Hydro One Releases 2013 Second Quarter Financial Results
TORONTO, Aug. 9, 2013 /CNW/ – Hydro One Inc. today released its 2013
second quarter results with net income for the quarter of $168 million
and revenues of $1,403 million.
“In the wake of the Toronto flood, which disrupted power flow to the
western Greater Toronto Area, power was restored to 90% of customers
within the first 12 hours,” said Carmine Marcello, President and CEO,
Hydro One Inc. “Our crews, in conjunction with the Province, the City
of Toronto, and Toronto Hydro, worked around the clock to restore power
and then stabilize the system.”
The following are some of our key achievements:
-- Our crews and our staff at our Ontario Grid Control Centre worked quickly and safely to restore power to more than 270,000 customers during two separate storms that affected Ontario in late May and early June. In early July, our crews worked diligently to reconfigure our electricity system to restore power to over 400,000 Toronto homes after unprecedented heavy rains caused severe flooding at our Richview and Manby transmission stations, which are the primary stations serving western Toronto. A total of approximately 3,500 MW of load was interrupted when our critical equipment became completely submerged under water. Our crews proved themselves yet again in late July as they worked tirelessly to restore power to more than 180,000 customers after several severe weather systems caused damage to our distribution system across northeastern and central Ontario. -- In July, we successfully completed our certification to the Occupational Health and Safety Assessment Series (OHSAS) 18001 standard. The OHSAS 18001 standard is recognized as a world class occupational health and safety management system. The certification symbolizes our commitment to continual health and safety improvement, as nothing is more important than the health and safety of our employees. -- As part of our proactive approach to monitoring and improving our 120,000 kilometer distribution system to deliver value to our customers, we are replacing 11,000 poles this year. This investment is part of an ongoing program to continually assess the condition of our power system and make significant investments to improve overall reliability. In addition, we accomplished 8,000 kilometres of brush control and line clearing in the first half of this year. Downed trees are a major cause of line failure on our distribution system. -- In June, we held our second annual First Nations, Métis and Inuit awards ceremony to recognize the 2013 recipients of our Company's academic scholarships for post-secondary students enrolled in electricity industry-related programs. We are committed to supporting First Nations, Métis and Inuit communities and to playing a role in increasing the representation of First Nations, Métis and Inuit employees in the electricity sector. -- A new collective agreement with the Power Workers' Union (PWU) was ratified by the PWU at the end of July for a two-year term ending March 31, 2015. In April, the Society of Energy Professionals ratified a new three-year collective agreement with our Company effective April 1, 2013.
Net income was $168 million for the second quarter and $425 million for
the first six months of 2013, $1 million, or 1%, lower than our
comparable 2012 net income in the quarter and $46 million, or 12%,
higher in the first six months. We experienced higher distribution
revenues mainly reflecting increased purchased power costs, primarily
related to the Ontario Energy Board’s regulated price plan rate-setting
process and the Independent Electricity System Operator’s spot market.
Our net income was also positively impacted by lower operation,
maintenance and administration expense primarily resulting from a
reduction to our provision for payments in lieu of transmission station
property taxes in the first quarter following the finalization of the
assessment of certain prior years’ property tax returns.
Capital expenditures of $621 million for the first six months of 2013
were lower by $46 million, or 7%, compared to 2012. We 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 went into service in May 2012. We
completed our Commerce Way Transformer Station, earlier this year,
contributing to lower expenditures compared to 2012. Within our
Distribution Business, increases in year-over-year expenditures were
primarily attributable to capital replacements due to storm restoration
work following several storms in the first half of the year, our wood
pole replacement program to improve overall system reliability and the
completion of the Customer Information System phase of our entity-wide
information system replacement and improvement project, which was
successfully placed into service in May, 2013.
Total revenues for the first six months of $2,975 million were $148
million, or 5%, higher than the same period last year. Our distribution
revenues were $2,204 million, $139 million higher than last year,
primarily reflecting the recovery of higher purchased power costs.
Higher energy consumption resulting from the colder weather in the
first quarter also contributed to the increase. Transmission revenues
of $741 million were $10 million higher than last year primarily
reflecting export service revenues and other ancillary services
associated with the December 20, 2012 transmission rate decision. The
revenue requirement approved for 2013 resulted in no change to rates
for the transmission portion of the customer bill compared to previous
2012 OEB-approved rate levels.
Net cash from operating activities was $333 million in the second
quarter of 2013. During the quarter, we paid dividends to the Province
of Ontario of $30 million and recorded a provision for payments in lieu
of corporate income taxes due to the Ontario Electricity Financial
Corporation in the amount of $11 million.
CONSOLIDATED FINANCIAL HIGHLIGHTS AND STATISTICS
Three months ended June 30 Six months ended June 30 (Canadian dollars in millions, except as otherwise $ % $ % noted) 2013 2012 Change Change 2013 2012 Change Change Revenues 1,403 1,359 44 3 2,975 2,827 148 5 Purchased power 684 640 44 7 1,482 1,369 113 8 Operating costs 451 436 15 3 845 850 (5) (1) Net income 168 169 (1) (1) 425 379 46 12 Net cash from operating activities 333 217 116 53 475 454 21 5 Average Ontario 60-minute peak demand (MW)1 20,668 21,029 (361) (2) 20,977 20,870 107 1 Distribution - units distributed to our customers (TWh)1 6.5 6.7 (0.2) (3) 14.8 14.5 0.3 2
1 System-related statistics are preliminary
Hydro One Inc. is a holding company that operates through its
subsidiaries in electricity transmission and distribution and telecom
businesses. One of its subsidiaries, Hydro One Networks Inc., operates
one of the largest transmission and distribution systems in North
America. Hydro One Inc. is wholly owned by the Province of Ontario.
Hydro One Inc.’s 2013 Second Quarter Consolidated Financial Statements
and Management’s Discussion and Analysis can be accessed through the
SOURCE Hydro One Inc.