Hydro One reports C$413M quarterly profit as grid investment rises
Third-quarter capital investment rose to C$1.084 billion as higher costs outweighed gains from approved rates and peak demand.
Ines Halvorsen
In the quarter ended Sept. 30, revenue rose to C$2.491 billion from C$2.299 billion at Hydro One Limited TSEH, which reported lower profit on Tuesday. Net income attributable to common shareholders fell to C$413 million from C$421 million in the comparable period of 2025, according to its earnings release.
Capital investments in the third quarter of 2026 climbed to C$1.084 billion from C$779 million a year earlier. Assets placed in service increased to C$658 million from C$577 million over the same period.
Shares closed lower at C$57.09 in Toronto at 4 p.m. EST on Nov. 9, before the earnings release, according to TSEH.
The Ontario transmission and distribution utility said its Oct. 7 rate application proposes an approximately C$37 billion investment plan for 2028 through 2032, including operating costs. It updated future capital investment disclosures to align with that filing.
Basic earnings per share fell to C$0.69 in the third quarter of 2026 from C$0.70 a year earlier. Higher maintenance, depreciation, asset removal and financing costs outweighed gains from approved rates and higher peak demand.
Station maintenance and vegetation management increased operating expenses. Storm restoration increased asset removal costs, while growth in capital assets added depreciation.
Operating cashflow rose to C$892 million in the third quarter of 2026 from C$713 million a year earlier. Hydro One attributed higher financing charges mainly to increased long-term debt, partly offset by a lower average volume of short-term notes outstanding.
Over the first nine months of 2026, capital investments totalled C$2.611 billion. Operating cashflow for that period was C$1.972 billion.
"Our 2028-2032 investment plan positions Hydro One to meet rising demand while enabling the communities, businesses and industries that will drive Ontario's next chapter of growth," chief executive Megan Telford said in the release.
Rate Application Proposes C$16.7 Billion For Transmission
For 2028 through 2032, the rate application proposes C$16.7 billion of transmission capital expenditure. Distribution capital expenditure would total C$10.8 billion, with another C$192 million proposed for its Sault Ste. Marie Limited Partnership.
Hydro One's Oct. 7 plan summary separately identifies about C$5 billion of affiliate transmission-line investments for that period, outside the joint rate application.
For North Shore Link, the company says it filed a leave-to-construct application with the Ontario Energy Board for a 105-kilometre line. The Nov. 10 release estimates the investment at approximately C$1.3 billion, with service expected in 2029. The application itself was not reviewed.
The Nov. 10 release also reports energizing the Etobicoke Greenway line, which Hydro One says will add approximately 300 megawatts of regional capacity. The line links Richview and Manby transformer stations in Etobicoke.
Canadian peer Fortis Inc. TSEFTS NYSEFTS announced a C$32.2 billion capital plan for 2027 through 2031 on Nov. 3. Fortis expects to fund that plan primarily with operating cashflow and regulated utility debt.
Read more: PPL Corporation outlines US$5B to US$7B QTS power plan, raises growth target
Hydro One management's next scheduled update is its earnings and outlook teleconference at 8 a.m. EST on Nov. 10.
