Financial results for 2017: Adjusted net income up $30 million - Hydro-Québec's net electricity exports reach historic high
13 Mar, 2018, 15:05 ET
MONTRÉAL, March 13, 2018 /CNW Telbec/ - Éric Martel, President and Chief Executive Officer of Hydro-Québec, and Lise Croteau, Executive Vice President and Chief Financial Officer, today announce the company's financial results for 2017. Adjusted net income totaled $2,891 million, up $30 million from $2,861 million in 2016. This strong result is mainly due to net electricity exports of more than 34 TWh—a record volume in the company's history.
Moreover, under the earnings-sharing mechanism implemented in 2017, Hydro-Québec TransÉnergie and Hydro-Québec Distribution now share with customers any surplus over and above the rate of return authorized by the Régie de l'énergie for a given year. An amount of $45 million was therefore recognized in this regard in 2017.
"Hydro-Québec's employees all work in our customers' best interests to provide high-quality service at the lowest possible cost," stated Mr. Martel. "Thanks to their efforts, combined with careful management across all our business segments, we were able to set a new export record and increase customer satisfaction while keeping our rate increases below inflation."
- Net electricity exports reach historic high of 34.4 TWh:
- Increase of 1.8 TWh over the previous record, set in 2016
- Contribution of $780 million to net income
- Commissioning of Romaine–3 generating station (395 MW) in September:
- Facility put to good use both to help meet Québec demand during peak consumption periods in winter 2017–2018 and for export purposes
- Careful management of operational expenditure:
- Decrease of $7 million from 2016
- Absorption of the impacts of inflation, salary indexing and growth in activities
- Economic spin-offs of Hydro-Québec's operations:
- Contribution to Québec government's revenue: more than $4 billion for the fifth consecutive year
- Net income of $2.8 billion, water-power royalties of $0.7 billion, public utilities tax of $0.3 billion and guarantee fees related to debt securities of $0.2 billion
- Major investments throughout Québec: $3.8 billion
- Purchases of goods and services in Québec: $2.9 billion
Hydro-Québec posted net income of $2,846 million in 2017. Under the earnings-sharing mechanism, which applied for the first time in 2017, the company recognized $45 million payable to customers, in accordance with the terms established by the Régie de l'énergie. For purposes of comparison with 2016 net income, which totaled $2,861 million, adjusted net income excluding this new item was $2,891 million in 2017, an increase of $30 million over the previous year. Net electricity exports rose by $7 million, primarily because of a 1.8-TWh volume increase. On the Québec market, supplies provided by Hydro-Québec Production to Hydro-Québec Distribution increased by $37 million compared to 2016, mainly as a result of temperature variances.
Net electricity exports rose by 1.8 TWh to reach a historic high of 34.4 TWh. This significant volume is due to an effective sales strategy, smooth operation of generating and transmission facilities and high runoff.
In 2017, net exports accounted for 17% of electricity sales volume, but generated 27% of the company's net income, contributing $780 million to net income.
The investment program totaled $3,754 million in 2017, mainly because of ongoing work on major projects in the generation and transmission segments.
The main jobsite remained the construction and connection of the Romaine hydroelectric complex, in the Côte-Nord region. A new milestone was reached in September with the commissioning of Romaine–3 generating station (395 MW). Two of the four generating stations in this 1,550-MW project—Romaine-2 (640 MW) and Romaine-1 (270 MW)—were brought onstream in 2014 and 2015, respectively, and Romaine-4 (245 MW) should follow on the 2020 horizon.
Work on the 735-kV Chamouchouane–Bout-de-l'Île project was stepped up in 2017. The project has two components: first, deployment of 735-kV lines extending approximately 400 km between Chamouchouane substation, in the Saguenay–Lac-Saint-Jean region, and the Montréal metropolitan loop, as well as the rerouting of a short segment of 735-kV line to Bout-de-l'Île substation, in Montréal; and, second, construction of 735/120/25-kV Judith-Jasmin substation in Terrebonne, in the Lanaudière region. Line construction is proceeding simultaneously in the Saguenay–Lac-Saint-Jean, Mauricie and Lanaudière regions, with the goal of commissioning all the facilities at the end of 2018.
"We are very proud to announce such excellent results," stated Ms. Croteau. "This performance is due to strict and responsible financial management, and also reflects the outstanding work of our employees."
For more information on Hydro-Québec's 2017 financial results, visit www.hydroquebec.com/ar.
For further information: Serge Tsoto, Hydro-Québec, Tel.: 514 289-5005, Newsroom: news.hydroquebec.com/en/
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