Toronto Hydro Corporation reports its year-end financial results for 2024
Selected financial and operational highlights
(in millions of Canadian dollars)
Year ended
December 31
2024
$
2023
$
Distribution revenue
937.8
839.5
Net income after net movements in regulatory balances
130.3
139.9
Capital expenditures
882.4
755.0
KEY FINANCIAL HIGHLIGHTS
Distribution revenue for the year ended Dec. 31, 2024 was $937.8 million:
Increase of $98.3 million compared to the comparable period in 2023
The increase was driven by higher revenue collected through Ontario Energy Board (OEB)-approved rate riders, higher 2024 distribution rates and higher electricity consumption
Net income after net movements in regulatory balances for the year ended Dec. 31, 2024 was $130.3 million:
Decrease of $9.6 million compared to the comparable period in 2023
The decrease was primarily due to higher operating expenses, higher depreciation and amortization expense due to higher in-service asset additions, and higher financing costs
This was partially offset by higher distribution revenue
Capital expenditures for the year ended Dec. 31, 2024 were $882.4 million:
Increase of $127.4 million compared to the comparable period in 2023
Capital initiatives in 2024 included the delivery of customer connections, replacement of overhead and underground infrastructure, customer-initiated relocations and expansions, reactive capital, and stations programs
CORPORATE DEVELOPMENTS
On Nov. 12, 2024, the OEB issued its 2025–2029 Custom Incentive Rate-setting (CIR) Decision, and on Dec. 12, 2024, issued its CIR Final Rate Order (together, the 2025–2029 CIR Decision and Rate Order), both in relation to Toronto Hydro's 2025–2029 CIR Application. The 2025–2029 CIR Decision and Rate Order approved the negotiated settlement proposal as filed, final electricity distribution rates for the first year of the five-year rate period effective Jan. 1, 2025, a custom incentive rate-setting index for the period commencing on Jan. 1, 2026 and ending on Dec. 31, 2029, and the final clearance of various deferral and variance account balances for the 2020–2024 period through rate riders. The approved rates for 2025 were implemented on Jan. 1, 2025.
On Nov. 27, 2024, Federico Zeni was named Interim Chief Financial Officer. Mr. Zeni replaced Céline Arsenault, former CFO, who left Toronto Hydro in November 2024.
On Dec. 16, 2024, Toronto Hydro issued 28 common shares to the City of Toronto (City) for total proceeds of $50.0 million in relation to a one-time upfront special equity investment from the City.
On Dec. 17, 2024, Toronto City Council appointed Brian Topp and Councillor Rachel Chernos Lin to Toronto Hydro's Board of Directors. Mr. Topp was also appointed as Chair of the Board upon nomination by the City effective as of Dec. 19, 2024, replacing David McFadden, whose term on the Board ended in December 2024. Mr. Topp's term on the Board ends on June 27, 2026, or the effective date of the appointment of a successor. Deputy Mayor Jennifer McKelvie and Councillor Dianne Saxe were re-appointed as directors of Toronto Hydro by City Council on Dec. 17, 2024, with each of their terms and that of Councillor Chernos Lin lasting until Nov. 14, 2026, or the effective date of the appointment of a successor.
On Jan. 2, 2025, Toronto Hydro issued 14 common shares to the City for total proceeds of $25.0 million in relation to an annual equity contribution from the City.
On Feb. 26, 2025, Toronto Hydro's Board of Directors declared a dividend in the amount of $15.0 million with respect to the first quarter of 2025, which is payable to the City by Mar. 31, 2025.
QUICK FACTS
QUOTE
'Toronto Hydro is proud to have had another year of strong financial performance in which we continued to provide meaningful value to our customers and shareholder. As we look forward to 2025, we're committed to continuing to invest in expanding, modernizing and sustaining the grid and our operations to meet the current and future needs of our customers and our city.'
- Jana Mosley, President and CEO, Toronto Hydro
ABOUT TORONTO HYDRO
Toronto Hydro is a holding company which wholly owns two subsidiaries:
Toronto Hydro-Electric System Limited (THESL) – distributes electricity; and
Toronto Hydro Energy Services Inc. – provides streetlighting and expressway lighting services in the city of Toronto
The principal business of Toronto Hydro and its subsidiaries is the distribution of electricity by THESL, which owns and operates the electricity distribution system for Canada's largest city. Recognized as a Sustainable Electricity Leader™ by Electricity Canada, it has approximately 796,000 customers located in the city of Toronto and distributes approximately 18 per cent of the electricity consumed in Ontario.
SOCIAL MEDIA ACCOUNTS
X: x.com/torontohydro
Facebook:
FORWARD-LOOKING INFORMATION
Certain information included in this news release constitutes 'forward-looking information' within the meaning of applicable securities legislation. All information, other than statements of historical fact, which address activities, events or developments that we expect or anticipate may or will occur in the future, are forward-looking information. The words 'anticipates,' 'believes,' 'budgets,' 'can,' 'committed,' 'continual,' 'could,' 'estimates,' 'expects,' 'focus,' 'forecasts,' 'further notice,' 'future,' 'impact,' 'increasingly,' 'intends,' 'may,' 'might,' 'objective,' 'once,' 'ongoing,' 'outlook,' 'plans,' 'propose,' 'projects,' 'schedule,' 'seek,' 'should,' 'trend,' 'will,' 'would,' or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. The purpose of the forward-looking information (including any financial outlook) contained herein is to provide Toronto Hydro's current expectations regarding its future results of operations, performance, business prospects and opportunities, and readers are cautioned that such information may not be appropriate for other purposes. All forward-looking information is given pursuant to the 'safe harbour' provisions of applicable Canadian securities legislation.
Specific forward-looking information in this news release includes, but is not limited to, statements regarding the payment of dividends to the City of Toronto as shareholder and Toronto Hydro's continuing investments in its grid, including those outlined in its 2025–2029 investment plan.
The forward-looking information reflects Toronto Hydro's current beliefs and is based on information currently available to Toronto Hydro. The forward-looking information is based on estimates and assumptions made by Toronto Hydro's management in light of past experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes to be reasonable in the circumstances, including, but not limited to: the amount of indebtedness of Toronto Hydro; changes in funding requirements; the future course of the economy and financial markets; no unforeseen delays and costs in Toronto Hydro's capital projects; no unforeseen changes to project plans; compliance with covenants; the receipt of favourable judgments; no unforeseen changes in electricity distribution rate orders or rate-setting methodologies; no unfavourable changes in environmental regulation; the ratings issued by credit rating agencies; the level of interest rates; Toronto Hydro's ability to borrow; and assumptions regarding general business and economic conditions.
Forward-looking information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. The factors which could cause results or events to differ from current expectations include, but are not limited to: risks associated with the execution of Toronto Hydro's capital and maintenance programs necessary to maintain the performance of aging distribution assets and make required infrastructure improvements, including to deliver a modernized grid and meet electrification requirements to achieve government net-zero greenhouse gas (GHG) emissions targets; risks associated with capital projects; risks associated with changing weather patterns due to climate change and resultant impacts to electricity consumption based on historical seasonal trends, terrorism and pandemics, and Toronto Hydro's limited insurance coverage for losses resulting from those events; risks of changing government policy and regulatory requirements, including in respect of climate change and the energy transition; risks of municipal government activity, including the risk that the City could introduce rules, policies or directives, including those relating to net-zero GHG emissions targets, that could potentially limit Toronto Hydro's ability to meet its business objectives as laid out in its Shareholder Direction principles; risks of Toronto Hydro being unable to retain necessary qualified external contracting forces relating to its capital, maintenance and reactive infrastructure programs; risk that Toronto Hydro is not able to arrange sufficient and cost-effective debt financing to repay maturing debt and to fund capital expenditures and other obligations; risk that Toronto Hydro is unable to maintain its financial health and performance at acceptable levels; risk that insufficient debt or equity financing will be available to meet Toronto Hydro's requirements, objectives or strategic opportunities; risk of downgrades to Toronto Hydro's credit rating; risks related to the timing and extent of changes in prevailing interest rates and discount rates and their effect on future revenue requirements and future post-employment benefit obligations; risks arising from inflation, the course of the economy and other general macroeconomic factors; risk associated with the impairment to Toronto Hydro's image in the community, public confidence or brand; risk associated with Toronto Hydro failing to meet its material compliance obligations under legal and regulatory instruments; and risks associated with market expectations with respect to increases in demand for electricity.
Toronto Hydro cautions the reader that the above list of factors is not exhaustive, and there may be other factors that cause actual events or results to differ materially from those described in forward-looking information. Some of the other factors are discussed more fully under the heading 'Risk Management and Risk Factors' in Toronto Hydro's Management Discussion and Analysis for the years ended December 31, 2024 and 2023.
All forward-looking information in this document is qualified in its entirety by the above cautionary statements. Furthermore, unless otherwise stated, all forward-looking information contained herein is made as of the date hereof, and Toronto Hydro undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise, except as required by law.
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