BC Hydro announces second quarter results
Net income on target, infrastructure investment continues
VANCOUVER, B.C. – BC Hydro today announced its second quarter financial results for fiscal year 2011 [PDF 1.9 Mb], reporting a consolidated net income of $119 million for the period July 1 to September 30, 2010, which was $4 million higher than the same period last year primarily due to higher trade income. Year-to-date, net income was $210 million which is $21 million higher than the same period last year.
"While we are pleased with our overall financial results, historically low water levels in our reservoirs – which is where we store water for generating electricity – remain a concern and are placing upward pressure on rates," said Dave Cobb, BC Hydro's President and Chief Executive Officer.
"Our hydroelectric system relies on winter snowpack runoff and ongoing precipitation, and overall water inflows this year are forecast to be only 83 per cent of average, the second lowest level in the 50 years. As a result, we've had to continue purchasing additional energy and more expensive energy from the market to meet our domestic needs, and this means ratepayers are seeing an increase in our overall energy costs. If water inflows are as low as forecast, we will become more reliant on market energy to meet domestic needs, especially as we move into the winter season and peak electricity use," he said.
BC Hydro continues to implement its $1.7 billion capital plan for fiscal 2011 as the company implements programs to renew and revitalize aging infrastructure and meet the growing demand for electricity.
"Investing in the renewal, revitalization and maintenance of our electricity system is one of BC Hydro's highest priorities," added Cobb. "It's critical that we continue to invest in generating clean power, and ensuring that we deliver that power to homes and businesses in a safe and reliable manner, every day of the year."
Among the projects underway are the Mica Gas-Insulated Switchgear Replacement, which will help to retain generation reliability, and the Central Vancouver Island Transmission and Saanich Peninsula Transmission Projects that will deliver reliable electricity to the growing communities of Vancouver Island. In addition, the Vancouver City Central Transmission Project will help meet the growing demand for electricity in the South False Creek and Mount Pleasant communities while increasing electrical reliability in downtown Vancouver.
Key financial highlights include:
- On July 5, 2010, the British Columbia Transmission Corporation (BCTC) was integrated with BC Hydro as part of the Clean Energy Act enacted by the Province of British Columbia on June 3, 2010. All BCTC assets, liabilities and employees were transferred to BC Hydro as of July 5, 2010 and the operating results of both entities were reported on a combined basis commencing in the second quarter of fiscal 2011.
- Trade revenues were significantly lower as a result of lower average commodity prices and lower electricity trade sales volumes, partially offset by higher gas trade sales volumes. Domestic revenue was higher due mainly to higher rates. Domestic electricity sales volumes were comparable to the previous year reflecting economic stabilization in the current year for those customers severely impacted by the economic downturn in fiscal 2010.
- Water inflows into system reservoirs during the quarter were 23 per cent below historical average due to low winter snowpack levels and lower than normal precipitation during the spring and summer of 2010. BC Hydro was required to increase market energy purchases in the quarter in order to meet domestic load requirements.
- Capital expenditures of $419 million in the quarter were $12 million higher than in the same period in the previous year. The increase was primarily due to higher expenditures on transmission projects, including the Central Vancouver Island Project, partially offset by lower expenditures on generation projects primarily due to the Revelstoke Unit 5 Installation and GM Shrum Transformer Replacement projects which are nearing completion in the current year.
- 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:
Greg Alexis
Senior Advisor, Media Relations
Phone: 604 623 4022
Cell: 604 828 4964