An energy crunch in California helped B.C. Hydro post record sales of $7.9-billion last year.
But the California windfall has also had a downside because B.C. Hydro has taken a hefty write-off related to $455-million worth of sales to the state for which payment is in doubt.
And declining power prices and low water in B.C. Hydro's reservoirs mean the utility's streak of bonanza profits may be over.
"We definitely don't believe that we will have the same sort of financial year that we had last fiscal year," B.C. Hydro representative Elisha Odowichuk said yesterday.
British Columbia Hydro and Power Authority reported a profit of $859-million, before customer rebates and transfers to a rate stabilization account, up from $545-million in fiscal 2000.
Earlier, B.C. Hydro had said it expected a profit for the year of $1-billion.
Profit after customer rebates and transfers was $446-million, up from $416-million the year before. A customer rebate of $310-million issued in February was deducted from the utility's income.
Yesterday, Hydro announced a $755-million provision for operations, maintenance and administration expenses, up $280-million from the same item the year before. The utility said the provision reflected California receivables - it didn't specify how much - and other factors, including higher pension costs.
B.C. Hydro also cut its electricity trade revenue by an undisclosed amount to reflect the California situation. The annual report says only that a portion of electricity trade revenue was not recognized as revenue "due to the market uncertainty."
B.C. Hydro's export arm, Powerex Corp., is one of about 50 power sellers that California accuses of price-gouging last year. California claims it is owed up to $9-billion (U.S.), while a U.S. federal judge who oversaw failed settlement talks between the state and power sellers this month said $1-billion may be closer to a reasonable amount, and that Californian purchasers may owe more than any refunds due.
B.C. Hydro is owed $289-million, or about $455-million (Canadian), by California purchasing agencies.
During recent settlement talks, B.C. Hydro offered to reduce the amount it is owed by $125-million (U.S.). That offer was rejected.
B.C. Hydro is reluctant to put an exact figure on the amount of its provision related to California accounts because of ongoing government actions, including the U.S.
Federal Energy Regulatory Commission investigation into alleged overcharging, Ms. Odowichuk said.
In its report, B.C. Hydro said, "management has not disclosed the provision amount or range of expected outcomes due to the potentially adverse effect on the collection process."
For fiscal 2002, B.C. Hydro faces a low water year, declining energy prices and price controls in California.
The utility's dams and reservoirs create storage capacity that allows the utility to buy electricity at cheap rates during off-peak hours and sell it when prices are high.
Electricity trade revenue climbed steadily from 1997 through 2000, and soared last year, jumping to $5.5-billion (Canadian) for the year ended March 31, up from $1.1-billion the year before. Total revenue for the year was $7.9-billion, up from $3.5-billion in fiscal 2000.