Natural Resources
June 17, 2009Province Positions Hydro to Make
Critical Investments in Infrastructure
The Provincial Government is implementing measures to improve
Newfoundland and Labrador Hydro�s (Hydro) financial position to bring it
in line with other Canadian regulated utilities and enable it to make
appropriate ongoing investments in infrastructure to ensure reliable
service.
"These measures bring Hydro�s return on equity and capital structure
in line with that of Newfoundland Power and many other Canadian
regulated utilities," said the Honourable Kathy Dunderdale, Minister of
Natural Resources. "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 least-cost
electricity through its regulated line of business, Hydro."
To accomplish these objectives, the Public Utilities Board (PUB) is
being directed to permit Hydro to earn a return on equity equal to that
of Newfoundland Power. The Provincial 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-million equity injection into Hydro�s
capital structure allocated in Budget 2008 is also assisting in retiring
debt.
"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," said Minister
Dunderdale. "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."
"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," said the
minister. "As a result of these measures, Hydro will not file a general
rate application for 2010."
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Media contact:
Tracy Barron
Director of Communications
Department of Natural Resources
709-729-5282, 690-8241
tracybarron@gov.nl.ca
2009 06 17 11:00 a.m.