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Comparable EBITDA from Bruce Power decreased by $23 million for the three months ended March 31, 2017 compared to the same period in 2016 mainly due to lower gains from contracting activities and higher interest expense, partially offset by higher volumes resulting from fewer outage days.
Planned outage work which commenced on Unit 5 in February 2017 is scheduled to be completed in second quarter 2017. Planned outages for Units 3 and 6 are scheduled to occur in the second half of 2017. The overall average plant availability percentage in 2017 is expected to be approximately 90 per cent.
NATURAL GAS STORAGE AND OTHER
Comparable EBITDA for Natural Gas Storage and Other increased by $12 million for the three months ended March 31, 2017 compared to the same period in 2016 mainly due to increased third party storage revenues as a result of higher realized natural gas storage price spreads.
U.S. POWER (monetization expected to close in the first half of 2017)
The following are the components of comparable EBITDA and comparable EBIT.
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three months ended March 31 ------------------------------ (unaudited - millions of US$) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Revenue(1) Power(2) 530 418 Capacity 42 62 ---------------------------------------------------------------------------- 572 480 Commodity purchases resold (409) (305) Plant operating costs and other(3) (109) (100) ---------------------------------------------------------------------------- Comparable EBITDA(1) 54 75 Depreciation and amortization(4) - (31) ---------------------------------------------------------------------------- Comparable EBIT(1) 54 44 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) Includes Ironwood commencing February 1, 2016. (2) Includes the realized gains and losses from financial derivatives used to manage U.S. Power's assets which are presented on a net basis in Power revenues. The unrealized gains and losses from financial derivatives are excluded to arrive at comparable EBITDA. (3) Includes the cost of fuel consumed in generation. (4) U.S. Power assets held for sale are no longer being depreciated effective November 2016./T/
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Sales volumes and plant availability
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three months ended March 31 ------------------------------ (unaudited) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Physical sales volumes (GWh) Supply Generation 2,007 2,280 Purchased 6,356 4,748 ---------------------------------------------------------------------------- 8,363 7,028Plant availability(1) 71% 71% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) The percentage of time the plant was available to generate power, regardless of whether it was running.
U.S. Power - other information
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three months ended March 31 ------------------------------ (unaudited) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Average Spot Power Prices (US$ per MWh) New England(1) 36 30 New York2 36 28 PJM(3) 29 21 Average New York2 Spot Capacity Prices (US$ per KW-M) 3.43 5.83 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) New England ISO all hours Mass Hub price. (2) Zone J market in New York City where the Ravenswood plant operates. (3) The METED Zone price in Pennsylvania where the Ironwood plant operates. Average price for 2016 is from the Ironwood acquisition date of February 1, 2016./T/
Comparable EBITDA for U.S. Power decreased by US$21 million for the three months ended March 31, 2017 compared to the same period in 2016 and was the net effect of:
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-- lower realized capacity prices in New York
-- higher realized power prices at our facilities in New York and New
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Average New York Zone J spot capacity prices were approximately 41 per cent lower for the three months ended March 31, 2017 compared to the same period in 2016. The decrease in spot capacity prices and the offsetting impact of hedging activities resulted in lower realized capacity prices in New York. This was primarily due to an increase in demonstrated capability from existing resources in the New York City's Zone J market.
Physical purchased volumes sold to wholesale, commercial and industrial customers were higher for the three months ended March 31, 2017 than the same period in 2016 as we have expanded our customer base in the PJM and New England markets.
Corporate
The following is a reconciliation of comparable EBITDA and comparable EBIT (our non-GAAP measures) to segmented losses (the equivalent GAAP measure). Certain costs previously reported in our Corporate segment are now being reported within the business segments to better align with how we measure our financial performance. 2016 results have been adjusted to reflect this change.
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Comparable EBITDA and EBIT (4) (1) Specific items: Acquisition related costs - Columbia (29) (26) ---------------------------------------------------------------------------- Segmented losses (33) (27) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
Corporate segmented losses increased by $6 million for the three months ended March 31, 2017 compared to the same period in 2016. Comparable EBIT in 2017 and 2016 excluded acquisition and integration costs associated with the acquisition of Columbia.
OTHER INCOME STATEMENT ITEMS
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Interest expense
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Interest on long-term debt and junior subordinated notes Canadian dollar-denominated (108) (111) U.S. dollar-denominated (317) (246) Foreign exchange impact (103) (85) ---------------------------------------------------------------------------- (528) (442) Other interest and amortization expense (17) (19) Capitalized interest 45 41 ---------------------------------------------------------------------------- Interest expense (500) (420) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
Interest expense increased by $80 million for the three months ended March 31, 2017 compared to the same period in 2016 and was the net effect of debt assumed in the acquisition of Columbia on July 1, 2016 and long-term debt issuances, partially offset by Canadian and U.S. dollar-denominated debt maturities.
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Allowance for funds used during construction
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Canadian dollar-denominated 50 41 U.S. dollar-denominated 38 45 Foreign exchange impact 13 15 ---------------------------------------------------------------------------- Allowance for funds used during construction 101 101 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
AFUDC was consistent for the three months ended March 31, 2017 compared to the same period in 2016. The increase in Canadian dollar-denominated AFUDC is primarily due to increased investment in our NGTL System expansions, while the decrease in our U.S. dollar-denominated AFUDC is primarily due to the completed construction of Topolobampo and Mazatlan pipelines, partially offset by our increased investment in projects acquired as part of the Columbia acquisition on July 1, 2016.
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Interest income and other
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Interest income and other included in comparable earnings 5 47 Specific item: Risk management activities 15 53 ---------------------------------------------------------------------------- Interest income and other 20 100 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
Interest income and other decreased by $80 million for the three months ended March 31, 2017 compared to the same period in 2016 and was the net effect of:
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-- realized losses in 2017 compared to realized gains in 2016 on
derivatives used to manage our net exposure to foreign exchange rate fluctuations on U.S. dollar-denominated income -- lower unrealized gains on risk management activities in 2017 compared to 2016. These amounts have been excluded from comparable earnings -- the impact of a fluctuating U.S. dollar on the translation of foreign currency denominated working capital.Income tax expense
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Income tax expense included in comparable earnings (244) (180) Specific items: Acquisition related costs - Columbia 15 - U.S. Northeast power monetization 1 - Keystone XL income tax recoveries 7 - Keystone XL asset costs 1 4 Alberta PPA terminations - 64 TC Offshore loss on sale - 1 Risk management activities 20 41 ---------------------------------------------------------------------------- Income tax expense (200) (70) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
Income tax expense included in comparable earnings increased by $64 million for the three months ended March 31, 2017 compared to the same period in 2016 mainly as a result of higher pre-tax earnings in 2017 compared to 2016 and changes in the proportion of income earned between Canadian and foreign jurisdictions.
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Net income attributable to non-controlling interests
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net income attributable to non-controlling interests (90) (80) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
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