August 8, 2023
CALGARY, ALBERTA (Business Wire – August 8, 2023) – During the second quarter of 2023, unprecedented wildfires in central and northern Alberta forced thousands of Albertans to evacuate their homes.
There have been more than 930 reported wildfires in Alberta in 2023, with more than 19,400 square kilometres burned. While first responders fought to bring the fires under control, AltaLink activated its emergency response plan and mobilized a large team to safely begin the restoration of significant damage to its transmission system.
Wildfires in May and June damaged 12 AltaLink transmission lines, requiring the repair or replacement of 243 structures across its service territory.
“This spring, AltaLink took on the largest restoration effort in our history to get the transmission system back up and running following the devastating wildfires,” said Gary Hart, AltaLink President and Chief Executive Officer. “During the peak of our repair work, we had more than 100 workers battling extremely difficult conditions to quickly and safely repair the system and restore power to our customers.”
AltaLink restored service to all customers by July 3, 2023.
“I’m incredibly proud of the team that worked tirelessly to restore the transmission system. I want to thank them and all those who worked to bring these fires under control, protecting Albertan lives, homes and businesses,” said Mr. Hart.
AltaLink to amend its General Tariff Application in response to growing wildfire risk
In response to the increase in extreme weather and the severity of wildfire activity in Alberta, AltaLink notified the Alberta Utilities Commission in July that it intends to file an amendment to its wildfire program that was included in its 2024-2025 General Tariff Application.
“We believe the risk of wildfire and the severity of the consequences for Albertans is increasing with the extreme weather conditions we’ve experienced,” said Mr. Hart. “We need to address this growing challenge.”
AltaLink is committed to managing its transmission system in a safe and cost-effective manner. AltaLink is planning to continue the implementation of its wildfire mitigation plan to manage the increased risk to public safety and the environment from identified wildfire ignition risks.
In 2019, AltaLink became the first utility in Alberta to have a wildfire mitigation plan. Two years later, AltaLink partnered with Electricity Canada to develop and publish a best practices guide for utilities on mitigating wildfire risk and promoting industry resilience.
AltaLink announces 2023 second quarter financial results
Today, AltaLink, L.P. announced comprehensive income of $74.1 million for the three months ended June 30, 2023, compared to $77.0 million for the same period in 2022, a decrease of $2.9 million. The change is primarily due to higher interest rates on short-term debt and the equity return on a lower rate base.
Revenue from operations for the three months ended June 30, 2023, was $243.7 million compared to $233.8 million during the same period in 2022, an increase of $9.9 million. The change is primarily due to recovery of higher allowable costs of transmission services, partially offset by the returns on a lower rate base.
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 second quarter of 2023
AltaLink’s safe delivery of affordable and reliable electricity for its customers highlights its second quarter of 2023 results:
- On May 6, 2023, the Province of Alberta declared a province-wide state of emergency due to wildfires. When it was safe to complete repairs, AltaLink’s emergency response team quickly began restoring damaged transmission lines to reestablish power for the multiple residential and industrial customers impacted. Throughout May and June 2023, wildfires damaged 12 transmission lines including 243 individual wood pole structures interrupting power to communities and directly connected industrial customers. Many customers were unable to take power for an extended period due to provincial evacuation orders or damage to their facilities because of the fires. The restoration of the damaged transmission lines cost $11.3 million in the quarter and AltaLink plans to file an application with the AUC for recovery once final costs are known. AltaLink restored service to all impacted customers by July 3, 2023.
- On July 5, 2023, AltaLink applied to the AUC to suspend its 2024-2025 GTA application process until August 31, 2023, to develop and file an amendment with additional measures to address the increase in wildfire risk. On July 11, 2023, the AUC allowed AltaLink to refile its application..
- We achieved a customer satisfaction average score of 9.73 out of 10 compared to 9.69 for the same quarter in 2022. On June 14, 2023, we hosted our annual “Let’s Connect” customer summit to update our customers on industry trends and on our key customer initiatives.
- We had one employee injury in the quarter, matching our result for the same quarter in 2022. Our total recordable injury frequency rate for the first half of 2023 was 0.30.
- AltaLink’s reliability of service to customers improved in the second quarter compared to the same quarter in 2022. The average outage duration in the second quarter of 2023 was one minute compared to three minutes in 2022. This Electricity Canada industry metric excludes major events, like the Alberta wildfires.
- On June 28, 2023, with the release of our 2022 ESG Report, AltaLink continued to demonstrate its commitment to sustainability as it operates the transmission system that supplies millions of Albertans with electricity. In 2022, AltaLink developed a greenhouse gas management plan which identifies focus areas to help get AltaLink to net zero by 2050.
- On June 27, 2023, the AESO held its inaugural Stakeholder Symposium, which brought together members of the AESO executive team and their counterparts from the industry to discuss the AESO's current key priorities. The AESO re-affirmed its 2022 Long-Term Plan and highlighted that the transmission system is not overbuilt.
- We earned net and comprehensive income of $74.1 million compared to $77.0 million for the same quarter in 2022. Our income decreased mainly due to higher interest rates on short-term debt, and the equity return on a lower rate base.
- We celebrated our long-standing partnerships with the Piikani Nation and the Kainai-Blood Tribe on the fourth-year anniversary of PiikaniLink L.P.’s joint investment in 240-kilovolt transmission assets on the Piikani reserve.
- On June 20, 2023, S&P reaffirmed its issuer credit rating and senior secured rating on AltaLink at “A”, but revised its outlook from stable to negative due to the potential for BHE’s business or financial risk to increase over the next 24 months if BHE-owned, PacifiCorp, faces significantly increased liabilities related to the 2020 wildfires in the U.S. state of Oregon.
- On July 21, 2023, DBRS reaffirmed its ratings on AltaLink including the Issuer rating, and Medium-Term Note (Secured) and Senior Secured Note rating at “A” with stable trends. An “A” rating allows us to keep debt financing costs low for our customers.
- We invested $57.8 million in capital assets compared to $62.3 million for the same quarter in 2022 primarily to ensure continued electric system reliability.
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.