MONTREAL, Nov. 15, 2013 /CNW Telbec/ - For the nine months ended September 30, 2013, Hydro-Québec posted a result from continuing operations of $2,123 million, compared to $2,121 million for the same period last year. Net electricity exports increased by $147 million, whereas electricity purchases from Rio Tinto Alcan decreased by $105 million. The deferred implementation of Hydro-Québec Distribution's rate adjustment, i.e., the difference between the April 1 effective date of the rate adjustment and the recording of additional costs as of January 1, whose effect was amplified in 2013, had a negative impact of $91 million. A downward adjustment of $38 million related to Hydro-Québec TransÉnergie's 2013 rate case was also a factor. In addition, water-power royalties increased by $39 million over last year.
When the discontinued operations are factored in, the net result for the first nine months of the year amounted to $2,136 million in 2013, compared to $265 million in 2012.
Consolidated operations for the third quarter
For the third quarter of 2013, Hydro-Québec's result from continuing operations was $319 million, compared to $376 million in 2012. Net electricity exports by Hydro-Québec Production increased slightly over the same period in 2012. However, this increase was offset by adjustments related to the regulated activities of Hydro-Québec TransÉnergie and Hydro-Québec Distribution.
Segmented operations for the first three quarters
Hydro-Québec Production posted a result from continuing operations of $1,414 million, compared to $1,208 million in 2012. This $206-million increase is mainly due to growth of $147 million in net electricity exports. In addition, electricity purchases from Rio Tinto Alcan decreased by $105 million. These factors were mitigated by a $39-million increase in water-power royalties.
Hydro-Québec TransÉnergie's result from continuing operations was $416 million, a $60-million decrease from 2012 that is due, among other things, to an adjustment related to the division's 2013 rate case and to variances in revenue from point-to-point transmission services.
Hydro-Québec Distribution posted a result from continuing operations of $231 million, compared to $346 million in 2012. Revenue from electricity sales increased by $317 million on account of three main factors: temperatures that were close to normal in 2013, whereas they had been milder in 2012; higher demand, primarily in the residential sector; and the rate adjustments of April 1, 2012 and 2013. Other revenue decreased, partly because of revenue variances related to climate conditions given the mild temperatures in 2012. Electricity purchases increased by $261 million, mainly because of additional supplies from independent power producers. Moreover, depreciation and amortization expense increased by $40 million compared to 2012.
In the Construction segment, the volume of activity at Hydro-Québec Équipement et services partagés and Société d'énergie de la Baie James totaled $1,756 million, compared to $1,551 million in 2012. Projects under way for Hydro-Québec Production include ongoing construction at the Romaine jobsites. Work in progress for Hydro-Québec TransÉnergie includes expansion of the transmission system in the Minganie region, the addition of a 735/315-kV section and related work at Bout-de-l'Île substation as well as various projects stemming from continued investment in asset sustainment.
Hydro-Québec invested $2,920 million during the first nine months of 2013, compared to $2,627 million in 2012. As expected, a large portion of this amount was devoted to the company's growth and development projects as well as to maintenance and improvement activities.
During the third quarter of 2013, Hydro-Québec borrowed $1.6 billion on the Canadian market. In July, it issued debentures due February 2050 with a yield of 3.95%, which enabled it to raise $0.6 billion. Then, in September, the company issued variable-rate notes for a total amount of $1.0 billion, maturing in September 2018. The funds will be used to support part of the investment program and to refinance maturing debt.
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