Advertisement
REGULATED GAS UTILITIES - CANADIAN
FORTISBC ENERGY COMPANIES (1)
----------------------------------------------------------------------------Financial Highlights (Unaudited) Quarter AnnualPeriods Ended December 31 2012 2011 Variance 2012 2011 Variance--------------------------------------------------------------------------------------------------------------------------------------------------------Gas Volumes (petajoules) 60 63 (3) 199 203 (4)Revenue ($ millions) 422 476 (54) 1,426 1,566 (140)Earnings ($ millions) 49 51 (2) 138 137 1--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Includes FortisBC Energy Inc. ("FEI"), FortisBC Energy (Vancouver Island) Inc. ("FEVI") and FortisBC Energy (Whistler) Inc. ("FEWI") Factors Contributing to Quarterly and Annual Gas Volumes VariancesUnfavourable
-- Lower average gas consumption by residential and commercial customers, driven by overall warmer temperatures
Favourable
-- Higher gas transportation volumes to industrial customers, due to certain customers switching to natural gas from alternative sources of fuel as a result of low natural gas prices
With the implementation of the Customer Care Enhancement Project on January 1, 2012, the FortisBC Energy companies changed their definition of a customer. As a result of this change, the FortisBC Energy companies reduced their combined customer count by approximately 18,000, as at January 1, 2012. As at December 31, 2012, the total number of customers served by the FortisBC Energy companies was approximately 945,000.
The FortisBC Energy companies earn approximately the same margin regardless of whether a customer contracts for the purchase and delivery of natural gas or only for the delivery of natural gas. As a result of the operation of regulator-approved deferral mechanisms, changes in consumption levels and the commodity cost of natural gas from those forecast to set residential and commercial customer gas rates do not materially affect earnings.
Seasonality has a material impact on the earnings of the FortisBC Energy companies as a major portion of the gas distributed is used for space heating. Most of the annual earnings of the FortisBC Energy companies are realized in the first and fourth quarters.
Factors Contributing to Quarterly and Annual Revenue Variances
Unfavourable
-- Lower commodity cost of natural gas charged to customers-- Lower average gas consumption by residential and commercial customers-- Lower-than-expected customer additions in 2012
Favourable
-- A net increase in the delivery component of customer rates, effective January 1, 2012, mainly due to ongoing investment in energy infrastructure and forecasted certain higher expenses recoverable from customers as reflected in the 2012/2013 revenue requirements decision received in April 2012-- Higher gas transportation volumes to industrial customers Factors Contributing to Quarterly Earnings Variance
Unfavourable
-- The timing of certain operating and maintenance expenses during 2012-- Lower capitalized AFUDC, due to lower assets under construction period over period-- Lower-than-expected customer additions in 2012
