FortisBC received regulatory decisions in 2012 for 2012/2013 revenue requirements at its gas and electric utilities and expects to file its next rate applications in the first half of 2013. A regulatory decision on a request by FortisBC Gas to amalgamate its three gas utilities into one legal entity and to implement common rates and services for customers across British Columbia, effective January 1, 2014, is pending. FortisAlberta received a decision in April 2012 for its 2012 revenue requirements. The Alberta Utilities Commission ("AUC") issued a generic decision in September 2012 on its PBR Initiative, outlining the PBR framework applicable to distribution utilities in Alberta for a five-year term, which commenced January 1, 2013. The Alberta PBR decision raises concerns and uncertainty for FortisAlberta regarding the treatment of certain capital expenditures. FortisAlberta, along with other distribution utilities operating in Alberta, have sought clarification of this matter in applications filed in November 2012 and have also requested leave to appeal the PBR decision to the Alberta Court of Appeal. Final allowed rates of return on common shareholder's equity and capital structure for 2013 remain outstanding for FortisBC, FortisAlberta and Newfoundland Power. In Alberta, a Generic Cost of Capital ("GCOC") Proceeding was initiated by the AUC in October 2012. In British Columbia, a public hearing occurred in December 2012 related to the first phase of a GCOC Proceeding initiated by the regulator in 2012. At Newfoundland Power, a public hearing commenced in January 2013 related to the utility's general rate application filed in September 2012 to set 2013/2014 customer rates and cost of capital.
Caribbean Regulated Electric Utilities contributed $19 million of earnings compared to $20 million for 2011. FortisTCI Limited acquired Turks and Caicos Utilities Limited ("TCU") in August 2012 for an aggregate purchase price of approximately $13 million (US$13 million), inclusive of debt assumed. TCU serves more than 2,000 customers on Grand Turk and Salt Cay. The utility currently operates pursuant to a 50-year licence that expires in 2036.
Non-Regulated Fortis Generation contributed $17 million to earnings compared to $18 million for 2011. The decrease in earnings was mainly due to overall lower production associated with less rainfall and a generating facility being out of service in 2012, partially offset by a $0.5 million after-tax gain on disposal of assets.
Fortis Properties delivered earnings of $22 million compared to $23 million for 2011. The Company acquired the 126-room StationPark All Suite Hotel in London, Ontario for approximately $13 million, inclusive of debt assumed, in October 2012.
Corporate and other expenses were $88 million compared to $61 million for 2011. Excluding CH Energy Group acquisition-related expenses, incurred largely in the first half of 2012, and the merger termination fee paid to Fortis in July 2011, corporate and other expenses were $8.5 million higher year over year. The increase was mainly the result of a $2 million foreign exchange loss recognized in 2012 compared to a $1.5 million after-tax net foreign exchange gain recognized in 2011, certain non-recurring operating expenses in 2012 and lower effective income tax recoveries, partially offset by lower finance charges.
Cash flow from operating activities was $976 million, up $61 million from 2011, driven by higher earnings and the collection of increased depreciation and amortization expense in customer rates.
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