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OPG releases Q2 2023 results, updates on hydroelectric work

OPG releases Q2 2023 results, updates on hydroelectric work
(photo courtesy Ontario Power Generation)

Ontario Power Generation Inc. (OPG) reported its financial and operating results for the second quarter of 2023 and shared an update on its hydroelectric work.

OPG said it had net income attributable to the shareholder of $418 million, which is down compared to $446 million for the same period last year. The decrease was primarily attributable to lower nuclear electricity generation due to a higher number of planned outages at the Pickering nuclear generating station, and increased compensation expenses. The decrease was partially offset by a higher regulated price for OPG’s nuclear electricity generation previously approved by the Ontario Energy Board (OEB), a lower income tax expense and a gain related to the sale of certain non-core real estate assets.

The increased compensation expenses resulted from the impact on OPG’s collective agreements from the Nov. 29, 2022, Ontario Superior Court’s decision, which found unconstitutional the Protecting a Sustainable Public Sector for Future Generations Act, 2019 that set limits on compensation increases for employees in the Ontario public sector, and the OEB decision on June 27, 2023, denying OPG’s requested regulatory variance account to record the related costs for the OEB’s future review and disposition. On July 17, 2023, OPG filed a motion asking the OEB to review the decision denying the variance account. In response, the OEB has agreed to hear the merits of OPG’s motion, with submissions to be filed during the third quarter of 2023.

Regarding hydroelectric power, OPG said the province’s growth plan includes a request for OPG to optimize current hydroelectric generation and conduct further due diligence on high-potential hydroelectric sites in northern Ontario, while engaging with Indigenous communities. The plan also calls on the IESO to assess the proposed 400 MW Marmora hydroelectric pumped storage facility. This project, a joint venture between OPG and Northland Power Inc., is a first-of-a-kind for Canada and would convert an inactive, open-pit iron ore mine in eastern Ontario into a hydroelectric battery to generate electricity.

“As we work to generate more power from existing hydroelectric facilities, we continue to have discussions with First Nations and communities to further understand the potential for new hydroelectric development in the north and support the IESO’s review of pumped hydro,” said OPG President and Chief Executive Officer Ken Hartwick. “With Ontario’s largest, most diverse clean power portfolio and our talented team of employees, OPG will help power a growing economy while enabling net zero goals and ensuring the participation of Indigenous communities.”

OPG’s Climate Change Plan goals include becoming a net-zero company by 2040 and helping the economy reach net-zero by 2050. By investing in its fleet of 66 hydroelectric stations in Ontario, OPG will ensure these assets continue to deliver clean, reliable electricity to support the province’s growing economy and demands from electrification.