Nalcor Energy as we know it held its annual general meeting in St. John’s Thursday, releasing financial results for 2017.
The energy Crown corporation reported a $169-million operating profit, up from $136 million in 2016 and $46 million in 2015.
Total assets continued to grow, reaching $18 billion at the end of 2017, up from $14.1 billion in 2016.
But Nalcor has also required more equity from the province, and reached $9.3 billion in long-term debt, up from $5.9 billion in 2016.
It will be hard to use these figures in considering the overall performance of the corporation in the years ahead, given the provincial government’s decision to carve out oil and gas operations from Nalcor Energy.
The plan is that the oil and gas division and Bull Arm Fabrication Facility will be rolled into a new Crown corporation, shifting the financial profile of Nalcor.
Of the $169-million operating profit reported by Nalcor Energy in 2017, for example, $111 million came from the oil and gas business.
“Our oil and gas investments have performed very well and the impact that they’ve had on our financial results has been very significant,” chief financial officer Derrick Sturge said during the annual general meeting.
Sturge said the Bull Arm Fabrication Facility was also a “very significant contributor to net profit in 2017.”
Future contributions from the Bull Arm site remain uncertain. With the wind-up of construction of the Hebron offshore oil platform, a request for proposals for new activity at the site went out. Four proposals were received and negotiations for use of the site are ongoing with two companies.
Nalcor Energy president and CEO Stan Marshall had already said publicly he did not object to the province’s decision to remove the oil and gas division from the existing corporation. He repeated as much to reporters immediately following the annual general meeting.
“It’s not a loss to the province,” Marshall said, noting oil and gas revenues are still within provincial control.
But what does the change mean for him, and the Nalcor Energy that remains?
“I’ll focus on the areas I’m responsible for,” he said.
Marshall said the new Nalcor will be an electrical power business, and one he expects won’t change significantly until hydropower from the Muskrat Falls project comes online.
Marshall said the last cost and schedule estimate for the Muskrat Falls project, issued in June 2017, is holding.
The estimate put the cost at $12.7 billion. First power is expected in late 2019 and full power in 2020.
Meanwhile, there are plans for increased use of new transmission lines in the next year, bringing in more power from outside the province as a cheaper power alternative than burning oil at the Holyrood Thermal Generating Station, while that plant remains online.
That won’t be enough to keep power rates from taking a significant jump in the near future. Options to further help mitigate rising power rates continue to be explored.
“Make no mistake, everything we’re doing is with the best interests of the consumer and the people of the province in mind,” Marshall told the annual general meeting audience.
The complete financial report is available on Nalcor Energy’s website.