CALGARY, ALBERTA--(Marketwired - Feb. 27, 2017) -
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Delivering improved reliability and safety results for customers while reducing costs by hundreds of millions of dollars highlighted AltaLink's 2016 results.
"During 2016, AltaLink was clearly focused on improving our system reliability while continuing to identify opportunities to reduce costs for our customers," said Scott Thon, AltaLink President & Chief Executive Officer. "The result was fewer and significantly shorter outages for our customers than in 2015. This operational performance combined with the approval of our customer rate relief proposal that saves Albertans almost $600 million by the end of 2018, shows that our team is committed to delivering the results our customers need."
Operating Alberta's largest transmission system, AltaLink reduced the average length of outages by 35% and reduced the number of outages by 13% over 2015 results. Improvements in customer restoration practices have driven the improved results without increasing cost to customers. AltaLink's reliability performance is in the top quartile among its Canadian peers.
AltaLink's proposal to reduce its cost to customers was approved by the Alberta Utilities Commission (AUC) in May. The decision resulted in almost 25% lower rates for customers in both 2015 and 2016. Albertans will save a further $91 million in both 2017 and 2018 for a total reduction of $600 million over four years.
"As Alberta's economy recovers and we transition to more renewable energy sources, the transmission system will play a key role in delivering the lowest-cost energy to Alberta's homes, farms, businesses, and industries," said Scott Thon.
AltaLink announces 2016 year end financial results
Today, AltaLink, L.P. announced net income for the year ended December 31, 2016, was $306.0 million. During 2015, AltaLink earned $209.3 million of net income. Revenue for the year ended 2016 was $977.9 million compared to $829.1 million during 2015. Our comprehensive income for the year ended December 31, 2016 increased by $97.7 million, respectively, compared to 2015, primarily due to the negative impact of the AUC's (Alberta Utilities Commission) Generic Cost of Capital (GCOC) decision related to 2014 and 2013 ($27.2 million) recorded in 2015, combined with an increased return from our investment in electricity transmission infrastructure and adjustments in 2016 in relation to the 2015-2016 General Tariff Application, 2012-2013 Direct Assign Capital Deferral Account, and 2016 GCOC decisions issued by the AUC.
As a partnership, AltaLink, L.P. reports its net income before income taxes; therefore its results are not directly comparable with net income reported by corporations that recognize income taxes in their financial statements.
AltaLink's full financial results and management's discussion and analysis can be found on AltaLink's website at www.altalink.ca or on SEDAR at www.sedar.com.
Headquartered in Calgary, with offices in Edmonton, Red Deer and Lethbridge, AltaLink is Alberta's largest electricity transmission provider. AltaLink is committed to partnering with its customers to provide innovative solutions to meet the province's demand for reliable and affordable energy. A wholly-owned subsidiary of Berkshire Hathaway Energy, AltaLink is part of a global group of companies delivering energy services to customers worldwide.
Significant 2016 highlights
During the 12 months ended December 31, 2016:
- AltaLink earned net income of $306.0 million (2015 - $209.3 million). This is pre-tax net income, since AltaLink is a limited partnership and tax is incurred and paid by our owners. 2016 net income was $69.5 million higher than normalized net income for 2015. Normalized net income of $236.5 million for 2015 removes the GCOC 2013 and 2014 $27.2 million impact on 2015 results. Our net income increased in 2016 due to our past investment in assets and higher revenue for the recovery of deemed income taxes. Our revenue for deemed income taxes increased by $21.1 million from 2015 to 2016. This revenue is a non-cash item since we changed to the flow through method of tax funding as part of our customer rate relief offerings and therefore, does not impact current rates paid by customers.
- The AUC approved our Direct Assign Capital Deferral Account filing for 2012, 2013 and the Heartland project for 2014, approving $1,862 million of capital additions as prudently incurred
- We received a decision from the AUC on our 2015-2016 GTA. The AUC approved the majority of our proposed immediate rate-relief measures for our customers in the amount of $600 million for 2015 to 2018. The customer rate relief resulted in our cash flow from operations decreasing from $404.9 million in 2015 to $158.0 million in 2016.
- S&P raised its long-term corporate credit and senior secured ratings on AltaLink to "A" from "A-" with a stable outlook solely as a consequence of an upgrade to our parent company, BHE. DBRS also confirmed an "A" rating on our Medium-Term Notes along with an "R-1 (low)" rating on our commercial paper. A strong "A" rating allows us to continue to provide lower debt financing costs for our customers.
- AltaLink had excellent safety results, exceeding our five year historical average results, and received two awards from the Canadian Electricity Association for our 2015 safety performance
- AltaLink improved its customer reliability, reducing its outage duration by 45% and its outage restoration time by 20% from 2015
- For 2016, 85% of customers surveyed said they were satisfied with AltaLink's services, meeting the company's expectation
- AltaLink reached a new collective bargaining agreement with the UUWA, which is effective from January 1, 2016 to December 31, 2019
- AltaLink energized two significant projects:
- The Southern Alberta Transmission Reinforcement's Medicine Hat 138 kV reconfiguration project, enabling the connection of new wind generation in southern Alberta; and
- The final portion of the Edmonton Debottlenecking project, designed to improve reliability and reduce congestion of the transmission grid in the Edmonton area
- AltaLink invested $621.3 million in capital assets to ensure the continued reliability of Alberta's transmission system and help prepare for a renewable energy future
This news release does not constitute an offer to sell or the solicitation of an offer to buy AltaLink's securities in any jurisdiction, including but not limited to, the United States. AltaLink's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Except for the historical and present factual information contained herein, the matters set forth in this news release, including words such as "expects", "intends", "projects", "plans", "anticipates" and similar expressions, are forward looking information that represents management of AltaLink's Internal projections, expectations or beliefs concerning, among other things, future operating results and various components thereof or the economic performance of AltaLink. The projections, estimates and beliefs contained in such forward looking statements necessarily involve known and unknown risks and uncertainties, which may cause AltaLink's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward looking statements. These risks and uncertainties include, among other things, those described in AltaLink's filings with the Canadian securities authorities. Accordingly, holders of AltaLink securities and potential investors are cautioned that events or circumstances could cause results to differ materially from those predicted. AltaLink disclaims any responsibility to update these forward looking statements.