AltaLink achieves top performance while holding costs flat
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CALGARY, Alberta, Feb. 28, 2020 (GLOBE NEWSWIRE) — During the first year of AltaLink’s Flat for Five commitment, AltaLink held its transmission costs to customers flat while delivering best ever results in customer service and outage duration performance.
“Improving performance while not increasing costs is one of the most challenging aspects of operating any business,” said Scott Thon, AltaLink’s President and Chief Executive Officer. “With a business as critical to the economy as the electricity transmission system, we know Albertans are relying on us to improve every day without increasing our cost of service.”In 2019, AltaLink filed an application with the Alberta Utilities Commission (AUC) to keep its rates flat from 2019 to 2021, covering the first three years of its five-year commitment. This application also included a negotiated settlement between AltaLink and customer groups representing industrial and residential customers that commits AltaLink to reducing operating expenses by a further $22.5 million and capital investments by an additional $58 million.Since 2015, through a combination of customer refunds and tariff levelization, AltaLink has reduced the cost to our customers by more than $700 million. If the AUC approves AltaLink’s 2019-2021 application, this would increase savings to more than $1.2 billion by 2022.While keeping its costs below 2018 levels, in 2019 AltaLink achieved a customer satisfaction rate of 99 per cent and saw a 30 per cent improvement in its outage duration performance over the previous year. The company also became the first Canadian utility to be re-designated at a Sustainable Electricity Company by the Canadian Electricity Association.“We hear a consistent message from our customers every day – safely keep the lights on, do it affordably, and protect the environment. Our team takes this to heart and has developed innovative solutions to improve our performance without increasing cost,” said Thon. “I’m proud of the improvements our team has made to support Albertans.”AltaLink announces 2019 year end resultsAltaLink continues to invest in transmission facilities to ensure the reliability of the electricity grid. During 2019, AltaLink invested $318.7 million in its transmission system.Today, AltaLink, L.P. announced comprehensive income of $257.6 million for the year ended December 31, 2019, compared to $292.5 million for the same period in 2018. Comprehensive income decreased year over year mainly due to a $58.0 million re-measurement of future income tax recovery recorded in 2016 to 2018 as a result of the Alberta government reducing the corporate income tax rate in 1% increments from 12% for the first half of 2019 to 8% in 2022. Revenue from operations for the year ended December 31, 2019, was $947.6 million compared to $968.8 million during the same period in 2018, a decrease of $21.2 million. Revenue from operations decreased year over year mainly as a result of lower recovery of future income taxes for 2019 primarily due to a reduced provincial corporate income tax rate and lower recovery of depreciation and salvage expenses.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 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 2019 highlightsDuring the 12 months ended December 31, 2019:In 2019, customer satisfaction was 99%, which is an improvement compared to 96% in 2018;On September 30, 2019, AltaLink refunded $6.5 million for customers which represents the customers’ share of cost savings arising from the cost-sharing mechanism in the 2017-2018 GTA Negotiated Settlement Agreement;We reached a Negotiated Settlement Agreement with customer groups on the majority of our 2019 to 2021 tariff application. Under the agreement, AltaLink will reduce operating expenses by $22.5 million and sustaining capital expenditures by $58.0 million from the April 2019 filing of the GTA for 2019 to 2021. The agreement does not include AltaLink’s proposed change to the method of funding salvage that would reduce customer rates and its salvage study and excludes certain programs to reduce the risk of wildfires and to comply with transmission line clearance code requirements, as well as certain asset retirements, which were part of a GTA hearing in November, 2019. On July 10, 2019, AltaLink filed the agreement with the AUC for approval;As part of an amendment to its 2019 to 2021 GTA, AltaLink has filed to invest $38 million to improve public safety related to its wildfire mitigation program. The program, which includes increased line inspections, vegetation management activities, asset reinforcement and the potential of proactive Public Safety Power Shut-offs, will help reduce the potential of wildfires in High Fire Risk Areas within AltaLink’s service territory. AltaLink will continue to consult with impacted stakeholders about the program through the second quarter of 2020;Reliability of service provided to customers in 2019 improved compared to 2018. AltaLink’s 2019 customer outage time was 18 minutes compared to 25 minutes in 2018, customer outage frequency was 0.43 compared to 0.42 in 2018, and customer restoration time was 80 minutes compared to 113 minutes in 2018;In November 2019, for the third consecutive year, we received the CEA President’s Award of Excellence for Employee Safety as the best performing transmission company with 501-1,000 employees in 2018. Our employee safety performance results continue to be strong. Our 2019 total recordable injury frequency rate was 0.27 compared to 0.27 in 2018;In November, 2019, the CEA awarded AltaLink the Sustainability Electricity CompanyTM re-designation. In 2014, AltaLink was the first transmission company in Canada to receive the designation and now becomes the first CEA member to be re-designated under this process;On August 23, 2019, the AUC issued its decision on AltaLink’s 2014-2015 Capital Deferral Account Compliance filing. The AUC awarded AltaLink $9.6 million of applied for revenue for carrying costs;On June 27, 2019, AltaLink initiated its 2016-2018 deferral account proceeding. AltaLink’s related application includes approximately $947 million in capital additions;We earned comprehensive income of $257.6 million compared to $292.5 million in 2018. Our comprehensive income decreased year over year due to a $58.0 million re-measurement of future income tax recovery as a result of the Alberta government reducing the corporate income tax rate in 1% increments from 12% for the first half of 2019 to 8% in 2022. The reduction of AltaLink’s recovery of future income taxes will benefit customers when AltaLink is deemed to start paying cash taxes and is offset by a corresponding decrease in income tax expense of AltaLink’s corporate owners;On June 1, 2019, AltaLink and the Piikani First Nation operationalized a new limited partnership called PiikaniLink, L.P. On January 1, 2020, AltaLink and the Kainai Nation (Blood Tribe) operationalized a new limited partnership called KainaiLink, L.P. The partnerships, which were approved by the AUC in November, 2018, result in the Piikani Nation’s and Kainai Nation’s investment in the Southwest 240 kilovolt transmission line and associated substation equipment on reserve lands;AltaLink was selected by Emissions Reduction Alberta to develop a 20 megawatt/20 megawatt-hour Transmission Deferral Battery Energy Storage project; andAltaLink invested $318.7 million in capital assets compared to $340.8 million in 2018 to ensure continued reliability of the electricity network.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.