AltaLink Focused on Safety and Reliability Through Its Wildfire Mitigation Plan

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CALGARY, Alberta–(BUSINESS WIRE)–#AlbertaElectricity–As the frequency and intensity of wildfires increase, AltaLink continues to focus on enhancing wildfire mitigation activities to support public safety and reduce the likelihood of its transmission system contributing to the ignition of a wildfire.

In its recent decision on AltaLink’s 2024-2025 General Tariff Application, the Alberta Utilities Commission (AUC) approved $11.76 million of forecast expenditures related to AltaLink’s 2024-2025 Wildfire Mitigation Plan. This is in addition to the $14.3 million in wildfire mitigation costs already approved as part of the AltaLink’s negotiated settlement with its largest customers.

However, the commission denied an additional $50.8 million in wildfire mitigation expenditures. AltaLink proposed to accelerate these activities in response to the increasing public safety risk in the province, following the worst-ever wildfire season in 2023 when thousands of Albertans were evacuated from their homes.

“AltaLink remains a leader in wildfire mitigation among Canadian utilities,” said Mr. Hart. “While we’re disappointed the AUC denied our request for additional funding to accelerate and enhance our wildfire mitigation plan, we will continue to work to reduce the likelihood that our transmission system contributes to the ignition of a catastrophic wildfire.”

AltaLink announces 2024 second quarter financial results

AltaLink is the only regulated utility in Alberta that has kept its rates at or below its 2018 level for the past five years. In support of its customers, AltaLink committed in 2018 to keep its transmission rates flat between 2019 and 2023. AltaLink delivered on that commitment, keeping its Flat for Five promise.

Today, AltaLink, L.P. announced net and comprehensive income of $83.9 million compared to $74.1 million for the same quarter in 2023. The change is primarily due to increased revenue from the regulatory generic cost of capital decision, and a higher recovery of interest as a result of higher approved short term interest rates.

For the three months ended June 30, 2024, our revenue from operations was $239.6 million, decreasing by $4.1 million compared to the same period in 2023. The change is primarily due to recovery of lower revenue related to salvage expenses, partially offset by higher debt and equity returns on rate base and higher recovery of other allowable costs of transmission services.

As a partnership, AltaLink, L.P. reports its net income before income taxes; therefore its results are not directly comparable with net income reported by corporations that recognize income taxes in their financial statements.

AltaLink’s full financial results and management’s discussion and analysis can be found on AltaLink’s website at www.altalink.ca or on SEDAR+ at www.sedarplus.ca.

Headquartered in Calgary, with offices in Edmonton, Red Deer and Lethbridge, AltaLink is Alberta’s largest electricity transmission provider. AltaLink is partnering with its customers to provide innovative solutions to meet the province’s demand for reliable and affordable energy. A wholly-owned subsidiary of Berkshire Hathaway Energy, AltaLink is part of a global group of companies delivering energy services to customers worldwide.

Significant highlights during the second quarter of 2024

AltaLink’s safe delivery of affordable and reliable electricity for its customers highlights its second quarter of 2024 results:

• On June 19, 2024, the AUC issued Decision 28174-D02-2024 with respect to AltaLink’s 2024-2025 GTA, providing its reasons for the approval of the negotiated settlement and its findings on the matters excluded from the negotiated settlement. Specifically, the AUC:
  • approved the previously denied $98.9 million actual salvage costs incurred from 2019 to 2021 and the 2022-2025 salvage expenditures of $124.3 million, subject to changes arising from revised wildfire mitigation capital expenditures. The AUC also approved AltaLink’s transition to the capitalization of site preparation or salvage costs for capital replacement projects starting in 2024. However, the AUC did not approve the recovery of $11 million of debt and equity returns for 2022-2023 related to the previously denied $98.9 million salvage costs;
  • approved $26.1 million of forecast capital expenditures related to AltaLink’s 2024-2025 Wildfire Mitigation Plan, which is generally consistent with the approved wildfire capital expenditures in AltaLink’s 2022-2023 Wildfire Mitigation Plan. The AUC did not approve AltaLink’s request, filed on August 31, 2023, for an incremental $46.3 million in forecast wildfire mitigation capital expenditures; and
  • denied AltaLink’s proposed wildfire damages deferral account stating that AltaLink currently has multiple layers of protection to address the risk of liability for wildfire-related third-party damages. The AUC confirmed the layers include AltaLink’s capital replacement and upgrade program, AltaLink’s Wildfire Mitigation program, protection under Section 90 of the Electric Utilities Act, commercial insurance and the regulatory self-insurance reserve account.
• AltaLink, together with ATCO Electric Ltd., has secured Canada Infrastructure Bank financing for the Central East Transfer-Out project. This investment will save Alberta ratepayers approximately $135 million over the 30-year financing of the project. The financing is subject to customary closing conditions, including approval by the AUC.
• We achieved a customer satisfaction average score of 9.71 out of 10 compared to 9.73 for the same quarter in 2023.
• We had one employee injury, representing a quarterly recordable injury frequency rate of 0.61, matching one injury for the same quarter in 2023.
• Our customer average outage duration increased to four minutes compared to one minute for the same quarter in 2023. AltaLink experienced greater impacts from wildlife and weather-related outages as compared to 2023.
• We earned net and comprehensive income of $83.9 million compared to $74.1 million for the same quarter in 2023. Our income increased mainly due to increased revenue from the regulatory generic cost of capital decision, and a higher recovery of interest as a result of higher approved short term interest rates.
• On May 6, 2024, AltaLink and the United Utility Workers’ Association reached a four-year collective agreement. The term of the agreement is January 1, 2024 to December 31, 2027.
• On June 27, 2024, with the release of our 2023 Sustainability Report, AltaLink continued to demonstrate its commitment to sustainability as it operates the transmission system that supplies millions of Albertans with electricity.
• On April 26, 2024, S&P reaffirmed its issuer credit rating and senior secured rating on AltaLink at “A-” with a stable outlook. On July 9, 2024, DBRS reaffirmed its ratings on AltaLink including the Issuer rating, and Medium-Term Note (Secured) and Senior Secured Note rating at “A” with stable trends. “A” and “A-” ratings allow us to keep debt financing costs low for our customers.
• We invested $96.0 million in capital assets compared to $57.8 million for the same quarter in 2023 to ensure continued electric transmission system safety and reliability, and connect generation.

This news release does not constitute an offer to sell or the solicitation of an offer to buy AltaLink’s securities in any jurisdiction, including but not limited to, the United States. AltaLink’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Except for the historical and present factual information contained herein, the matters set forth in this news release, including words such as “expects”, “intends”, “projects”, “plans”, “anticipates”, and similar expressions, are forward looking information that represents management of AltaLink’s internal projections, expectations or beliefs concerning, among other things, future operating results and various components thereof or the economic performance of AltaLink. The projections, estimates and beliefs contained in such forward looking statements necessarily involve known and unknown risks and uncertainties, which may cause AltaLink’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward looking statements. These risks and uncertainties include, among other things, those described in AltaLink’s filings with the Canadian securities authorities. Accordingly, holders of AltaLink securities and potential investors are cautioned that events or circumstances could cause results to differ materially from those predicted. AltaLink disclaims any responsibility to update these forward looking statements.

Contacts

Investor Relations
Chris Lomore
Vice President, Treasurer

AltaLink Management Ltd.

Phone: 403.828.1521

E-mail: chris.lomore@altalink.ca

Media Relations
Scott Schreiner
Vice President, External Engagement

AltaLink Management Ltd.

Phone: 403.880.0275

E-mail: scott.schreiner@altalink.ca