TC Energy Corporation (TRP Quick QuoteTRP - Free Report) announced its commitment to proceed with the C$4.5 billion Ontario Pumped Storage Project in collaboration with the Saugeen Ojibway Nation. The company plans to initiate discussions with federal and provincial regulators to establish a potential long-term revenue framework for the ambitious project.

The decision followed a directive from Ontario's minister of energy to the Independent Electricity System Operator, outlining the next steps for the project, including the formation of a cost recovery agreement. This guidance from the energy minister is seen as crucial in facilitating the ongoing development of the Ontario Pumped Storage Project, which aligns with the province's strategic goal of creating a sustainable and clean electricity system.

The project is positioned as a made-in-Ontario solution, with its design, engineering, and construction to be executed by a domestic supply chain. During the construction phase, the project is expected to generate 1,000 well-paid, unionized jobs, with more than 75% of materials and supplies sourced from Ontario-based companies.

Annesley Wallace, executive vice-president, Strategy and Corporate Development, and president, Power and Energy Solutions at TC Energy, emphasized the minister's directive as a strong signal of the project's significance in enhancing the diversity of Ontario's supply mix and achieving a net-zero electricity grid.

The next steps outlined by TC Energy involve immediate collaboration with the Ministry and OEB to establish a potential long-term revenue framework, with a report expected by Jul 31, 2024. Subsequent reports on estimated development costs and schedules will be submitted, leading to the Ministry's recommendation for pre-development work within 45 days.

While the project is subject to approval by TC Energy's board of directors and Saugeen Ojibway Nation, its construction is anticipated to commence in the latter part of the decade, with in-service expected in the early 2030s. Ultimately, a final decision to fund development costs will be subject to the Cabinet’s approval.

Zacks Rank & Key Picks

TC Energy currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Sunoco LP (SUN Quick QuoteSUN - Free Report) , Oceaneering International, Inc. (OII Quick QuoteOII - Free Report) and Enbridge Inc. (ENB Quick QuoteENB - Free Report) . While both Sunoco and Oceaneering International sport a Zacks Rank #1 (Strong Buy), Enbridge carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow. 

SUN’s earnings beat estimates in two of the trailing four quarters and missed twice, delivering an average surprise of 28.33%.

Oceaneering International is a leading provider of integrated technology solutions, active at all phases of the offshore oilfield lifecycle. Its strong relationship with high-quality customers provides revenue visibility and business certainty. OII is well-positioned to supply equipment for deep-water projects.

Enbridge has an extensive oil and liquid pipeline system that spreads across 17,809 miles. A significant portion of the midstream operator’s earnings is generated from transportation operations, driven by a string of long-term contracts. ENB anticipates substantial cash flows from recently completed midstream projects.