November 9, 2023
CALGARY, ALBERTA (Business Wire – November 9, 2023) – Following five consecutive years of keeping its transmission rates below 2018 tariff levels, AltaLink will negotiate with its customer representatives to see if an agreement can be reached on its 2024 and 2025 transmission tariff.
“We’ve kept our promise to maintain our rates below 2018 levels through to the end of 2023,” said Gary Hart, AltaLink President and Chief Executive Officer. “Rising costs in all areas of society are putting pressure on Albertans. We’re proud to be the only regulated utility in Alberta to have kept our costs for our customers below 2018 levels during the past five years.”
AltaLink previously reached negotiated settlements with customers in 2017 and 2019.
“As a regulated utility, our job is to ensure that the transmission service we provide is reliable and affordable for the millions of Albertans we serve every day,” said Mr. Hart. “As we enter into these important negotiations, we appreciate the opportunity to continue strengthening our relationship with our customers, meeting their needs, and delivering the transmission service they expect.”
AltaLink filed is 2024/2025 General Tariff Application with the Alberta Utilities Commission (AUC) earlier this year. Any settlement between AltaLink and its customers must be approved by the AUC.
AltaLink announces 2023 third quarter financial results
Today, AltaLink, L.P. announced comprehensive income of $74.6 million for the three months ended September 30, 2023, generally consistent compared to the same period in 2022. Our net and comprehensive income for the nine months ended September 30, 2023, decreased by $5.4 million compared to the same period in 2022. The change is primarily due to higher interest rates on short-term debt and the equity return on a lower rate base.
For the three and nine months ended September 30, 2023, our revenue from operations increased by $8.0 million and $17.1 million, respectively, compared to the same periods in 2022. The changes are 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 third quarter of 2023
AltaLink’s safe delivery of affordable and reliable electricity for its customers highlights its third quarter of 2023 results:
- We continue to deliver on our commitment to customers and Albertans by keeping their costs, our 2023 revenue requirement of $883 million, below the 2018 level of $904 million.
- On October 9, 2023, the AUC issued its decision on the Generic Cost of Capital for 2024 and beyond for Alberta's regulated electric and gas utilities, approving a set equity ratio and a formula to determine return on equity. The AUC set the deemed equity ratio at 37% and a notional return on equity of 9.00%, subject to formulaic adjustments using 30-year Government of Canada bond yields and Canadian utility spreads. In November 2023, the AUC will set and provide utilities with the approved return on equity for 2024 and will provide the same in November of each year going forward.
- We achieved a customer satisfaction average score of 9.57 out of 10 compared to 9.65 for the same quarter in 2022.
- We had one employee injury compared to two injuries for the same quarter in 2022. Our total injury rate for the first nine months of 2023 was 0.42 compared to 0.63 for the same period in 2022.
- The average outage duration was four minutes compared to two minutes for the same quarter in 2022. Our average outage duration for the first nine months of 2023 was nine minutes compared to seven minutes for the same period in 2022; trending close to our best-ever performance established in 2022.
- On August 31, 2023, AltaLink filed with the AUC an amendment to its 2024-2025 GTA with additional measures to proactively expand and accelerate its Wildfire Mitigation Plan in response to the increase in wildfire risk to Albertans and AltaLink's critical infrastructure which delivers reliable electricity to customers. In its amendment, AltaLink also requested a deferral account for future catastrophic wildfire damages in excess of insurance coverage and noted that this deferral account would only be accessible if we substantially comply with our Wildfire Mitigation Plan.
- On September 19, 2023, AltaLink received permit and license from the AUC to construct and operate the Vauxhall Area Transmission Development project. The project is intended to alleviate congestion in the Vauxhall area and is anticipated to be in-service in late 2024. The estimated project cost is $20 million.
- On October 5, 2023, AltaLink's updated estimate of $223 million for its portion of the Central East Transfer-Out project was formally approved by the AESO.
- We earned net and comprehensive income of $74.6 million, which is consistent compared to the same period in 2022.
- On July 21, 2023, DBRS reaffirmed its ratings on AltaLink including the Issuer rating, 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.
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.