Hydro-Québec’s net result up in the third quarter

Montréal, November 14, 2014 – For the third quarter of 2014, Hydro-Québec posted a net result of $351 million, compared to $312 million in 2013. This $39-million increase is mainly due to a decrease in financial expenses. For the nine months ended September 30, 2014, the company’s net result totaled $2,581 million, or $445 million more than the $2,136 million recorded in 2013. This increase is primarily attributable to the very cold temperatures in winter 2014, which led to growth in Hydro-Québec Production’s net electricity exports as well as in the Québec market’s contribution.

Segmented operations for the first three quarters
Hydro-Québec Production recorded a net result of $1,798 million, compared to $1,427 million in 2013. This $371-million increase is due to the very cold temperatures in winter 2014. Net electricity exports generated $214 million more than last year as a result of higher market prices. The Québec market’s contribution increased by $129 million, mainly because of the additional peak supplies provided by Hydro-Québec Production to Hydro-Québec Distribution.

Hydro-Québec TransÉnergie’s net result amounted to $514 million, a $98-million increase over 2013 that is partly due to a $67-million increase in revenue from native-load transmission service following a decision handed down by the Régie de l’énergie. It is also owing to the fact that last year, the division had recorded a $38-million adjustment related to its 2013 rate case.

Hydro-Québec Distribution posted a net result of $157 million, compared to $231 million in 2013. Revenue from electricity sales increased by $556 million due to the very cold temperatures in winter 2014 and the April 1, 2013 and 2014 rate adjustments. Other revenue also increased, mainly on account of the amounts due to Hydro-Québec for the additional supply costs incurred in winter 2014. Net electricity purchases and the related transmission costs rose by $707 million, primarily because of temperatures. Supplies from third parties thus increased by $403 million due to wind power purchases and ad hoc winter requirements, while supplies from Hydro-Québec Production increased by $252 million.

In the Construction segment, the volume of activity at Hydro-Québec Équipement et services partagés and Société d’énergie de la Baie James totaled $1,660 million, compared to $1,756 million in 2013. Projects under way for Hydro-Québec Production include ongoing construction of the Romaine hydroelectric complex. Work in progress for Hydro-Québec TransÉnergie includes expansion of the transmission system in the Minganie region, the addition of a 735/315-kV section and related work at Bout-de-l’Île substation as well as various projects stemming from continued investment in asset sustainment.

Investment
In the first nine months of 2014, Hydro-Québec invested $2,725 million in property, plant and equipment and intangible assets, compared to $2,920 million in 2013. Most of this amount was allocated to the company’s growth and development projects as well as to maintenance and improvement activities.

Financing
During the third quarter of 2014, Hydro-Québec issued variable-rate notes for a total amount of $1.0 billion, maturing in 2019. This borrowing was made on the Canadian market. The funds will be used to support part of the investment program and to refinance maturing debt.

Information:

Serge Abergel
Media Relations
514 289-2211, ext. 3183
abergel.serge@hydro.qc.ca