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1
Presentation to S & POctober 27, 2015
Manitoba HydroCorporate Update
Manitoba Hydro 2017/18 & 2018/19 General Rate Application PUB/MH I-60b-Attachment
Available in accessible formats upon request
2
Agenda Corporate Profile
Financial Results
Capital Overview
Power Sale Contracts
Liquidity & Projected Financing
Financial Targets
Rates
3
Corporate Profile
One of the largest integrated electricity and natural gas utilities in Canada.
562,000 electricity customers and275,000 natural gas customers.
$18 billion total assets. $2 billion annual revenues. 5,701 MW generating capability. Among the lowest electricity rates in North America. One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial ResultsFor the Fiscal Years Ended March 31st ($ are in millions)
Actual Actual Forecast Forecast2014 2015 2016 2017
Revenues(net of cost of gas) $2,060 $2,046 $2,121 $2,203Expenses (1,908) (1,943) (2,007) (2,144)Non‐Controlling Interest 22 11 12 8
Net Income $174 $114 $126 $67
Total Assets $15,639 $17,594 $19,100 $22,030Retained Earnings $2,716 $2,830 $2,901 $2,968Financial Ratios:Debt/ Equity 76:24 79:21 81:19 83:17Interest Coverage 1.28 1.17 1.17 1.07
6
Financial Results - IFRSFor the 3 Months Ended June 30th ($ are in millions)
3 Months 3 MonthsJune 2014 June 2015
Revenues $502 $502Expenses (505) (534)Regulatory Deferral Movement 7 0Non‐Controlling Interest 6 3
Net Income $10 ($29)
Total Assets $15,779 $17,929Retained Earnings $2,653 $2,697
7
Capital Overview
8
Major Generation and Transmission Projects
Bipole III (2018/19) $4.65 billion
695 MW Keeyask G.S. (2019/20) $6.50 billion
9
Capital Expenditures (CEF14)
Other Major
Pointe du Bois
Bipole III
Keeyask
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Mill
ions
Fiscal Year Ending
10
Long-Term Export Contracts
11
Future Long-Term Export Contracts
Minnesota Power 250 MW System Participation Sale starting in 2020 (15 years) 133 MW Energy Sale starting in 2020 (20 years)
Northern States Power 125 MW System Power Sale starting in 2021 (4 years) 75 MW System Power Sale starting in 2016 (4 years)
SaskPower 25 MW System Power Sale starting in 2015 (7 years) 100 MW System Power Sale starting in 2020 (20 years)
12
Future Long-Term Export Contracts
Wisconsin Public Service 108 MW System Power Sale starting in 2016 (5 years) 100 MW System Power Sale starting in 2021 (4 years) 100 MW Energy Sale starting in 2025 (4 years) 308 MW System Power Sale dependent on Conawapa 8 MW Energy Sale starting in 2023 (6 years)
NextEra Energy 100 MW Capacity Sale starting in 2016 (2 years)
American Electric Power Energy Partners 79/50 MW Capacity Sale starting in 2016 (4 years)
13
Liquidity & Financing
14
Cash Flow from Operations (IFF14)
-
100
200
300
400
500
600
700
800
900
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($ M
illio
ns)
Current Outlook Base Capital
15
Forecasted New Debt Financing Requirements (IFF14)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000
3200
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($ M
illio
ns)
16
Financial Targets
Equity Ratio
17
0%
5%
10%
15%
20%
25%
30%
IFF14 Target
Capital Coverage Ratio
18
0.00
0.50
1.00
1.50
2.00
2.50
IFF14 Target
Interest Coverage Ratio
19
0.000.200.400.600.801.001.201.401.601.802.002.202.402.60
IFF14 Target
20
Rates
Average Retail Price of ElectricityAverage Retail Price of ElectricityTop 10 Provinces/ States in North America
Source: US Dept of Energy (December 2014) & Edison Electric Survey (January 2015)(Exchange rate as of September 23, 2015: 1 US$ = 1.3278 Cdn)
21
6.306.61
8.849.05
9.39 9.55 9.57 9.60 9.60 9.61
5.0
6.0
7.0
8.0
9.0
10.0
Cents /
kW.h (C
anad
ian)
Utility Rate Changes
22
23
Domestic Rate Strategy Recent PUB Board Orders
On July 24, 2015 the PUB issued Orders 73/15 and 77/15 which approved a 3.95% across-the-board rate increase for all customer classes effective August 1, 2015
On January 16, 2015, Manitoba Hydro filed its 2015/16 & 2016/17 General Rate Application with the PUB, in which Manitoba Hydro requested approval, on an interim basis, of a 3.95% across-the-board rate increase effective April 1, 2015 and another effective April 1, 2016.
24
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
25
Questions?
1
Presentation to Moody’sJune 17, 2015
Manitoba HydroCorporate Update
2
Agenda Corporate Profile
Financial Results
Capital Overview
Power Sale Contracts
Liquidity & Projected Financing
Financial Targets
Rates
3
Corporate Profile
One of the largest integrated electricity and natural gas utilities in Canada.
556,000 electricity customers and272,000 natural gas customers.
$16 billion total assets. $2 billion annual revenues. 5,725 MW generating capability. Among the lowest electricity rates in North America. One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial ResultsFor the Fiscal Years Ended March 31st ($ are in millions)
Actual Preliminary Forecast Forecast2014 2015 2016 2017
Revenues(net of cost of gas) $2,035 $2,031 $2,121 $2,203Expenses (1,883) (1,928) (2,007) (2,144)Non‐Controlling Interest 22 11 12 8
Net Income $174 $114 $126 $67
Total Assets $15,639 $17,585 $19,100 $22,030Retained Earnings $2,716 $2,830 $2,901 $2,968Financial Ratios:Debt/ Equity 76:24 79:21 81:19 83:17Interest Coverage 1.28 1.17 1.17 1.07
6
Capital Overview
7
Major Generation and Transmission Projects
Bipole III (2018/19) $4.65 billion
695 MW Keeyask G.S. (2019/20) $6.50 billion
8
Capital Expenditures (CEF14)
Other Major
Pointe du Bois
Bipole III
Keeyask
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Mill
ions
Fiscal Year Ending
9
Long-Term Export Contracts
10
Future Long-Term Export Contracts
Minnesota Power 250 MW System Participation Sale starting in 2020 (15 years) 133 MW Energy Sale starting in 2020 (20 years)
Northern States Power 125 MW System Power Sale starting in 2021 (4 years) 75 MW System Power Sale starting in 2016 (4 years)
SaskPower 25 MW System Power Sale starting in 2015 (7 years)
11
Future Long-Term Export Contracts
Wisconsin Public Service 108 MW System Power Sale starting in 2016 (5 years) 100 MW System Power Sale starting in 2021 (4 years) 308 MW System Power Sale starting in 2027 (9 years) 8 MW Energy Sale starting in 2023 (6 years)
12
Liquidity & Financing
13
Cash Flow from Operations (IFF14)
-
100
200
300
400
500
600
700
800
900
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($ M
illio
ns)
Current Outlook Base Capital
14
Forecasted New Debt Financing Requirements (IFF14)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000
3200
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($ M
illio
ns)
15
Financial Targets
Equity Ratio
16
0%
5%
10%
15%
20%
25%
30%
IFF14 Target
Capital Coverage Ratio
17
0.00
0.50
1.00
1.50
2.00
2.50
IFF14 Target
Interest Coverage Ratio
18
0.000.200.400.600.801.001.201.401.601.802.002.202.402.60
IFF14 Target
19
Rates
Average Retail Price of ElectricityAverage Retail Price of ElectricityTop 10 Provinces/ States in North America
Source: US Dept of Energy (December 2014) & Edison Electric Survey (January 2015)(Exchange rate as of March 31,2015: 1 US$ = 1.2683 Cdn)
20
6.306.61
8.849.05
9.39 9.55 9.57 9.60 9.60 9.61
5.0
6.0
7.0
8.0
9.0
10.0
Cents /
kW.h (C
anad
ian)
Utility Rate Changes
21
22
Domestic Rate Strategy Recent PUB Board Orders
On May 7, 2014, the PUB issued Order 51/14 with respect to Manitoba Hydro's Application for Interim Rates Effective May 1, 2014 approving on an interim basis a 2.75% across-the-board rate increase for all customer classes.
On January 16, 2015, Manitoba Hydro filed its 2015/16 & 2016/17 General Rate Application with the PUB, in which Manitoba Hydro is requesting approval, on an interim basis, of a 3.95% across-the-board rate increase effective April 1, 2015 and another effective April 1, 2016.
23
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
24
Questions?
1
Presentation to Moody’s July 13, 2016
Manitoba Hydro Corporate Update
2
Agenda
Corporate Profile Financial Results Capital Overview Power Sale Contracts Liquidity & Projected Financing Financial Targets Rates
3
Corporate Profile
One of the largest integrated electricity and natural gas utilities in Canada.
568,000 electricity customers and 277,000 natural gas customers.
$20 billion total assets. $2 billion annual revenues. 5,680 MW generating capability. Among the lowest electricity rates in North America. One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial Results - IFRS For the Fiscal Years Ended March 31st ($ are in millions)
Preliminary Preliminary Forecast Forecast2015 2016 2017 2018
Revenues $2,316 $2,258 $2,436 $2,511Expenses (2,229) (2,266) (2,403) (2,441)Net Movement in Regulatory Balances 38 47 0 0Non-Controlling Interest 11 10 9 4
Net Income $136 $49 $42 $74
Total Assets and Regulatory Deferral Balance $17,567 $19,780 $23,360 $26,286Retained Earnings $2,779 $2,828 $2,793 $2,867Financial Ratios:Debt/ Equity 82:18 83:17 86:14 85:15EBITDA Interest Coverage 1.73 1.55 1.55 1.55
6
Capital Overview
7
Major Generation and Transmission Projects
Bipole III (2018/19) $4.65 billion 695 MW Keeyask G.S. (2019/20) $6.50 billion
8
Capital Expenditures (CEF15)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mill
ions
of D
olla
rs
Fiscal Year Ending
Electric Gas Other MNG&T Wuskwatim Keeyask Conawapa Bipole III DSM Pointe Du Bois Pointe Du Bois
9
Long-Term Export Contracts
10
Future Long-Term Export Contracts Minnesota Municipal Power Agency
60 MW Energy Sale starting in 2017 (5 years)
Minnesota Power
250 MW System Participation Sale starting in 2020 (15 years) 133 MW Energy Sale starting in 2020 (20 years) 50 MW Capacity Sale starting in 2018 (2 years)
Northern States Power 125 MW System Power Sale starting in 2021 (4 years)
11
Future Long-Term Export Contracts
SaskPower 100 MW System Power Sale starting in 2020 (20 years)
Wisconsin Public Service 100 MW System Power Sale starting in 2021 (4 years)
(with an option to extend to 2027) 100 MW Energy Sale starting in 2025 (4 years) 308 MW System Power Sale TBD (Ending in 2036) 8 MW Energy Sale starting in 2023 (6 years)
Basin Electric Power 50 MW Capacity Sale starting in 2018 (2 years)
12
Liquidity & Financing
13
Cash Flow from Operations (IFF15)
-
100
200
300
400
500
600
700
800
900
1,000
1,100
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
($ M
illio
ns)
Current Outlook Base Capital
14
Forecasted New Debt Financing Requirements (IFF15)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
($ M
illio
ns)
15
Financial Targets
Equity Ratio
16
0%
5%
10%
15%
20%
25%
30%
35%
40%
IFF15 Target
Capital Coverage Ratio
17
0.00
0.50
1.00
1.50
2.00
2.50
3.00
IFF15 Target
Interest Coverage Ratio
18
0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25
IFF15 Target
19
Rates
Average Retail Price of Electricity Average Retail Price of Electricity
Top 10 Provinces/ States in North America
Source: US Dept of Energy (December 2015) & Edison Electric Survey (January 2016) (Exchange rate as of May 4,2016: 1 US$ = 1.2870 Cdn)
20
6.456.81
8.26
9.02 9.03
9.83 9.84 10.03 10.03
10.81
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
Cent
s / k
W.h
(Can
adia
n)
Utility Rate Changes
21
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cumulative
Current Rate
Index*
Manitoba Hydro 2.25% 5.00% 2.90% 2.80% 2.00% 4.40% 3.50% 2.75% 3.95% 3.36% 38.2% 100
Hydro Quebec 1.90% 2.90% 1.20% 0.35% -0.40% -0.50% 2.41% 4.30% 2.90% 0.70% 16.8% 106
BC Hydro 2.10% 0.83% 9.28% 7.29% 7.77% 7.07% 1.44% 9.00% 6.00% 4.00% 69.8% 129
SaskPower 4.20% 0.00% 8.50% 4.50% 0.00% 0.00% 4.90% 5.50% 5.00% 5.00% (proposed)
44.2% 152
New Brunswick Power
5.90% 3.00% 3.00% 3.00% 0.00% 0.00% 2.00% 2.00% 1.60% 2.00% (proposed)
24.8% 159
Nova Scotia Power
3.80% 0.00% 9.30% 0.00% 6.05% 8.70% 3.00% 3.00% 0.00% -1.00% 37.4% 207
* This index is based on the Edison Electric Institute Survey and compares the average price per kWh for the various utilities. Manitoba Hydro's average price is $0.0645/kWh in Canadian dollars. The Survey is based on 12 months data ending December 2015. SaskPower average price/kWh is based on their 2015 annual report.
22
Domestic Rate Strategy Recent PUB Board Orders
On July 24, 2015, the PUB issued Orders 73/15 and 77/15 with respect to Manitoba Hydro's 2015/16 & 2016/17 General Rate Application approving a 3.95% across-the-board rate increase for all customer classes effective August 1, 2015.
On April 28, 2016, the PUB issued Order 59/16 with respect to Manitoba Hydro’s Supplemental Filing for Interim Electric Rates effective April 1, 2016 approving a 3.36% interim increase; Manitoba Hydro had requested a 3.95% across-the-board rate increase.
23
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
24
Questions?
1
Presentation to Moody’sJuly 20, 2017
Manitoba HydroCorporate Update
2
Agenda Corporate Profile
Financial Results
Capital Overview
Power Sale Contracts
Liquidity & Projected Financing
Financial Targets
Rates
3
Corporate Profile
One of the largest integrated electricity and natural gas utilities in Canada.
573,000 electricity customers and279,000 natural gas customers.
$22 billion total assets. $2 billion annual revenues. 5,680 MW generating capability. Among the lowest electricity rates in North America. One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial Results - IFRSFor the Fiscal Years Ended March 31st ($ are in millions)
Preliminary Forecast Forecast
2016 2017 2018 2019
Revenues $2,258 $2,327 $2,512 $2,780Expenses (2,266) (2,323) (2,425) (2,578)Net Movement in Regulatory Balances 47 55 93 109Non‐Controlling Interest 10 12 8 1
Net Income $49 $71 $188 $312
Total Assets and Regulatory Deferral Balance $19,779 $22,338 $25,533 $28,366Retained Earnings $2,828 $2,899 $3,087 $3,399Financial Ratios:Debt/ Equity 83:17 84:16 85:15 85:15EBITDA Interest Coverage 1.57 1.54 1.66 1.83
6
Capital Overview
7
Major Generation and Transmission Projects
Bipole III (2018/19) $5.04 billion
695 MW Keeyask G.S. (2021/22) $8.70 billion
8
Capital Expenditures (CEF16)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mill
ions
of D
olla
rs
Fiscal Year Ending
Electric Gas Other MNG&T Wuskwatim Keeyask Conawapa Bipole III Pointe Du Bois Electric DSM Gas DSM
9
Long-Term Export Contracts
10
Future Long-Term Export Contracts Minnesota Power
250 MW System Participation Sale starting in 2020 (15 years) 133 MW Energy Sale starting in 2020 (20 years)
Northern States Power 125 MW System Power Sale starting in 2021 (4 years)
11
Future Long-Term Export Contracts
SaskPower 100 MW System Power Sale starting in 2020 (20 years)
Wisconsin Public Service 100 MW System Power Sale starting in 2021 (4 years) 100 MW Energy Sale starting in 2025 (4 years) 308 MW System Power Sale TBD (Ending in 2036) 8 MW Energy Sale starting in 2023 or 2021 (6 years)
Basin Electric Power 50 MW Capacity Sale starting in 2018 (2 years) 50 MW Capacity Sale starting in 2020 (1 year)
12
Liquidity & Financing
13
Cash Flow from Operations (IFF16 Update)
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
($ M
illio
ns)
Current Outlook Base Capital
14
Forecasted New Debt Financing Requirements (IFF16 Update)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
($ M
illio
ns)
15
Financial Targets
Equity Ratio
16
0%
5%
10%
15%
20%
25%
30%
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
IFF16 Update Target
Capital Coverage Ratio
17
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
IFF16 Update Target
EBITDA Interest Coverage Ratio
18
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
IFF16 Update Target
19
Rates
Average Retail Price of ElectricityAverage Retail Price of ElectricityTop 10 Provinces/ States in North America
Source: US Dept of Energy (December 2016) & Edison Electric Survey (January 2017)(Exchange rate as of April 26 ,2017: 1 US$ = 1.3592 Cdn)
20
6.456.84
8.56
10.09 10.1410.45 10.48 10.51 10.64 10.68
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
Cents /
kW.h (C
anadian)
Utility Rate Changes
21
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cumulative
Current Rate
Index*
Manitoba Hydro 2.25% 5.00% 2.90% 2.80% 2.00% 4.40% 3.50% 2.75% 3.95% 3.36% 7.90% 49.1% 100
Hydro Quebec1.90% 2.90% 1.20% 0.35% ‐0.40% ‐0.50% 2.41% 4.30% 2.90% 0.70% 0.70% 17.6% 106
BC Hydro 2.10% 0.83% 9.28% 7.29% 7.77% 7.07% 1.44% 9.00% 6.00% 4.00% 3.50% 75.7% 132
SaskPower4.20% 0.00% 8.50% 4.50% 0.00% 0.00% 4.90% 5.50% 5.00% 5.00% 3.50% 49.2% 156
New Brunswick Power 5.90% 3.00% 3.00% 3.00% 0.00% 0.00% 2.00% 2.00% 1.60% 1.66% 1.77% 26.6% 162Nova Scotia Power 3.80% 0.00% 9.30% 0.00% 6.05% 8.70% 3.00% 3.00% 0.00% ‐1.00% 1.50% 39.4% 205
* This index is based on the Edison Electric Institute Survey and compares the average price per kWh for the various utilities. Manitoba Hydro's average price is $0.0648/kWh in Canadian dollars based on 12 months data ending December 2016.
Residential Monthly Bill ComparisonAverage Retail Price of ElectricityIn 2018/19 – Residential Consumption 1,000 kWh/ month
22
$181$169
$167
$164
$163$132
$116
$114$108
$101
$72
$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200
Toronto
Ottawa
Charlottetown
Halifax
Regina
Moncton
St. John's
Vancouver
Calgary
Winnipeg
Montreal
Monthly Bill Comparison in 2 years (2018/19)Residential Consumption: 1,000 kWh / month
23
Domestic Rate Strategy Recent PUB Board Orders
On May 5, 2017, Manitoba Hydro filed its 2017/18 & 2018/19 General Rate Application with the PUB. In this filing, Manitoba Hydro is requesting approval of a 7.9% rate increase effective August 1, 2017 and a further 7.9% rate increase effective April 1, 2018.
On July 11, 2017, Manitoba Hydro filed an update to its financial forecast for electric operations as part of the 2017/18 & 2018/19 General Rate Application with the PUB.
24
Domestic Rate Strategy Recent PUB Board Orders
On May 17, 2016, the PUB issued Order 68/16 approving a 3.36% electricity rate increase for all customer classes effective August 1, 2016; Manitoba Hydro had requested a 3.95% across-the-board rate increase.
25
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
26
Questions?
1
Presentation to DBRSNovember 16, 2015
Manitoba HydroCorporate Update
2
Agenda Corporate Profile
Financial Results
Capital Overview
Power Sale Contracts
Liquidity & Projected Financing
Financial Targets
Rates
3
Corporate Profile
One of the largest integrated electricity and natural gas utilities in Canada.
562,000 electricity customers and275,000 natural gas customers.
$18 billion total assets. $2 billion annual revenues. 5,701 MW generating capability. Among the lowest electricity rates in North America. One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial ResultsFor the Fiscal Years Ended March 31st ($ are in millions)
Actual Actual Forecast Forecast2014 2015 2016 2017
Revenues(net of cost of gas) $2,060 $2,046 $2,121 $2,203Expenses (1,908) (1,943) (2,007) (2,144)Non‐Controlling Interest 22 11 12 8
Net Income $174 $114 $126 $67
Total Assets $15,639 $17,594 $19,100 $22,030Retained Earnings $2,716 $2,830 $2,901 $2,968Financial Ratios:Debt/ Equity 76:24 79:21 81:19 83:17Interest Coverage 1.28 1.17 1.17 1.07
6
Financial Results - IFRSFor the 3 Months Ended June 30th ($ are in millions)
3 Months 3 MonthsJune 2014 June 2015
Revenues $502 $502Expenses (505) (534)Regulatory Deferral Movement 7 0Non‐Controlling Interest 6 3
Net Income $10 ($29)
Total Assets $15,779 $17,929Retained Earnings $2,653 $2,697
7
Capital Overview
8
Major Generation and Transmission Projects
Bipole III (2018/19) $4.65 billion
695 MW Keeyask G.S. (2019/20) $6.50 billion
9
Capital Expenditures (CEF14)
Other Major
Pointe du Bois
Bipole III
Keeyask
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Mill
ions
Fiscal Year Ending
10
Long-Term Export Contracts
11
Future Long-Term Export Contracts
Minnesota Power 250 MW System Participation Sale starting in 2020 (15 years) 133 MW Energy Sale starting in 2020 (20 years)
Northern States Power 125 MW System Power Sale starting in 2021 (4 years) 75 MW System Power Sale starting in 2016 (4 years)
SaskPower 25 MW System Power Sale starting in 2015 (7 years) 100 MW System Power Sale starting in 2020 (20 years)
12
Future Long-Term Export Contracts
Wisconsin Public Service 108 MW System Power Sale starting in 2016 (5 years) 100 MW System Power Sale starting in 2021 (4 years) 100 MW Energy Sale starting in 2025 (4 years) 308 MW System Power Sale dependent on Conawapa 8 MW Energy Sale starting in 2023 (6 years)
NextEra Energy 100 MW Capacity Sale starting in 2016 (2 years)
American Electric Power Energy Partners 79/50 MW Capacity Sale starting in 2016 (4 years)
13
Liquidity & Financing
14
Cash Flow from Operations (IFF14)
-
100
200
300
400
500
600
700
800
900
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($ M
illio
ns)
Current Outlook Base Capital
15
Forecasted New Debt Financing Requirements (IFF14)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000
3200
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($ M
illio
ns)
16
Financial Targets
Equity Ratio
17
0%
5%
10%
15%
20%
25%
30%
IFF14 Target
Capital Coverage Ratio
18
0.00
0.50
1.00
1.50
2.00
2.50
IFF14 Target
Interest Coverage Ratio
19
0.000.200.400.600.801.001.201.401.601.802.002.202.402.60
IFF14 Target
20
Rates
Average Retail Price of ElectricityAverage Retail Price of ElectricityTop 10 Provinces/ States in North America
Source: US Dept of Energy (December 2014) & Edison Electric Survey (January 2015)(Exchange rate as of September 23, 2015: 1 US$ = 1.3278 Cdn)
21
6.306.61
8.849.05
9.39 9.55 9.57 9.60 9.60 9.61
5.0
6.0
7.0
8.0
9.0
10.0
Cents /
kW.h (C
anad
ian)
Utility Rate Changes
22
23
Domestic Rate Strategy Recent PUB Board Orders
On July 24, 2015 the PUB issued Orders 73/15 and 77/15 which approved a 3.95% across-the-board rate increase for all customer classes effective August 1, 2015
On January 16, 2015, Manitoba Hydro filed its 2015/16 & 2016/17 General Rate Application with the PUB, in which Manitoba Hydro requested approval, on an interim basis, of a 3.95% across-the-board rate increase effective April 1, 2015 and another effective April 1, 2016.
24
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
25
Questions?
1
Presentation to DBRS
August 22,2016
Manitoba Hydro Corporate Update
2
Agenda
Corporate Profile Financial Results Capital Overview Power Sale Contracts Liquidity & Projected Financing Financial Targets Rates
3
Corporate Profile
One of the largest integrated electricity and
natural gas utilities in Canada.
568,000 electricity customers and 277,000 natural gas customers.
$20 billion total assets.
$2 billion annual revenues.
5,680 MW generating capability.
Among the lowest electricity rates in North America.
One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial Results - IFRS For the Fiscal Years Ended March 31st ($ are in millions)
Actual Actual Forecast Forecast
2015 2016 2017 2018
Revenues $2,316 $2,258 $2,436 $2,511
Expenses (2,229) (2,266) (2,403) (2,441)
Net Movement in Regulatory Balances 38 47 0 0
Non-Controlling Interest 11 10 9 4
Net Income $136 $49 $42 $74
Total Assets and Regulatory Deferral Balance $17,567 $19,780 $23,360 $26,286
Retained Earnings $2,779 $2,828 $2,793 $2,867
Financial Ratios:
Debt/ Equity 82:18 83:17 86:14 85:15
EBITDA Interest Coverage 1.73 1.55 1.55 1.55
6
Capital Overview
7
Major Generation and Transmission Projects
Bipole III (2018/19) $4.65 billion 695 MW Keeyask G.S. (2019/20) $6.50 billion
8
Capital Expenditures (CEF15)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mill
ions o
f D
olla
rs
Fiscal Year Ending
Electric Gas Other MNG&T Wuskwatim Keeyask Conawapa Bipole III DSM Pointe Du Bois Pointe Du Bois
9
Long-Term Export Contracts
10
Future Long-Term Export Contracts
Minnesota Municipal Power Agency
60 MW Energy Sale starting in 2017 (5 years)
Minnesota Power
250 MW System Participation Sale starting in 2020 (15 years)
133 MW Energy Sale starting in 2020 (20 years)
50 MW Capacity Sale starting in 2018 (2 years)
Northern States Power
125 MW System Power Sale starting in 2021 (4 years)
11
Future Long-Term Export Contracts
SaskPower
100 MW System Power Sale starting in 2020 (20 years)
Wisconsin Public Service
100 MW System Power Sale starting in 2021 (4 years)
(with an option to extend to 2027)
100 MW Energy Sale starting in 2025 (4 years)
308 MW System Power Sale TBD (Ending in 2036)
8 MW Energy Sale starting in 2023 (6 years)
Basin Electric Power
50 MW Capacity Sale starting in 2018 (2 years)
12
Liquidity & Financing
13
Cash Flow from Operations (IFF15)
-
100
200
300
400
500
600
700
800
900
1,000
1,100
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
($ M
illions)
Current Outlook Base Capital
14
Forecasted New Debt Financing Requirements (IFF15)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
($ M
illions)
15
Financial Targets
Equity Ratio
16
0%
5%
10%
15%
20%
25%
30%
35%
40%
IFF15 Target
Capital Coverage Ratio
17
0.00
0.50
1.00
1.50
2.00
2.50
3.00
IFF15 Target
Interest Coverage Ratio
18
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
IFF15 Target
19
Rates
Average Retail Price of Electricity Average Retail Price of Electricity
Top 10 Provinces/ States in North America
Source: US Dept of Energy (December 2015) & Edison Electric Survey (January 2016)
(Exchange rate as of May 4,2016: 1 US$ = 1.2870 Cdn)
20
6.456.81
8.26
9.02 9.03
9.83 9.8410.03 10.03
10.81
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
Ce
nts
/ k
W.h
(C
anad
ian
)
Utility Rate Changes
21
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cumulative
Current
Rate
Index*
Manitoba Hydro 2.25% 5.00% 2.90% 2.80% 2.00% 4.40% 3.50% 2.75% 3.95% 3.36% 38.2% 100
Hydro Quebec 1.90% 2.90% 1.20% 0.35% -0.40% -0.50% 2.41% 4.30% 2.90% 0.70% 16.8% 106
BC Hydro 2.10% 0.83% 9.28% 7.29% 7.77% 7.07% 1.44% 9.00% 6.00% 4.00% 69.8% 129
SaskPower 4.20% 0.00% 8.50% 4.50% 0.00% 0.00% 4.90% 5.50% 5.00% 5.00%
(proposed) 44.2% 152
New Brunswick
Power 5.90% 3.00% 3.00% 3.00% 0.00% 0.00% 2.00% 2.00% 1.60%
2.00% (proposed)
24.8% 159
Nova Scotia
Power 3.80% 0.00% 9.30% 0.00% 6.05% 8.70% 3.00% 3.00% 0.00% -1.00% 37.4% 207
* This index is based on the Edison Electric Institute Survey and compares the average price per kWh for the various utilities.
Manitoba Hydro's average price is $0.0645/kWh in Canadian dollars. The Survey is based on 12 months data ending December 2015.
SaskPower average price/kWh is based on their 2015 annual report.
22
Domestic Rate Strategy Recent PUB Board Orders
On July 24, 2015, the PUB issued Orders 73/15 and 77/15 with respect to Manitoba Hydro's 2015/16 & 2016/17 General Rate Application approving a 3.95% across-the-board rate increase for all customer classes effective August 1, 2015.
On April 28, 2016, the PUB issued Order 59/16 with respect to Manitoba Hydro’s Supplemental Filing for Interim Electric Rates effective April 1, 2016 approving a 3.36% interim increase; Manitoba Hydro had requested a 3.95% across-the-board rate increase.
23
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
24
Questions?
1
Presentation to DBRSJune 8, 2017
Manitoba HydroCorporate Update
2
Agenda Corporate Profile
Financial Results
Capital Overview
Power Sale Contracts
Liquidity & Projected Financing
Financial Targets
Rates
3
Corporate Profile
One of the largest integrated electricity and natural gas utilities in Canada.
573,000 electricity customers and279,000 natural gas customers.
$22 billion total assets. $2 billion annual revenues. 5,680 MW generating capability. Among the lowest electricity rates in North America. One of Canada’s “Top 100” Employers.
4
Financial Results
5
Financial Results - IFRSFor the Fiscal Years Ended March 31st ($ are in millions)
Preliminary Forecast Forecast2016 2017 2018 2019
Revenues $2,258 $2,330 $2,442 $2,736Expenses (2,266) (2,323) (2,417) (2,585)Net Movement in Regulatory Balances 47 55 88 100Non‐Controlling Interest 10 12 9 1
Net Income $49 $74 $122 $252
Total Assets and Regulatory Deferral Balance $19,780 $22,341 $25,424 $28,390Retained Earnings $2,828 $2,902 $2,993 $3,245Financial Ratios:Debt/ Equity 83:17 84:16 85:15 85:15EBITDA Interest Coverage 1.55 1.51 1.60 1.79
6
Capital Overview
7
Major Generation and Transmission Projects
Bipole III (2018/19) $5.04 billion
695 MW Keeyask G.S. (2021/22) $8.70 billion
8
Capital Expenditures (CEF16)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mill
ions
of D
olla
rs
Fiscal Year Ending
Electric Gas Other MNG&T Wuskwatim Keeyask Conawapa Bipole III Pointe Du Bois Electric DSM Gas DSM
9
Long-Term Export Contracts
10
Future Long-Term Export Contracts Minnesota Power
250 MW System Participation Sale starting in 2020 (15 years) 133 MW Energy Sale starting in 2020 (20 years)
Northern States Power 125 MW System Power Sale starting in 2021 (4 years)
11
Future Long-Term Export Contracts
SaskPower 100 MW System Power Sale starting in 2020 (20 years)
Wisconsin Public Service 100 MW System Power Sale starting in 2021 (4 years) 100 MW Energy Sale starting in 2025 (4 years) 308 MW System Power Sale TBD (Ending in 2036) 8 MW Energy Sale starting in 2023 or 2021 (6 years)
Basin Electric Power 50 MW Capacity Sale starting in 2018 (2 years) 50 MW Capacity Sale starting in 2020 (1 year)
12
Liquidity & Financing
13
Cash Flow from Operations (IFF16)
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
($ M
illio
ns)
Current Outlook Base Capital
14
Forecasted New Debt Financing Requirements (IFF16)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
($ M
illio
ns)
15
Financial Targets
Equity Ratio
16
0%
5%
10%
15%
20%
25%
30%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
IFF16 Target
Capital Coverage Ratio
17
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
IFF16 Target
EBITDA Interest Coverage Ratio
18
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
IFF16 Target
19
Rates
Average Retail Price of ElectricityAverage Retail Price of ElectricityTop 10 Provinces/ States in North America
Source: US Dept of Energy (December 2016) & Edison Electric Survey (January 2017)(Exchange rate as of April 26 ,2017: 1 US$ = 1.3592 Cdn)
20
6.456.84
8.56
10.09 10.1410.45 10.48 10.51 10.64 10.68
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
Cents /
kW.h (C
anadian)
Utility Rate Changes
21
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cumulative
Current Rate
Index*
Manitoba Hydro 2.25% 5.00% 2.90% 2.80% 2.00% 4.40% 3.50% 2.75% 3.95% 3.36% 7.90% 49.1% 100
Hydro Quebec1.90% 2.90% 1.20% 0.35% ‐0.40% ‐0.50% 2.41% 4.30% 2.90% 0.70% 0.70% 17.6% 106
BC Hydro 2.10% 0.83% 9.28% 7.29% 7.77% 7.07% 1.44% 9.00% 6.00% 4.00% 3.50% 75.7% 132
SaskPower4.20% 0.00% 8.50% 4.50% 0.00% 0.00% 4.90% 5.50% 5.00% 5.00% 3.50% 49.2% 156
New Brunswick Power 5.90% 3.00% 3.00% 3.00% 0.00% 0.00% 2.00% 2.00% 1.60% 1.66% 1.77% 26.6% 162Nova Scotia Power 3.80% 0.00% 9.30% 0.00% 6.05% 8.70% 3.00% 3.00% 0.00% ‐1.00% 1.50% 39.4% 205
* This index is based on the Edison Electric Institute Survey and compares the average price per kWh for the various utilities. Manitoba Hydro's average price is $0.0648/kWh in Canadian dollars based on 12 months data ending December 2016.
Residential Monthly Bill ComparisonAverage Retail Price of ElectricityIn 2018/19 – Residential Consumption 1,000 kWh/ month
22
$181$169
$167
$164
$163$132
$116
$114$108
$101
$72
$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200
Toronto
Ottawa
Charlottetown
Halifax
Regina
Moncton
St. John's
Vancouver
Calgary
Winnipeg
Montreal
Monthly Bill Comparison in 2 years (2018/19)Residential Consumption: 1,000 kWh / month
23
Domestic Rate Strategy Recent PUB Board Orders
On May 5, 2017, Manitoba Hydro filed its 2017/18 & 2018/19 General Rate Application with the PUB. In this filing, Manitoba Hydro is requesting approval of a 7.9% rate increase effective August 1, 2017 and a further 7.9% rate increase effective April 1, 2018.
On May 17, 2016, the PUB issued Order 68/16 approving a 3.36% electricity rate increase for all customer classes effective August 1, 2016; Manitoba Hydro had requested a 3.95% across-the-board rate increase.
24
Domestic Rate Strategy Future Plans
MH will continue to request domestic rate increases in support of the Finance goal in the Corporate Strategic Plan to “maintain a strong financial structure.”
25
Questions?
top related