News Release

VANCOUVER – BC Hydro announced Tuesday its first quarter financial results [PDF, 1.8 Mb] for fiscal year 2011, reporting a consolidated net income of $91 million for the period April 1 to June 30, 2010, which was $17 million higher than the same period last year.

The increased consolidated net income, quarter over quarter, is largely due to higher domestic revenue as a result of higher average customer rates and an increase in the rate rider, lower operating costs largely due to lower expenditures for electricity and gas purchases, lower finance charges, and higher trade income.

"Overall, our financial results for the first quarter were in line with expectations," said Dave Cobb, President and Chief Executive Officer. "However, given that the vast majority of our system is reliant on hydro-generated electricity, low winter snowpack levels combined with lower than normal precipitation during the spring and summer have resulted in very low water inflows into our system reservoirs and this will result in a significant increase in market purchases of energy through the balance of this fiscal year."

A one-foot drop in water levels at the Williston Reservoir, for example, equals 230 gigawatt hours of energy (equal to powering 21,000 homes). Low water inflows mean that hydro-generation is reduced and this shortfall is largely made up by an increase in market energy purchases.

BC Hydro currently forecasts that hydro generation will be reduced by approximately 5,800 gigawatt hours in fiscal 2011 compared to the original forecast (equal to powering 530,000 homes).

"While low water inflows are factors out of our control, we know that our customers expect us to do all that we can to manage our costs and to work hard to keep BC Hydro rates among the lowest in North America," added Cobb. "We'll also continue to carefully manage the upgrade of our aging infrastructure, add new facilities and clean energy sources to meet growing demand, and provide our customer with tools – such as smart meters – to help manage their own power use."

Key financial highlights include:

• Overall revenue for the quarter was $1.1 billion, a decrease of 20 per cent from the same period in the previous year, due to lower trade revenues as a result of lower average commodity prices and lower electricity trade sales volumes, partially offset by higher gas trade sales volumes. Domestic electricity sales volumes were comparable to the previous year reflecting economic stabilization in the current year for those customers severely affected by the economic downturn in fiscal 2010.
• Total energy costs of $518 million in the quarter were $347 million lower than in the same period in the previous year, as a result of lower electricity purchases for trade related to the lower revenue volumes.
• Hydro generation levels in the first quarter were six per cent lower than last year as a result of lower than average water inflows into BC Hydro reservoirs due to low winter snowpack levels and lower than normal precipitation during the spring of 2010. Water inflows into BC Hydro reservoirs during the quarter were at 83 per cent of historic average and are forecast to be at 84 per cent of average through the second quarter due to forecast low precipitation.
• Capital expenditures of $317 million in the quarter were $46 million lower than in the same period in the previous year, primarily due to timing of generation expansion and replacement projects, lower expenditures on distribution projects as a result of the ongoing impact of the economic downturn, and lower expenditures on transmission projects.
• Energy trading results improved over the same period in the prior year due to strengthening of the U.S. dollar and improvement in natural gas demand and prices, reflecting economic improvement over the prior year.

Contact:

Susan Danard
Media Relations
Phone: 604 623 4220