BC Hydro announces third quarter results
Implementation of capital plan continues for fiscal 2011 to upgrade aging infrastructure
VANCOUVER – BC Hydro on Tuesday announced its third quarter financial results [PDF, 1.9 Mb] for fiscal year 2011, reporting a consolidated net income of $171 million for the period October 1 to December 31, 2010, which was $58 million higher than the same period last year primarily due to higher domestic revenues. Year-to-date, net income was $381 million which is $79 million higher than the same period last year.
The increased consolidated net income is partially a result of lower operating costs primarily due to lower expenditures for electricity and gas purchases, lower finance charges and higher trade income. The increase was also due to higher domestic revenues due to previously announced higher average customer rates and an increase in the rate rider, which took effect on April 1, 2010.
BC Hydro also continues to implement its $1.6 billion capital plan for fiscal 2011 – part of an extensive overall plan to address the growing demand for electricity in British Columbia and renew and revitalize its aging infrastructure. Examples of capital projects that are being planned, underway or near completion follow below.
"As we mark BC Hydro's 50th anniversary this year and plan ahead for our next 50 years and beyond, we are making significant investments in our electricity system to ensure we can meet British Columbia's future energy needs," said Dave Cobb, BC Hydro's President and CEO. "In order to continue to provide reliable and clean electricity, BC Hydro is in a significant building phase and going forward we will invest more than $6 billion to build new systems to renew and replace aging generating, transmission and distribution facilities."
Key financial highlights include from the third quarter results:
- On December 2, 2010 the British Columbia Utilities Commission approved the Negotiated Settlement Agreement on BC Hydro's F2011 Revenue Requirements Application, confirming the rate increase of 6.11 per cent for all customer classes for fiscal 2011, with a credit of 4.71 per cent applied to all other approved rates except for the rate rider for the period January 1, 2011 through March 31, 2011. The NSA also confirmed a rate rider of 4.0 per cent for the period April 1, 2010 through December 31, 2010, after which it will decrease to 2.5 per cent.
- Domestic revenue was higher due mainly to higher rates in fiscal 2011. Domestic electricity sales volumes for the light industrial and commercial and large industrial sectors were higher than the previous year, reflecting economic stabilization in the current year for those customers impacted by the economic downturn in fiscal 2010. 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.
- Water inflows into system reservoirs during the quarter were four per cent above average. However, the very low inflows in the first half of the year due to low winter snowpack levels and lower than normal precipitation during the spring and summer of 2010 are currently forecast to leave BC Hydro's system inflows at 85 per cent of average for the full fiscal year.
- Capital expenditures of $375 million in the quarter were in line with the same period in the previous year. Higher expenditures on transmission projects, including the Saanich Peninsula Project and the Central Vancouver Island Project, were offset by lower expenditures on generation projects primarily due to completion of the Revelstoke Unit 5 Installation and GM Shrum Transformer Replacement projects by the end of the third quarter of fiscal 2011.
Examples of capital projects that are being planned, underway or near completion:
- Vancouver City Central Transmission Project – the most significant investment in central Vancouver's electrical system in almost 30 years, including a new substation in Mount Pleasant and approximately eight kilometres of new underground 230-kilovolt transmission circuits. The estimated investment of $200 million is expected to result in 216 person years of direct employment. Construction is expected to be completed in November 2012.
- Mica Units 5 and 6 Projects – a $700-800 million project to add two generating units to the Mica Dam Generating Station north of Revelstoke. The project is expected to create 800 person years of direct employment. The target in-service date for Mica Unit 5 is October 2014 and the target in-service date for Mica Unit 6 is October 2015.
- Fort Nelson Resource Smart Upgrade – a $150-165 million project to upgrade the generation capacity at the Fort Nelson Generating Station from 47 megawatts to 72 megawatts to meet growing demand in the region. The project is expected to result in 130 direct jobs and construction is expected to be completed in 2012.
- Central Vancouver Island Transmission Project – a $66.3 million project to build a 12 kilometre, 230 kilovolt transmission line, including the new Harewood West Substation, was recently completed on time and under budget. The line ensures a continued, reliable supply of electricity to the growing communities between Nanaimo and Qualicum Beach.
BC Hydro Media Relations
Phone: 604 928 6468