February 28, 2022
AltaLink delivers on its commitment to not increase electricity transmission rates for five years
CALGARY, ALBERTA(Globe Newswire – February 28, 2022) –
In 2018, AltaLink announced a plan to support its customers as they navigated a challenging economy and low energy prices. The company committed to keeping its rates at or below 2018 levels through to the end of 2023. With the recent Alberta Utilities Commission (AUC) decision on AltaLink’s 2022-2023 General Tariff Application, AltaLink has achieved its goal to not increase rates for five years.
“I am proud of the work our team has done in partnership with our customers to keep our portion of the electricity bill flat,” said Gary Hart, AltaLink President and Chief Operating Officer. “The pandemic has put even more cost pressure on many of our customers. Our ability to deliver outstanding service while managing costs has been incredibly important to Albertans.”
AltaLink’s regulated transmission rates represent a portion of the provincial transmission charge.
In its decision, the AUC rejected AltaLink’s request to refund an additional $120 million to Alberta customers during 2022-2023. AltaLink proposed to refund previously collected depreciation expenses to support customers as Alberta’s economy recovers.
“We’re disappointed the Commission denied our request to put these dollars back into the hands of Albertans through a refund, but we’ll continue to seek opportunities to reduce our costs and improve our performance for Albertans,” said Mr. Hart.
Outstanding safety performance from AltaLink employees highlights 2021 results
For the first time in its history, AltaLink completed a calendar year without a recordable employee injury. It has been nearly two years since an AltaLinker was injured while at work.
“Every AltaLinker contributes to our safe work environment,” said Mr. Hart. “Working in challenging conditions, our employees are dedicated to keeping themselves and their colleagues safe. We are all clear that we believe in safety without compromise.”
In 2021, AltaLink was awarded the Canadian Electricity Association (CEA) President’s Award for Safety Excellence for the fifth consecutive year. The award is given to corporate utilities that achieve the top ranking in Total Recordable Injury Frequency (TRIF) among utilities of comparable size in generation, transmission, or distribution operations.
AltaLink announces 2021 annual results
AltaLink continues to invest in transmission facilities to ensure the reliability of the electricity grid. During 2021, AltaLink invested $256.7 million in its transmission system.
Today, AltaLink, L.P. announced comprehensive income of $307.3 million for the 12 months ended December 31, 2021, compared to $310.4 million for the same period in 2020. Our comprehensive income decreased primarily due to higher operating revenue recognized in 2020 as a result of one-time adjustments related to the 2019-2021 GTA decision and the recovery of DACDA carrying costs, partially offset by disallowed capital costs in the 2016-2018 deferral account reconciliation decision issued in December 2020.
Revenue from operations for the 12 months ended December 31, 2021, was $950.8 million compared to $953.9 million during the same period in 2020. Our revenue from operations decreased by $3.1 million primarily due to higher operating revenue recognized in the second quarter of 2020 as a result of one-time adjustments related to the 2019-2021 GTA decision, partially offset by the recovery of higher allowable 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.
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 2021
AltaLink’s safe delivery of affordable and reliable electricity for its customers highlights 2021 results:
- Our outstanding safety performance continued with zero injuries for the last 21 months. Our employee safety performance as measured by total recordable injury frequency rate was zero, representing zero injuries which equals our best result ever, compared to one injury in 2020. In November 2021, for the fifth consecutive year, we received the CEA President's Award of Excellence for employee safety as the best performing transmission company with 300 to 1,500 employees in 2020.
- Our reliability of service provided to customers improved as demonstrated by our reliability metrics. Our average customer outage duration of 13 minutes improved compared to 20 minutes in 2020. Our customer outage frequency of 0.37 improved compared to 0.39 in 2020. Our customer restoration time of 62 minutes also improved compared to 80 minutes in 2020.
- Our customer satisfaction average score of 9.43 improved compared to 9.13 in 2020.
- Our revenue requirement for 2021 was $873.3 million, continuing to achieve our commitment to customers to keep our rates at or below the 2018 level of $904 million. Our transmission tariff, which is charged to our customers, was $632.9 million in 2021 compared to $887.8 million in 2018. The decrease in our transmission tariff is primarily due to our $230.0 million customer tariff relief refund in 2021 as approved by the AUC on March 15, 2021. AltaLink applied to provide customers tariff relief because of the sudden and unexpected pandemic and economic shutdown that has negatively impacted all Albertans.
- Alberta experienced consecutive waves of the COVID-19 pandemic in 2021 and AltaLink effectively managed the safety of its employees with no workplace transmission. We also continued to maintain delivery of essential and reliable electricity for Albertans and our industrial customers while managing the impacts of the COVID-19 pandemic.
- On April 30, 2021, AltaLink filed its 2022-2023 GTA, delivering on our commitment to keep rates at or below the 2018 level for customers for the five-years from 2019 to 2023. On January 19, 2022, the AUC issued Decision 26509-D01-2022 with respect to AltaLink’s 2022-2023 GTA. On February 18, 2022, AltaLink filed its compliance filing with a two-year total revenue requirement of $1,742.2 million. In recognition of the Alberta Court of Appeal's ruling that KLP and PLP be allowed to include annual audit and hearing costs in their tariffs, the AUC directed AltaLink to include the previously disallowed costs in KLP and PLP's compliance filing. The AUC approved the 2020 capital deferral account total as filed, including $26.2 million of capital project additions.
- We earned comprehensive income of $307.3 million compared to $310.4 million in 2020. Our comprehensive income decreased primarily due to higher operating revenue recognized in 2020 as a result of one-time adjustments related to the 2019-2021 GTA decision and the recovery of DACDA carrying costs, partially offset by disallowed capital costs in the 2016-2018 deferral account reconciliation decision issued in December 2020.
- On April 14, 2021, S&P reaffirmed its issuer credit rating and senior secured rating on AltaLink at “A” with a stable outlook. On July 20, 2021, DBRS reaffirmed AltaLink's Issuer Rating and Senior Debt rating at “A” with stable trends, and the rating of its Commercial Paper at “R-1 (low)”. An “A” rating allows us to keep debt financing costs low for our customers.
- We invested $256.7 million in capital assets compared to $307.8 million in 2020 to ensure continued electric system reliability.
- On March 19, 2021, the AUC issued its decision on AltaLink's 2019 Deferral Accounts Reconciliation Application approving $128.0 million of the total $128.5 million of capital project additions, disallowing $0.5 million of capital costs.
- On March 4, 2021, the AUC extended AltaLink's current return on equity of 8.5% and deemed equity ratio of 37% on a final basis for 2022.
- AltaLink has been working on two projects that support the integration of renewable electricity generation in the east section of Alberta – the Central East Transfer-Out Transmission Development and the Provost to Edgerton and Nilrem to Vermilion Transmission Development. On August 10, 2021, the AUC approved the facility application for the Central East Transfer-Out Transmission Development with an estimated project cost of $159 million. On August 26, 2021, the AUC approved the facility application for the Provost to Edgerton portion of the Provost to Edgerton and Nilrem to Vermilion Transmission Development with an estimated project cost of $125 million. On September 23, 2021, the AUC denied the facility application for the Nilrem to Vermilion portion with an estimated project cost of $113 million. The AESO has chosen to delay this project by uprating an existing transmission line and postponed directing AltaLink and ATCO Electric Ltd. to re-file their facility applications.
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.