OPG’s Q1 net income drops to $28M from $154M in 2012

Lower earnings from nuclear funds, higher operating costs to blame.

TORONTO — Ontario Power Generation Inc. has reported a big drop in first-quarter net income as higher operating expenses and depreciation costs and lower earnings on nuclear funds hurt the bottom line.

The provincially owned utility says its net income fell to $28 million in the three months ended March 31. That was down from $154 million in the same 2012 period.

Revenue totalled $1.26 billion, up from just under $1.2 billion.

OPG said earnings on nuclear funds fell to $124 million from $210 million, while depreciation and amortization costs rose to $242 million from $189.

The nuclear fund is the money set aside to pay for the safe management of nuclear waste and the cost of decommissioning nuclear plants both now and in the future.

“While net income was lower than last year primarily due to lower earnings from the nuclear funds, Ontario Power Generation continues to moderate the overall prices paid by Ontarians for their electricity,” president and CEO Tom Mitchell said in a statement.

Mitchell noted that Ontario Hydro received an average price of 5.5 cents per kilowatt-hour in the quarter, compared with an average for all the other power generators in Ontario of 9.2 cents.

“For me, that shows the value of OPG as a publicly-owned generating company,” Mitchell said.

“In addition to moderating prices, OPG had other successes in the first quarter that will benefit consumers. First among these was the completion of the 10-kilometre Niagara Tunnel below the approved budget and nine months ahead of the approved project completion date,” he added.

“This tunnel will provide comparatively inexpensive, clean hydroelectric power for many decades, serving our children and grandchildren – just as the original Sir Adam Beck station still serves Ontario after operating for almost a century.”

© 2013 The Canadian Press