http://www.canada.com/montreal/montrealgazette/news/business/story.html?id=5 9f2b604-95f4-4750-8ad4-ce15a7f6419f Two rate hikes paying off big for Hydro-Quebec On track to post record profits again. Utility says it intends to initiate regular demands for rate increases of two to three per cent a year NICOLAS VAN PRAET The Gazette, Saturday, November 13, 2004 Hydro-Quebec is on pace to post another year of record profits as it reaps income from two rate hikes saddled on consumers since January and resumes energy exports outside the province. The utility has earned $1.79 billion since the beginning of the year, including $314 million in third quarter profits revealed yesterday. Despite weakness at Hydro's distribution arm, the utility as a whole is poised to post earnings higher than $2 billion, surpassing last year's profit of $1.93 billion. "The results for the first nine months of the year are encouraging," said Daniel Leclair, Hydro-Quebec's chief financial officer. "Now we have to keep the momentum." Hydro said it collected $221 million in net profits for the first nine months of 2004 from two rate hikes implemented this year. Quebec's energy regulator will begin hearing submissions this month on another 2.7-per-cent proposed electricity rate increase to come into effect next April. The hike translates to a $30 increase to an average yearly bill. Hydro-Quebec president Andre Caille has said the utility intends to initiate regular demands for rate hikes of two to three per cent a year, raising over time the price Quebecers pay for power. The provincial utility said yesterday higher rates and a cautious return to short-term electricity sales outside Quebec increased profits for its latest quarter ended Sept. 30 by 21 per cent, compared with the period last year. The increase in income came despite lower sales. Sales totalled $7.73 billion. Hydro has been replenishing its energy reserves during the first six months of 2004 amid lower sales to industrial customers in Quebec like Alcoa, which has shut down the bulk of production at its Becancour aluminum smelter because of a strike. The utility's generation unit started selling electricity outside the province again in July, particularly to fuel strong demand from the U.S. northeast. In addition to higher rates and lower financial expenses, Hydro-Quebec's $900-million gain from the sale of its stake in Noverco also pushed up earnings in the first nine months. Profit was up $317 million for the first three quarters of 2004, compared with the year before. Operating income dropped $324 million to $3.1 billion over the same period because the utility sold less power outside Quebec. Hydro said its investment program for 2004 will top $3.7 billion, nearly $500 million more than in 2003. It will allocate $1 billion of that to build the Eastmain-1 and Toulnustouc hydroelectric generating stations. The utility also submitted an amended $1.7-billion energy-efficiency plan to the Regie de l'energie yesterday, calling on Quebec electricity users to contribute $641 million in energy savings. nvanpraet@thegazette.canwest.com --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.782 / Virus Database: 528 - Release Date: 10/22/2004
<<attachment: winmail.dat>>