	1.66
Year-to-Date June 30
Basic EPS	586	464.2	1.26	1,031	431.3	2.39
Potential dilutive effect of stock options	—	0.6		—	0.6
Diluted EPS	586	464.8	1.26	1,031	431.9	2.39

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Supplementary Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplementary Cash Flow Information

	Quarter Ended		Year-to-Date
	June 30		June 30
($ millions)	2020	2019	2020	2019
Change in working capital
Accounts receivable and other current assets	69	237	107	135
Prepaid expenses	29	21	25	18
Inventories	(45)	(7)	(1)	16
Regulatory assets - current portion	14	(10)	28	(16)
Accounts payable and other current liabilities	14	(199)	(194)	(256)
Regulatory liabilities - current portion	(108)	(4)	(146)	3
	(27)	38	(181)	(100)
Non-cash investing and financing activities
Accrued capital expenditures	367	329	367	329
Common share dividends reinvested	10	76	18	151
Contributions in aid of construction	8	12	8	12
Exercise of stock options into common shares	—	2	2	4
Right-of-use assets obtained in exchange for operating lease liabilities	—	2	1	48

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Fair Value of Financial Instruments and Risk Management (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Hierarchy

The following table presents the fair value of assets and liabilities that are accounted for at fair value on a recurring basis.

($ millions)	Level 1 (1)	Level 2 (1)	Level 3 (1)	Total
As at June 30, 2020
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	32	—	32
Energy contracts not subject to regulatory deferral (2)	—	12	—	12
Foreign exchange contracts and total return swaps (2)	7	—	—	7
Other investments (4)	129	—	—	129
	136	44	—	180
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	—	(109)	—	(109)
Energy contracts not subject to regulatory deferral (5)	—	(16)	—	(16)
	—	(125)	—	(125)

($ millions)	Level 1 (1)	Level 2 (1)	Level 3 (1)	Total
As at December 31, 2019
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	22	—	22
Energy contracts not subject to regulatory deferral (2)	—	8	—	8
Foreign exchange contracts, interest rate and total   return swaps (2)	14	4	—	18
Other investments (4)	121	—	—	121
	135	34	—	169
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	(1)	(138)	—	(139)
Energy contracts not subject to regulatory deferral (5)	—	(12)	—	(12)
	(1)	(150)	—	(151)

⁽¹⁾Under the hierarchy, fair value is determined using: (i) level 1 - unadjusted quoted prices in active markets; (ii) level 2 - other pricing inputs directly or indirectly observable in the marketplace; and (iii) level 3 - unobservable inputs, used when observable inputs are not available. Classifications reflect the lowest level of input that is significant to the fair value measurement.

⁽²⁾Included in accounts receivable and other current assets or other assets

⁽³⁾Unrealized gains and losses arising from changes in fair value of these contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates as permitted by the regulators, with the exception of long-term wholesale trading contracts and certain gas swap contracts.

⁽⁴⁾Included in other assets

⁽⁵⁾Included in accounts payable and other current liabilities or other liabilities

Derivative Asset Contracts Under Master Netting Agreements and Collateral Positions

The Corporation has elected gross presentation for its derivative contracts under master netting agreements and collateral positions, which apply only to its energy contracts. The following table presents the potential offset of counterparty netting.

Energy Contracts	Gross
	Amount	Counterparty	Cash
	Recognized	Netting of	Collateral
	on Balance	Energy	Received/
($ millions)	Sheet	Contracts	Posted	Net Amount
As at June 30, 2020
Derivative assets	44	30	10	4
Derivative liabilities	(125)	(30)	—	(95)

As at December 31, 2019
Derivative assets	30	22	10	(2)
Derivative liabilities	(151)	(22)	(2)	(127)

Derivative Liability Contracts Under Master Netting Agreements and Collateral Positions

The Corporation has elected gross presentation for its derivative contracts under master netting agreements and collateral positions, which apply only to its energy contracts. The following table presents the potential offset of counterparty netting.

Energy Contracts	Gross
	Amount	Counterparty	Cash
	Recognized	Netting of	Collateral
	on Balance	Energy	Received/
($ millions)	Sheet	Contracts	Posted	Net Amount
As at June 30, 2020
Derivative assets	44	30	10	4
Derivative liabilities	(125)	(30)	—	(95)

As at December 31, 2019
Derivative assets	30	22	10	(2)
Derivative liabilities	(151)	(22)	(2)	(127)

Schedule of Volume of Derivative Activity

As at June 30, 2020, the Corporation had various energy contracts that will settle on various dates through 2029. The volumes related to electricity and natural gas derivatives are outlined below.

	As at
	June 30,	December 31,
	2020	2019
Energy contracts subject to regulatory deferral (1)
Electricity swap contracts (GWh)	341	628
Electricity power purchase contracts (GWh)	3,172	3,198
Gas swap contracts (PJ)	143	168
Gas supply contract premiums (PJ)	231	241
Energy contracts not subject to regulatory deferral (1)
Wholesale trading contracts (GWh)	2,559	1,855
Gas swap contracts (PJ)	35	43

⁽¹⁾GWh means gigawatt hours and PJ means petajoules.

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Description of Business - Regulated Utilities (Details)	Jun. 30, 2020
Wataynikaneyap Power Limited Partnership
Public Utilities, General Disclosures [Line Items]
Equity investment ownership (percent)	39.00%
Belize Electricity
Public Utilities, General Disclosures [Line Items]
Equity investment ownership (percent)	33.00%
ITC
Public Utilities, General Disclosures [Line Items]
Controlling ownership interest (percent)	80.10%
Noncontrolling ownership (percent)	19.90%
Caribbean Utilities
Public Utilities, General Disclosures [Line Items]
Controlling ownership interest (percent)	60.00%

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Regulatory Matters (Details) $ in Millions, $ in Millions			1 Months Ended							3 Months Ended		6 Months Ended
	Oct. 01, 2020	Jul. 01, 2020	Jun. 30, 2020 CAD ($)	May 31, 2020	Apr. 30, 2020	Mar. 31, 2020 USD ($)	Feb. 29, 2020	Nov. 30, 2019	Sep. 30, 2016	Jun. 30, 2020 CAD ($)	Jun. 30, 2019 CAD ($)	Jun. 30, 2020 CAD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 CAD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 CAD ($)	Dec. 31, 2019 USD ($)
Public Utilities, General Disclosures [Line Items]
Regulatory liability			$ 3,319							$ 3,319		$ 3,319				$ 3,358
Net earnings										324	$ 765	677		$ 1,121
Net earnings, common equity shareholders										274	$ 720	586		$ 1,031
ROE complaints liability
Public Utilities, General Disclosures [Line Items]
Regulatory liability			22							22		22				91
UNS Energy | Arizona Corporation Commission | 2020 Utilities Customer Relief Initiative
Public Utilities, General Disclosures [Line Items]
Refund to customers													$ 8
Central Hudson | New York Public Service Commission | March 2020 Utilities Customer Relief Initiative
Public Utilities, General Disclosures [Line Items]
Deferred collection in customer rates						$ 3
Central Hudson | New York Public Service Commission | May 2020 Utilities Customer Relief Initiative | Future increase
Public Utilities, General Disclosures [Line Items]
Equity component of capital structure (percent)	50.00%	49.00%
FortisTCI | Government Of The Turks And Caicos Islands | February 2020 Rate Increase
Public Utilities, General Disclosures [Line Items]
Average increase on electricity rates (percent)							6.80%
ITC | May 2020 FERC Order
Public Utilities, General Disclosures [Line Items]
Net earnings												37
Net earnings, common equity shareholders												29
ITC | May 2020 FERC Order | ROE complaints liability
Public Utilities, General Disclosures [Line Items]
Regulatory liability			$ 22							$ 22		22			$ 16
ITC | November 2019 FERC Order | ROE complaints liability
Public Utilities, General Disclosures [Line Items]
Regulatory liability																$ 91	$ 70
ITC | May 2020 FERC Order, Prior Year Impact
Public Utilities, General Disclosures [Line Items]
Net earnings, common equity shareholders												27
ITC | May 2020 FERC Order, Current Year Impact
Public Utilities, General Disclosures [Line Items]
Net earnings, common equity shareholders												2
ITC | U.S. Federal Energy Regulatory Commission | May 2020 FERC Order
Public Utilities, General Disclosures [Line Items]
Refund to customers												$ 27	$ 20
ROE, including incentive adders (percent)				10.77%
ITC | U.S. Federal Energy Regulatory Commission | May 2020 FERC Order | Minimum
Public Utilities, General Disclosures [Line Items]
ROE (percent)				10.02%
ITC | U.S. Federal Energy Regulatory Commission | May 2020 FERC Order | Maximum
Public Utilities, General Disclosures [Line Items]
ROE (percent)				12.62%
ITC | U.S. Federal Energy Regulatory Commission | November 2019 FERC Order
Public Utilities, General Disclosures [Line Items]
ROE, including incentive adders (percent)								10.63%
ITC | U.S. Federal Energy Regulatory Commission | September 2016 FERC Order
Public Utilities, General Disclosures [Line Items]
ROE, including incentive adders (percent)									11.07%
ITC | U.S. Federal Energy Regulatory Commission | March 2020 FERC Review of Transmission Incentive Policy
Public Utilities, General Disclosures [Line Items]
Proposed ROE incentives, percentage						2.50%
FortisBC Energy and FortisBC Electric | British Columbia Utilities Commission
Public Utilities, General Disclosures [Line Items]
Variance sharing (percent)			50.00%
FortisBC Energy and FortisBC Electric | British Columbia Utilities Commission | April 2020 Utilities Customer Relief Initiative
Public Utilities, General Disclosures [Line Items]
Period of bill deferrals					3 months

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Segmented Information - Related-party and Inter-company Transactions (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Related Party Transaction [Line Items]
Inter-segment loans	$ 69		$ 69		$ 279
Inter-segment loan, weighted average interest rate	1.10%		1.10%
Inter-segment loan interest	$ 1		$ 2
Intersegment loan interest, less than		$ 1		$ 1
Equity Method Investee | Belize Electricity
Related Party Transaction [Line Items]
Due from related party	13		13		$ 8
Aitken Creek
Related Party Transaction [Line Items]
Intercompany revenue recognized	5	6	12	12
Waneta Expansion
Related Party Transaction [Line Items]
Intercompany revenue recognized	$ 0	$ 1	$ 0	$ 17

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Segmented Information - Information by Reportable Segment (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Revenue	$ 2,077	$ 1,970	$ 4,468	$ 4,406
Energy supply costs	514	496	1,264	1,329
Operating expenses	599	603	1,225	1,219
Depreciation and amortization	366	338	723	672
Gain on disposition	0	577	0	577
Operating income	598	1,110	1,256	1,763
Other income, net	47	43	56	81
Finance charges	263	263	519	532
Income tax expense	58	125	116	191
Net earnings	324	765	677	1,121
Non-controlling interests	33	28	58	56
Preference share dividends	17	17	33	34
Common equity shareholders	274	720	586	1,031
Goodwill	12,482	12,092	12,482	12,092	$ 12,004
Total assets	56,205	51,699	56,205	51,699	$ 53,404
Capital expenditures	775	843	1,937	1,583
Inter-segment eliminations
Segment Reporting Information [Line Items]
Revenue	0	0	0	(3)
Energy supply costs	0	0	0	0
Operating expenses	0	0	0	(3)
Depreciation and amortization	0	0	0	0
Gain on disposition		0		0
Operating income	0	0	0	0
Other income, net	0	0	0	0
Finance charges	0	0	0	0
Income tax expense	0	0	0	0
Net earnings	0	0	0	0
Non-controlling interests	0	0	0	0
Preference share dividends	0	0	0	0
Common equity shareholders	0	0	0	0
Goodwill	0	0	0	0
Total assets	(89)	(119)	(89)	(119)
Capital expenditures	0	0	0	0
Regulated | Operating segments
Segment Reporting Information [Line Items]
Revenue	2,064	1,945	4,430	4,348
Energy supply costs	514	495	1,263	1,327
Operating expenses	580	587	1,188	1,177
Depreciation and amortization	361	332	713	658
Gain on disposition		0		0
Operating income	609	531	1,266	1,186
Other income, net	42	25	58	54
Finance charges	224	221	443	440
Income tax expense	79	54	168	151
Net earnings	348	281	713	649
Non-controlling interests	33	25	58	48
Preference share dividends	0	0	0	0
Common equity shareholders	315	256	655	601
Goodwill	12,455	12,065	12,455	12,065
Total assets	55,328	50,960	55,328	50,960
Capital expenditures	772	828	1,930	1,553
Regulated | Operating segments | ITC
Segment Reporting Information [Line Items]
Revenue	477	428	910	836
Energy supply costs	0	0	0	0
Operating expenses	113	132	231	256
Depreciation and amortization	75	68	148	131
Gain on disposition		0		0
Operating income	289	228	531	449
Other income, net	13	12	17	22
Finance charges	79	79	159	156
Income tax expense	55	39	98	81
Net earnings	168	122	291	234
Non-controlling interests	30	21	52	41
Preference share dividends	0	0	0	0
Common equity shareholders	138	101	239	193
Goodwill	8,332	8,037	8,332	8,037
Total assets	21,251	19,533	21,251	19,533
Capital expenditures	232	301	481	537
Regulated | Operating segments | UNS Energy
Segment Reporting Information [Line Items]
Revenue	546	500	1,019	1,043
Energy supply costs	184	164	351	396
Operating expenses	157	161	315	313
Depreciation and amortization	85	74	166	148
Gain on disposition		0		0
Operating income	120	101	187	186
Other income, net	16	5	13	14
Finance charges	34	33	62	66
Income tax expense	17	13	25	19
Net earnings	85	60	113	115
Non-controlling interests	0	0	0	0
Preference share dividends	0	0	0	0
Common equity shareholders	85	60	113	115
Goodwill	1,876	1,809	1,876	1,809
Total assets	11,252	9,884	11,252	9,884
Capital expenditures	176	156	685	323
Regulated | Operating segments | Central Hudson
Segment Reporting Information [Line Items]
Revenue	206	199	486	476
Energy supply costs	51	58	129	150
Operating expenses	125	107	259	225
Depreciation and amortization	24	19	46	39
Gain on disposition		0		0
Operating income	6	15	52	62
Other income, net	8	4	17	8
Finance charges	12	11	24	22
Income tax expense	0	1	8	9
Net earnings	2	7	37	39
Non-controlling interests	0	0	0	0
Preference share dividends	0	0	0	0
Common equity shareholders	2	7	37	39
Goodwill	612	591	612	591
Total assets	3,967	3,574	3,967	3,574
Capital expenditures	91	78	164	142
Regulated | Operating segments | FortisBC Energy
Segment Reporting Information [Line Items]
Revenue	249	235	715	720
Energy supply costs	66	63	226	244
Operating expenses	76	78	158	161
Depreciation and amortization	59	59	119	118
Gain on disposition		0		0
Operating income	48	35	212	197
Other income, net	2	3	3	6
Finance charges	35	34	71	69
Income tax expense	(2)	(6)	21	24
Net earnings	17	10	123	110
Non-controlling interests	1	0	1	0
Preference share dividends	0	0	0	0
Common equity shareholders	16	10	122	110
Goodwill	913	913	913	913
Total assets	7,291	6,885	7,291	6,885
Capital expenditures	95	104	216	174
Regulated | Operating segments | FortisAlberta
Segment Reporting Information [Line Items]
Revenue	150	150	302	295
Energy supply costs	0	0	0	0
Operating expenses	34	36	72	77
Depreciation and amortization	56	53	111	105
Gain on disposition		0		0
Operating income	60	61	119	113
Other income, net	0	0	1	1
Finance charges	25	27	51	52
Income tax expense	2	0	4	1
Net earnings	33	34	65	61
Non-controlling interests	0	0	0	0
Preference share dividends	0	0	0	0
Common equity shareholders	33	34	65	61
Goodwill	228	228	228	228
Total assets	4,918	4,732	4,918	4,732
Capital expenditures	83	95	204	202
Regulated | Operating segments | FortisBC Electric
Segment Reporting Information [Line Items]
Revenue	91	90	205	209
Energy supply costs	15	15	54	55
Operating expenses	26	27	53	52
Depreciation and amortization	15	15	30	31
Gain on disposition		0		0
Operating income	35	33	68	71
Other income, net	1	1	2	2
Finance charges	18	18	36	36
Income tax expense	1	1	2	6
Net earnings	17	15	32	31
Non-controlling interests	0	0	0	0
Preference share dividends	0	0	0	0
Common equity shareholders	17	15	32	31
Goodwill	235	235	235	235
Total assets	2,377	2,267	2,377	2,267
Capital expenditures	30	26	58	51
Regulated | Operating segments | Other Electric
Segment Reporting Information [Line Items]
Revenue	345	343	793	769
Energy supply costs	198	195	503	482
Operating expenses	49	46	100	93
Depreciation and amortization	47	44	93	86
Gain on disposition		0		0
Operating income	51	58	97	108
Other income, net	2	0	5	1
Finance charges	21	19	40	39
Income tax expense	6	6	10	11
Net earnings	26	33	52	59
Non-controlling interests	2	4	5	7
Preference share dividends	0	0	0	0
Common equity shareholders	24	29	47	52
Goodwill	259	252	259	252
Total assets	4,272	4,085	4,272	4,085
Capital expenditures	65	68	122	124
NON-REGULATED | Operating segments | Energy Infrastructure
Segment Reporting Information [Line Items]
Revenue	13	25	38	61
Energy supply costs	0	1	1	2
Operating expenses	7	9	15	23
Depreciation and amortization	4	5	8	13
Gain on disposition		0		0
Operating income	2	10	14	23
Other income, net	0	1	0	2
Finance charges	0	(1)	0	0
Income tax expense	(1)	1	2	1
Net earnings	3	11	12	24
Non-controlling interests	0	3	0	8
Preference share dividends	0	0	0	0
Common equity shareholders	3	8	12	16
Goodwill	27	27	27	27
Total assets	740	671	740	671
Capital expenditures	3	7	7	13
NON-REGULATED | Operating segments | Corporate and Other
Segment Reporting Information [Line Items]
Revenue	0	0	0	0
Energy supply costs	0	0	0	0
Operating expenses	12	7	22	22
Depreciation and amortization	1	1	2	1
Gain on disposition		577		577
Operating income	(13)	569	(24)	554
Other income, net	5	17	(2)	25
Finance charges	39	43	76	92
Income tax expense	(20)	70	(54)	39
Net earnings	(27)	473	(48)	448
Non-controlling interests	0	0	0	0
Preference share dividends	17	17	33	34
Common equity shareholders	(44)	456	(81)	414
Goodwill	0	0	0	0
Total assets	226	187	226	187
Capital expenditures	$ 0	$ 8	$ 0	$ 17

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Allowance for Credit Losses (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Allowance for Credit Losses and Doubtful Accounts Receivable [Roll Forward]
Beginning of period	$ (44)	$ (33)	$ (35)	$ (33)
Credit loss expensed	(5)	(4)	(14)	(9)
Credit loss deferred	(8)		(8)
Write-offs, net of recoveries	3	4	6	8
Foreign exchange	1	0	(2)	1
End of period	$ (53)	$ (33)	$ (53)	$ (33)

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Regulatory Assets and Liabilities - Schedule of Regulatory Assets and Liabilities (Details) - CAD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Regulatory Assets [Line Items]
Total regulatory assets	$ 3,505	$ 3,383
Less: Current portion	(395)	(425)
Long-term regulatory assets	3,110	2,958
Regulatory Liabilities [Line Items]
Total regulatory liabilities	3,319	3,358
Less: Current portion	(428)	(572)
Long-term regulatory liabilities	2,891	2,786
Deferred income taxes
Regulatory Liabilities [Line Items]
Total regulatory liabilities	1,483	1,440
Asset removal cost provision
Regulatory Liabilities [Line Items]
Total regulatory liabilities	1,235	1,187
Renewable energy surcharge
Regulatory Liabilities [Line Items]
Total regulatory liabilities	101	94
Rate stabilization and related accounts
Regulatory Liabilities [Line Items]
Total regulatory liabilities	100	166
Energy efficiency liability
Regulatory Liabilities [Line Items]
Total regulatory liabilities	95	101
Electric and gas moderator account
Regulatory Liabilities [Line Items]
Total regulatory liabilities	40	45
Employee future benefits
Regulatory Liabilities [Line Items]
Total regulatory liabilities	33	45
ROE complaints liability
Regulatory Liabilities [Line Items]
Total regulatory liabilities	22	91
Other
Regulatory Liabilities [Line Items]
Total regulatory liabilities	210	189
Deferred income taxes
Regulatory Assets [Line Items]
Total regulatory assets	1,619	1,556
Employee future benefits
Regulatory Assets [Line Items]
Total regulatory assets	530	530
Deferred energy management costs
Regulatory Assets [Line Items]
Total regulatory assets	305	279
Rate stabilization and related accounts
Regulatory Assets [Line Items]
Total regulatory assets	237	208
Deferred lease costs
Regulatory Assets [Line Items]
Total regulatory assets	119	116
Manufactured gas plant site remediation deferral
Regulatory Assets [Line Items]
Total regulatory assets	116	81
Generation early retirement costs
Regulatory Assets [Line Items]
Total regulatory assets	87	88
Derivatives
Regulatory Assets [Line Items]
Total regulatory assets	86	119
Other
Regulatory Assets [Line Items]
Total regulatory assets	$ 406	$ 406

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Long-Term Debt - Schedule of Long-Term Debt (Details) - CAD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term debt, excluding credit facility borrowings	$ 23,656	$ 21,547
Long-term debt	24,698	22,320
Less: Deferred financing costs and debt discounts	(147)	(129)
Less: Current installments of long-term debt	(990)	(690)
Long-term debt less current portion and deferred financing costs and debt discounts	23,561	21,501
ITC
Debt Instrument [Line Items]
Fair value adjustment - ITC acquisition	133	133
Credit facility
Debt Instrument [Line Items]
Long-term debt	909	640
Less: Current installments of long-term debt	(371)	(252)
Credit facility | Long-term credit facility borrowings
Debt Instrument [Line Items]
Long-term debt	$ 909	$ 640

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Long-Term Debt - Long-term Debt Issuances (Details) $ in Millions, $ in Millions	1 Months Ended
	May 31, 2020 USD ($)	Jan. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)	May 31, 2020 CAD ($)	Apr. 30, 2020 USD ($)	Apr. 30, 2020 CAD ($)
ITC | Unsecured
Debt Instrument [Line Items]
Amount	$ 700
ITC | Unsecured | Floating Rate One-Month LIBOR Unsecured Term Loan
Debt Instrument [Line Items]
Amount		$ 75
ITC | Unsecured | Floating Rate One-Month LIBOR Unsecured Term Loan | LIBOR
Debt Instrument [Line Items]
Variable rate (percent)		0.45%
ITC | Unsecured | Floating Rate Two-Month LIBOR Unsecured Term Loan
Debt Instrument [Line Items]
Amount		$ 200
Maximum borrowings		$ 400
ITC | Unsecured | Floating Rate Two-Month LIBOR Unsecured Term Loan | LIBOR
Debt Instrument [Line Items]
Variable rate (percent)		0.60%
ITC | Unsecured | Two Point Nine Five Percent Unsecured Senior Notes
Debt Instrument [Line Items]
Interest rate	2.95%			2.95%
Amount	$ 700
Repayments	$ 400
UNS Energy | Unsecured | Four Percent Unsecured Senior Notes
Debt Instrument [Line Items]
Interest rate					4.00%	4.00%
Amount					$ 350
Central Hudson | Unsecured | Three Point Four Two Percent Unsecured Senior Notes
Debt Instrument [Line Items]
Interest rate	3.42%			3.42%
Amount	$ 30
FortisBC Electric | Unsecured | Three Point One Two Percent Unsecured Debentures
Debt Instrument [Line Items]
Interest rate	3.12%			3.12%
Amount				$ 75
Newfoundland Power | Secured | Three Point Six One Percent First Mortgage Sinking Fund Bonds
Debt Instrument [Line Items]
Interest rate					3.61%	3.61%
Amount						$ 100
FortisTCI | Unsecured | Five Point Three Zero Percent Unsecured Senior Notes
Debt Instrument [Line Items]
Interest rate			5.30%
Amount			$ 15
Maximum borrowings			$ 30

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Long-Term Debt - Narrative (Details) $ in Millions, $ in Millions	1 Months Ended				6 Months Ended
	Jul. 31, 2020 USD ($)	May 31, 2020 USD ($)	Apr. 30, 2020 USD ($)	Mar. 31, 2020 CAD ($)	Jun. 30, 2020 CAD ($)	Jul. 31, 2020 CAD ($)	Apr. 30, 2020 CAD ($)	Jan. 31, 2020 USD ($)	Dec. 31, 2019 CAD ($)
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 5,863				$ 5,590
Credit facilities unused					$ 4,793				$ 4,324
No one bank | Bank concentration risk | Credit facility
Debt Instrument [Line Items]
Concentration risk percentage					25.00%
Caribbean Utilities | Unsecured Revolving Committed Credit Facility
Debt Instrument [Line Items]
Increase in unsecured debt								$ 20
FortisBC Energy | Uncommitted Letter Of Credit Facility
Debt Instrument [Line Items]
Debt instrument, term				2 years
Maximum borrowing capacity				$ 55
FortisAlberta | Non-Revolving Committed Facility
Debt Instrument [Line Items]
Debt instrument, term				1 year
Maximum borrowing capacity				$ 150
Corporate | Unsecured Revolving Term Committed Facility
Debt Instrument [Line Items]
Debt instrument, term			1 year
Maximum borrowing capacity							$ 500
Three Point One Three Percent First Mortgage Bonds | ITC | Subsequent Event
Debt Instrument [Line Items]
Debt instrument, term	31 years
Debt instrument, face amount	$ 180
Interest rate	3.13%					3.13%
Three Point Six Two Percent Unsecured Senior Notes | Central Hudson | Subsequent Event
Debt Instrument [Line Items]
Debt instrument, term	40 years
Debt instrument, face amount	$ 30
Interest rate	3.62%					3.62%
Two Point Five Four Percent Unsecured Debentures | FortisBC Energy | Subsequent Event
Debt Instrument [Line Items]
Debt instrument, term	30 years
Debt instrument, face amount						$ 200
Interest rate	2.54%					2.54%
Committed facilities with maturities ranging from 2021 through 2025
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 5,600
Unsecured Non-Revolving Uncommitted Credit Facility | UNS Energy
Debt Instrument [Line Items]
Termination of debt			$ 225
Uncommitted Credit Facility | Central Hudson
Debt Instrument [Line Items]
Termination of debt		$ 10
Unsecured Revolving Committed Credit Facility | Central Hudson | Subsequent Event
Debt Instrument [Line Items]
Termination of debt	$ 50

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Long-Term Debt - Schedule of Credit Facilities (Details) - CAD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Line of Credit Facility [Line Items]
Total credit facilities	$ 5,863	$ 5,590
Credit facilities utilized:
Short-term borrowings	(25)	(512)
Long-term debt (including current portion)	(24,698)	(22,320)
Letters of credit outstanding	(136)	(114)
Credit facilities unutilized	4,793	4,324
Current installments of long-term debt	990	690
Credit facility
Credit facilities utilized:
Long-term debt (including current portion)	$ (909)	$ (640)
Long-term debt (including current portion), weighted average interest rate (percent)	1.10%	2.40%
Current installments of long-term debt	$ 371	$ 252
Credit facility
Credit facilities utilized:
Short-term borrowings	$ (25)	$ (512)
Short-term borrowings, weighted average interest rate (percent)	1.90%	3.20%
Long-term credit facility borrowings | Credit facility
Credit facilities utilized:
Long-term debt (including current portion)	$ (909)	$ (640)
Regulated Utilities
Line of Credit Facility [Line Items]
Total credit facilities	3,982
Credit facilities utilized:
Letters of credit outstanding	(83)
Credit facilities unutilized	2,965
Regulated Utilities | Credit facility
Credit facilities utilized:
Long-term debt (including current portion)	(909)
Regulated Utilities | Credit facility
Credit facilities utilized:
Short-term borrowings	(25)
Corporate and Other
Line of Credit Facility [Line Items]
Total credit facilities	1,881
Credit facilities utilized:
Letters of credit outstanding	(53)
Credit facilities unutilized	1,828
Corporate and Other | Credit facility
Credit facilities utilized:
Long-term debt (including current portion)	0
Corporate and Other | Credit facility
Credit facilities utilized:
Short-term borrowings	$ 0

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Preference Shares (Details) - $ / shares		5 Months Ended	60 Months Ended
	Jun. 01, 2020	May 31, 2020	May 30, 2025
First Preference Shares, Series H
Conversion of Stock [Line Items]
Annual dividend (CAD per share)		$ 0.6250
First Preference Shares, Series H | Forecast
Conversion of Stock [Line Items]
Annual dividend (CAD per share)			$ 0.45875
First Preference Shares, Series H
Conversion of Stock [Line Items]
Number of shares converted (in shares)	267,341
Number of shares issued for each share of convertible preferred stock	1
First Preference Shares, Series I
Conversion of Stock [Line Items]
Number of shares converted (in shares)	907,577
Number of shares issued for each share of convertible preferred stock	1

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Employee Future Benefits - Schedule of Net Benefit Costs (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Defined Benefit Pension Plans
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service costs	$ 25	$ 19	$ 50	$ 38
Interest costs	29	32	57	63
Expected return on plan assets	(44)	(40)	(88)	(80)
Amortization of actuarial losses (gains)	9	6	17	12
Amortization of past service credits/plan amendments	(1)	(1)	(1)	(1)
Regulatory adjustments	(1)	0	(2)	1
Net benefit cost	17	16	33	33
OPEB Plans
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service costs	8	7	16	14
Interest costs	5	7	11	13
Expected return on plan assets	(5)	(4)	(10)	(8)
Amortization of actuarial losses (gains)	(2)	(1)	(3)	(2)
Amortization of past service credits/plan amendments	0	(2)	(1)	(4)
Regulatory adjustments	1	1	2	3
Net benefit cost	$ 7	$ 8	$ 15	$ 16

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Employee Future Benefits - Narrative (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Retirement Benefits [Abstract]
Defined contribution plan cost recognized	$ 9	$ 10	$ 22	$ 22

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Disposition (Details) $ in Millions		3 Months Ended		6 Months Ended
	Apr. 16, 2019 CAD ($) MW	Jun. 30, 2020 CAD ($)	Jun. 30, 2019 CAD ($)	Jun. 30, 2020 CAD ($)	Jun. 30, 2019 CAD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on disposition		$ 0	$ 577	$ 0	$ 577
Waneta Expansion
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership percentage sold	51.00%
Fortis' share of earnings before tax, excluding the gain on disposition					51.00%
Waneta Expansion
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Generating capacity (MW) | MW	335
Proceeds on disposition	$ 995
Gain on disposition	577
Gain on disposition, after tax	$ 484
Earnings before tax, excluding the gain on disposition			$ 7		$ 17

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Other Income, Net (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Other Income and Expenses [Abstract]
Equity component, allowance for funds used during construction	$ 21	$ 19	$ 35	$ 37
Derivative gains	11	6	0	13
Interest income	3	4	8	8
Gain on repayment of debt	0	11	0	11
Other	12	3	13	12
Other income, net	$ 47	$ 43	$ 56	$ 81

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Earnings Per Common Share - Schedule of Earnings Per Share (EPS) (Details) - CAD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net Earnings to Common Shareholders
Basic EPS	$ 274	$ 720	$ 586	$ 1,031
Potential dilutive effect of stock options	0	0	0	0
Diluted EPS	$ 274	$ 720	$ 586	$ 1,031
Weighted Average Shares
Basic EPS (shares)	464.6	433.1	464.2	431.3
Potential dilutive effect of stock options (shares)	0.6	0.6	0.6	0.6
Diluted EPS (shares)	465.2	433.7	464.8	431.9
EPS
Basic (CAD per share)	$ 0.59	$ 1.66	$ 1.26	$ 2.39
Diluted (CAD per share)	$ 0.59	$ 1.66	$ 1.26	$ 2.39

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Supplementary Cash Flow Information (Details) - CAD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Change in working capital
Accounts receivable and other current assets	$ 69	$ 237	$ 107	$ 135
Prepaid expenses	29	21	25	18
Inventories	(45)	(7)	(1)	16
Regulatory assets - current portion	14	(10)	28	(16)
Accounts payable and other current liabilities	14	(199)	(194)	(256)
Regulatory liabilities - current portion	(108)	(4)	(146)	3
Changes in working capital	(27)	38	(181)	(100)
Non-cash investing and financing activities
Accrued capital expenditures	367	329	367	329
Common share dividends reinvested	10	76	18	151
Contributions in aid of construction	8	12	8	12
Exercise of stock options into common shares	0	2	2	4
Right-of-use assets obtained in exchange for operating lease liabilities	$ 0	$ 2	$ 1	$ 48

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Fair Value of Financial Instruments and Risk Management - Derivative Narrative (Details) $ in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2020 CAD ($)	May 31, 2020 USD ($)	Dec. 31, 2019 CAD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized losses recognized in regulatory assets	$ 3,505		$ 3,383
UNS Energy
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Realized gains, portion shared with customers (percent)	10.00%
ITC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Realized loss recognized in OCI	$ 31
ITC | Unsecured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument, face amount		$ 700
Total return swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notional amount	$ 113
Total return swaps | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative terms	1 year
Total return swaps | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative terms	3 years
Foreign exchange contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notional amount	$ 380
Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Reclassification period	5 years
Interest Rate Swap | ITC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notional amount	$ 611
Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized losses recognized in regulatory assets	86		119
Derivative instruments | Energy contracts subject to regulatory deferral
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized losses recognized in regulatory assets	$ 86		$ 119

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Fair Value of Financial Instruments and Risk Management - Fair Value Hierarchy (Details) - Recurring - CAD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Assets
Other investments	$ 129	$ 121
Total Assets	180	169
Liabilities
Total Liabilities	(125)	(151)
Energy contracts subject to regulatory deferral
Assets
Derivative asset	32	22
Liabilities
Derivative liability	(109)	(139)
Energy contracts not subject to regulatory deferral
Assets
Derivative asset	12	8
Liabilities
Derivative liability	(16)	(12)
Foreign exchange contracts and total return swaps
Assets
Derivative asset	7
Foreign exchange contracts, interest rate and total return swaps
Assets
Derivative asset		18
Level 1
Assets
Other investments	129	121
Total Assets	136	135
Liabilities
Total Liabilities	0	(1)
Level 1 | Energy contracts subject to regulatory deferral
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	(1)
Level 1 | Energy contracts not subject to regulatory deferral
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Level 1 | Foreign exchange contracts and total return swaps
Assets
Derivative asset	7
Level 1 | Foreign exchange contracts, interest rate and total return swaps
Assets
Derivative asset		14
Level 2
Assets
Other investments	0	0
Total Assets	44	34
Liabilities
Total Liabilities	(125)	(150)
Level 2 | Energy contracts subject to regulatory deferral
Assets
Derivative asset	32	22
Liabilities
Derivative liability	(109)	(138)
Level 2 | Energy contracts not subject to regulatory deferral
Assets
Derivative asset	12	8
Liabilities
Derivative liability	(16)	(12)
Level 2 | Foreign exchange contracts and total return swaps
Assets
Derivative asset	0
Level 2 | Foreign exchange contracts, interest rate and total return swaps
Assets
Derivative asset		4
Level 3
Assets
Other investments	0	0
Total Assets	0	0
Liabilities
Total Liabilities	0	0
Level 3 | Energy contracts subject to regulatory deferral
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Level 3 | Energy contracts not subject to regulatory deferral
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Level 3 | Foreign exchange contracts and total return swaps
Assets
Derivative asset	$ 0
Level 3 | Foreign exchange contracts, interest rate and total return swaps
Assets
Derivative asset		$ 0

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Fair Value of Financial Instruments and Risk Management - Derivative Contracts Under Master Netting Agreements and Collateral Positions (Details) (Details) - Energy contracts - CAD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Derivative assets
Gross Amount Recognized in Balance Sheet	$ 44	$ 30
Counterparty Netting of Energy Contracts	30	22
Cash Collateral Received/Posted	10	10
Net Amount	4	(2)
Derivative liabilities
Gross Amount Recognized in Balance Sheet	(125)	(151)
Counterparty Netting of Energy Contracts	(30)	(22)
Cash Collateral Received/Posted	0	(2)
Net Amount	$ (95)	$ (127)

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Fair Value of Financial Instruments and Risk Management - Volume of Derivative Activity (Details) kJ in Trillions	6 Months Ended	12 Months Ended
	Jun. 30, 2020 kJ GWh	Dec. 31, 2019 GWh kJ
Electricity swap contracts (GWh)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Volume (gwh / kj) | GWh	341	628
Electricity power purchase contracts (GWh)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Volume (gwh / kj) | GWh	3,172	3,198
Gas swap contracts (PJ)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Volume (gwh / kj) | kJ	143	168
Gas supply contract premiums (PJ)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Volume (gwh / kj) | kJ	231	241
Wholesale trading contracts (GWh)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Volume (gwh / kj) | GWh	2,559	1,855
Gas swap contracts (PJ)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Volume (gwh / kj) | kJ	35	43

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Fair Value of Financial Instruments and Risk Management - Credit Risk Narrative (Details) - CAD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Value of derivative instruments in net liability positions	$ 109	$ 161
Revenue | Three Customers | Customer Concentration Risk | ITC
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentration risk percentage	65.00%

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Fair Value of Financial Instruments and Risk Management - Foreign Exchange Hedge Narrative (Details) - Foreign net investments - USD ($) $ in Billions	Jun. 30, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unhedged foreign net investments	$ 10.0	$ 9.7
Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Long-term debt designated as an effective hedge	$ 2.2	$ 2.2

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Fair Value of Financial Instruments and Risk Management - Financial Instruments Not Carried At Fair Value Narrative (Details) - CAD ($) $ in Billions	Jun. 30, 2020	Dec. 31, 2019
Carrying Value
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 24.7	$ 22.3
Estimated Fair Value
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 28.9	$ 25.3

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Commitments and Contingencies (Details)	Jun. 30, 2020 CAD ($)
FHI and Fortis | Claim related to pipeline rights
Site Contingency [Line Items]
Contingency accrual	$ 0