Results for 2008: Hydro-Québec posts net income of $3,141 million, up $234 million



    MONTREAL, April 8 /CNW Telbec/ - Net income totaled $3,141 million for
2008, up 8% over 2007. The $234-million increase was mainly the result of
higher net electricity exports by Hydro-Québec Production. In 2008, these
exports, which accounted for 8.2% of sales volume, generated 32% of income
from the company's continuing operations.
    "2008 was a good year for Hydro-Québec: increased exports and higher
export prices, an additional gain of $126 million resulting from a price
adjustment related to the sale of our Chilean assets in 2006, and effective
management throughout the company enabled us to earn more than $3 billion in
net income and pay a $2,252-million dividend to the Québec government," said
Lise Croteau, Vice President, Accounting and Control at Hydro-Québec.

    Consolidated results

    Revenue totaled $12,717 million in 2008, up 3%. Revenue from electricity
sales rose by $379 million to reach $12,364 million.
    In Québec, revenue from electricity sales amounted to $10,445 million,
compared to $10,368 million in 2007. The $77-million increase was attributable
to rate adjustments, mitigated by the effect of milder temperatures in 2008
than in 2007 and by a decrease in demand, particularly in the industrial
category.
    On markets outside Québec, revenue from electricity sales totaled $1,919
million, up $302 million as a result of a 3.6-TWh increase in the volume of
exports by Hydro-Québec Production and highly favorable market conditions.
    Total expenditure amounted to $7,260 million, up $324 million over 2007.
This increase stems mainly from the higher amortization expense for the
regulatory assets and liabilities of Hydro-Québec Distribution arising from
variances in transmission and electricity procurement costs and a $285-million
increase in water-power royalties paid by Hydro-Québec Production. These items
were partially offset by a reduction in electricity purchases in excess of the
heritage pool by Hydro-Québec Distribution.
    Operating expenses were down $44 million or 1.7%, chiefly due to a
decrease in pension costs and to company-wide efficiency gains.

    Segmented results

    Hydro-Québec Production posted net income of $2,137 million, a
year-over-year increase of $60 million. Net electricity exports rose by $380
million, while water-power royalties were up $285 million. It should be noted
that in 2007, a transition year, the half-rate rule applied to water-power
royalties.
    Hydro-Québec TransEnergie's net income was $481 million in 2008, compared
to $396 million in 2007. This rise is partially attributable to an $18-million
increase in revenue from point-to-point transmission services due to higher
exports. It should also be noted that a $50-million regulatory liability was
recorded in 2007, resulting in a positive variance of $50 million in 2008.
    Hydro-Québec Distribution recorded net income of $421 million, up $26
million. An $85-million increase in revenue from electricity sales and a
$222-million reduction in net electricity purchases exceeding the heritage
pool and in transmission costs were offset by a $343-million increase in
amortization expense for regulatory assets and liabilities arising mainly from
variances in transmission and electricity procurement costs.
    Regulatory deferrals amounted to $71 million in 2008, compared to $21
million in 2007, for a positive impact of $50 million.
    The volume of activity at Hydro-Québec Equipement and Société d'énergie
de la Baie James (SEBJ) totaled $2,416 million, as against $2,150 million in
2007. Major projects under way include the Eastmain-1-A/Sarcelle/Rupert
hydroelectric development and the 1,250-MW interconnection with Ontario.

    Investments

    In 2008, Hydro-Québec invested $4.0 billion, compared to $3.6 billion in
2007. Most of this amount was devoted to the growth and development projects
of Hydro-Québec Production, Hydro-Québec TransEnergie and Hydro-Québec
Distribution, as well as the continued implementation of the Energy Efficiency
Plan.




For further information:

For further information: Hydro-Québec - Media Relations: Flavie Côté,
Press Officer, (514) 289-2220, Cote.Flavie@hydro.qc.ca; Press room:
http://www.hydroquebec.com/media


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