KELOWNA, BRITISH COLUMBIA--(CCNMatthews - Feb. 2, 2007) - FortisBC Inc. (TSX:FTS) today announced net earnings for the year ended December 31, 2006 of $26.5 million, an increase of $3.0 million or 12.8% over 2005. The higher earnings for 2006 were primarily due to increased electricity revenue and lower operating expenses, partially offset by increased power purchases, depreciation and amortization, and interest expense.
"We are pleased with the 2006 results as they reflect FortisBC's commitment to improved customer service and productivity, as well as the successful execution of our capital plan," noted John Walker, President & CEO, FortisBC Inc. "In 2006, we invested over $100 million in our electrical system in response to customer growth and to improve system reliability."
A number of upgrades to electrical transmission and distribution systems were completed in the Okanagan, Boundary and Kootenay regions in 2006. FortisBC also continued its hydro generation upgrade life extension program, which resulted in an increase in the combined capacity of the Company's hydroelectric stations of more than 20 megawatts (MW) to 235 MW.
The Company made significant progress in the areas of safety and customer service. These improvements included a reduction in the number of employee injuries per 100 workers in 2006 compared to 2005 and an increase in the Company's customer satisfaction rating from 81% in 2005 to 85% in 2006.
Electricity sales in 2006 were 3,070 gigawatt hours (GWh), an increase of 61 GWh compared to 3,009 GWh in 2005. Continued population growth, particularly in the Okanagan area, was the main driver of increased electricity sales.
Electricity revenue for 2006 was $204.8 million, an increase of $19.9 million over 2005. The increase was primarily attributable to customer growth and a British Columbia Utilities Commission (BCUC) approved 5.9% rate increase.
On December 20, 2006, FortisBC received approval from the BCUC for a 1.2% general rate increase effective January 1, 2007. The 2007 increase was driven primarily by capital programs to address customer growth, as well as increased power purchase costs.
On November 24, 2006, the BCUC approved FortisBC's 2007-2008 capital plan application to spend approximately $128.6 million in 2007 and $111.6 million in 2008, with certain projects subject to additional regulatory processes.
FortisBC is an integrated electric utility based in Kelowna, British Columbia and operating in the southern interior of British Columbia. The Company serves over 152,000 customers directly and indirectly. The utility has four regulated hydroelectric generating plants with a combined capacity of 235 megawatts and 6,750 kilometers of transmission and distribution power lines. FortisBC employs over 570 people in British Columbia and is an indirect wholly owned subsidiary of Fortis Inc. - a diversified, international electric utility holding company based in St. John's, Newfoundland, with assets of approximately $5 billion and annual revenues of more than $1.4 billion. The Common Shares, First Preference Shares, Series C, First Preference Shares, Series E and First Preference Shares, Series F of Fortis are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C, FTS.PR.E and FTS.PR.F, respectively. Fortis 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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