KELOWNA, BRITISH COLUMBIA--(CCNMatthews - July 20, 2006) - FortisBC Inc. (TSX:FTS) released its 2006 second quarter results today.
Net earnings for the second quarter were $3.6 million, a decrease of $1.1 million over the same period last year. These lower earnings were due to a decrease in other revenue, increases in power purchases, depreciation and amortization, and interest expense offset in part by increases in electricity revenue and decreases in operating expenses and income taxes. Year-to-date earnings for 2006 were $14.9 million, an increase of $1.7 million over the same period last year. This increase is primarily related to additional electricity revenue as a result of customer growth and an approved 5.9% rate increase.
The Company continued to improve performance in the areas of safety, reliability and customer satisfaction in the second quarter. The customer satisfaction rating for the second quarter of 2006 was 83% compared to a 2005 rating of 81%.
During the second quarter, FortisBC, British Columbia Utilities Commission (BCUC) staff and a group of intervenors concluded negotiations on the Company's 2006 revenue requirements application. Following the negotiations, the BCUC approved a 5.9% customer rate increase effective January 1, 2006. The BCUC also approved a performance based rate setting mechanism covering the years 2006-2008, with an option to extend to 2009.
"Strong customer growth in our service area and the need for improved system reliability continues to drive our investment in the electrical system," said John Walker, President and CEO of FortisBC. "Consistent with our long term capital investment plan to expand and upgrade our transmission and distribution system and hydroelectric generating facilities, the Company spent approximately $20.5 million in the second quarter of 2006."
FortisBC is an integrated utility operating in the southern interior of British Columbia, serving approximately 150,000 customers directly and indirectly. The utility has four hydroelectric generating plants with a combined capacity of 235 megawatts and over 6,400 kilometers of transmission and distribution power lines. FortisBC employs approximately 550 people in British Columbia and is an indirect wholly owned subsidiary of Fortis Inc. - primarily a diversified, international electric utility holding company based in St. John's, Newfoundland, with assets exceeding $4.3 billion and annual revenues of more than $1.4 billion. The Common Shares, Series C First Preference Shares and Series E First Preference Shares of Fortis Inc. are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C and FTS.PR.E, respectively. Fortis Inc. information can be accessed at www.fortisinc.com.
Further information is available on SEDAR at www.sedar.com.
FortisBC may include forward-looking statements in this release. By their very nature, forward-looking statements are based on underlying assumptions and are subject to inherent risks and uncertainties surrounding future expectations generally. Such events include, but are not limited to, general economic, market and business conditions, regulatory developments, weather and competition. FortisBC cautions readers that should certain events or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. For additional information with respect to certain of these risks or factors, reference should be made to FortisBC's continuous disclosure materials filed from time to time with Canadian Securities Regulatory Authorities. FortisBC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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