Hydro One Profit Up, Sales Soar on Hot Summer
14:53 GMT-05:00 Friday, November 15, 2002
TORONTO - Hydro One, Ontario's largest electricity transmission grid, announced a small rise in third-quarter profit on Friday but blamed a rate mitigation plan, introduced last year to offset big price rises, for a 10 percent decline in nine-month profit.
Hydro One, which is owned by the provincial government, said it earned C$112 million ($71 million) in the third quarter, about 9 percent higher than a profit of C$103 million in the year-before quarter.
A government plan to sell off Hydro One in a C$5.5 billion initial offering was quashed by a court ruling earlier this year, and the province now intends to sell a minority stake in the company.
Revenue rose 40 percent to C$1.24 billion from C$880 million in the third quarter of last year, as peak-demand summer season led to higher transmission rates.
"The extreme hot weather conditions experienced throughout July, August and September resulted in heavy use of the transmission and distribution systems," Hydro One said in a statement.
For the first nine months, profit fell about 10 percent to C$317 million from C$351 million in the year-ago period. Sales in the first three quarters rose 30 percent to C$3.15 billion from C$2.42 billion.
Ontario's Conservative government has said that a global search for potential minority stakeholders in Hydro One is under way and a winner should emerge early next year.
SNC-Lavalin , Canada's largest engineering company, has said it is interested.
Energy and utility firm Atco Ltd. has also expressed interest in a bigger role in the power business in Ontario, Canada's biggest power market and its most populous province with 12 million people.
Billionaire investor Warren Buffett's MidAmerican Energy Holdings and Britain's National Grid have also been busy acquiring energy assets recently.
Analysts say it will be difficult for the government to sell Hydro One because of its messy attempt to open the province's power market for competition.
Soaring electricity prices during the first six months of deregulation led the government to announce a freeze on electricity prices this week.
Critics say the reregulation of the market will scare off any potential investors who wanted to invest in power generation plants in Ontario.
Investors will also be wary of buying Hydro One because the government's intervention does not show it is committed toward a competitive power market, analysts said. |
