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SOURCE Ontario Power Generation Inc.
TORONTO, May 15, 2014 /CNW/ - Ontario Power Generation Inc. (OPG or Company) today reported its financial and operating results for the three months ended Mar. 31, 2014. Net income attributable to the Province for the first quarter of 2014 was $242 million compared to $28 million for the same quarter in 2013.
Tom Mitchell, President and CEO said, "The long, cold winter put an unusually high demand on Ontario's electricity system. Our increased income, in part, resulted from OPG's ability to meet the demand for electricity when people needed it. The price paid to OPG continues to lower the overall price paid by Ontarians for electricity."
Mr. Mitchell added, "I am especially pleased by the continued positive performance of our Darlington Nuclear Generating Station. In fact, in April, the station received its second consecutive excellent safety and performance evaluation from the World Association of Nuclear Operators. Last year Pickering Nuclear received a strong performance review, the best in that station's history."
Mr. Mitchell said Ontario will continue to get value out of the Darlington station for many years to come. "We are deep into the preparations for the refurbishment that would keep the four units in operation until the middle of this century. It is a very valuable asset for the province as it provides about 20 per cent of Ontario's power every year."
Net income attributable to the Province for the first quarter of 2014 increased by $214 million compared to the same quarter in 2013. This increase was primarily due to the favourable impact of higher market prices resulting in higher revenue from electricity sales in the inter-jurisdictional market. This was caused by unseasonably cold temperatures during the first quarter of 2014. These increases were partially offset by lower earnings from the Nanticoke generating station (GS) and the Lambton GS, which ended coal-fired generation in 2013.
The end of coal-fired operations at the Nanticoke GS and the Lambton GS also resulted in a 90 per cent reduction in carbon dioxide and acid gas emissions during the first quarter of 2014, compared to the same quarter in 2013.
Business Segment, Generating, and Operating Performance
OPG's income before interest and income taxes from the electricity generation business segments was $346 million in the first quarter of 2014. This compared to $109 million in the same quarter of 2013. The increase was due primarily to the favourable impact of higher market prices received for the generation produced by hydroelectric generating stations that are subject to market price volatility. The increase was partially offset by the impact of ending coal-fired operations at the Nanticoke GS and Lambton GS.
The nuclear waste management business segment recorded a loss before interest and income taxes of $34 million in the first quarter of 2014, compared to a loss before interest and income taxes of $63 million in the same quarter of 2013. The improvement was primarily due to higher earnings on the Used Fuel Segregated Fund, partially offset by higher accretion expense which reflected the increase in asset retirement obligations due to the passage of time.
The increase in income before interest and income taxes of $27 million for the Services, Trading, and other Non-Generation business segment was primarily a result of higher trading margin for electricity sold to neighbouring energy markets.
Total electricity generated during the three months ended March 31, 2014 was 20.5 terawatt hours (TWh) compared to 21.3 TWh for the same quarter in 2013. This decrease was mainly due to ending coal-fired operations at the Nanticoke GS and the Lambton GS in 2013.
The capability factor at the Darlington nuclear station was 96.0 per cent in the first quarter of 2014 compared to 84.1 per cent for the same quarter in 2013, and reflected a decrease in planned outage days. The Pickering stations had a 66.6 per cent capability factor compared to 79.0 per cent in the first quarter of 2013, primarily as a result of an increase in outage days. The availability of OPG's hydroelectric generating stations remained at high levels.
OPG is undertaking a number of generation development and life extension projects to support Ontario's long-term electricity supply requirements. Significant developments during the year are as follows:
Atikokan Conversion to Biomass
Thunder Bay Conversion to Advanced Biomass
|FINANCIAL AND OPERATIONAL HIGHLIGHTS|
|Three Months Ended|
|(millions of dollars - except where noted)||2014||2013|
|Operations, maintenance and administration||670||700|
|Depreciation and amortization||181||242|
|Accretion on fixed asset removal and nuclear waste management liabilities||196||189|
|Nuclear Funds (earnings) - a reduction to expense||(160)||(124)|
|Income from investments subject to significant influence||(13)||(10)|
|Other net expenses||14||18|
|Income before interest and income taxes||350||57|
|Net interest expense||12||25|
|Income tax expense||95||4|
|Net income attributable to the Province||242||28|
|Net Income attributable to non-controlling interest 1||1||-|
|Income (loss) before interest and income taxes|
|Electricity generation business segments||346||109|
|Regulated - Nuclear Waste Management||(34)||(63)|
|Services, Trading, and Other Non-Generation||38||11|
|Total income before interest and income taxes||350||57|
|Cash flow provided by operating activities||428||245|
|Electricity generation (TWh)|
|Regulated - Nuclear Generation||11.6||11.6|
|Regulated - Hydroelectric|
|Existing regulated hydroelectric generating stations||4.8||4.7|
|Hydroelectric generating stations subject to rate regulation effective July 1, 2014||3.3||3.4|
|Contracted Generation Portfolio 2||0.8||1.6|
|Total electricity generation||20.5||21.3|
|Average sales prices and average revenue (¢/kWh)|
|Average revenue for OPG 3||6.2||5.6|
|Average revenue for all electricity generators, excluding OPG 4||10.1||9.2|
|Nuclear unit capability factor (per cent)|
|Availability (per cent)|
|Regulated - Hydroelectric||92.4||93.1|
|Contract Generation Portfolio - Hydroelectric||96.0||97.9|
|Equivalent forced outage rate|
|Contract Generation Portfolio - Thermal||3.0||17.9|
|Return on common equity for the twelve months ended March 31, 2014||3.8||1.5|
|and December 31, 2013 (per cent) 5|
|Funds from operations interest coverage for the twelve months||3.0||2.8|
|ended March 31, 2014 and December 31, 2013 (times) 5|
|1||Relates to the 25 per cent interest of the Amisk-oo-Skow Finance Corporation, a corporation wholly-owned by the Moose Cree First Nation, in the incremental assets of the Lower Mattagami Limited Partnership.|
|2||Includes OPG's share of generation volume from its 50 percent ownership interests in the Portlands Energy Centre (PEC) and Brighton Beach.|
|3||Average revenue for OPG is comprised of regulated revenues, market based revenues, revenues from energy supply agreements, and other energy revenue from cost recovery agreements. In 2014, average revenue for OPG excludes the revenue from the cost recovery agreement for termination costs for the Nanticoke GS and Lambton GS as these stations ended coal-fired operations in 2013. Average revenue for OPG also excludes OPG's share of revenues and generation from PEC and Brighton Beach.|
|4||Revenues for other electricity generators are calculated as the sum of hourly Ontario demand multiplied by the hourly Ontario electricity price (HOEP), plus total global adjustment payments, plus the sum of hourly net exports multiplied by the HOEP, less OPG's generation revenue, including revenue from the Nanticoke GS and Lambton GS cost recovery agreement.|
|5||"Funds from operations interest coverage" and "Return on equity" are non-GAAP financial measures and do not have any standardized meaning prescribed by US GAAP. Additional information about these measures is provided in OPG's Management's Discussion and Analysis for the period ended Mar. 31, 2014, under the heading, Supplementary Non-GAAP Financial Measures.|
Ontario Power Generation Inc. is an Ontario-based electricity generation company whose principal business is the generation and sale of electricity in Ontario. Our focus is on the efficient production and sale of electricity from our generation assets, while operating in a safe, open and environmentally responsible manner.
Ontario Power Generation Inc.'s unaudited consolidated financial
statements and Management's Discussion and Analysis as at and for the
three months ended Mar. 31, 2014, can be accessed on OPG's Web site (www.opg.com), the Canadian Securities Administrators' Web site (www.sedar.com), or can be requested from the Company.
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