BC Hydro announces fiscal results for 2009

Press Release
BC Hydro
July 10, 2009

VANCOUVER – BC Hydro today announced its financial results for Fiscal 2009, including a consolidated net income of $366 million for the year ended March 31, 2009, which is comparable to the prior year's net income.

"Overall, our financial results for Fiscal 2009 are in line with expectations and I am very pleased that the energy saved through our Power Smart programs exceeded expectations," said Bob Elton, BC Hydro President and CEO. "We have also made good progress in our capital plan to upgrade aging assets to meet growing customer demand and improve system resiliency. Unfortunately, the economic downturn has affected many industries, especially forestry, which resulted in decreased demand for electricity from the industrial sector."

Other highlights of the Annual Report include:

* Domestic revenues were $2,814 million – $130 million lower than the previous year, primarily as a result of decreased revenue from the industrial sector mainly due to closures in the current year of pulp and paper operations in the forestry sector.

* Total energy costs of $2,393 million were $336 million higher than in the prior year. BC Hydro experienced a 14 per cent decrease in hydro generation over the prior year due to lower water inflows and system constraints, causing BC Hydro to purchase higher-priced market energy to meet domestic requirements.

* Energy saved through Power Smart programs surpassed expectation and continued to deliver cost-effective energy over the last fiscal year, producing cumulative energy savings of 983 GWh, an increase of 657 GWh over Fiscal 2008. This increased saving is equivalent to powering 65,700 homes for a year.

* Capital expenditures of $1,400 million in the year were $324 million higher than the previous year, primarily due to reinforcement work on the Vancouver Island transmission reinforcement project and generation replacements and expansion projects such as the Revelstoke Unit 5 installation to meet growing customer demand, and system improvements to the distribution network.

* Energy trading income increased in Fiscal 2009 mainly as a result of favourable electricity price spreads between the Northwest and Southwest and between the Northwest and Alberta during peak periods in the current year, and growth in natural gas trading activity over the previous year.

* Operating costs were $27 million lower in Fiscal 2009, primarily as a result of higher costs in the previous fiscal year for First Nations settlement provisions. These lower operating costs were partially offset by higher expenditures in the current year on demand side management and smart metering and infrastructure projects, higher maintenance costs to address equipment failures at the G.M. Shrum Generating Station, expenditures on Phase 2 of the Site C project, and higher levels of work in vegetation maintenance to improve system resiliency.

Contact:

Susan Danard
Media Relations
Phone: 604 623 4220

Drop in demand means lower profits at BC Hydro

Utility reported it had to purchase more expensive energy to meet demand

BC Hydro posted profits of $366 million last year, down slightly from the $369 million the provincially owned electric utility earned a year earlier. Photograph: Vancouver Sun files

BC Hydro posted profits of $366 million last year, down slightly from the $369 million the provincially owned electric utility earned a year earlier.

The drop in profit came as rate increases were offset by a decrease in demand, mainly from industries such as forestry that were hard hit by the recession, BC Hydro said in its annual report, released Friday.

Energy costs for the year — which ran from April 1, 2008 to March 31, 2009 — were higher ($2.4 billion compared to $2.1 billion) as lower reservoirs led to power generation being down 14 per cent, the report said.

As a result, BC Hydro had to purchase more expensive energy to meet demand.

Water flow “is our largest variable, it’s our fuel,” BC Hydro spokeswoman Susan Danard said in an interview. So the utility keeps a watchful eye on snowpack in the north and rain in the south.

But despite the dry summer the Lower Mainland has been enjoying so far, it is too early to predict what water inflow will be like this year, Danard said. While the south has been dry, the Peace River area, where BC Hydro’s largest facilities are located, has been quite wet.

Domestic revenues at the utility fell $130 million to $2.8 billion even though the utility added 34,000 customers, mainly in the Interior of the province and on Vancouver Island.

In addition to a drop in industrial consumption, BC Hydro’s Power Smart program — which encourages customers to reduce energy consumption by 10 per cent — saved 983 gigawatt hours (GWh) of energy, an increase of 657 GWh from the amount saved in 2008. The increase in saved energy is enough to power more than 65,000 homes for a year, the report said.

Revenues at Powerex, BC Hydro’s trading arm, were up $189 million due to increases in revenue from both electricity and gas trades. Higher prices in electricity more than offset a 13-per-cent drop in sales to increase revenue. And Powerex’s push to grow its gas business led to volume growth of 27 per cent while prices were up eight per cent.

Last year, BC Hydro experienced more widespread power failures caused by transmission and substation issues than in previous years, affecting more customers, the report said.

That would include last summer’s underground electrical fire, which caused as many as 20 per cent of downtown Vancouver customers, many of them businesses, to be without power for up to four days.

fionaanderson@vancouversun.com

© Copyright (c) The Vancouver Sun