N.L. Hydro lost $52M in first quarter of 2025, largely due to rate mitigation

Newfoundland and Labrador Hydro's profits fell by $140 million between 2023 and 2024, and by over $50 million over the first three months of 2025, largely due to its commitment to rate mitigation payments.

Lisa Hutchens, the Crown corporation's chief financial officer, said Tuesday that the company reported its second consecutive quarterly net loss in the first quarter of 2025 of $52 million.

Net income fell from $619 million in 2023 to $479 million in 2024.

"A substantial portion of the profits that we generate are, however, being used to mitigate customer rates in our core operations," Hutchens said during the company's annual general meeting Tuesday. "This reduction was expected, and is largely a result of our commitment to the province's rate mitigation plan."

Much of the loss is tied to payments Hydro makes in connection with the Muskrat Falls hydroelectric project. The project was expected to cost $7.4 billion, but ballooned to $13.5 billion.

The corporation and the Newfoundland and Labrador government have been committed to ensuring that cost doesn't translate to exceedingly high electricity bills for residents, announcing a rate mitigation plan that limits electricity rate increases Hydro can introduce to 2.25 per cent annually until 2030.

Hutchens said millions have been committed to the project already, including the most recent payment of $441 million in February.

"Rate mitigation was the main driver of our reduced income in 2024," she said.

"The message that I want to leave you with today is that rate mitigation is a program that Hydro is actively funding today. We are doing so for the benefit of rate payers."

Hydro CEO Jennifer Williams told reporters similar payments will continue in the future. They go toward lowering the balance of expenses connected to new assets, which are monitored by the Public Utilities Board.

"There will be another payment later this year, but I think it will be smaller, maybe $100 million, $150 million. Then next year, there will be another larger payment again," Williams said.

"That's generally what you're probably going to see for the coming years, because this is the experience you're probably going to see as we see those costs go up. We do a big payment, and they keep going up. Basically, as we incur the cost, in the following year we pay it down."

Those payments are expected to impact net incomes for future years. The corporation is projecting a net income of $132 million for 2025.

However, Williams said she's not concerned about the company's  ability to manage operations moving forward, given funds to pay for rate mitigation come from excess money not required for ongoing operations.

Outside of rate mitigation, Hydro reported a $114 million reduction in funds from oil operations, largely due to the Sea Rose FPSO station being offline for most of the year, and a $111 million increase in excess energy sales largely due to purchasing from Hydro Quebec.

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