Nalcor Energy releases first quarter financial results

May 28th, 2019

May 28, 2019, St. John’s, NL – Nalcor Energy reported its financial results for the first quarter of 2019.

“Nalcor Energy’s financial results for the quarter continue to be strong. We remain focused on a safe and strong finish of the Muskrat Falls Project. Recently, the Project reached two years without a lost time injury. This accomplishment is outstanding and reflects the exceptional work that the entire team is doing to ensure an incident and injury free workplace. As we move closer to first power, we are taking all reasonable measures to manage costs and minimize the impact on electricity rates for our customers.”

Stan Marshall, President and CEO

First Quarter Financial Highlights

  • Profit for the three months ended March 31, 2019, was $92 million compared to $78 million for the same period in 2018, an increase of $14 million. Key drivers of the increase include a reduction in energy supply costs primarily due to importing off-island energy and additional revenues from interim rates in Newfoundland and Labrador Hydro (Hydro) Regulated; along with higher revenues from increased production and lower exploration and evaluation costs in Oil and Gas. These favourable variances were partially offset by a reduction in Energy Trading revenue due to lower volumes available for export, and higher interest on long-term debt in Hydro Regulated.
  • The increase profit resulting from lower energy supply costs is temporary and anticipated to reverse later in 2019, upon implementation of the final 2017 General Rate Application Order.
  • Capital expenditures for the three months ended March 31, 2019, excluding the Maritime Link, were $284 million compared to $304 million for the same period in 2018, a decrease of $20 million. The decrease was driven by lower expenditures in Hydro Regulated and a decrease in expenditures for the transmission component of the Lower Churchill Project, which were partially offset by an increase in capital expenditures for the development of Muskrat Falls.
  • Total assets for the quarter of $18.9 billion compared to $18.8 billion at December 31, 2018.
  • Debt to capital for the quarter of 64 per cent is comparable to December 31, 2018.

Other Recent Developments

Significant progress continues to be made across all areas of the Muskrat Falls Project with overall project construction now reaching over 97 per cent complete.

On the transmission side of the project, commissioning and testing continued, bringing power from Labrador to the island adding to winter reliability and savings for Hydro customers. Work also continued throughout the first quarter with our contractor General Electric to ensure their success in the development and integration of the software required to operate the Labrador-Island-Link.

On the generation side of the project, in March, the North Dam – the third and final dam required for the generating facility – was completed and is now in operation. Also in March, the intake area between the river and the upstream side of the powerhouse was filled with water. Work is ongoing on each of the four units in the powerhouse. In Unit 1, the turbine has recently been installed and the generator will soon be lowered into the unit. The turbine and generator parts are being assembled and installed for Units 2 and 3 while civil work continues on Unit 4.

At Nalcor’s regulated operations, Hydro, Jennifer Williams was appointed as Hydro’s new President in February.

On February 20, the island portion of the province experienced an historic peak electricity usage of 1,784 megawatts. Hydro met this peak without issue with well over 400 megawatts of additional operating reserve. Hydro experienced strong winter performance at its hydraulic and thermal generating assets, specifically at the aging Holyrood Thermal Generating Station, where units operated reliably throughout the winter period.

Hydro also completed its final submission for the 2017 General Rate Application in February. An Order from the Board of Commissioners of Public Utilities (Board) was recently received in May. Over the coming weeks, Hydro will carefully review the Order and then submit a compliance filing to the Board that provides updated information requested and proposed changes in electricity rates for customers. The Board will then review that filing and make a final decision about 2019 electricity rates. The final decision is expected this fall.

In March, Hydro received approval from the Board on the transmission interconnection project for the Happy Valley – Goose Bay area. This transmission project will see the construction of a new 138 kilovolt line from the Muskrat Falls terminal station to Goose Bay, increasing reliability and capacity for the area. The project will span two years, bringing added reliability this coming winter and further enhancements by winter 2021. The cost of the project is $20 million.

Work continues on the partial transition of the Oil and Gas business and Bull Arm Fabrication to a stand-alone Crown corporation. In March 2019, legislation was passed to enact a stand-alone Oil and Gas Crown corporation. As part of the transition plan, Bull Arm Fabrication will transition as a subsidiary of the new entity. Nalcor will retain its existing oil and gas equity interests as well as the profits from these investments.

A copy of the quarterly report and a recording of the webcast will be available at


Media Contact:

Deanne Fisher

Director, Corporate Affairs and Corporate Planning

t: 709.733.5299 c: 709.697.3418 e: