On the desk · Pipelines
TC Energy (TRP): The cleanup, finished.
The read · Machine
Post-South-Bow-spinout pure-play North American gas pipeline operator with a small but real power segment. Coastal GasLink completed in late 2023. The 2024 spinout separated the liquids pipelines into a standalone (South Bow). Long-life regulated and contracted assets dominate.
Generated May 14, 2026 from TC Energy FY 2025 disclosure and Q4 2025 release (February 2026). Reviewed by principal May 14, 2026.
By the numbers
- FY 2025
- Natural gas pipelines
- ~93 Bcf/d transported, NA-wide footprint
- Power & energy solutions
- Bruce Power (~48%) + smaller
- Capital program
- ~C$6–7B annual run-rate
- Dividend growth
- Targeted 3–5% per year
- Net debt / EBITDA
- ~4.8× target band
- Take-or-pay / contracted share
- >90% of EBITDA
- Listings
- TSX: TRP · NYSE: TRP
What we track
- Rate-base growth across NGTL and US gas
- Bruce Power refurbishment progress
- Capital program at the C$6–7B run-rate, not above
- Dividend coverage at the 3–5% growth pace
- South Bow inter-company alignment, where any
The Trough Test
The note · Principal
The note
TC Energy is the pipeline business its critics finally stopped writing about. The two events that defined the last seven years — Coastal GasLink and the South Bow spinout — are both behind us. What is left is a North American gas pipeline and power business that earns more than 90% of EBITDA from take-or-pay and cost-of-service contracts.
The business, in one paragraph
TC Energy moves roughly 93 Bcf/day of natural gas across a network that touches Canada, the US, and Mexico. The NGTL system in Alberta is one of the largest gas-gathering systems in the world. The US gas pipelines (Columbia, ANR, Northern Border) anchor the eastern and Midwest networks. Coastal GasLink, completed in late 2023, delivers feedstock to LNG Canada. The power segment, anchored by an approximately 48% interest in Bruce Power in Ontario, is a meaningful and growing contributor. The South Bow spinout in October 2024 carved out the liquids pipelines.
What FY 2025 actually said
The simplified business reported cleanly. EBITDA grew at the targeted rate. The capital program continued at the C$6–7B annual run-rate that management has committed to. The dividend was raised in line with the 3–5% growth target. Net debt sits at the high end of the targeted band. The Coastal GasLink over-run is no longer a near-term cash drag.
Two things we are reading carefully
1. Whether the capital program discipline holds
The pre-2023 capital program was the problem. Coastal GasLink alone was a multi-billion dollar over-run. The post-spinout capital program at C$6–7B is sized appropriately for the rate base and the balance sheet. The honest test is whether management resists the temptation to chase the next mega-project. We track every new project announcement against the run-rate.
2. Bruce Power refurbishment
Bruce is a long-life, regulated, low-emissions power asset whose refurbishment program is one of the largest capital programs in Canadian power. TC Energy's interest is a meaningful and growing contributor to EBITDA. We track refurbishment unit progress and the regulated rate-of-return.
What we are watching into FY 2026
- Capital program discipline at the C$6–7B run-rate.
- Bruce Power refurbishment progress.
- NGTL rate-base growth.
- Net debt trajectory within the target band.
A pipeline is a toll-road. The honest version of TC Energy is the one with the cleanup finished.
Checklist scorecard
Ten questions, three pillars. Status icons reflect the principal's read on this name; absent a green dot, fall back to the question's standard note. See the full Checklist for the framework.
Pillar I
The business
Does it generate free cash flow through the full cycle, or only the top half of it?
Pass
FCF through the full cycle, every year. Regulated and contracted EBITDA dominates.
Do the unit economics still work at the worst price of the last decade?
Pass
Take-or-pay and cost-of-service contracts; unit economics are not commodity-price exposed in the way E&P is.
What does the balance sheet look like at trough pricing: net debt, covenants, maturity ladder?
Not yet
Net debt is at the high end of the target band post-Coastal GasLink. The South Bow spinout cleaned the picture.
When they reinvest a dollar (capex, M&A, or buyback), what actually comes back?
Not yet
Coastal GasLink was a multi-billion dollar over-run. ROIC on incremental capital across 2018–2023 trailed the original case meaningfully.
Pillar II
The people
How much of the operator's own net worth, bought and not granted, sits in this name?
Not yet
Insider ownership is modest. Capital allocation behaviour at the board is what we read, not direct insider buys.
What did management actually do in 2015 and 2020: issue, buy back, or sit still?
Pass
2015 and 2020: dividend held and raised in both years. The regulated cash flow did its job.
Is compensation tied to per-share value, or to production, revenue, and size?
Not yet
Compensation is partially per-share-aligned; the legacy plan was production-sized rather than capital-efficient.
Who succeeds the operator, and is that person already visible on the page?
Pass
Succession is visible; Poirier was promoted from inside, and the executive team is named.
Pillar III
The cycle
Where are we on the cost curve that matters: the real one, not the one in the pitch deck?
Pass
NGTL and the US gas footprint sit on rate base that has rate-base-driven economics. The cost-curve discussion is largely irrelevant.
What does a “normal” year look like a decade from now, and does this business still work at that price?
Pass
Underwriting at any realistic North American gas demand path, the regulated and contracted base earns. The decade-out picture is favourable for gas pipeline rate-base.
Disclosure
This writeup is for informational and educational purposes only and is not a recommendation, solicitation, or price call. The author may hold a position in TC Energy Corporation and may transact at any time without notice. Figures are sourced from TC Energy's FY 2025 disclosure and Q4 2025 release (February 2026). Where a figure is marked “(approx.)” or “—” the source disclosure was either unconfirmed or unreported at the time of writing. See the Terms of Use for the full disclaimer. Halvren's companion writeup may appear on Substack at greater length.
Pillar I. The business. TC Energy is more than 90% take-or-pay or cost-of-service EBITDA. The post-South-Bow business is structurally simpler than the pre-2024 business. The Bruce Power refurbishment program is a real contributor and a long-life regulated asset in its own right. The legitimate Pillar I weakness is the 2018–2023 capital allocation record, anchored by Coastal GasLink's multi-billion dollar over-run.
Pillar II. The people. François Poirier led the cleanup, including the South Bow spinout and the post-Coastal-GasLink balance-sheet repair. The dividend was held and raised through both 2015 and 2020. Insider ownership is modest. The compensation reset post-2022 is incrementally per-share-aligned; the legacy plan was not.
Pillar III. The cycle. Natural gas pipeline rate base is structurally a long-cycle asset. The decade-out demand picture for North American natural gas — LNG export, gas-fired power generation, industrial — is favourable. The Pillar III risk is regulatory, not commodity. Underwriting at the targeted 3–5% dividend growth and rate-base expansion, TC Energy is a compounder. Not a fast one. A reliable one.