Thanks [Julian]. Good morning, everyone and thank you for joining us for the AltaGas Q3 2019 financial results conference call.

Speaking on the call this morning will be Randy Crawford, President and Chief Executive Officer; James Harbilas, Executive Vice President and Chief Financial Officer; and we're also joined here this morning by several additional members of our executive team. As always, today's prepared remarks will be followed by an analysts' question-and-answer period.

And I'd remind everyone that the Investor Relations team will be available after the call for any follow-up questions or any detailed modeling questions that you might have. A replay of the call will be available later today and the transcript will be posted to the website shortly thereafter.

I would like to point out that we have slight change in the format for today’s call, presentation slides have been made available and can be accessed through our events and presentations webpage, however the prepared remarks will not follow directly along with the slides provided. Before we begin, I'll remind everyone that we will refer to forward-looking information on today's call.

This information is subject to certain risks and uncertainties as outlined in the forward-looking information disclosure on Slide 2 of the presentation slide and more fully within the public disclosure filings on both the SEDAR and EDGAR systems. And with that I'll now turn the call over to Randy Crawford.

Thank you Adam and good morning everyone. It is my pleasure to welcome you to our 2019 third quarter results call.

As move through our third quarter we continue to execute against our near term operational and financial priorities, the success of which I will touch on throughout my prepared remarks. Our utilities and midstream groups delivered solid operational results this quarter, however, given the number of moving parts I thought it was important to begin this call by providing appropriate context around our third quarter.

As you can see from our financials we recorded normalized EBITDA of 178 million compared 226 million in the prior year. On the surface that obviously shows a steep decline in EBITDA.

As you are well aware we've been very successful in monetizing assets to deliver the company which has a corresponding impact on lost EBITDA. The lost EBITDA due to asset sales in Q3 was $93 million.

This quarter we also recorded a one-time adjustment of $30 million related to the hearing examiner's report in Virginia due to an adjustment of the TCJA liability which includes a change in excess referrals amortization period, reduction in allowed ROE and a disallowance of capital associated with our [indiscernible] program. When I look at the underlying performance of our base business removing these impacts our normalized EBITDA grew by $75 million quarter-over-quarter to $178 million.

For more information on this you can refer to our slide deck posted on our website. This impact flows through the normalized funds from operations or FFO which were $67 million compared to $117 million in the third quarter of 2018 excluding the impact of the Virginia hearing examiner's report and lost FFO from asset sales, FFO would have increased by approximately $39 million for the quarter as compared to the same quarter last year.

Material components of our near-term priorities is our asset sale program. In Q3 we exceeded our asset sale target of 1.5 to 2 billion with the announcement for the sale of the central pen pipeline.

We have now announced or completed approximately 2.2 billion in assets sales in 2019 with funds being used to deliver our balance sheet and fund organic growth. In addition to this, subsequent to the quarter end ACI announced it had entered into a definitive agreement for the acquisitions of ACI in an all-cash transaction for 33.50 per share which if approved by shareholders would generate proceeds of $317 million to AltaGas.

Normalized net loss was $58 million, $0.21 per share for the quarter compared to normalized net loss of $17 million, $0.07 per share for the same quarter in 2019. Factors negatively impacting normalized net loss included lower income tax recovery and the same previously referenced factors impacting normalized EBITDA partially offset by lower interest expense and lower depreciation and amortization expense.

Digging slightly deeper into our segments our midstream segment reported very strong Q3 results with EBITDA up almost 100% over the same period in 2018. Our energy export strategy was a significant contributor to the quarter with strong volumes at both RIPET and at Ferndale from our equity investment in petrogas.

Results in our base midstream business remains strong and we are seeing healthy volumes at our plants. This is a direct result of the work we have done with respect to our northeast BC and energy export strategies that have created integrated value chain connecting our customers from wellhead to export markets in Asia.

This quarter represented our first full quarter of RIPET the cornerstone assets of our Canadian midstream strategy. RIPET generated approximately $37 million in EBITDA in the third quarter was slightly greater than 3 million barrels or six shifts of propane exported to Asia.

Third quarter EBITDA from RIPET benefited from a higher average FEI to Mount Bellevue hedge rate of $14 per barrel that included second quarter supply hedges that were rolled forward to the third quarter. The resulting impact the third quarter EBITDA a one-time benefits of approximately $5 million.

Overall we are pleased with performance of the facility to date. Volumes have steadily increased to its current 40,000 barrel per day capacity and we continue to improve operational efficiencies.

The third quarter at our utilities was similar to the second quarter where we saw decline in earnings driven by the warmer weather experienced in the summer months. This seasonality in our earnings is expected and consistent with historical results.

Overall of the utilities we saw decrease to normalize EBITDA compared to last year. This is largely attributed to the hearing examiner's report in the Virginia rate case.

The impact of the ACI IPO higher operating expenses partially offset by higher revenues from a full quarter of WJL ownership and the impact of the stronger U.S. dollar.

One final word on the Virginia hearing examiner's report we were disappointed with their recommendations and we have filed a rebuttal appealing certain aspects of the hearing examiner's report on October 21 and are hopeful a final order will be issued in late 2019 or early first quarter 2020. Lastly the power segment normalized EBITDA decreased to $70 million primarily results of asset sales partially offset by strong contributions from retail marketing as margins widen as expected with the change in PJM capacity pricing that occurred this past June.

Turning to our capital program and balanced funding plan for 2019 we continue to improve our financial flexibility particularly given the success of our 2019 asset sale program. We remain comfortable with our 2019 funding plan.

Our funding plan for 2019 was designed to deliver and stabilize the balance sheet through a combination of asset sales, disciplined capital allocation and a repositioning of our dividend. The funding plan includes 1.3 billion to 1.36 billion in capital projects where we have a clear line of sight to a significant number of high-quality organic growth opportunities.

The slight increase in expected capital compared to the 1.3 billion previously disclosed is primarily due to the timing of the closing of certain asset sales relative to our original budget. We continue to execute on our capital projects both on-time and on-budget.

Year-to-date we have spent approximately 1.2 billion focused on the expansion of our midstream value chain with the completion of RIPET and the Nig Creek facility and continued work at the Townsend and North Pine expansions the market connector pipeline and improving safety and reliability of our systems with the accelerated replacement programs at our utilities. These opportunities reflect the underlying strengths of our utilities and midstream business.

In addition, we have approximately $3 billion in debt repayment plan which includes 900 million of fixed term debt maturities with the balance reducing short term borrowings on our facility. The date in 2019 we have already achieved a reduction in net debt of $2.4 billion and expect net debt to decrease further as we close the sale with of the central Penn pipeline in the fourth quarter.

Our investment grade credit ratings continues to be fundamental to our strategy. As it provides us with greater financial flexibility and a lower cost of capital which in turn supports growth going forward.

We designed our 2019 capital and funding plan with a very clear goal of maintaining an investment grade credit rating. We expect our capital and funding plan along with the low risk profile of our overall business mix and a dividend reduction will all contribute to improving investment grade credit metrics over time.

As we have discussed in the past we expect our credit profile to improve as we execute our growth capital program and new capital projects enter service. Given the significant progress we have made this year on our balanced funding plan our focus is shifting towards executing on organic growth opportunities that drive meaningful contributions in 2020 and beyond.

Supported by strong operational results in the first nine months of this year we are maintaining our guidance range for normalized EBITDA of 1.2 billion to 1.3 billion. The success of our 2019 asset sales program will result in additional EBITDA lost year-over-year in 2020 of approximately $170 million which we anticipate replacing with investments in our energy export strategy including a full year of RIPET increased gas processing volumes from the Nig Creek facility that came on in the fourth quarter of 2019.

The Townsend expansion and contributions from the expansion of our North pine fractionator that are expected to come online in the first quarter 2020 as well as growth in our utilities where we expect to benefit from the investment in the market connector pipeline customer growth as well as improvements in our earned returns from Maryland settlement announced subsequent to the quarter and new rates at Semco following completion of the rate case. While we expect to see some growth in EBITDA 2020 over 2019 adjusting for the impact of asset sales we expect normalized earnings per share growth to outpace EBITDA growth as a result of the significant reduction in debt and the resulting decrease in interest expense.

We plan to provide the market a fuller view of 2020 outlook capital and funding following the completion of our normal planning cycle later this year. In conclusion AltaGas has made tremendous progress in reshaping its business and creating greater financial flexibility over the past several months.

Looking to the future I believe that the combination of appropriate capital discipline, hurdle rates business optimization and operational excellence will position us to deliver strong performance. With that I will turn the call over to Randy to review our progress on our near-term goals and our next steps as we focus on future growth in our midstream and utility segment.

Thank you James and good morning everyone. When I first spoke with you in December I laid out a plan that would refocus the company, capture the intrinsic value of our core assets and regain our financial footing providing us the flexibility to capitalize on the significant investment opportunities ahead of us.

I'm pleased to share that we have made tremendous progress against these goals and that that progress is clearly evident in our Q3 results and accomplishments. Returning to our near-term priorities we move swiftly and decisively in recent months to execute our asset sale program designed to delever our balance sheet under capital program and maintain our investment grade rating.

With the announcement of central Penn asset sale we completed or announced 2.2 billion in assets sales to date in 2019 and have exceeded our target of $1.5 billion to $2 billion. Most recently we announced the sale of Central Penn pipeline at the end of September for approximately $870 million or U.S.

$657 million representing a strong multiple of just over 13 times which is accretive to our credit metrics. The proceeds from this transaction will be used to both pay off a portion of our debt which James addressed as well as fund profitable growth initiatives in our core businesses.

In addition to the asset sales we have announced to-date I mentioned to you on the last call we have remaining asset sale liquidity with Mountain Valley pipeline ACI and Blythe. With respect to Blythe I am pleased to inform you that we have successfully re-contracted this facility with southern California addition.

A direct result of Blythe competitive advantage. California public utilities commission approval is required and expected to occur in the first half of 2020.

The extension in this agreement preserves the current annualized EBITDA of approximately 40 million through 2023. Also as you are well aware and as James mentioned AltaGas Canada received all cash offere to purchase the company.

We are supportive on locking the value we have invested in this asset and will act in the best interest of AltaGas shareholders. Our work over the past several months do not focus on asset sales alone.

However, we have been laying the ground work to implement our operational excellence model throughout our business. We expect this model will not allow us to be more efficient and effective but we will also expect to drive significant cost savings.

Turning to strategy, we believe that the combination of our higher growth mid stream assets with strong and predictable cash flows of our utility businesses is the right one. We continue to work on the unique structural advantage we have created with our integrated platform in the market which is underpinned by RIPET and our LPG export strategy.

At our utilities the rate base growth that we expect combined with performance based culture we are implementing in proactive and popular approach to our rate cases will all contribute to ROE expansion in earnings growth. Looking a little deeper at our midstream business we have a unique value proposition and the distinctive competencies that centers around our RIPET asset.

Our ability to access premium price global markets in Asia were demand for cleaner burning fuel sources is increasing is a competitive advantage that we will build upon. Increasing throughput at our facilities optimizing our existing rail infrastructure RIPET to gain scale and efficiencies in honing our and growing our export capabilities.

Our fundamental assumptions underlying our midstream strategy is at the marginal molecule of natural gas and natural gas liquids in Canada will need to be exported not to the U.S. but to Asia.

The growing demand for energy in Asia will be a driving force behind our Canadian midstream business. Leveraging our first[ mover] advantage as the first and only company but the capability to export LPG from Canada to Asia is paramount to attracting more volumes to our system.

And ultimately driving growth across our integrated platform. At RIPET we saw a significant contribution to the business with our first core quarter of operations completed.

Volumes have steadily increased to our target capacity. In the quarter six ships were loaded exporting over 3 million barrels of LPG from RIPET to Asia.

This generated approximately 37 million in EBITDA or $11 per barrel. Well I am excited with these results they were not expected due to RIPET structural advantage and the increasing trading [indiscernible] at the far East index as to Mount [indiscernible].

Now going forward we expect to continued pricing premium to be maintained due to the structural shipping advantage RIPET has compared to the U.S. and the growing U.S.

supply. This pricing premium is certainly benefited us but it also materially benefiting our customers to producers who have totaling contracts through RIPET as they have realized the benefit of the global market premium.

Looking forward into the fourth quarter we expect to sell approximately 40,000 barrels per day to Asia through combination of our totaling volumes in our active merchant hedging program we have locked in our base load margin on approximately 85% of our remaining 2019 volume. For the remaining 15% of barrels we pay [indiscernible] prices plus transportation fees and in return we have realized FDI premiums.

With only five four months of operations we have made tremendous financial and operational headway. As we continue to improve the efficiencies in logistics surrounding RIPET we will gradually ramp the volume toward it's nameplate capacity.

The RIPET advantage also increases the utilization of our existing processing effects [indiscernible] assets and positions us for additional investment in the [indiscernible]. This value added approach to our customers is the foundation of our North East BC growth program which includes the Nig Creek gas plant that we co-own with Black Sawn which came online in September.

A quarter earlier than expected as well as expansions in North Pine and Townsend anticipate to come in service in the first quarter of 2020. This is exactly how our business model is designed to leverage our export strategy to provide higher net backs to our customers, increase throughput and utilization of our assets, provide more organic growth opportunities and grow our export capabilities.

I commend the team for the successful execution of our strategy and as this added significant value to our midstream business. At our utilities we reported earnings after adjusted for one time regulatory impacts in assets sales that were essentially flat compared to the third quarter 2018.

The seasonality in our utility business masked the underlying structural improvements we have made on updating our rates to reflect more current rate base and operating cost levels in 2018. The recent Maryland rate case settlement our accelerated replacement programs and the pending SEMCO rate case are recent examples of that progress.

Where you will see the full impact of these efforts is in the fourth and first quarters due to the seasonal nature associated with the volumetric rate recovery. As we continue to close the gap between our current rates and our allowed return we expect to improve our return on invested equity capital by over 200 basis points which will represent an increase in after-tax earnings of up to U.S.

$50 million. Upon achieving these results we expect an increase in earnings per share of approximately $0.25.

This is going to take some time but I'm confident we are going to get there by the end of 2021. This is one of our greatest financial growth opportunities as the capital has already been invested.

We will accomplish this ROE expansion in the following ways. First continue to update our rates to reflect our growing rate base in most current cost structure to close the gap in earning our allowed return.

Currently we have active and planned rate cases in three of our five operating jurisdictions and applications under review for accelerated replacement programs to renew aging infrastructure in the District of Columbia and in Michigan. Maryland is a solid example of our efforts to enhance our returns and foster positive relationships with our regulators where our recent rate case saw an increase in revenue of the U.S.

$27 million, we are awaiting a decision at SEMCO expected no later than March 2020 and we also anticipate filing a rate case in the District of Columbia in 2020 where we have the largest gap between our earned return and our allowed return. Secondly, we are enhancing our operational performance, updating aging infrastructure and continually improving our service offering for our utility customers.

This is where our team will be laser focused for the balance of this year and in the next. Finally, we must aggressively lower operating cost.

The main area of focus is the continued replacement of our aging infrastructure. We will continue to approve our predictive model to identify and prioritize to chronic pipe, create the right plan to address it and ensure we continue maximizing every dollar we spend on repairing and replacing aging pipe across our jurisdiction.

When we do this our cost will come down bring up dollars to invest in improving our customer experience. With one of the higher rate based growth rates in the U.S.

at 8% to 10% we have clear sight on ample earnings growth and our utilities well into the future as we modernize and expand our distribution footprint. We will continue to utilize accelerated rate recovery to ensure the timely recovery of this growth opportunity.

This combination of higher overall returns combined with rate based growth presents us with an opportunity to drive significant earnings growth within our utility businesses into the future. The visible near-term growth opportunities for the company and the potential for growth I see today exceeds any notion of what we thought even a year ago.

Our base business is healthy and performing as it should be and we remain on track to meet our guidance for 2019 and are well positioned to enter 2020 in a much stronger position. In the longer term I believe the strategy I have outlined today will result in consistent and attractive earnings and dividends growth.

In our mid stream segment this includes expanding our integrated value chain with a full year of operations and expanded throughput at RIPET and the Nig Creek facility and increasing gas processing volumes from the Townsend expansion and contributions from the expansion of our North Pine fractionator. At our utilities we expect to see significant growth in this segment in the future driven by projects like our market connector pipeline and improved system reliability and supports new customer additions.

Our accelerated replacement programs which replaces aging infrastructure and improves the reliability and safety of our systems in updating our rates in approving our return on invested capital. In summary we continue to reposition AltaGas as a low risk high-growth utility and midstream company.

We have exceeded our asset sale goals target and significantly improved our balance sheet. Executed our midstream strategy including successful commissioning of RIPET and continue to improve our returns at our utilities through updated rates and accelerated replacement and with that I will turn the call over to the operator to facilitate the Q&A session.

Morning everyone. Thanks for taking my call.

Good morning Rob.

Maybe to start off on the utilities appreciate the additional color on slide 13 of the deck there. It looks like Maryland will give you a nice bump up and kind of income in 2020 but the rest of the items seem to be kind of spread in between 2021 and late 2021 just want to get a sense of where you think the path to improving the ROEs on the utilities are?

It will be more back and loaded or kind of more spread evenly through the years?

Well Rob, I think that you highlight the Maryland rate case which was positive and will have a strong contribution in 2020, clearly we're focusing on updating our rates in our DC rate case. We're focused currently we have an integration team now in place that's laying the foundation to optimize our structure to align the business over time and so we're aggressively managing our O&M and our leak mitigation.

I think you'll see significant progress next year and so difficult to say that it'll be evenly spread but I think that overall, I think that we'll probably get half of that through 2020 and then we'll manage the restroom through the rest of that year. So maybe not smoothly but overall targeting the end of 2021.

Okay. Appreciate that color.

And then just moving over the balance sheet you surpassed your assets goal for 2019 which has accelerated some delivering. Looking forward what metrics are you targeting and is the expectation there that you're going to get there through just increasing EBITDA and FFO or is asset still something that you have a number of processes going on and something that we could see continuing on into 2020.

So Rob so the goals or the metrics that we've obviously set for ourselves is very closely aligned with what the rating agencies have outlined for goals that we need to achieve to maintain strong investment grade credit ratings. So we have a focus on FFO to debt of above 10% going forward probably in the 10% to 12% range.

We feel that we can get there just with organic growth in EBITDA based on some of the assets that are going to be coming online but we can continue to improve those credit metrics with some of the options that Randy mentioned in his prepared remarks on additional assets that we can monetize. So power continues to be non-core to us and Blythe would be available to monetize and take more debt off the balance sheet in 2020.

The ACI deal if approved by shareholders will close at some point in 2020 that can also help us deliver and then MVP at some point will need to decide what we do with that.

And Rob I'll just add to that that I think we're in an ambient from the standpoint that we have executed above our target and that will be opportunistic going forward and up I think that's essentially a strong position for us to be and that we can drive it as James said through organic growth and some of the initiatives and will be opportunistic with some of the other assets sale liquidity.

Thank you. I'll hop back in queue.

Good morning Julian.

[Audio Gap] recovery on capital spent. So, I -- perhaps a two part question there to start with.

Sure. Thanks for -- look, I think we've got in terms of our accelerated rate recovery infrastructure mechanisms that we have in all of our jurisdictions, clearly provide timely rate recovery going forward.

And it has another benefit as we deploy those dollars through the -- replacing the [chronic pipe] that, provides lower operating cost prospectively into the future, which again, is sustainable over the long run. And so, we think that as we increase the amount of dollars that we put into that recovery mechanism that will help us with more timely returns.

And in terms of, I think that will address and I've talked about that on the call really the regulatory lag aspect of this on a going forward basis. And so I think that we're looking at it really our focuses is to execute the cost initiatives, the capital, all focused on improving the customer value proposition, and that will lower costs, improve higher reliability, outstanding services.

And those are, frankly, the model that we're going to implement that will provide sustainable long-term growth for the utility, and ultimately cost reduction. So, I think that's the culture that we're driving in our utility.

Got it, excellent. And then quickly, if I can follow-up on [indiscernible], certainly some interesting updates here very constructive price data points in the market, can you talk to some of the pricing that you've been able to confirm on that sale or that asset that you're holding there?

And then in tandem with that, very quick question, how do you think about 20 volume growth on the RIPET side, just to clarify?

Sure, on the asset sale Black I think it's excellent news, as you point out and then demonstrates the value of that asset. I don't think it's appropriate right now that to comment on any types of evaluation or offers that we have had in but really, we're in a -- as I said, a flexible position to the extent that the value that we receive if we ultimately monetize blight is in the shareholders’ best interests, we move forward.

And but we have the option to maintain firm and steady EBITDA with that asset. So, you know, it's non-core, but we'll continue to evaluate the offers.

With respect to your question on RIPET. I mean, the facility itself was built to accommodate [80,000] barrels with minimal capital expenditures to get there.

We are expecting to gradually increase that volume through 2020. And we've continued to procure supply.

And so you know, we're forecasting it will come out with exact numbers, but we would expect us to be above our 40,000 barrel level in throughout 2020. And then in the next month, we'll give you some clear guidance on what that is as we walk through our Business Plan.

Excellent. Congratulations on everything, really impressive.

Thank you.

Thank you for that

Hey, good morning. If I can come back to the utility spending and Randy, you've talked historically and again today about, you know, making sure that you're very efficient with the capital, trying to get in on the trackers and timely recovery.

But then again, you're also talking about the rate based growth and that 8% to 10% is being --- and that's pretty similar to what you've talked about in the past. So, are we seeing a pickup in the amount of spending that you think you can direct into the trackers or is that just a shift between kind of where the CAPEX was before between what you can get immediate recovery and what might have to live on that?

Yeah, you know, thank you, Robert --- question. As I've said in the previous calls, you know, our target is to anything above our depreciation expense, to recover through our accelerated pipeline replacement programs, which will eliminate the regulatory lag on a going forward basis.

And so we're making progress there. I think you should expect us to continue to increase this spend that we have in that mechanism, as we target the 8% to 10% growth.

And I think that's really where we're targeting we have the ability to make the filings. We've made a couple, we're working in Washington D.C.

District right now with a filing. So, expect us to increase the spend there, which will -- I think provides a win-win, to both our, you know, our customers, our shareholders by providing a safe, reliable system driving down costs and improving the service levels for all of our customers.

So, that's our strategy and we're -- laser focused on executing on it.

Got it. So, its total spending up or is it just the shift between kind of activities that might have a lag and where you've got recovery into the trackers?

I – you think right now we're primarily looking at a shift, but when we get through into next into next – into our Business Plan, and we lay out our plan for 2020, you'll see you know, a modest growth and overall rate based. So, I targeted to the 8% to 10%.

But there's the persist to shift in accelerated and had the incremental run through that as well.

Got it. Just turning to ACI, you didn't sign a support agreement and you effectively have a lock in your control position as it relates to the [indiscernible].

Just wondering, are you actively working your stake as part of this?

We are -- obviously as I made, Robert, in my prepared comments that we are working in the best interest of about the shareholders. We commend the ACI team for what they -- the process and the price that they ran, but certainly we are open to offers.

We stand ready. If there's -- and so we're certainly, you know, focused on that.

And we'll see how the process goes.

So do I take that as you're passively kind of there and if something happens, that's great or actually…?

Yeah, I would see – yeah, but -- yeah, we think that's -- it's a good price and that I've always said that asset is noncore to us. And so, I’ve seen something that is better or in -- to our shareholders, yeah we would certainly move forward with the sale.

Great. [indiscernible] the 40 million Randy that you noted is that U.S.

dollars or Canadian dollars…

That's US, right. Yeah, U.S.

dollars.

Okay, so a light reduction, but nothing [indiscernible] from where you are.

Yeah, I think where you are? Yeah, there's a little – yeah, no, it's -- I look at is pretty consistent to where we've been.

Okay. And then just with that, the Siemens service contract, if plight were to shutdown post this contract, are you want to hope for the remaining payment, or can you terminate without the further obligation?

Yeah, could you repeat that Robert? I'm sorry.

I didn't put the question.

I think. I think you've got a service contract in place with Siemens that runs a lot longer than 2023.

Oh, that's the maintenance contract. Right, right, I, you know what I believe that continues but let me check that.

Okay, just to make 100% sure.

It's okay.

I believe that's a longer term contract. We can get to the specifics on that.

That's great. Thank you so much.

You’re welcome.

Thank you. I'm wondering if you could give us some a bit more color on the Virginia regulatory situation.

Can you give us a sense of the ongoing run rate on the effect of this decision to EBITDA earnings and FFO? And then further to that, if your appeal is successful, what would be the upside related to that and can you comment on the nature of the elements that you're appealing in that decision?

So, Linda, we've, fully reflected the downside of the Virginia Hearing as [indiscernible] reporting in Q3. So, we wouldn't anticipate that this will have an ongoing impact in 2020 relative to 2019.

Ultimately, the Hearing Examiners report was no increase to base rate. So, we feel that we've fully reflected the true-up and the accelerated refund of the TCJA amounts reflecting the lower -- the lower tax rate.

You are correct, we have appealed that decision and perhaps Adrian our President of WG could comment on some of the areas that we are appealing. But, what I can say is that it's hard for us to speculate on what the ultimate decision will be.

But, to the extent that we are successful in overturning certain aspects of the Hearing Examiners report that will all be upside that we reflect in 2020.

Good morning, this is Adrian Chapman. Yeah, a comment on a couple of items in the appeal, we focused on some items specific to the language of our Virginia sale accelerated replacement program and how that surcharge should be included in an assessment of whether we are earning within the allowed range or not.

We think the commission through the Hearing Examiners order have -- has in appropriately calculated what our earnings are by adding in the Virginia sale surcharge revenues. And we believe that if those are excluded, then we fall below the allowed earnings range and it triggers an opportunity for the increase to take place.

I think that's very specifically going to be focused on a review of the legislative language and I think there's an opportunity for upside as a result of that.

And can you just quantify what the upside would be if you're fully successful?

I think, we certainly see that that is then going to trigger or be triggered by the commission's review of some O&M, some expenditure items that the Hearing Examiners also disallowed as non-recurring. And so it's really going to be triggered by those decisions.

And I think those amounts are laid-out in the appeal language that is in what we filed with the commission. So, that could be variable and the range could be, you know, in the amounts of several million dollars.

Thank you. And just to follow up on the Midstream business, in your Q3 results, there was some mention of lower volumes at Townsend due to producer activity.

Can you comment on what the outlook is in terms of producer activity in the regions in which you operate in Western Canada and how you're managing maybe some of the counterparty risk with existing customers on that front?

So I'll let Randy to present Mainstream. Linda, I address your volume issue and the ramp up at Townsend and then James can talk about the credit as [indiscernible].

Randy?

Hi, Linda. The areas of [indiscernible] that we have with Townsend we do see growth as we were doing the expansion, so, we do have volumes increasing.

The volume decline that you -- we saw in Q3 was really one of our IT customers, they started up their own facility and so they did remove some volumes that we think that's going to be offset by other new volumes coming in from [indiscernible] and so they are drilling in this part of the [indiscernible] and that's really the value driver there. So, we do think volumes are going to grow in [indiscernible] assets.

Linda it’s James here. On the credit side, obviously it's not a phenomenon that's unique off the gas, but I obviously all Midstream doing business in Western Canada are concerned with that.

But, we actively monitor financial health of all our counterparties. They obviously are providing working with producers to provide access to premium markets in Asia for them to increase their Netbacks.

We've been very, very active over the last 12 months in terms of diversifying our customer base within our Northeastern DC footprint, so that we're not overly reliant on anyone customer. And obviously, we continue to invest in a very strong base and that has a lot of liquid.

So, we feel that liquids will continue to flow in Western Canada and continues to generate some pretty strong economics. And the last thing, I'll say is, if you look at our Midstream business, you obviously the RIPET terminal has counterparty exposures to Asia, where we are the marketer of those barrels and those are strong investment grade credits.

And then on the tolling side is where we're dealing with, with local customers and monitoring credit profiles actively.

Thank you.

I wouldn't mind just coming back to the question. You asked them the potential upside.

And again, I wanted to have the Virginia appeal. And again, I want to say that we're not going to speculate on how that goes.

But, if we're successful on all fronts, we expect that we can actually recover about $10 million to $12 million U.S. of that amount.

So, in that revenue earnings?

It would be revenue that flows to EBITDA.

Thank you.

Hey, good morning, Rob Catellier here. I just wanted to dig into RIPET a little bit further.

So, it looks like the contracting is up a little bit. Does that include the volume is from the Nig facility?

Yeah, but there's a bit of lines coming into the Nig facility, we put the pipe in the service earlier this year. Adrian, do you want to comment on that any…..?

What is the question?

The Nig Creek volumes, are they coming on to the system this quarter?

Hi, Robert. Yes, the Nig Creek facility, Black Swan brought that on in September, and they're flowing -- it's 100 million a day facility and they're flowing, probably 80% or more to that facility.

So, that would be the growth in volumes there.

Okay, and just what does the commercial strategy being increase tolling volumes at RIPET and is it really tied to the [indiscernible] or can you increase them in the interim period, is that basically the engaging item to expand the facility, in other words, well, we have that contract up the base facility before you consider expanding?

Well, this is Randy. Not exactly, but to your first part of your question that we can absolutely do tolling as we move forward and we have agreements that on the existing facilities that are – and that will ramp up overtime.

But, that's not the expansion of the – of RIPET requires very minimal capital. It's more of the logistics in such and in procuring more of the supply.

So, we expect to be able to ramp that up. But, at the same time, we would expect tolling to ramp up consistently with that volume curve, because there's robust demand to access the FBI markets.

And so you should expect this to increase tolling, but at the same time move additional volumes, into RIPET.

Okay, and then finally, just a clarification here in the normalized EBITDA there [indiscernible] Midstream on Page 19. There's number of items that are indicated there RIPET, WGL, Petrogas, but also higher NGO marketing margins.

So, that's an addition to RIPET and Petrogas, I wonder if you can sort of describe what's impacting those margins?

Randy.

Okay, thank you very much.

You’re welcome.

Good morning.

Good morning.

I got a question related to the dividend that you alluded to Randy, from an investor market perspective. Well, I mean, I think I have some ideas, but what would be the trigger point or trigger event or events that would prompt you to take potential dividends increased to the Board?

Well, again, we would be – you know, we're working to our investment grade in S&P and the asset sales that we're moving forward. But, I think as we look at our Business Plan going into 2020, and the growth and net income, you know, we'll be looking at targeting you know, consistent with that growth a dividend policy that, you know, follows a growth in net income.

So, since we're focused on growing EPS in the next few years, we will take that to the Board and discuss that in the context of all of our financing strategies. But philosophically, you know, where we want head is the race that increase the dividend consistent with the growth in earnings.

But, we're going through that in detail here. We built our foundation, its strong financial position, and now we're executing on our operations which will allow us to grow earnings in dividends going forward.

So, I guess the way we can look at that is confirmation of investment grade rating and a clear path to net income increase would be the trigger points. Correct?

Correct. Those are the two key triggers.

You are correct.

So, I -- maybe I missed this. But, you definitely alluded to coming out with a capital forecast and potentially an EBITDA and FFO forecast.

Would that come before year-end maybe some idea of the timing on that?

Yeah, I think that we're looking at and I'll let James comment, but certainly this year to our Business Plan and setting our capital budget and getting our Board approve that would come before the year-end. Anything you want to add to that James.

Yeah, I mean, that's part of our normal planning cycle. Elias, we're meeting with the Board at the end of November to review capital budgets for 2020 and obviously EBITDA targets and net income and we will be updating the markets once we get those approvals from the Board.

Great. One final question and we'll focus on RIPET.

If I break the potential increase in volumes, at RIPET into securing supply or working through logistics, what do you see the more critical factor, in other words, if you could get the supply tomorrow, do you still have logistics issues that will take you a year to work out or is it the reverse is it workout logistics and then try to get supply or get supply in place and then logistics will work itself through.

Well, Elias both we’re -- each and every day, the team's doing an excellent job building its core competency and improving the logistics each and every day, at the same time, it is related to where we bring the supply from, ultimately and how we manage the rail issues. So, it's a common of that two.

But, we're actively managing that working with CNN and our producers. So, you know, I think that -- you'll you won't see -- you'll see throughout next year a consistent steady increase going forward.

But, they're both related is to where we get the supply and then how we manage the logistics.

Great. I'll leave it with that.

Thank you very much for those answers.

You’re welcome.

Thank you.

Hey, good morning, guys. Just a follow up again on RIPET here., clearly running followed and I'm sure the priority over the near-term is to, you know, maximize back propane volumes and spreads but, just curious if you're also looking at capitalizing on butane or LPG export opportunities at the site or is there just you know, not the same international demand or arbitrage opportunity for local butane.

Patrick, you know, there is opportunities in our business development team and Randy are looking at all the different options. As I said, we believe the marginal molecule in Canada needs to be exploited and that would be to the Asia not to the U.S.

So, that applies to both butane as well as propane. So, we'll continue to look at those opportunities going forward.

But, right now we're focused on, you know, moving propane specifically, but we definitely have negotiations and thoughts going on all the products.

If I could just back I mean right now -- I mean, our platform we are benefiting from an increase in butane exports through our investment in Petrogas as well. They've moved a lot of volumes this year of butane into Asia at some very strong margins.

And that's where our platform has benefited from butane.

Got it. Thanks for that.

And then also on the business development front, in Northeast DC, you know, there's been a new NGO pipeline and extraction plant proposed just wondering, you know, if a new [indiscernible] plant is something you guys would look to compete for or, you know, is the North Pine and younger footprint that you have enough to backfill your goals with it?

Well, I think that we believe in new [indiscernible] plant would add value to the basin, you know, versus moving which gas to the US market, it produce more LPG volumes, and quite frankly, those volumes would need to be exported and that would be beneficial to RIPET. And we would like to handle those molecules in every aspect of the business.

Okay, that's great. That's it for me.

Thanks, guys.

Thanks.

Thank you, Julian. And thank you everyone, once again for joining the call this morning and for your interest in AltaGas.

As a reminder, the Investor Relations team will be available after the call for any follow-up questions that you might have. That concludes our call this morning and I hope that you all enjoy the rest of your day.

And you may now disconnect your phone lines.