Hy­dro al­lowed to gen­er­ate more rev­enue

The Southern Gazette - - SPORTS -

The Pro­vin­cial Gov­ern­ment is im­ple­ment­ing mea­sures to im­prove New­found­land and Labrador Hy­dro’s (Hy­dro) fi­nan­cial po­si­tion.

The move will bring the com­pany in line with other Cana­dian reg­u­lated util­i­ties and en­able it to make ap­pro­pri­ate on­go­ing in­vest­ments in in­fra­struc­ture to en­sure re­li­able ser­vice.

Nat­u­ral Re­sources Min­is­ter Kathy Dun­derdale an­nounced Wed­nes­day the cor­po­ra­tion Hy­dro will be per­mit­ted to earn prof­its equal to New­found­land Power over the next two years so it can im­prove in­fra­struc­ture and its fi­nan­cial po­si­tion.

To ac­com­plish this ob­jec­tive, the Pub­lic Util­i­ties Board (PUB) is be­ing di­rected to per­mit Hy­dro to earn a re­turn on eq­uity equal to that of New­found­land Power. The gov­ern­ment has also agreed to waive its an­nual debt-guar­an­tee fee (val­ued at ap­prox­i­mately $13 mil­lion a year) un­til 2010, at which point the full ef­fect of th­ese mea­sures will be im­ple­mented. A $100-mil- lion eq­uity in­jec­tion into Hy­dro’s cap­i­tal struc­ture al­lo­cated in Bud­get 2008 is also as­sist­ing in re­tir­ing debt.

Ms. Dun­derdale said “It is im­por­tant that all parts of Nalcor are strong and fi­nan­cially sound to en­able our en­ergy cor­po­ra­tion to meet its man­date, which in­cludes be­ing a re­li­able sup­plier of least­cost elec­tric­ity through its reg­u­lated line of busi­ness, Hy­dro.”

“Th­ese mea­sures are nec­es­sary to en­sure Hy­dro is able to ser­vice its own debts and main­tain a sta­ble fi­nan­cial struc­ture, thereby al­low­ing it to weather un­ex­pected fluc­tu­a­tions in its busi­ness. This will sup­port the fi­nan­cial vi­a­bil­ity and sta­bil­ity of Hy­dro and its abil­ity to make nec­es­sary cap­i­tal in­vest­ments and up­grades in pro­vid­ing re­li­able ser­vice to its cus­tomers.”

Ms. Dun­derdale sug­gested Hy­dro will now be pro­vided with an ap­pro­pri­ate re­turn on reg­u­lated eq­uity com­pa­ra­ble to other Cana­dian reg­u­lated util­i­ties and its debt will be less­ened through the $100 mil­lion eq­uity in­jec­tion.

As a re­sult of th­ese mea­sures, Hy­dro will not file a gen­eral rate ap­pli­ca­tion for 2010.

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