Today, Newfoundland and Labrador Hydro (Hydro) released its financial results for the third quarter of 2023.

Key highlights
• Hydro’s year to date net income was $313 million, a $230 decrease compared to the same period last year. For the third quarter, net income was $199 million lower compared to the third quarter of 2022, for a net loss of $19 million.

• The key drivers of the decreases for the quarter and year-to-date are the net impacts of commissioning of the Lower Churchill Project (LCP) assets, including rate mitigation funding; lower realized export electricity prices; and lower oil revenue as a result of reduced volumes. This was partially offset by an increase in export electricity volumes.

• Also impacting the year-to-date comparative results is the Q2 2022 reversal of an impairment of Hydro’s oil and gas assets. Impairments and reversals of impairments as a result of volatility in global oil prices are not uncommon in the oil and gas industry, and can lead to large non-cash variations in profit or loss between reporting periods.

• In August, the first drawing on the federal convertible debt reduced the balance of the Supply Cost Variance Deferral Account (SCVDA) and Hydro’s net income by $145M, reducing future amounts owed from regulated customers. As one of the initial steps to implement rate mitigation, on March 31 of this year the Government of Newfoundland and Labrador announced the provision of $190 million of rate mitigation funding to offset increases in supply costs primarily associated with the LCP. Year-to-date, there has been $335 million of rate mitigation funding provided to Hydro Regulated which has reduced the SCVDA to $143.5 million as at September 30, 2023.

Links:
The Quarterly Financial Report can be found at: https://nlhydro.com/about-hydro/publications/