Hydro One vows to keep focus at home

TORONTO The chief executive of Hydro One Ltd. said Thursday that the company will now be laser-focused on its home market of Ontario, a change in strategy that comes after the electrical utility saw its attempt at a major takeover of a U.S. energy company fall apart earlier this year over political concerns.

Hydro One president and CEO Mark Poweska said during a conference call that for the next five years, the Toronto-based company will not “actively pursue” any mergers or acquisitions outside of Ontario, where it is the biggest electricity transmission and distribution provider.

“What I learned from listening to shareholders and others only confirmed what I suspected having long watched the Hydro One story from B.C.: We became distracted by opportunities beyond our borders,” said Poweska, who took over the CEO job in May after more than 25 years working at BC Hydro.

“This outward focus narrowed our minds to the great opportunities that exist here at home. It’s time for Hydro One to focus in on the things that matter. It’s time for us to build on our strengths and seize opportunities right here in Ontario.”

The Ontario-centric strategy comes after Hydro One announced in January that it had agreed to drop a $6.7-billion takeover of Spokane, Wash.-headquartered Avista Corp. As a result, the utility had to pay a $138-million break fee. Hydro One’s decision to abandon the Avista deal followed U.S. regulators rejecting the arrangement, citing concerns of possible political interference by the Ontario government, Hydro One’s biggest shareholder.

Those concerns were raised after Ontario elected a Progressive Conservative government led by now-Premier Doug Ford, who had campaigned on firing Hydro One’s previous CEO and board of directors over their compensation. Both the board and the CEO at the time departed after the election, which ultimately resulted in Poweska’s hiring.

Hydro One also reported Thursday net income attributable to common shareholders of $241 million for the three months ended Sept. 30, up 24.2 per cent from the same quarter a year earlier.

It recorded a dip in revenue for its third quarter.

Hydro One’s stock price fell following the release of its earnings, finishing Thursday 1.25 per cent lower, at $23.79. Shares were still up more than 17 per cent for the year. Financial Post