Hydro One Releases 2009 Third Quarter Financial Results
TORONTO - Hydro One Inc. released its third quarter results with net income of $359 million and revenues of $3,537 million for the nine months ended September 30, 2009.
"Hydro One is moving ahead to plan and implement a series of major
transmission projects and distribution improvements in support of Ontario's
Green Energy Act, 2009," said Laura Formusa, President and CEO, Hydro One
Inc. "This is an important opportunity to facilitate the delivery of green
power to consumers in Ontario."
The following are some of our recent key achievements:
- On September 21, 2009, the Government of Ontario asked our company to
proceed with 20 transmission projects to support the Green Energy
Act, 2009. These projects will help bring renewable energy to the
- In October 2009, they initiated the planning for the Northwest Transmission Expansion project under Ontario's Environmental Assessment Act. If approved, the 430 kilometre, single circuit 230kV transmission line between Nipigon and Pickle Lake will improve reliability, increase transmission capacity and connect renewable generation to the grid.
- They were named one of the Top 90 Greater Toronto Employers for 2010. Mediacorp Canada Inc. reviewed applications from more than 2,600 employers and recognized our efforts to support employees through ongoing skills training required to deliver necessary investments in electricity infrastructure and to support employee involvement in the communities where they work.
- They connected First Light, one of Canada's largest solar parks located in Stone Mills, Ontario. With more than 126,000 solar panels spanning across 90 acres, this farm is expected to generate over 10 million kWh of renewable electricity in its first year of operation - enough to power 1,000 households.
Net income of $100 million in the third quarter and $359 million
year-to-date was lower by $12 million, or 11% and $8 million, or 2%
respectively, compared to 2008 results. In the quarterly and year-to-date
periods, net income was affected by higher operation, maintenance and
administration expenditures primarily related to work programs necessary to
sustain our transmission and distribution systems. In addition, lower
transmission revenues resulted from lower average monthly peak demands and
lower export service revenues. These impacts were partially offset by the
higher distribution tariff revenues associated with the December 18, 2008 and
May 13, 2009 OEB rate decisions in support of necessary work programs which
enable the safe and reliable delivery of electricity. In addition, payments
in lieu of corporate income taxes were lower and reflect higher capital cost
allowance deductions being available on our information system and smart
Capital expenditures of $1,119 million for the first nine months were
higher by $284 million, or 34%, compared to the previous year. Expenditures
to expand our transmission system increased primarily as a result of a number
of significant inter-area network upgrade projects facilitating new
generation or increased transfer capability from other jurisdictions. These
projects include our Bruce to Milton Transmission Reinforcement Project; our
Southwestern Ontario Capacitor Banks Project; and work on our Cherrywood to
Claireville Transformer Station connection. Our Bruce to Milton Project to
connect wind generation and refurbished nuclear sources in the
Huron-Grey-Bruce area demonstrates our commitment to connect clean and
renewable generation. Expenditures to sustain our transmission system
decreased slightly in the quarter but remain higher on a year-to-date basis,
primarily as a result of refurbishment and replacement of end-of-life
equipment associated with various station projects. During the quarter, we
completed the Claireville Transformer Station Project which has improved
reliability to meet growing demand. Increased capital expenditures within our
Distribution Business reflect ongoing investments within our Smart Meter
Program. We installed approximately 113,000 smart meters during the quarter,
bringing our cumulative program total to about 1,138,000 meters. We are also
focused on the development and integration of the systems required for
time-of-use billing, including integration with the Independent Electricity
System Operator's meter data repository.
Total revenues for the nine-month period were $3,537 million, which were
$134 million, or 4%, higher than the same period last year. Distribution
revenues of $2,620 million were higher primarily due to the recovery of
higher purchased power costs attributed to increases in the OEB's Regulated
Price Plan for residential and other eligible customers. In addition,
distribution revenues were positively impacted by the earlier OEB decisions
which approved increases in distribution tariff rates for our subsidiary,
Hydro One Networks Inc. These tariff increases were implemented on February
1, 2009, and June 1, 2009 respectively. Our transmission revenues decreased
by $43 million year-to-date compared to last year primarily due to lower
average monthly peak demands and the impacts of the August 28, 2008 and May
28, 2009 OEB transmission rate decisions.
During the first nine months of 2009, we paid dividends and recorded
payments in lieu of corporate income taxes to the Province of Ontario in the
amount of $161 million and $39 million, respectively.