May 4, 2020
AltaLink employees deliver essential electricity to Albertans during COVID-19 pandemic
CALGARY, ALBERTA (Globe Newswire – May 4, 2020) – As many Albertans stay home to prevent the spread of the COVID-19 virus, AltaLink field crews, control centre operators and employees continue to ensure the electricity that supplies more than three million Albertans is delivered uninterrupted.
"While many of our employees are working remotely, there are critical operational roles that need to be either in the field or our control centre to ensure that Albertans have the electricity they need during this unprecedented time,” said Scott Thon, AltaLink President and Chief Executive Officer. “We’ve adjusted many of our work practices to keep our employees healthy and safe from the spread of COVID-19 while they’re working on the transmission system.”
Utilities are one of the industries identified by the Government of Alberta as an essential service for Albertans. AltaLink employees continue to operate the grid from AltaLink’s 24-hour control centre and substation, line, telecom and relay crews are working in the field to maintain the reliability of the transmission system, Alberta’s electricity backbone.
"We are incredibly grateful to the first responders who are doing so much for Albertans, Canadians and around the world,” said Thon. “Whether it’s our doctors and nurses, supply chain workers, grocery and pharmacy workers, public transit operators, or utilities, our team is proud to be part of the huge team that is working 24 hours a day, 7 days a week to keep Alberta running.”
AltaLink announces 2020 first quarter results
AltaLink continues to invest in transmission facilities to ensure the reliability of the electricity grid. During the first quarter of 2020, AltaLink invested $82.8 million in its transmission system.
Today, AltaLink, L.P. announced net and comprehensive income of $74.0 million for the three months ended March 31, 2020, compared to $79.8 million for the same period in 2019. Revenue from operations for the three months ended March 31, 2020, was $228.9 million compared to $232.0 million during the same period in 2019, a decrease of $3.1 million. Net and comprehensive income and revenue decreased mainly due to lower recovery of future income tax revenue, as a result of the Alberta tax rate reductions which were legislated in June 2019. The reduction of AltaLink’s recovery of future income tax revenue will benefit our customers and is offset by a corresponding decrease in income tax expense of AltaLink’s corporate owners.
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.
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 highlights during the first quarter of 2020
During the three months ended March 31, 2020:
- In late January 2020, with the onset of the COVID-19 pandemic in North America, AltaLink implemented its emergency response plan to ensure the ongoing safety of our employees and to maintain the transmission of reliable electricity for Albertans and our industrial customers. As part of our plan, we implemented additional safety measures which included restricting external visitors to our offices and control centre operations; restricting all business-related travel; enhancing our workplace cleaning practices; conducting teleconference meetings with our customers, stakeholders, and external parties; implementing working from home strategies for employees where possible; and implementing cell structures (partitioned work teams) for our control centre and field operations.
- Our integrated emergency response team continues to closely monitor the rapidly changing situation and directions from Alberta Health Services to ensure the safety of our employees and the public and the reliability of our operations. On March 17, 2020, AltaLink was confirmed as an essential business by the Government of Alberta and our critical employees and contractors continue to work throughout our service territory to maintain and operate our transmission facilities.
- On April 16, 2020, the AUC issued Decision 23848-D01-2020 with respect to AltaLink’s 2019-2021 GTA. The AUC approved the negotiated settlement agreement as filed and rendered its decision and directions on the excluded matters. The AUC denied AltaLink’s proposed salvage methodology, but indicated that it will initiate a generic proceeding to review the matter on an industry wide basis. Reverting the salvage method back to the traditional pre-collection approach will increase the amount of salvage collected from customers by approximately $82 million, since the AUC in its Decision rejected the proposed method aimed at benefiting customers through lower rates. Overall, the Decision results in an increase to AltaLink’s cash transmission tariffs collected for the 2019-2021 period by approximately $77 million. The AUC approved $13 million of AltaLink’s requested additional $20 million of forecast transmission line clearance capital on placeholder basis and will review the remaining $7 million capital investment in AltaLink’s compliance filing. The AUC will further review prudency of these actual expenditures in the next GTA. Also, $3 million of forecast operating expenses and $4 million of forecast capital investment were approved to reduce the risk of fires, with a further $31 million of capital subject to further review in the compliance filing as well as prudency review in the next GTA. Finally, the AUC approved $6 million of retirements for towers and fixtures. AltaLink is directed to file a compliance filing within 45 days of the date of the decision.
- Our employee safety performance was strong and consistent compared to the same period in 2019. Our year to date total recordable injury frequency rate was 0.58, representing one injury compared to one injury for the same period in 2019.
- On January 1, 2020, AltaLink and the Kainai Nation (Blood Tribe) operationalized a new limited partnership called KainaiLink, L.P., which was approved by the AUC in November 2018 and results in the Kainai Nation's 51% common equity investment in the Southwest 240 kilovolt transmission line on reserve land.
- On March 11, 2020, S&P reaffirmed its corporate credit and senior secured ratings on AltaLink at “A” with a stable outlook. An “A” credit rating allows us to keep debt financing costs low for our customers.
- Our year to date customer outage time was nine minutes compared to less than one minute for the same period in 2019, primarily due to adverse weather in the first quarter of 2020.
- We earned net and comprehensive income of $74.0 million compared to $79.8 million for the same period in 2019. Our net and comprehensive income decreased mainly due to lower recovery of future income tax revenue, as a result of the Alberta tax rate reductions which were legislated in June 2019. The reduction of AltaLink’s recovery of future income tax revenue will benefit our customers and is offset by a corresponding decrease in income tax expense of AltaLink’s corporate owners.
- We invested $82.8 million in capital assets compared to $86.6 million for the same period in 2019 to ensure continued reliability of the electricity network.
- We deferred customer surveys due to the impacts of the COVID-19 pandemic.
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.
FOR FURTHER INFORMATION
Vice President, Treasurer
AltaLink Management Ltd.
Vice President, Communications
AltaLink Management Ltd.