Shareholder approves amendment to its dividend
policy
TORONTO, June 28,
2024 /CNW/ - The City of
Toronto (City) and Toronto Hydro Corporation (Toronto Hydro
or the Corporation) have agreed on the City making new equity
investments in Toronto Hydro totalling $300
million, including a one-time upfront special equity
investment of $50 million by 2025 and
multi-tranche annual equity contributions of $25 million over 10 years beginning in 2025. The
City of Toronto has approved these
investments and supporting documents were finalized and provided to
Toronto Hydro on June 28, 2024,
following the meeting of City Council earlier that week.
In addition to these equity investments, City Council has also
approved amendments to Toronto Hydro's Shareholder Direction, which
set out targets for reduced dividends from the Corporation to the
City for the period between 2025 and 2034.
These equity investments and Shareholder Direction amendments
support Toronto Hydro's long-term financial stability and optimize
the returns on equity to the City, strengthen the Corporation's
ability to invest in the grid in line with its regulated capital
structure, and help deliver on Toronto Hydro's Climate Action Plan
supporting the City's Net Zero Strategy.
QUICK FACTS
- The demand for electricity is expected to increase over the
coming decades due to population growth, housing intensification,
transit expansion, economic development, and customers shifting
away from emissions-intensive fossil fuels to largely
emissions-free electricity
- Toronto Hydro's Climate Action Plan is designed to support and
enable the City's Net Zero Strategy by implementing initiatives to
expand the capacity and capabilities of the local grid and to
provide climate advisory services to help Toronto residents and businesses
decarbonize
- The City is sole shareholder of Toronto Hydro and sets
corporate governance principles with respect to the Corporation
through its Shareholder Direction
ABOUT TORONTO HYDRO
Toronto Hydro is a holding company which wholly owns two
subsidiaries:
- Toronto Hydro-Electric System Limited (THESL) – distributes
electricity; and
- Toronto Hydro Energy Services Inc. – provides streetlighting
and expressway lighting services in the city of Toronto
The principal business of Toronto Hydro and its subsidiaries is
the distribution of electricity by THESL, which owns and operates
the electricity distribution system for Canada's largest
city. Recognized as a Sustainable Electricity Leader™ by
Electricity Canada, it has approximately 794,000 customers located
in the city of Toronto and distributes approximately 17
per cent of the electricity consumed in Ontario.
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FORWARD-LOOKING INFORMATION
Certain information included in this news release constitutes
"forward-looking information" within the meaning of applicable
securities legislation. The purpose of the forward-looking
information is to provide management's expectations regarding the
Corporation's future results of operations, performance, business
prospects and opportunities, and may not be appropriate for other
purposes. All forward-looking information is given pursuant to the
"safe harbour" provisions of applicable Canadian securities
legislation. The words "can," "could," "expect," "seek," "will" and
similar expressions are often intended to identify forward-looking
information, although not all forward-looking information contains
these identifying words.
The specific forward-looking information included in this news
release includes, but is not limited to, expectations with respect
to increase in demand for electricity, receipt of the equity
investments from the City of
Toronto and payment of dividends to the City of Toronto as shareholder.
The forward-looking information reflects management's beliefs
and is based on information currently available to the
Corporation's management. The factors which could cause
results or events to differ from current expectations include, but
are not limited to:
- risk that the Corporation is unable to maintain its financial
health and performance at acceptable levels;
- risk that insufficient debt or equity financing will be
available to meet the Corporation's requirements, objectives or
strategic opportunities;
- risk of downgrades to the Corporation's credit rating;
- risks related to the timing and extent of changes in prevailing
interest rates and discount rates and their effect on future
revenue requirements and financial obligations;
- risks of changing government policy and regulatory
requirements, including in respect of climate change and energy
transition;
- risks of adverse regulatory decisions;
- risks associated with capital projects;
- risks arising from inflation, the course of the economy and
other general macroeconomic factors; and
- risks associated with market expectations with respect to
increase in demand for electricity
Forward-looking information is subject to risks, uncertainties
and other factors, and actual results may differ materially from
historical results or results anticipated by the forward-looking
information. In particular, the forward-looking information
contained in this news release is based on estimates and
assumptions made by the Corporation's management in light of past
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that
management believes to be reasonable in the circumstances,
including, but not limited to: the amount of indebtedness of the
Corporation; changes in funding requirements; the future course of
the economy and financial markets; no unforeseen delays and costs
in the Corporation's capital projects; no unforeseen changes to
project plans; no unforeseen changes in the legislative and
operating framework for electricity distribution in Ontario; the receipt of applicable regulatory
approvals and requested rate orders; no unexpected delays in
obtaining required approvals; the ratings issued by credit rating
agencies; the level of interest rates and the Corporation's ability
to borrow and no significant event occurring outside the ordinary
course of business. These factors are not intended to represent a
complete list of the factors that could affect the Corporation;
however, these factors should be considered carefully and readers
should not place undue reliance on forward-looking information made
herein.
All forward-looking information in the news release is qualified
in its entirety by the above cautionary statements. Furthermore,
unless otherwise stated, all forward-looking information contained
in this news release is made as of the date hereof, and the
Corporation undertakes no obligation to revise or update any
forward-looking information as a result of new information, future
events or otherwise, except as required by law.
SOURCE Toronto Hydro Corporation