Parker Gallant is quite disturbed by the most recent annual report from Hydro One, Ontario’s government-owned electrical transmission corporation:
No major media reported on Hydro One’s annual statement to “investors,” as the company puts it, even though the report is a dog’s breakfast of warning signs and bizarre trends that spell trouble.
[. . .]
As debt rises, Hydro One’s debt-to-equity ratio weakened from 1.71:1 to 1.91:1. It borrows money to pay for capital costs surrounding the province’s Green Energy Act and puts the company at risk of a debt ratings downgrade, which will drive borrowing costs up.
Return on equity is down to 8.7% from 9.7% in 2008, indicating an overall decline in the value of the company. Return on assets fell to 3% from 3.5%. As a result, the dividend payment to the province was $188-million, down 27.4%. But the CEO says the company is “on target.”
Even though revenues and costs are rising, and profit falling, Hydro One handles less electricity — 139.2 terawatts, a decline of 6.4%. The cost of distribution per terawatt was up by 14.9%. Operations and maintenance costs keep rising as power transmitted declines. The number of employees rose 7.7%. Since 2002, when the company had 3,933 employees to distribute 153.2 terawatts, total employment has jumped 38% to 4,400 to distribute 9% less power. Are these additional 1500 staff working in the field or at head office working on rate increase applications?
Bah. Let the eastern bastards freeze in the dark.
Comment by Lickmuffin — February 25, 2010 @ 18:21
They don’t dare: they might arouse the fury of Pierre Eliot Harper!
Comment by Nicholas — February 25, 2010 @ 18:24