February 27, 2023
AltaLink keeps 2022 costs to customers below 2018 levels for fourth year in a row
CALGARY, ALBERTA (Globe Newswire – February 27, 2023) – As Albertans feel the pressure of higher costs for food, rent and energy, AltaLink continues to focus on providing reliable, affordable electricity transmission service for millions of Albertans. In 2022, AltaLink kept its annual cost to customers below 2018 levels for the fourth consecutive year, delivering on its flat-for-five commitment to Albertans to keep costs at or below 2018 levels. In those four years, AltaLink’s tariffs have not contributed to an increase in electricity prices.
“We understand how the pressure of higher power bills is impacting many Albertans, especially when they depend on our team to deliver the energy they need,” said Gary Hart, AltaLink President and Chief Executive Officer. “We will continue to focus on keeping our rates as low as possible while ensuring the transmission system remains secure for all of our customers.”
As Alberta’s demand for electricity grew in 2022, with the province setting records for peak demand in December, AltaLink managed costs to customers while delivering outstanding reliability performance. AltaLink reduced the average duration of outages across its entire system in 2022, resulting in best-ever reliability for its customers.
“With Alberta’s demand for electricity growing and new energy sources connecting to the transmission system, we can’t lose sight of our primary goal – keeping the lights on for millions of Albertans,” said Mr. Hart. “We’re proud to have kept our costs at or below 2018 levels while delivering outstanding transmission system reliability.”
AltaLink announces 2022 annual results
Today, AltaLink, L.P. announced comprehensive income of $311.2 million for the 12 months ended December 31, 2022, compared to $307.3 million for the same period in 2021. The increase is primarily due to lower 2022 operating expenses achieved through cost control and 2021 losses on asset retirements and certain non-recoverable depreciation which did not reoccur. These positive variances were partially offset by higher interest expense as a result of higher interest rates on short-term debt compared to lower tariff recovery.
Revenue from operations for the 12 months ended December 31, 2022, was $952.8 million compared to $950.8 million during the same period in 2021. Our revenue from operations increased by 0.2% or $2.0 million for the 12-month period primarily due to the recovery of higher allowable costs of transmission services provided in the year.
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 2022
AltaLink’s safe delivery of affordable and reliable electricity for its customers highlights 2022 results:
- We continued to deliver on our flat-for-five commitment to our customers and Albertans by keeping their costs—our 2022 revenue requirement of $878.9 million—below the 2018 level of $904 million. We also received the AUC's approval of our 2023 revised revenue requirement of $883 million, allowing AltaLink to fully deliver on its 2019-2023 flat-for-five commitment for our customers.
- We provided essential electricity to meet the needs of our customers with improved reliability, as demonstrated by our reliability metrics. Our average customer outage duration of 9.1 minutes improved compared to 12.9 minutes in 2021 and our customer outage frequency of 0.27 improved compared to 0.37 in 2021. Our 2022 results were our best annual results achieved to date.
- Our average customer satisfaction score of 9.57 improved compared to 9.43 in 2021. Our 2022 results were our best annual results achieved to date.
- For the first time in our history, in March 2022 we completed two full years without a recordable employee injury. After the first quarter of 2022, we experienced three employee injuries resulting from two incidents. For 2022, our employee safety performance as measured by total recordable injury frequency rate was 0.48, compared to zero in 2021. In November 2022, for the sixth consecutive year, we received the Electricity Canada (formerly Canadian Electricity Association) President's Award of Excellence for employee safety as the best performing transmission company with 300 to 1,500 employees in 2021.
- In 2022, to promote diversity, equity and inclusion, AltaLink leaders and its employees engaged in Employee Resource Groups, including Women in Energy; BEAUTIE (Black Employees and Allies United to Inspire Equity); InspirAsian (Asian and Pacific Islander employees and allies); Pride Connection (LGBTQ2+ employees and allies); and Our Familia (Latino, Latina and Latinx employees and allies).
- In February 2023, AltaLink and the United Utility Workers' Association of Canada (UUWA) ratified a two-year agreement for 2022 and 2023.
- On December 1, 2022, the AESO issued direction to AltaLink and ATCO Electric Ltd. (ATCO Electric) to begin construction on Stage 1 of the Central East Transfer-Out project based on the AUC's agreement that the construction trigger had been met. AltaLink's portion of the 240 kilovolt circuit is approximately 60 kilometres with a capital cost of approximately $150 million for Stage 1. The anticipated in-service date for this Central East Transfer-Out development is early 2026.
- On December 9, 2022, AltaLink filed its facility application for the Vauxhall Area Transmission Development with the AUC. This project includes the construction of a new 138 kilovolt transmission line approximately 14 kilometres long and the uprate of an existing line to enable renewable generation integration and manage congestion in the area. The anticipated in-service date is in late 2024 and the estimated project cost is approximately $20 million.
- In its November 2022 decision, the AUC denied the AESO's proposed rate design, citing that no industry participants supported it and that cost bypass was not addressed. The AUC has directed the AESO to refile its proposed rate design by January 31, 2025, after further consultation and issue resolution. The current rates will remain in effect until new rates are approved by the AUC.
- We earned comprehensive income of $311.2 million compared to $307.3 million in 2021. Our comprehensive income increased primarily due to lower 2022 operating expenses achieved through cost control and 2021 losses on asset retirements and certain non-recoverable depreciation which did not reoccur. These positive variances were partially offset by higher 2022 interest expense as a result of higher interest rates on short-term debt compared to lower tariff recovery.
- On May 9, 2022, S&P reaffirmed its issuer credit rating and senior secured rating on AltaLink at “A” with a stable outlook. On July 21, 2022, DBRS reaffirmed its ratings on AltaLink including the Issuer credit rating, Medium-Term Note rating (which includes the 2020-1 Senior Secured Notes) at “A” and the rating of its Commercial Paper at R-1 (low). All trends are Stable. An “A” rating allows us to keep debt financing costs low for our customers.
- We invested $230.0 million in capital assets compared to $256.7 million in 2021 to ensure continued electric system reliability.
- On June 30, 2022, with the release of our 2021 ESG Report, AltaLink continues to demonstrate its commitment to sustainability as it operates the transmission system that supplies millions of Albertans with electricity.
- On March 31, 2022, the AUC extended AltaLink's current return on equity of 8.5% and deemed equity ratio of 37% on a final basis for 2023.
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.