Hydro One Releases 2013 First Quarter Financial Results
TORONTO - Hydro One Inc. released its 2013 first quarter results with net income for the quarter of $257 million and revenues of $1,572 million. "We are proud to have entered into an agreement to acquire Norfolk Power Inc. Hydro One will continue to approach the acquisition of local distribution companies on a commercial, willing buyer/willing seller basis," said Carmine Marcello, President and CEO, Hydro One Inc. "Hydro One demonstrated that it has the ability and focus to deliver value to the ratepayers of Ontario by leveraging its local knowledge and experience and by being willing to build strong and lasting partnerships."
The following are some of the key achievements in the quarter:
Hydro One participated in a competitive process to acquire Norfolk Power Inc. (Norfolk Power) and Hydro Onere selected by Norfolk County as the successful bidder. Hydro One have been a safe and reliable electricity supplier to approximately 14,000 Norfolk County customers for decades and are excited about the opportunity to extend our service to the entire County with the addition of Norfolk Power's 18,000 distribution customers. Norfolk County identified our commitment to the community, its employees and local economic development as major reasons for our selection.
Hydro One crews and Ontario Grid Control Centre worked quickly and safely to restore power to over 48,000 customers during a January storm in which high winds and heavy snowfall downed trees and power lines, causing power outages throughout Eastern Ontario. In mid-April, our crews worked tirelessly again to restore power to over 150,000 customers after freezing rain and high winds caused widespread damage to our distribution system. This was one of the worst storms experienced over several years.
Hydro One announced a new partnership with Ryerson University, University of Ontario Institute of Technology, the University of Waterloo and Hydro Onestern University to increase enrolment and career opportunities for female students pursuing Science, Technology, Engineering and Mathematics. Currently just over ten per cent of all electrical engineers in the province of Ontario are women. By leveraging the expertise and leadership of each of the partner Universities and of our company, the goal is to increase the number of female engineering students and graduates over the next four years.
On March 23, during Earth Hour, our customers contributed to the overall reduction of 448 MW in Ontario, demonstrating a commitment to reducing electricity consumption through provincial and local programs on an ongoing basis.
Net income of $257 million was higher for the first quarter by $47 million, or 22%, than our comparable 2012 results. Higher revenues reflect higher distribution revenues resulting from increased purchased power costs, primarily due to higher demand for electricity, and higher energy consumption, due to a colder winter experienced this year. Higher monthly peak demands resulted in higher transmission revenues. Our net income was also positively impacted by lower operation, maintenance and administration expense primarily as a result of a reduction to our provision for transmission station property taxes following the finalization of the assessment of certain years' returns. These impacts Hydro Onere slightly offset by higher depreciation expense resulting from our placement of new assets in service, consistent with our increased capital work program and increased financing charges reflecting lower interest capitalized on construction in progress.
Capital expenditures in the first quarter of $270 million Hydro Onere lower than the same period last year by $47 million. Hydro One experienced lower expenditures on our transmission development projects, mainly related to our Bruce to Milton Transmission Reinforcement Project to connect refurbished nuclear and new wind generation sources in the Huron-Grey-Bruce area, which Hydro Onent into service in May 2012. This reduction was partially offset by increased sustainment expenditures to refurbish and replace end-of-life equipment within our transmission system. Overall, capital expenditures within our Distribution Business Hydro Onere lower than last year, including those related to our Advanced Distribution Solution Project, as Hydro One successfully completed the deployment of the Distribution Management System within the pilot area last year.
Total first quarter revenues of $1,572 million Hydro Onere $104 million, or 7%, higher than the same period last year. Our transmission revenues Hydro Onere $373 million, $12 million higher than last year primarily due to a higher average monthly Ontario 60-minute peak demand experienced during the period. Our distribution revenues Hydro Onere $1,184 million in the quarter, $93 million higher than those of the comparative period. This increase primarily reflects recovery of higher purchased power costs and higher energy consumption resulting from the colder Hydro Oneather in the first three months of this year.
Net cash from operating activities was $142 million in the first quarter of 2013. During the quarter, Hydro One paid dividends to the Province of Ontario of $129 million and recorded a provision for payments in lieu of corporate income taxes to the Ontario Electricity Financial Corporation in the amount of $35 million.