BC Hydro
While BC Hydro offers its customers among the lowest residential, commercial and industrial rates in North America, it is also responding to its customers' need for a company that is as smart about creating power as it is about using power, and is planning ahead for the future.
Commitment to the Environment
BC Hydro renewed its commitment to clean, green renewable energy with an update to its Integrated Electricity Plan in 2000, which has set a target that ten per cent of all new generation resource acquisitions will be new green resources. This plan is reinforced by the installation of three wind monitoring towers to determine the viability of wind as a generation source in the near future, as well as investigations into wood-waste, micro hydro, hydrogen and community energy planning.
Greenhouse Gases Offset
To assist in maintaining BC Hydro's status as a low-emissions power supplier, BC Hydro purchased its first greenhouse gas (GHG) offsets from a Lower Mainland company. The ongoing upgrade of its Burrard Generating Station is also decreasing GHG emissions by increasing plant efficiency.
Customer Service
To provide better information to BC Hydro customers during power outages, a 1-888-POWERON number was introduced. By calling this number customers are able to find out when the power will be restored and the cause of the outage. The system is planned to be extended province-wide. Operating hours at call centres have been expanded and are now providing service in six languages: English, French, Mandarin, Cantonese, Hindi and Punjabi. Bill payments can now be made through bill payment machines at Power Smart Centres, 19 Pharmasave outlets, at government offices, and online.
Water Use Plans
BC Hydro's Water Use Planning Process is underway for 11 facilities across the province, with the plans for Stave/Ruskin and Alouette facilities already completed. Water Use Planning is part of an overall review of BC Hydro's licences to store and divert water for electricity generation. The plans are being developed in collaboration with the Ministry of Environment, Lands and Parks; the Ministry of Fisheries; Fisheries and Oceans Canada; local governments; First Nations; community groups and other stakeholders.
Georgia Strait Pipeline Crossing Project
BC Hydro is working on a joint venture with Williams Gas Pipeline to build a new natural gas pipeline to Vancouver Island Community consultation is completed and a tentative route has been submitted to the National Energy Board. BC Hydro is supporting a full panel review of the project. The new pipeline would help provide fuel to existing and proposed generation plants to meet the growing electricity needs on Vancouver Island.
ATCO Electric
Alberta government's restructuring of the provincial electricity industry provided the framework for much of ATCO Electric's work in 2000. As of January 1, 2001, all customers in Alberta will be able to choose their energy supplier.
ATCO Electric has a clear vision of its role in the new world -to deliver electricity over a safe, reliable system of power lines. As a delivery company, we will meet the growing need for facilities in our service area and continue to pursue excellence in the transmission and distribution of energy. Under the new structure, ATCO Electric will also provide a "regulated rate option," allowing most customers to continue buying the full electric service package. This means we continue to buy energy on behalf of the customers who have not chosen a retailer.
In September, ATCO Electric filed an application outlining its proposed approach to buying energy for the regulated rate option with the provincial Energy and Utilities Board (EUB). This was the latest step in a year filled with regulatory proceedings as the province prepares for industry restructuring.
In April, ATCO received approval from the EUB for a new rate structure that moves towards clear separation of the costs of energy and delivery. In July, we submitted an application for a distribution tariff -i.e., the delivery charge that will recover the costs of providing transmission and distribution service. In October, ATCO Electric successfully reached a negotiated settlement with customer groups on revenue required to cover its transmission costs. We are also working with customers on a negotiated settlement related to our distribution revenue requirement.
Another important aspect of industry restructuring has been how to move existing utility-owned generating plants into the competitive market. The provincial government's solution was to develop "Power Purchase Agreements" covering each unit.
These PPAs leave the ownership of the asset with the utility, who continue to be paid their costs for owning and operating the plants. However, marketers were allowed to buy the right to sell energy from these units at market prices. The auction of PPAs was held during July.
One of our major concerns on behalf of our customers is the current high market price for electricity. As of January, ATCO Electric must buy all energy for customers in the new market, rather than being able to buy "at cost" from utility-owned plants.
In December, the provincial government directed utilities to charge customers 11 cents per kWh for energy in 2001. However, current market prices are higher than 11 cents. As a result, ATCO Electric will carry the additional cost for customers. These costs will be collected from customers sometime after January, 2002.
ENMAX Corporation
ENMAX Corporation (ENMAX) is an electricity distribution, transmission, supply and services company serving customers in the Calgary area for more than 95 years. Formerly a division of The City of Calgary, ENMAX was incorporated in 1997 and became a wholly owned subsidiary of the City on January 1, 1998.
Until September 30, 2000, ENMAX provided 345,000 customers with 5,690 gigawatts hours of energy. More than 85 per cent of ENMAX's revenues, estimated in 2000 to be $500 million, are generated by distribution and retail activities. The service area of 1,044 square kilometres includes The City of Calgary, part of the Tsuu T'ina Reserve and adjacent portions of the municipal districts of Foothills and Rockyview.
Market segmentation studies with residential and small commercial customers indicates 81 per cent are satisfied or very satisfied with ENMAX due to system reliability, quick response to outages and quality customer service. Independent research also shows ENMAX's has 99 per cent name awareness and steadily increasing brand loyalty.
ENMAX does not generate electricity. All power in Alberta is purchased through the Power Pool, an independent organization responsible for balancing electricity supply and demand in the province. Due to deregulation of Alberta's electricity industry, ENMAX restructured its organization into two wholly owned subsidiaries.
ENMAX Power Corporation owns, operates and maintains the distribution and transmission network providing power to the Calgary area. Distribution rates are regulated by The City of Calgary and transmission revenues are regulated by Transmission Administrator -another independent provincial body. ENMAX Power currently has top quartile reliability performance in Canada and one of the fastest response and restoration times. With deregulation, ENMAX Power is responsible for customer registration, metering, load settlement, billing and data management.
ENMAX Energy Corporation is the retail service provider competing against other retailers in Alberta to provide customers with energy supply and services. In 2000, this unregulated business successfully secured long-term, competitively priced supply for customers well into the future.
ENMAX Energy also experienced a 20 per cent growth in customer base. In 2001, the business will provide electricity supply and services to about 60,000 new customers in Lethbridge, Red Deer, Fort MacLeod, Cardston and the Crowsnest Pass.
ENMAX Energy was the first Canadian utility to offer wind-generated electricity as an option to retail and commercial customers. In 2000, the impact of Greenmax participation was the same as leaving more than 113,000 tonnes of coal in the ground and planting more than 25,000 fully grown trees.
ENMAX has two additional unregulated businesses. Energy Services is responsible for electronic communications, security systems, outdoor and streetlights and direct-current power to the Light Rail Traction system. LightStream leases dark fibres to conduct high-speed data communications and owns more than 8,000 kilometres of fibre optic cable in Calgary.
EPCOR Utilities Inc.
EPCOR Utilities Inc. completed a very successful year as the company prepared to become Alberta's electicity retailer of choice in the deregulated marketplace.
EPCOR's preparation for competition culminated in November when it finalized the purchase of UtiliCorp Networks Canada's Alberta retail business. Under the terms of the agreement, EPCOR provides the Regulated Rate Option to 350,000 customers in central and southern Alberta, in addition to its current customer base of 270,000 in Edmonton, making EPCOR the largest electricity retailer in the province. EPCOR also acquired UtiliCorp's call centre in Calgary.
Tight supply and demand continues to be a concern in Alberta and more generation is required to alleviate this situation. EPCOR is committed to being part of the long-term solution to the tight supply problem by adding more generation. In December, EPCOR announced its intention to seek regulatory approval to add a third 400 MW generator at its Genesee Generating Station.
Other 2000 generation highlights included opening the 12.75 MW Taylor Hydroelectric Plant in partnership with Canadian Hydro Developers. EPCOR will add its share of power from Taylor to the sustainable energy offerings in its Green Power Program, the most successful green energy program in Alberta. We also acquired another Green Power source by signing a 10-year contract with the Peigan Indian Utilities Corporation for the output of a 750 kW wind turbine being built this winter. The 400 MW cogeneration facility at Joffre, built in partnership with ATCO Electric and NOVA Chemicals, began adding power to the provincial grid in December.
Outside of Alberta, EPCOR purchased a 7 MW hydroelectric plant at Brown Lake, BC from Syntex Energy Resources of Vancouver. All power from this plant is committed to BC Hydro under a 20-year contract. EPCOR also purchased a partially-built 249 MW natural gas-fired generation station near Tacoma, Washington with its partner Westcoast Power Inc.
EPCOR's commitment to the environment was recognized this year by Canada's Voluntary Challenge Registry when they awarded EPCOR with two awards, the 1999 VCR Gold Award for Reporting and the 1999 Leadership Award in the electric utilities class. In addition, the Genesee Generation Station received it ISO 14001 certification for environmental management in March 2000.
EPCOR is also an active participant in developing the emissions trading market. The company believes that an active emissions trading marketplace is a complement to its own actions in reducing and offsetting greenhouse gas emissions. In November, EPCOR and Fortum, a European energy company, completed the world's largest trans-Atlantic trade of carbon dioxide emission reductions. EPCOR purchased 50,000 tonnes of CO2 credits in the transaction.
While readying for competition and pursuing growth opportunities, EPCOR also continued to expand its non-electricity businesses of water, natural gas and technologies in 2000 and maintained its superior record of social responsibility. Highlights included a $1.25 million strategic partnership with the University of Alberta's Business and Engineering Faculties, $1.3 million to the 2001 World Championships in Athletics, in addition to donating $775,000 to community events, charities and other organizations.
TransALTA
"Transformation" is a watch word around TransAlta these days. Since the end of 1999, the company has gone from a regulated, integrated, Alberta-centric utility to an electrical energy company building a portfolio of coal, hydro, wind and natural gas generation assets in North America and around the world.
TransAlta is targeting its growth in Canada, the United States, Mexico and Australia. We are quickly building scale with more than 8,000 megawatts (MW) of generating capacity. Our target is to grow to 10,000 MW by 2002. An international electric energy company based in Calgary, Alberta, TransAlta is Canada's largest investor-owned electric utility.
TransAlta is capitalizing on its strengths as an owner, operator and developer of low-cost electricity generation and transmission assets and as a successful gas-fired independent power developer and energy marketer. The company has about 4,500 MW of coal-fired and hydroelectric generation in Alberta. TransAlta added another 1,340 MW with its acquisition of a major power plant in the United States in May 2000, and has about 2,400 MW of gas-fired power operating or in development in North America and select international markets.
TransAlta is the largest independent power producer in Canada and the second largest independent supplier of power in Western Australia. In early 2000, the company announced its first power plant in Mexico, and plans to expand its gas-fired independent power business into the United States. In August 2000, the company finalized its deal to build, own and operate the Sarnia Regional Cogeneration Plant -the largest facility of its kind in Canada.
Our transmission business, which ranks a first-quartile performer in North America, includes significant assets in Alberta where we have nearly 90 years experience operating and maintaining more than half of the province's transmission system. Transmission provides a critical link to growing our generation business and is an area of potential growth as markets deregulate.
SASKPOWER
At SaskPower, we challenge ourselves to work with innovation and a commitment to continuous improvement.
We announced two new generation projects in 2000 -the repowering of the Queen Elizabeth Power Station (QEPS) in Saskatchewan and the construction of the Cory Cogeneration Station.
We're using combined-cycle technology to upgrade the QEPS. By installing six 25-MW gas turbines and capturing waste heat from exhaust gases, we'll increase the station's efficiency from 30 to 45 per cent.
Our development arm, SaskPower International, is partnering with ATCO Power Ltd. of Alberta to build the Cory Cogeneration Station, a 228-MW cogeneration and combined-cycle facility at the Potash Corporation of Saskatchewan Inc. (PCS) Cory Mine site near Saskatoon.
These initiatives will help us meet Saskatchewan's future load growth and provide backup to our coal-fired stations.
We continue to take a proactive approach to environmental issues. Among our accomplishments in 2000, we became the first utility in Canada to achieve ISO 14001 registration. Thanks to the hard work of our employees, SaskPower's environmental management system meets the internationally recognized standards set by the International Organization for Standardization (ISO).
We also announced a project with the Government of Canada to develop a green power project in Saskatchewan. SaskPower expects to provide at least 25,000 MWh of wind energy to federal buildings in the province by 2002, with any excess capacity offered to other customers.
Our Diamond Legacy sponsorship with Ducks Unlimited Canada supports a variety of wildlife habitat projects in Saskatchewan. We've also become an active participant in the national Action by Canadians (ABC) program. We hosted ABC workshops for our employees and the public to provide tips on how to reduce greenhouse gas emissions in daily life. Another challenge facing our industry is the routing of transmission lines. In 2000, we convened a panel of independent experts to assess our current procedures, evaluate industry practices and receive public input. Their recommendations will assist us in future transmission projects.
As well, we're establishing an Open Access Transmission Tariff (OATT) for the use of SaskPower's transmission system. Scheduled to take effect July 1, 2001, this change will secure our direct use of the transmission systems of other utilities, enhancing our sales opportunities.
A major customer-focused initiative at SaskPower this year was the Customer Relations Management (CRM) project. Through CRM, we redesigned a number of business processes that involve customer contact, including outage calls and tenancy changes.
Our people are SaskPower's most important resource and we've launched a comprehensive process to strengthen employee relations, beginning with an employee satisfaction survey. Our priorities for action include facilitating more open, two-way communication and providing opportunities for staff to enhance their business knowledge and leadership skills.
Safety continues to be our top operational priority. We want to be an industry leader in safety performance and we're making progress in reaching our goal. On May 15, 2000, the employees at Shand Power Station marked another safety milestone by operating for three years without a single lost-time injury.
Looking ahead, we'll continue to build on our 70-year tradition of service excellence as we develop new products and services, manage our financial and human resources, and work with our business and community partners.
Manitoba Hydro
Strong export sales fuel Manitoba Hydro success
Over the past year, Manitoba Hydro continued to take steps necessary to meet the challenges and take advantage of the opportunities presented by the evolving North American energy market.
Our recent successes, including a record net income of $152 million in the 1999-00 fiscal year, are an indication we are not only moving in the right direction, but we have the organization and the people to take us where we want to go.
One of the keys to Manitoba Hydro's success is the continued strong export market for our electricity. Last year, the corporation realized our highest export revenues ever -$376 million. This year, second quarter results are pointing to continued improvement in export revenues, with sales amounting to $261 million for the six-month period, a $58 million increase over last year.
Manitoba Hydro's participation in this lucrative export market has allowed the Corporation to maintain overall electricity rates that are the lowest in North America. In December, the Corporation announced it had decided not to seek any rate increase to its electricity rates in 2001 for the fifth consecutive year. For large industrial customers, rates have remained constant for 10 years, enabling Manitoba business to remain very competitive with respect to electricity costs.
Our success in the export market is also reflected in our progress towards achieving the financial targets we established a few years ago.
The interest coverage ratio improved from 1.23 in 1998-99 to 1.35 in 1999-00. The Corporation's target is to maintain an annual gross interest coverage ratio, which indicates the extent to which net income is sufficient to pay gross interest on debt, in the range of 1.20 to 1.35.
The Corporation now has a debt/equity ratio of 83:17, improved from 84:16 at March 31, 1999, and is on target to meet our goal of a 75:25 debt/equity ratio by 2005-06.
Plus, Manitoba Hydro continues to finance all capital construction requirements through internally generated funds (except for major generation or transmission projects).
One of the keys to ensuring Manitoba Hydro continues to meet or exceed our financial targets will be continuing to take full advantage of the attractive market for export sales.
In March 2000, Manitoba Hydro announced plans to build a natural gas combustion turbine in Brandon by 2002. This facility will provide the energy support required in low water years and will allow the Corporation to maximize revenues from existing hydraulic generating stations by converting interruptible export sales to higher priced firm sales.
In addition, Manitoba Hydro is currently examining options for additional hydraulic generating facilities in northern Manitoba -work that represents a new phase in Hydro's relationship with Cree Nations. For the first time, we are working with Cree Nation communities within the surrounding area to reduce the negative impacts and maximize local opportunities from these future developments, even before a decision is made to proceed with construction.
Recently, this has led to an historic agreement with the Tataskweyak Cree Nation which enables the Tataskweyak, and potentially other Cree Nations within the Split Lake resource management area, to acquire up to a 25 per cent ownership interest in the proposed Gull Generating Station. Work is continuing with Cree Nations in the vicinity of the Gull, Notigi, and Wuskwatim projects, to perform the necessary planning and environmental studies to enable us to make a decision within the next year on making an application for licensing of one or more of the projects.
Our focus remains on ensuring Manitobans receive the best possible service and rates from their utility. An example of this focus is Manitoba Hydro's on-going transformation into a one-stop provider of high-quality energy services. Staff from both Manitoba Hydro and Centra Gas, which was acquired in July 1999, are engaged in an extensive integration process. Tremendous progress has been made to bring together the two organizations and we are well on our way to realizing the cost savings and improved services that will benefit all our customers.
"As Manitoba Hydro moves into the future, I am confident we are heading in the right direction, that we are taking the steps necessary to be the utility that today's marketplace demands and our customers deserve," said Manitoba Hydro's President Bob Brennan.
ONTARIO POWER GENERATION
Ontario Power Generation (OPG) is one of the largest electricity generators in North America.
We are preparing for a future in which we will compete in an open electricity market. To this end, we are optimizing our generation performance, strengthening our commercial operations, sharpening our customer focus, and building a workplace based on partnership, performance excellence and goal-sharing.
Financially, the company has achieved good results. Net income for the first nine months of 2000 was $543 million on revenues of $4.45 billion. In addition, the company has received investment-grade credit ratings from Canada's two rating agencies.
OPG's nuclear performance index has steadily improved by more than 40 per cent since the end of 1997 -moving the company closer to its ultimate goal of becoming a top-quartile nuclear operator worldwide. The company's diversified mix of nuclear, hydroelectric and fossil-fuelled stations enables it to reliably produce electricity that is cost competitive, safe and clean.
Seventy-five per cent of OPG's generation produces virtually no emissions contributing to acid gas, smog or global warming. At our fossil stations, we have reduced our emissions by almost 60 per cent since the early 1980s. To further reduce fossil emissions, in September 2000 OPG announced plans to invest $250 million for the purchase of four selective catalytic reduction units for installation at our Nanticoke and Lambton facilities. We are also planning to quadruple our portfolio of green energy sources, from the current 125 megawatts to 500 megawatts by 2005.
OPG's portfolio will be even cleaner with the planned return to service of the Pickering A nuclear station. Assuming all necessary regulatory approvals are met, Pickering A will annually displace 13 million tonnes of greenhouse gases that otherwise would be generated by coal-fired stations.
In July 2000, OPG announced the lease of its 6,200 MW Bruce A and B nuclear generating stations to Bruce Power, a subsidiary of British Energy. The lease helps the company meet a condition of its generation license that it decontrol a portion of its generation. This is one of the largest transactions of its kind ever undertaken in the industry. It is expected to close by mid 2001.
Toronto Hydro CORPORATION
Toronto Hydro Corporation operates the second largest municipally-owned distribution utility in North America, distributing 25 per cent of the electricity in Ontario. Its workforce of 1,960 skilled professionals serves 657,000 customers. Annual revenues are $1.9 billion with a peak load of 4,793 megawatts.
Toronto Hydro's new mandate and performance measures have created a distribution company that is now more responsive and customer focussed than ever before. While our distribution company is still a monopoly-based business, its ability to earn a profit will be based on a strict set of Performance Based Regulations monitored by the Ontario Energy Board.
Toronto Hydro's new retail affiliate, Toronto Hydro Energy Services Inc. (THESI), a fully integrated energy management company offering consumer and business customers value-added solution, was licensed in March 2000 to market both electricity and gas.
THESI has been successfully launching new products and services, and according to President John Brooks, the market is responding very favourably to its service offerings. THESI rolled out its residential retail offer throughout the fall at the major home shows around the GTA, winning an award for its booth at the recent Exhibition Place show. The group also won an award in November from the Canadian Marketing Association for its ÔBlack Hole' direct mail campaign from last Spring. A direct mail campaign in the 905 and 416 areas has been well received by consumers.
THESI is an active participant in the development of new generation projects in Ontario, including the Portlands co-generation project, in partnership with Boralex, which is expected to launch in the first quarter of 2001. "And our waterfront wind-turbines have moved ahead through the government approvals process," says Brooks. "Our target is to get them built this year."
In September, Toronto Hydro launched another affiliate -Toronto Hydro Telecom, which is dedicated to maximizing the value of the utility's fibre optic network and other telecommunications services. "We have an extensive fibre optic system across the city that we use for our own telecommunications purposes and we've leveraged the surplus capacity on this system into a multi-million dollar dark fibre leasing company," says Brooks.
And a third new initiative was announced at the end of October -EBT Express, a joint venture with Ontario Power Generation. EBT Express will provide data management and transaction services for local distribution companies and energy retailers. EBT Express services will be a new Ôniche company' that is a direct product of the opportunities presented by the new electricity market.
"As you know, when the electricity market opens, our customers can choose their energy suppliers. Our system will have to keep track of whose customer is whose so that they can be billed correctly. This means that there will be huge amounts of data flowing back and forth between the LDC and each retailer," says Brooks.
"We and OPG have taken a leadership role in the province on this venture and we expect to have all the joint venture agreements signed shortly. We already have letters of intent from many municipal utilities agreeing to sign on for this service," says Brooks. Having gone through massive change over the past three years, Toronto Hydro has become stronger, more customer-focussed and determined to retain its position of leadership in the new deregulated market.
Nova Scotia Power Inc.
The year two thousand has been a year of achievements for Nova Scotia Power Inc. As we focused on our vision to be the customer's choice in energy and services, and on our key strategies, 2000 became a year of moving forward and improving our performance.
Early in 2000 NSPI was granted approval by the Nova Scotia Utilities and Review Board for two new industrial rates. The Real Time Pricing and Load Retention rate options will help our large industrial customers to be more competitive. They will also help Nova Scotia Power retain customers and keep prices stable.
Stable prices has been a key focus for Nova Scotia Power over the past several years. NSPI hasn't increased prices since 1996. There were no increases in 2000, and there will be none in 2001. Keeping prices stable was a key challenge for our company in 2000, as fuel prices drove up costs in all other areas of our business.
Our success in achieving price stability is the direct result of the concerted efforts of our employees.
When they weren't busy moving the bar forward for NSPI customers, our employees were actively participating in building success in their own communities through our Good Neighbour programs. NSPI employees raised more than $140,000 through payroll deductions, and accessed funds through the Good Neighbour Volunteer Fund to assist more than 100 community projects. In all, Nova Scotia Power's Good Neighbour programs gave more than $600,000 to the communities where we live and work.
As the volume of business being conducted over the Web increased in 2000, Nova Scotia Power introduced new programs to better serve the needs of our customers who prefer to use this medium. NSPI's new E-Bill option allows all customers to pay their power bills online.
We also developed and delivered our new Smart Energy Information Service -an online energy management tool. With SEIS, our industrial and commercial customers can track their energy use at fifteen minute intervals and access these profiles via the Web. The system gives our customers better control over their energy use, and is a tool that can help them take advantage of energy savings.
Nova Scotia Power was the first company to use Sable Gas to generate electricity in Atlantic Canada. The gas which comes ashore in Goldboro, Guysborough County in Northeast Nova Scotia, is carried by Maritimes and Northeast Limited's main pipeline through Pictou County to the New Brunswick border and into the Northeastern United States. When Nova Scotia Power struck an agreement to purchase 60 million cubic feet per day of gas from Shell Canada back in 1997, the deal made construction of a natural gas lateral to Halifax viable and construction began.
Nova Scotia Power's Tufts Cove Generating Station in Dartmouth underwent an extensive natural gas addition. All three generating units were refitted to be dual firing - able to burn either oil or natural gas. Emissions monitors and low Nox burners were incorporated to improve the plant's overall environmental performance.
On November 1st commissioning of the pipeline was completed, and gas began flowing into the plant within a few days. Tufts Cove can now fuel switch between oil and gas according to energy markets and which fuel best helps us to meet our commitment to keep prices stable for our customers.
Nova Scotia Power's parent company changed its name to Emera from Nova Scotia Power Holdings. The new name better reflects the nature of Emera's business. Emera is a diversified energy and services company, with several subsidiaries in addition to Nova Scotia Power. Emera was the first Canadian company to purchase a U.S. utility. Emera's acquisition of Bangor Hydro was announced in June. The sale will be completed within the first six months of 2001.
Late in 2000 Nova Scotia Power made an unprecedented submission to the Utilities and Review Board. NSPI is asking the board to approve a process that would allow it to offer new energy options and solutions to residential and commercial customers. If the process is approved, customers would still be able to choose their existing rates, or they could take advantage of the new optional energy solutions and prices.
NSPI's Marketing and Sales Division has been hard at work developing these new optional packages. Initial offerings will likely include Time of Use rates as an energy saving tool. Currently, only customers who own an Electric Thermal Storage unit are eligible to take advantage of half price electricity between 11p.m. and 7a.m. Under the new optional plans Time of Use rates would be more widely available to customers who purchase enabling technologies such as timers for water heaters, dish washers or clothes dryers. The UARB will hear evidence to support the submission on March 19th.
In the coming year Nova Scotia Power will continue to focus on price stability. NSPI has committed to keeping prices stable in 2001, and that will again require the focused efforts of all our employees.
We will continue to be guided by our strategies as a means of achieving our vision. By building customer loyalty, working to earn the commitment of employees, managing costs and supporting growth through operational excellence, we will move the bar forward in our quest to be the customer's choice in energy and services.
New Brunswick Power
In 1999-2000, net income was $17 million which continued a positive trend of improving net incomes.
The Corporation's operating cash flow was $243 million, which is stable when compared to $247 million in 1998-1999. Capital expenditures increased to $95 million from $68 million the previous year. Higher capital spending, funded from cash flow, reflects the decision to make strategic investments to improve the future performance of the Corporation. Free cash flow, the funds available for debt reduction, increased to $196 million in 1999-2000, which is more than double the level of two years ago. Debt reduction for the year was $233 million.
This is the fourth consecutive fiscal year that NB Power has reduced its debt. These financial performance indicators demonstrate significant and continuing improvement. Over the past four years, the Corporation' s financial turnaround has exceeded $100 million, from a loss of $87 million in 1996-1997 to a net income of $17 million 1999-2000. During this turnaround period, the debt was paid down by over $453 million.
Operating Performance
The conventional generating units met their over-all availability and reliability performance targets allowing for a reliable, economic supply for in-province customers and record benefits from export sales. A new human resources plan, scheduled for completion in 2000-2001, will bring Generation's staffing levels in line with high-performing electric utilities in North America.
The Point Lepreau Nuclear Generating Station completed another year of successful operation. The station achieved its second longest period of continuous service since commissioning in 1982. The preliminary refurbishment definition and engineering work has begun so that an informed decision on whether to proceed with station life extension may be made in 2002.
Business Development Strategy
NB Power' s business development strategy leverages geographic location, generation diversity and transmission access in order to maximize the Corporation's business potential. The Corporation is pursuing partnership arrangements for new projects.
NB Power's plan is to maximize the value of its existing infrastructure through natural gas generation for in-province use and export. The joint development with Westcoast Energy of a natural gas combined cycle unit at Courtenay Bay, known as Bayside Power, is proceeding for completion in 2001. Discussions are on-going regarding further development at Courtenay Bay and other locations. New transmission models are being explored to take further advantage of NB Power' s strong interconnections with New England and Eastern Canada.
Business Unit Strengthening
NB Power has initiated a program in each business unit to integrate risk management with current business practices and to introduce a more sophisticated framework for control procedures. The plans and results are monitored at both the Executive and Board levels.
The Joint Workplace Improvement initiative, known as Outreach 2000, was another positive development. A Workplace Improvement Committee Conference, jointly sponsored by NB Power and the International Brotherhood of Electrical Workers, was held in January 2000.
From this beginning, employee awareness sessions during April 2000 provided face-to-face forums for open and frank discussion about the current operations and future direction of the Corporation. ET