Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Document And Entity Information [Abstract] | |
Document Type | 40-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | HYDRO ONE INC |
Entity Central Index Key | 1,114,445 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | ||
Distribution (includes $159 related party revenues; 2014 - $159) (Note 23) | CAD 4,949 | CAD 4,903 |
Transmission (includes $1,554 related party revenues; 2014 - $1,567) (Note 23) | 1,536 | 1,588 |
Other | 44 | 57 |
Total revenues | 6,529 | 6,548 |
Costs | ||
Purchased power (includes $2,335 related party costs; 2014 - $2,633) (Note 23) | 3,450 | 3,419 |
Operation, maintenance and administration (Note 23) | 1,130 | 1,192 |
Depreciation and amortization (Note 5) | 757 | 722 |
Total costs | 5,337 | 5,333 |
Income (loss) before financing charges and income taxes | 1,192 | 1,215 |
Financing charges (Note 6) | 376 | 379 |
Income before income taxes | 816 | 836 |
Income taxes (Notes 7, 23) | 114 | 89 |
Net income | 702 | 747 |
Other comprehensive income | 0 | 0 |
Comprehensive income | 702 | 747 |
Net income and comprehensive income attributable to: | ||
Noncontrolling interest (Note 22) | 10 | (2) |
Preferred shareholder | 13 | 18 |
Common shareholder | 679 | 731 |
Net income | CAD 702 | CAD 747 |
Earnings per common share (Note 20) | ||
Basic | CAD 6,340 | CAD 7,319 |
Diluted | 6,340 | 7,319 |
Dividends per common share declared (Note 19) | CAD 8,750 | CAD 2,696 |
Consolidated Statements of Ope3
Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Distribution revenues | CAD 4,949 | CAD 4,903 |
Transmission revenues | 1,536 | 1,588 |
Purchased power costs | 3,450 | 3,419 |
Related Party [Member] | ||
Distribution revenues | 159 | 159 |
Transmission revenues | 1,554 | 1,567 |
Purchased power costs | CAD 2,335 | CAD 2,633 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents (Note 13) | CAD 89 | CAD 100 |
Accounts receivable (net of allowance for doubtful accounts - $61; 2014 - $66) (Note 8) | 772 | 1,016 |
Due from related parties (Note 23) | 184 | 224 |
Regulatory assets (Note 11) | 36 | 31 |
Materials and supplies | 21 | 23 |
Deferred income tax assets (Note 7) | 19 | 19 |
Derivative instruments (Note 13) | 0 | 2 |
Prepaid expenses and other assets | 24 | 35 |
Total current assets | 1,145 | 1,450 |
Property, plant and equipment (Note 9): | ||
Property, plant and equipment in service | 25,911 | 25,356 |
Less: accumulated depreciation | 9,319 | 9,134 |
Property, plant and equipment before construction in progress and future use land components and spares | 16,592 | 16,222 |
Construction in progress | 1,144 | 1,025 |
Future use land, components and spares | 157 | 154 |
Property, plant and equipment, Total | 17,893 | 17,401 |
Other long-term assets: | ||
Regulatory assets (Note 11) | 3,015 | 3,200 |
Deferred income tax assets (Note 7) | 1,610 | 7 |
Intangible assets (net of accumulated amortization - $274; 2014 - $305) (Note 10) | 336 | 276 |
Goodwill (Note 4) | 163 | 173 |
Deferred debt issuance costs | 34 | 36 |
Derivative instruments (Note 13) | 1 | 0 |
Other | 6 | 7 |
Total other long-term assets | 5,165 | 3,699 |
Total assets | 24,203 | 22,550 |
Current liabilities: | ||
Bank indebtedness (Note 13) | 0 | 2 |
Short-term notes payable (Notes 12, 13) | 1,491 | 0 |
Accounts payable | 152 | 173 |
Accrued liabilities (Notes 15, 16) | 591 | 611 |
Due to related parties (Note 23) | 132 | 227 |
Accrued interest | 96 | 100 |
Regulatory liabilities (Note 11) | 19 | 47 |
Derivative instruments (Note 13) | 0 | 3 |
Long-term debt payable within one year (includes $nil measured at fair value; 2014 - $252) (Notes 12, 13) | 500 | 552 |
Total current liabilities | 2,981 | 1,715 |
Long-term debt (includes $51 measured at fair value; 2014 - $nil) (Notes 12, 13) | 8,224 | 8,373 |
Other long-term liabilities: | ||
Post-retirement and post-employment benefit liability (Note 15) | 1,541 | 1,533 |
Pension benefit liability (Note 15) | 952 | 1,236 |
Regulatory liabilities (Note 11) | 236 | 168 |
Deferred income tax liabilities (Note 7) | 206 | 1,313 |
Environmental liabilities (Note 16) | 185 | 221 |
Net unamortized debt premiums | 17 | 18 |
Due to related parties (Note 21, 23) | 10 | 0 |
Asset retirement obligations (Note 17) | 9 | 9 |
Long-term accounts payable and other liabilities | 17 | 17 |
Total other long-term liabilities | 3,173 | 4,515 |
Total liabilities | CAD 14,378 | CAD 14,603 |
Contingencies and Commitments (Notes 25, 26) | ||
Subsequent Events (Note 28) | ||
Preferred shares (Notes 18, 19) | CAD 0 | CAD 323 |
Noncontrolling interest subject to redemption (Note 22) | 23 | 21 |
Equity | ||
Common shares (Notes 18, 19) | 6,000 | 3,314 |
Retained earnings | 3,759 | 4,249 |
Accumulated other comprehensive loss | (9) | (9) |
Total Hydro One shareholder's equity | 9,750 | 7,554 |
Noncontrolling interest (Note 22) | 52 | 49 |
Total equity | 9,802 | 7,603 |
Total liabilities, preferred shares, noncontrolling interest subject to redemption and equity | CAD 24,203 | CAD 22,550 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | CAD 61 | CAD 66 |
Accumulated amortization, Net | 274 | 305 |
Long-term debt measured at fair value | 0 | 252 |
Long-term debt measured at fair value | CAD 51 | CAD 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - CAD CAD in Millions | Total | Common Shares [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Hydro One [Member] | Non-controlling Interest (Note 22) [Member] |
Beginning balance at Dec. 31, 2013 | CAD 7,092 | CAD 3,314 | CAD 3,787 | CAD (9) | CAD 7,092 | CAD 0 |
Net income | 748 | 0 | 749 | 0 | 749 | (1) |
Other comprehensive income | 0 | 0 | 0 | 0 | 0 | 0 |
Amount contributed by noncontrolling interest | 50 | 0 | 0 | 0 | 0 | 50 |
Dividends on preferred shares | (18) | 0 | (18) | 0 | (18) | 0 |
Dividends on common shares | (269) | 0 | (269) | 0 | (269) | 0 |
Ending balance at Dec. 31, 2014 | 7,603 | 3,314 | 4,249 | (9) | 7,554 | 49 |
Net income | 699 | 0 | 692 | 0 | 692 | 7 |
Other comprehensive income | 0 | 0 | 0 | 0 | 0 | 0 |
Distributions to noncontrolling interest | (4) | 0 | 0 | 0 | 0 | (4) |
Dividends on preferred shares | (13) | 0 | (13) | 0 | (13) | 0 |
Dividends on common shares | (875) | 0 | (875) | 0 | (875) | 0 |
Common shares issued (Note 18) | 2,923 | 2,923 | 0 | 0 | 2,923 | 0 |
Hydro One Brampton spin-off (Note 4) | (454) | (196) | (258) | 0 | (454) | 0 |
Hydro One Telecom and MBSI spin-offs (Note 4) | (77) | (41) | (36) | 0 | (77) | 0 |
Ending balance at Dec. 31, 2015 | CAD 9,802 | CAD 6,000 | CAD 3,759 | CAD (9) | CAD 9,750 | CAD 52 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | ||
Net income | CAD 702 | CAD 747 |
Environmental expenditures | (19) | (18) |
Adjustments for non-cash items: | ||
Depreciation and amortization (excluding removal costs) | 667 | 641 |
Regulatory assets and liabilities | (3) | (69) |
Deferred income taxes (Note 7) | (2,817) | 10 |
Other | 24 | 0 |
Changes in non-cash balances related to operations (Note 24) | 187 | (55) |
Net cash from (used in) operating activities | (1,259) | 1,256 |
Financing activities | ||
Long-term debt issued | 350 | 628 |
Long-term debt retired | (585) | (776) |
Short-term notes issued | 1,491 | 0 |
Common shares issued | 2,600 | 0 |
Dividends paid | (888) | (287) |
Amount contributed by noncontrolling interest (Note 22) | 0 | 72 |
Distributions paid to noncontrolling interest | (5) | 0 |
Change in bank indebtedness | (2) | (29) |
Other | (7) | (3) |
Net cash from (used in) financing activities | 2,954 | (395) |
Investing activities | ||
Property, plant and equipment (Note 24) | (1,594) | (1,481) |
Intangible assets (Note 24) | (37) | (23) |
Capital contributions received (Note 24) | 62 | 0 |
Proceeds from investment | 0 | 250 |
Other | 6 | (6) |
Net cash used in investing activities | (1,706) | (1,326) |
Net change in cash and cash equivalents | (11) | (465) |
Cash and cash equivalents, beginning of year | 100 | 565 |
Cash and cash equivalents, end of year | 89 | 100 |
Acquisition of Haldimand Hydro [Member] | ||
Investing activities | ||
Payments to acquisition (Note 4) | (66) | 0 |
Acquisition of Woodstock Hydro [Member] | ||
Investing activities | ||
Payments to acquisition (Note 4) | (24) | 0 |
Hydro One Brampton [Member] | ||
Investing activities | ||
Investment in Hydro One Brampton (Note 4) | (53) | 0 |
Norfolk Power [Member] | ||
Investing activities | ||
Payments to acquisition (Note 4) | CAD 0 | CAD (66) |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of the Business | 1. DESCRIPTION OF THE BUSINESS Hydro One Inc. (Hydro One or the Company) was incorporated on December 1, 1998, under the Business Corporations Act On October 31, 2015, Hydro One Limited, a subsidiary of the Province of Ontario (Province), acquired Hydro One. The principal businesses of Hydro One are the transmission and distribution of electricity to customers within Ontario. In November 2015, Hydro One Limited and the Province completed an initial public offering (IPO) on the Toronto Stock Exchange of 15% of Hydro One Limited’s 595 million outstanding common shares. See Note 18 for reorganization of Hydro One. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation These Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. On August 31, 2015, Hydro One completed the spin-off of its subsidiary, Hydro One Brampton Networks Inc. (Hydro One Brampton) to the Province. See note 4 – Business Combinations. These Consolidated Financial Statements include the results of operations of Hydro One Brampton up to August 31, 2015. In November 2015, Hydro One completed the spin-off of its subsidiaries, Hydro One Telecom Inc. (Hydro One Telecom) and Municipal Billing Services Inc. (MBSI). See note 4 – Business Combinations. These Consolidated Financial Statements include the results of operations of Hydro One Telecom and MBSI up to November 6, 2015. Basis of Accounting These Consolidated Financial Statements are prepared and presented in accordance with United States (US) Generally Accepted Accounting Principles (GAAP) and in Canadian dollars. Hydro One performed an evaluation of subsequent events through to February 11, 2016, the date these Consolidated Financial Statements were issued, to determine whether any events or transactions warranted recognition and disclosure in these Consolidated Financial Statements. See Note 28 – Subsequent Events. Use of Management Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, gains and losses during the reporting periods. Management evaluates these estimates on an ongoing basis based upon historical experience, current conditions, and assumptions believed to be reasonable at the time the assumptions are made, with any adjustments being recognized in results of operations in the period they arise. Significant estimates relate to regulatory assets and regulatory liabilities, environmental liabilities, pension benefits, post-retirement and post-employment benefits, asset retirement obligations, goodwill and asset impairments, contingencies, unbilled revenues, allowance for doubtful accounts, derivative instruments, and deferred income tax assets and liabilities. Actual results may differ significantly from these estimates. Rate Setting The Company’s Transmission Business consists of the transmission business of Hydro One Networks, as well as its 66% interest in B2M Limited Partnership (B2M LP). The Company’s Distribution Business consists of the distribution businesses of Hydro One Networks, Haldimand County Utilities Inc. (Haldimand Hydro), Hydro One Remote Communities Inc. (Hydro One Remote Communities), and Woodstock Hydro Holdings Inc. (Woodstock Hydro). The Ontario Energy Board (OEB) has approved the use of US GAAP for rate setting and regulatory accounting and reporting by Hydro One Networks’ transmission and distribution businesses, as well as by Hydro One Remote Communities. Transmission On January 8, 2015, pursuant to an application filed with the OEB, the OEB approved the 2015 Hydro One transmission rates revenue requirement, excluding the B2M LP revenue requirement, of $1,477 million. On June 30, 2015, B2M LP updated its application (originally filed March 30, 2015) with the OEB for 2015-2019 transmission rates, requesting approval of revenue requirement of $39 million, $36 million, $37 million, $38 million and $37 million for the respective years. On December 29, 2015, the OEB issued a Decision and Order approving the 2015-2019 rates revenue requirement, and on January 14, 2016, the OEB approved the B2M LP revenue requirement recovery through the 2016 Uniform Transmission Rates, and the establishment of a deferral account to capture costs of Tax Rate and Rule changes. Distribution On March 12, 2015, the OEB issued a Decision and Rate Order approving a revenue requirement of $1,326 million for 2015, $1,430 million for 2016 and $1,486 million for 2017. The revenue requirements for 2016 and 2017 are estimates that may change based on 2016 and 2017 Rate Orders. On April 23, 2015, the Final Rate Order for 2015 rates was approved by the OEB. On September 24, 2014, Hydro One Remote Communities filed an Incentive Regulation Mechanism application with the OEB for 2015 rates, seeking approval for increased base rates for the distribution and generation of electricity of 1.7%. On March 19, 2015, the OEB approved an increase of approximately 1.6% to basic rates for the distribution and generation of electricity, with an effective date of May 1, 2015. Regulatory Accounting The OEB has the general power to include or exclude revenues, costs, gains or losses in the rates of a specific period, resulting in a change in the timing of accounting recognition from that which would have been applied in an unregulated company. Such change in timing involves the application of rate-regulated accounting, giving rise to the recognition of regulatory assets and liabilities. The Company’s regulatory assets represent certain amounts receivable from future customers and costs that have been deferred for accounting purposes because it is probable that they will be recovered in future rates. In addition, the Company has recorded regulatory liabilities that generally represent amounts that are refundable to future customers. The Company continually assesses the likelihood of recovery of each of its regulatory assets and continues to believe that it is probable that the OEB will factor its regulatory assets and liabilities into the setting of future rates. If, at some future date, the Company judges that it is no longer probable that the OEB will include a regulatory asset or liability in setting future rates, the appropriate carrying amount will be reflected in results of operations in the period that the assessment is made. Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments with an original maturity of three months or less. Revenue Recognition Transmission revenues are collected through OEB-approved rates, which are based on an approved revenue requirement that includes a rate of return. Such revenue is recognized as electricity is transmitted and delivered to customers. Distribution revenues attributable to the delivery of electricity are based on OEB-approved distribution rates and are recognized on an accrual basis and include billed and unbilled revenues. Billed revenues are based on electricity delivered as measured from customer meters. Unbilled revenues are based on an estimate of electricity delivered determined by historical trends of consumption and are estimated at the end of each month. The unbilled revenue estimate is affected by energy consumption, weather, and changes in the composition of customer classes. Distribution revenue also includes an amount relating to rate protection for rural, residential and remote customers, which is received from the Independent Electricity System Operator (IESO) based on a standardized customer rate that is approved by the OEB. Revenues also include amounts related to sales of other services and equipment. Such revenue is recognized as services are rendered or as equipment is delivered. Revenues are recorded net of indirect taxes. Accounts Receivable and Allowance for Doubtful Accounts Billed accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Unbilled accounts receivable are recorded at their estimated value. Overdue amounts related to regulated billings bear interest at OEB-approved rates. The allowance for doubtful accounts reflects the Company’s best estimate of losses on billed accounts receivable balances. The Company estimates the allowance for doubtful accounts on customer receivables by applying internally developed loss rates to the outstanding receivable balances by aging category. Loss rates applied to the accounts receivable balances are based on historical overdue balances, customer payments and write-offs. Accounts receivable are written-off against the allowance when they are deemed uncollectible. The existing allowance for doubtful accounts will continue to be affected by changes in volume, prices and economic conditions. Noncontrolling interest Noncontrolling interest represents the portion of equity ownership in subsidiaries that is not attributable to shareholders of Hydro One. Noncontrolling interest is initially recorded at fair value and subsequently the amount is adjusted for the proportionate share of net income (loss) and other comprehensive income (loss) attributable to the noncontrolling interest and any dividends or distributions paid to the noncontrolling interest. If a transaction results in the acquisition of all, or part, of a noncontrolling interest in a subsidiary, the acquisition of the noncontrolling interest is accounted for as an equity transaction. No gain or loss is recognized in consolidated net income or comprehensive income as a result of changes in the noncontrolling interest, unless a change results in the loss of control by the Company. Income Taxes By virtue of being wholly owned by the Province, Hydro One was exempt from tax under the Income Tax Act Taxation Act, 2007 Electricity Act In connection with the IPO of Hydro One Limited, Hydro One’s exemption from tax under the Federal Tax Regime ceased to apply. Upon exiting the PILs Regime, Hydro One is required to make corporate income tax payments to the Canada Revenue Agency (CRA) under the Federal Tax Regime. Current and deferred income taxes are computed based on the tax rates and tax laws enacted as at the balance sheet date. Tax benefits associated with income tax positions taken, or expected to be taken, in a tax return are recorded only when the “more-likely-than-not” recognition threshold is satisfied and are measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. Management evaluates each position based solely on the technical merits and facts and circumstances of the position, assuming the position will be examined by a taxing authority having full knowledge of all relevant information. Significant management judgment is required to determine recognition thresholds and the related amount of tax benefits to be recognized in the Consolidated Financial Statements. Management re-evaluates tax positions each period in which new information about recognition or measurement becomes available. Deferred Income Taxes Deferred income taxes are provided for using the liability method. Deferred income taxes are recognized based on the estimated future tax consequences attributable to temporary differences between the carrying amount of assets and liabilities in the Consolidated Financial Statements and their corresponding tax bases. Deferred income tax liabilities are generally recognized on all taxable temporary differences. Deferred tax assets are recognized to the extent that it is more-likely-than-not that these assets will be realized from taxable income available against which deductible temporary differences can be utilized. Deferred income taxes are calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on the tax rates and tax laws that have been enacted as at the balance sheet date. Deferred income taxes that are not included in the rate-setting process are charged or credited to the Consolidated Statements of Operations and Comprehensive Income. If management determines that it is more-likely-than-not that some or all of a deferred income tax asset will not be realized, a valuation allowance is recorded against the deferred income tax asset to report the net balance at the amount expected to be realized. Previously unrecognized deferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become more-likely-than-not that the tax benefit will be realized. The Company records regulatory assets and liabilities associated with deferred income taxes that will be included in the rate-setting process. The Company uses the flow-through method to account for investment tax credits (ITCs) earned on eligible scientific research and experimental development expenditures, and apprenticeship job creation. Under this method, only non-refundable ITCs are recognized as a reduction to income tax expense. Materials and Supplies Materials and supplies represent consumables, small spare parts and construction materials held for internal construction and maintenance of property, plant and equipment. These assets are carried at average cost less any impairments recorded. Property, Plant and Equipment Property, plant and equipment is recorded at original cost, net of customer contributions, and any accumulated impairment losses. The cost of additions, including betterments and replacement asset components, is included on the Consolidated Balance Sheets as property, plant and equipment. The original cost of property, plant and equipment includes direct materials, direct labour (including employee benefits), contracted services, attributable capitalized financing costs, asset retirement costs, and direct and indirect overheads that are related to the capital project or program. Indirect overheads include a portion of corporate costs such as finance, treasury, human resources, information technology and executive costs. Overhead costs, including corporate functions and field services costs, are capitalized on a fully allocated basis, consistent with an OEB-approved methodology. Property, plant and equipment in service consists of transmission, distribution, communication, administration and service assets and land easements. Property, plant and equipment also includes future use assets, such as land, major components and spare parts, and capitalized project development costs associated with deferred capital projects. Transmission Transmission assets include assets used for the transmission of high-voltage electricity, such as transmission lines, support structures, foundations, insulators, connecting hardware and grounding systems, and assets used to step up the voltage of electricity from generating stations for transmission and to step down voltages for distribution, including transformers, circuit breakers and switches. Distribution Distribution assets include assets related to the distribution of low-voltage electricity, including lines, poles, switches, transformers, protective devices and metering systems. Communication Communication assets include fibre optic and microwave radio systems, optical ground wire, towers, telephone equipment and associated buildings. Administration and Service Administration and service assets include administrative buildings, personal computers, transport and work equipment, tools and other minor assets. Easements Easements include statutory rights of use for transmission corridors and abutting lands granted under the Reliable Energy and Consumer Protection Act, 2002 Intangible Assets Intangible assets separately acquired or internally developed are measured on initial recognition at cost, which comprises purchased software, direct labour (including employee benefits), consulting, engineering, overheads and attributable capitalized financing charges. Following initial recognition, intangible assets are carried at cost, net of any accumulated amortization and accumulated impairment losses. The Company’s intangible assets primarily represent major computer applications. Capitalized Financing Costs Capitalized financing costs represent interest costs attributable to the construction of property, plant and equipment or development of intangible assets. The financing cost of attributable borrowed funds is capitalized as part of the acquisition cost of such assets. The capitalized financing costs are a reduction of financing charges recognized in the Consolidated Statements of Operations and Comprehensive Income. Capitalized financing costs are calculated using the Company’s weighted average effective cost of debt. Construction and Development in Progress Construction and development in progress consists of the capitalized cost of constructed assets that are not yet complete and which have not yet been placed in service. Depreciation and Amortization The cost of property, plant and equipment and intangible assets is depreciated or amortized on a straight-line basis based on the estimated remaining service life of each asset category, except for transport and work equipment, which is depreciated on a declining balance basis. The Company periodically initiates an external independent review of its property, plant and equipment and intangible asset depreciation and amortization rates, as required by the OEB. Any changes arising from OEB approval of such a review are implemented on a remaining service life basis, consistent with their inclusion in electricity rates. The last review resulted in changes to rates effective January 1, 2015. A summary of average service lives and depreciation and amortization rates for the various classes of assets is included below: Rate Average Service Life Range Average Transmission 56 years 1% – 2% 2 % Distribution 46 years 1% – 7% 2 % Communication 16 years 1% – 15% 6 % Administration and service 18 years 1% –20% 6 % The cost of intangible assets is included primarily within the administration and service classification above. Amortization rate for computer applications software and other intangible assets is 10%. In accordance with group depreciation practices, the original cost of property, plant and equipment, or major components thereof, and intangible assets that are normally retired, is charged to accumulated depreciation, with no gain or loss being reflected in results of operations. Where a disposition of property, plant and equipment occurs through sale, a gain or loss is calculated based on proceeds and such gain or loss is included in depreciation expense. Depreciation expense also includes the costs incurred to remove property, plant and equipment where no asset retirement obligations have been recorded. Goodwill Goodwill represents the cost of acquired local distribution companies that is in excess of the fair value of the net identifiable assets acquired at the acquisition date. Goodwill is not included in rate base. Goodwill is evaluated for impairment on an annual basis, or more frequently if circumstances require. The Company performs a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount. If the Company determines, as a result of its qualitative assessment, that it is not more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, no further testing is required. If the Company determines, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, a goodwill impairment assessment is performed using a two-step, fair value-based test. The first step compares the fair value of the applicable reporting unit to its carrying amount, including goodwill. If the carrying amount of the applicable reporting unit exceeds its fair value, a second step is performed. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount, an impairment loss is recorded as a reduction to goodwill and as a charge to results of operations. For the year ended December 31, 2015, based on the qualitative assessment performed as at September 30, 2015, the Company has determined that it is not more-likely-than-not that the fair value of each applicable reporting unit assessed is less than its carrying amount. As a result, no further testing was performed, and the Company has concluded that goodwill was not impaired at December 31, 2015. Long-Lived Asset Impairment When circumstances indicate the carrying value of long-lived assets may not be recoverable, the Company evaluates whether the carrying value of such assets, excluding goodwill, has been impaired. For such long-lived assets, the Company evaluates whether impairment may exist by estimating future estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. When alternative courses of action to recover the carrying amount of a long-lived asset are under consideration, a probability-weighted approach is used to develop estimates of future undiscounted cash flows. If the carrying value of the long-lived asset is not recoverable based on the estimated future undiscounted cash flows, an impairment loss is recorded, measured as the excess of the carrying value of the asset over its fair value. As a result, the asset’s carrying value is adjusted to its estimated fair value. Within its regulated business, the carrying costs of most of Hydro One’s long-lived assets are included in rate base where they earn an OEB-approved rate of return. Asset carrying values and the related return are recovered through approved rates. As a result, such assets are only tested for impairment in the event that the OEB disallows recovery, in whole or in part, or if such a disallowance is judged to be probable. Hydro One regularly monitored the assets of its unregulated Hydro One Telecom subsidiary prior to spin-off for indications of impairment. Management assessed the fair value of such long-lived assets using commonly accepted techniques, which included but were not limited to, the use of recent third party comparable sales for reference and internally developed discounted cash flow analysis. Significant changes in market conditions, changes to the condition of an asset, or a change in management’s intent to utilize the asset was generally viewed by management as triggering events to reassess the cash flows related to these long-lived assets. As at December 31, 2015 and 2014, no asset impairment had been recorded for assets within either the Company’s regulated or unregulated businesses. Costs of Arranging Debt Financing For financial liabilities classified as other than held-for-trading, the Company defers the external transaction costs related to obtaining debt financing and presents such amounts as deferred debt issuance costs on the Consolidated Balance Sheets. Deferred debt issuance costs are amortized over the contractual life of the related debt on an effective-interest basis and the amortization is included within financing charges in the Consolidated Statements of Operations and Comprehensive Income. Transaction costs for items classified as held-for-trading are expensed immediately. Comprehensive Income Comprehensive income is comprised of net income and other comprehensive income (OCI). Hydro One presents net income and OCI in a single continuous Consolidated Statement of Operations and Comprehensive Income. Financial Assets and Liabilities All financial assets and liabilities are classified into one of the following five categories: held-to-maturity; loans and receivables; held-for-trading; other liabilities; or available-for-sale. Financial assets and liabilities classified as held-for-trading are measured at fair value. All other financial assets and liabilities are measured at amortized cost, except accounts receivable and amounts due from related parties, which are measured at the lower of cost or fair value. Accounts receivable and amounts due from related parties are classified as loans and receivables. The Company considers the carrying amounts of accounts receivable and amounts due from related parties to be reasonable estimates of fair value because of the short time to maturity of these instruments. Provisions for impaired accounts receivable are recognized as adjustments to the allowance for doubtful accounts and are recognized when there is objective evidence that the Company will not be able to collect amounts according to the original terms. All financial instrument transactions are recorded at trade date. Derivative instruments are measured at fair value. Gains and losses from fair valuation are included within financing charges in the period in which they arise. The Company determines the classification of its financial assets and liabilities at the date of initial recognition. The Company designates certain of its financial assets and liabilities to be held at fair value, when it is consistent with the Company’s risk management policy disclosed in Note 13 – Fair Value of Financial Instruments and Risk Management. Derivative Instruments and Hedge Accounting The Company closely monitors the risks associated with changes in interest rates on its operations and, where appropriate, uses various instruments to hedge these risks. Certain of these derivative instruments qualify for hedge accounting and are designated as accounting hedges, while others either do not qualify as hedges or have not been designated as hedges (hereinafter referred to as undesignated contracts) as they are part of economic hedging relationships. The accounting guidance for derivative instruments requires the recognition of all derivative instruments not identified as meeting the normal purchase and sale exemption as either assets or liabilities recorded at fair value on the Consolidated Balance Sheets. For derivative instruments that qualify for hedge accounting, the Company may elect to designate such derivative instruments as either cash flow hedges or fair value hedges. The Company offsets fair value amounts recognized on its Consolidated Balance Sheets related to derivative instruments executed with the same counterparty under the same master netting agreement. For derivative instruments that qualify for hedge accounting and which are designated as cash flow hedges, the effective portion of any gain or loss, net of tax, is reported as a component of accumulated OCI (AOCI) and is reclassified to results of operations in the same period or periods during which the hedged transaction affects results of operations. Any gains or losses on the derivative instrument that represent either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in results of operations. For fair value hedges, changes in fair value of both the derivative instrument and the underlying hedged exposure are recognized in the Consolidated Statements of Operations and Comprehensive Income in the current period. The gain or loss on the derivative instrument is included in the same line item as the offsetting gain or loss on the hedged item in the Consolidated Statements of Operations and Comprehensive Income. Additionally, the Company enters into derivative agreements that are economic hedges which either do not qualify for hedge accounting or have not been designated as hedges. The changes in fair value of these undesignated derivative instruments are reflected in results of operations. Embedded derivative instruments are separated from their host contracts and carried at fair value on the Consolidated Balance Sheets when: (a) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument is not measured at fair value, with changes in fair value recognized in results of operations each period; and (c) the embedded derivative itself meets the definition of a derivative. The Company does not engage in derivative trading or speculative activities and had no embedded derivatives at December 31, 2015 or 2014. Hydro One periodically develops hedging strategies taking into account risk management objectives. At the inception of a hedging relationship where the Company has elected to apply hedge accounting, Hydro One formally documents the relationship between the hedged item and the hedging instrument, the related risk management objective, the nature of the specific risk exposure being hedged, and the method for assessing the effectiveness of the hedging relationship. The Company also assesses, both at the inception of the hedge and on a quarterly basis, whether the hedging instruments are effective in offsetting changes in fair values or cash flows of the hedged items. Employee Future Benefits Employee future benefits provided by Hydro One include pension, post-retirement and post-employment benefits. The costs of the Company’s pension, post-retirement and post-employment benefit plans are recorded over the periods during which employees render service. The Company recognizes the funded status of its defined benefit pension, post-retirement and post-employment plans on its Consolidated Balance Sheets and subsequently recognizes the changes in funded status at the end of each reporting year. Defined benefit pension, post-retirement and post-employment plans are considered to be underfunded when the projected benefit obligation exceeds the fair value of the plan assets. Liabilities are recognized on the Consolidated Balance Sheets for any net underfunded projected benefit obligation. The net underfunded projected benefit obligation may be disclosed as a current liability, long-term liability, or both. The current portion is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next 12 months exceeds the fair value of plan assets. If the fair value of plan assets exceeds the projected benefit obligation of the plan, an asset is recognized equal to the net overfunded projected benefit obligation. The post-retirement and post-employment benefit plans are unfunded because there are no related plan assets. Pension benefits Pension costs are recorded on an accrual basis for financial reporting purposes. Pension costs are actuarially determined using the projected benefit method prorated on service and are based on assumptions that reflect management’s best estimate of the effect of future events, including future compensation increases. Past service costs from plan amendments and all actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service period of active employees in the plan, and over the estimated remaining life expectancy of inactive employees in the plan. Pension plan assets, consisting primarily of listed equity securities as well as corporate and government debt securities, are fair valued at the end of each year. Hydro One records a regulatory asset equal to the net underfunded projected benefit obligation for its pension plan. Post-retirement and post-employment benefits Post-retirement and post-employment benefits are recorded and included in rates on an accrual basis. Costs are determined by independent actuaries using the projected benefit method prorated on service and based on assumptions that reflect management’s best estimates. Past service costs from plan amendments are amortized to results of operations based on the expected average remaining service period. Hydro One records a regulatory asset equal to the incremental net unfunded projected benefit obligation for post-retirement and post-employment plans recorded at each year end based on annual actuarial reports. For post-retirement benefits, all actuarial gains or losses are deferred using the “corridor” approach. The amount calculated above the “corridor” is amortized to results of operations on a straight-line basis over the expected average remaining service life of active employees in the plan and over the remaining life expectancy of inactive employees in the plan. The post-retirement benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. For post-employment obligations, the associated regulatory liabilities representing actuarial gains on transition to US GAAP are amortized to results of operations based on the “corridor” approach. Post transition, the actuarial gains and losses on post-employment obligations that are incurred during the year are recognized immediately to results of operations. The post-employment benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, wi |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | 3. NEW ACCOUNTING PRONOUNCEMENTS Recent Accounting Guidance Not Yet Adopted In January 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This ASU eliminates the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary and to show the item separately in the income statement. This ASU is effective for fiscal years, and interim periods within these years, beginning after December 15, 2015. The adoption of this ASU is not anticipated to have an impact on the Company’s consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. This ASU provides guidance about the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The adoption of this ASU is not anticipated to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption of this ASU in the first quarter of 2016, the Company’s deferred debt issuance costs that are currently presented under other long-term assets will be reclassified as a deduction from the carrying amount of long-term debt. In April 2015, the FASB issued ASU 2015-04, Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets. This ASU permits an entity with a fiscal year-end that does not coincide with a month-end and an entity that has a significant event in an interim period that calls for a remeasurement of defined benefit plan assets and obligations to measure the defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end. This ASU is effective for fiscal years, and interim periods within these years, beginning after December 15, 2015. The adoption of this ASU is not anticipated to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license, as well as the related accounting for the arrangement. This ASU is effective for fiscal years, and interim periods within these years, beginning after December 15, 2015. The Company is currently assessing the impact of adoption of this ASU on its consolidated financial statements. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This ASU defers by one year the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) issued by the FASB in May 2014. ASU 2014-09 provides guidance on revenue recognition that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance in ASU 2014-09 is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the impact of adoption of ASU 2014-09 on its consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period of a business combination in the reporting period in which the adjustment amounts are determined. The amendments in this update require that the acquirer to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption of this ASU in the first quarter of 2016, the Company will apply the guidance in this ASU to future measurement adjustments related to business combinations, as applicable. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Upon adoption of this ASU in the first quarter of 2017, the current portions of the Company’s deferred income tax assets and liabilities will be reclassified as noncurrent assets and liabilities on the consolidated Balance Sheets. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU requires equity investments to be measured at fair value with changes in fair value recognized in net income, and requires enhanced disclosures and presentation of financial assets and liabilities in the financial statements. This ASU also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the impact of adoption of this ASU on its consolidated financial statements. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Combinations | 4. BUSINESS COMBINATIONS Acquisition of Woodstock Hydro On October 31, 2015, Hydro One acquired 100% of the common shares of Woodstock Hydro, an electricity distribution company located in southwestern Ontario. The total purchase price for Woodstock Hydro was approximately $32 million. The following table summarizes the preliminary determination of the fair value of the assets acquired and liabilities assumed: (millions of Canadian dollars) Cash and cash equivalents 3 Working capital 4 Property, plant and equipment 28 Intangible assets 1 Deferred income tax assets 2 Goodwill 17 Long-term debt (17 ) Other long-term liabilities (2 ) Post-retirement and post-employment benefit liability (1 ) Derivative instruments (3 ) 32 The preliminary determination of the fair value of assets acquired and liabilities assumed has been based upon management’s preliminary estimates and certain assumptions with respect to the fair values of the assets acquired and liabilities assumed. Due to the timing of the transaction, the Company has not yet completed the final fair value measurements as at December 31, 2015. In addition, the purchase agreement provides for final purchase price adjustments based on agreed working capital and other balances at the acquisition date which have not yet been finalized. The Company will continue to review information and perform further analysis prior to finalizing the total purchase price and the fair values of the assets acquired and liabilities assumed. The actual total purchase price and the fair values of the assets acquired and liabilities assumed may differ from the amounts above. Goodwill of approximately $17 million arising from the Woodstock Hydro acquisition consists largely of the synergies and economies of scale expected from combining the operations of Hydro One and Woodstock Hydro. All of the goodwill was assigned to Hydro One’s Distribution Business segment. Woodstock Hydro contributed revenues of $12 million and net income of $2 million to the Company’s consolidated financial results for the year ended December 31, 2015. All costs related to the acquisition have been expensed through the Consolidated Statements of Operations and Comprehensive Income. Woodstock Hydro’s financial information is not material to the Company’s consolidated financial results for the year ended December 31, 2015 and therefore, has not been disclosed on a pro forma basis. Hydro One Brampton Spin-off On August 31, 2015, Hydro One completed the spin-off of its subsidiary, Hydro One Brampton. The spin-off was accounted as a non-monetary, nonreciprocal transfer with the Province, based on its carrying values at August 31, 2015. Transactions that immediately preceded the spin-off as well as the spin-off were as follows: • Hydro One subscribed for 357 common shares of Hydro One Brampton for an aggregate subscription price of $53 million; • Hydro One transferred to a company wholly owned by the Province all the issued and outstanding shares of Hydro One Brampton as a dividend-in-kind; and all of the long-term intercompany debt in aggregate principal amount of $193 million plus accrued interest of $3 million owed by Hydro One Brampton to Hydro One as a return of stated capital of $196 million on its common shares. In connection with the Hydro One Brampton spin-off, the following assets and liabilities of Hydro One Brampton were transferred: (millions of Canadian dollars) Working capital 33 Property, plant and equipment and intangibles (net) 360 Other long-term assets 6 Long-term liabilities (205 ) As a result of the spin-off, goodwill related to Hydro One Brampton of $60 million was eliminated from the Consolidated Balance Sheet. Acquisition of Haldimand Hydro On June 30, 2015, Hydro One acquired 100% of the common shares of Haldimand Hydro, an electricity distribution company located in southwestern Ontario. The final total purchase price for Haldimand Hydro was approximately $73 million. The following table summarizes the determination of the fair value of the assets acquired and liabilities assumed: (millions of Canadian dollars) Cash and cash equivalents 3 Working capital 5 Property, plant and equipment 52 Deferred income tax assets 1 Goodwill 33 Long-term debt (18 ) Regulatory liabilities (3 ) 73 The determination of the fair value of assets acquired and liabilities assumed has been based upon management’s estimates and certain assumptions with respect to the fair values of the assets acquired and liabilities assumed. Goodwill of approximately $33 million arising from the Haldimand Hydro acquisition consists largely of the synergies and economies of scale expected from combining the operations of Hydro One and Haldimand Hydro. All of the goodwill was assigned to Hydro One’s Distribution Business segment. Haldimand Hydro contributed revenues of $32 million and net income of $6 million to the Company’s consolidated financial results for the year ended December 31, 2015. All costs related to the acquisition have been expensed through the Consolidated Statements of Operations and Comprehensive Income. Haldimand Hydro’s financial information is not material to the Company’s consolidated financial results for the year ended December 31, 2015 and therefore, has not been disclosed on a pro forma basis. Acquisition of Norfolk Power On August 29, 2014, Hydro One acquired 100% of the common shares of Norfolk Power, an electricity distribution and telecom company located in southwestern Ontario. Norfolk Power was a holding company for two subsidiaries, Norfolk Power Distribution Inc. (NPDI) and Norfolk Energy Inc. The total purchase price for Norfolk Power, net of the long-term debt assumed, was approximately $68 million. The purchase price was finalized in 2015, with no adjustments to the preliminary purchase price allocation as disclosed at December 31, 2014. The following table summarizes the determination of the fair value of the assets acquired and liabilities assumed: (millions of Canadian dollars) Working capital 6 Property, plant and equipment 56 Deferred income tax assets 1 Goodwill 40 Bank indebtedness (3 ) Derivative instruments (3 ) Long-term debt (26 ) Post-retirement and post-employment benefit liability (1 ) Environmental liability (1 ) Long-term accounts payable and other liabilities (1 ) 68 The determination of the fair values of assets acquired and liabilities assumed has been based upon management’s estimates and certain assumptions with respect to the fair values of the assets acquired and liabilities assumed. Goodwill of approximately $40 million arising from the Norfolk Power acquisition consists largely of the synergies and economies of scale expected from combining the operations of Hydro One and Norfolk Power. All of the goodwill was assigned to Hydro One’s Distribution Business segment. Norfolk Power contributed revenues of $18 million and net income of less than $1 million to the Company’s consolidated financial results for the year ended December 31, 2014. All costs related to the acquisition have been expensed through the Consolidated Statements of Operations and Comprehensive Income. Norfolk Power’s financial information was not material to the Company’s consolidated financial results for the year ended December 31, 2014 and therefore, has not been disclosed on a pro forma basis. Other On November 6, 2015, Hydro One completed the spin-off of its subsidiary, Hydro One Telecom. The spin-off was accounted as a non-monetary, nonreciprocal transfer with Hydro One Limited, based on its carrying values at November 6, 2015. Hydro One transferred to Hydro One Limited all the issued and outstanding shares of Hydro One Telecom totalling $17 million, and all of the intercompany debt receivable held by Hydro One due from Hydro One Telecom and Hydro One Telecom Link Limited totalling $21 million, as a return of stated capital of $38 million on its common shares. On November 6, 2015, Hydro One completed the spin-off of its subsidiary, MBSI. The spin-off was accounted as a non-monetary, nonreciprocal transfer with Hydro One Limited, based on its carrying values at November 6, 2015. Hydro One transferred to Hydro One Limited all the issued and outstanding shares of MBSI and all of the intercompany debt receivable held by Hydro One due from MBSI, as a return of stated capital of $3 million on its common shares. |
Depreciation and Amortization
Depreciation and Amortization | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Depreciation and Amortization | 5. DEPRECIATION AND AMORTIZATION Year ended December 31 (millions of Canadian dollars) 2015 2014 Depreciation of property, plant and equipment 594 565 Amortization of intangible assets 54 53 Asset removal costs 90 81 Amortization of regulatory assets 19 23 757 722 |
Financing Charges
Financing Charges | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift, Interest [Abstract] | |
Financing Charges | 6. FINANCING CHARGES Year ended December 31 (millions of Canadian dollars) 2015 2014 Interest on long-term debt 417 432 Other 16 12 Less: Interest capitalized on construction and development in progress (52 ) (49 ) Gain on interest-rate swap agreements (2 ) (10 ) Interest earned on investments (3 ) (6 ) 376 379 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES Income taxes / provision for PILs differs from the amount that would have been recorded using the combined Canadian federal and Ontario statutory income tax rate. The reconciliation between the statutory and the effective tax rates is provided as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Income taxes / provision for PILs at statutory rate 216 222 Increase (decrease) resulting from: Net temporary differences included in amounts charged to customers: Capital cost allowance in excess of depreciation and amortization (37 ) (72 ) Pension contributions in excess of pension expense (25 ) (24 ) Overheads capitalized for accounting but deducted for tax purposes (15 ) (15 ) Interest capitalized for accounting but deducted for tax purposes (13 ) (13 ) Environmental expenditures (5 ) (5 ) Non-refundable investment tax credits (2 ) (3 ) Post-retirement and post-employment benefit expense in excess of cash payments (1 ) 3 Prior year’s adjustments (1 ) (4 ) Other (2 ) (1 ) Net temporary differences (101 ) (134 ) Net tax benefit resulting from transition from PILs Regime to Federal Tax Regime (9 ) — Hydro One Brampton spin-off 7 — Net permanent differences 1 1 Total income taxes / provision for PILs 114 89 The major components of income tax expense are as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Current income taxes / provision for PILs 2,931 79 Deferred income taxes / provision for (recovery of) PILs (2,817 ) 10 Total income taxes / provision for PILs 114 89 Effective income tax rate 13.97 % 10.63 % The provision for PILs / current income taxes is remitted to, or received from, the OEFC (PILs Regime) and the CRA (Federal Tax Regime). At December 31, 2015, $12 million (2014 – $39 million) due from the OEFC was included in due from related parties and $1 million (2014 – $nil) due from the CRA was included in prepaid expenses and other assets on the Consolidated Balance Sheet. In connection with the IPO, Hydro One’s exemption from tax under the Federal Tax Regime ceased to apply. Under the PILs Regime, Hydro One was deemed to have disposed of its assets immediately before it lost its tax exempt status under the Federal Tax Regime, resulting in Hydro One making payments in lieu of tax (Departure Tax) totalling $2.6 billion. To enable Hydro One to make the Departure Tax payment, Hydro One Limited subscribed for 39,598 common shares of Hydro One for $2.6 billion. Hydro One used the proceeds of this share subscription to pay the Departure Tax. At December 31, 2015, the total income taxes / provision for PILs includes deferred income taxes / recovery of PILs of $2,817 million (2014 – deferred provision of $10 million), including $2,798 million (2014 – $nil) resulting from transition from the PILs Regime to the Federal Tax Regime, that is not included in the rate-setting process, using the liability method of accounting. Deferred income taxes / PILs balances expected to be included in the rate-setting process are offset by regulatory assets and liabilities to reflect the anticipated recovery or disposition of these balances within future electricity rates. Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities arise from differences between the carrying amounts and tax basis of the Company’s assets and liabilities. At December 31, 2015 and 2014, deferred income tax assets and liabilities consisted of the following: December 31 (millions of Canadian dollars) 2015 2014 Deferred income tax assets Depreciation and amortization in excess of capital cost allowance 918 (4 ) Post-retirement and post-employment benefits expense in excess of cash payments 572 8 Environmental expenditures 75 4 Non-capital losses 62 — Other 2 (1 ) Total deferred income tax assets 1,629 7 Less: current portion 19 — 1,610 7 December 31 (millions of Canadian dollars) 2015 2014 Deferred income tax liabilities Regulatory amounts that are not recognized for tax purposes (153 ) (140 ) Partnership interest (41 ) (38 ) Goodwill (10 ) (21 ) Capital cost allowance in excess of depreciation and amortization (1 ) (1,713 ) Post-retirement and post-employment benefits expense in excess of cash payments — 559 Environmental expenditures — 59 Other (1 ) — Total deferred income tax liabilities (206 ) (1,294 ) Less: current portion — 19 (206 ) (1,313 ) During 2015 and 2014, there were no changes in the rate applicable to future taxes. The Company has recorded a valuation allowance in the amount of $278 million (2014 – $nil) in respect of non-depreciable capital property. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Accounts Receivable | 8. ACCOUNTS RECEIVABLE December 31 (millions of Canadian dollars) 2015 2014 Accounts receivable – billed 374 496 Accounts receivable – unbilled 459 586 Accounts receivable, gross 833 1,082 Allowance for doubtful accounts (61 ) (66 ) Accounts receivable, net 772 1,016 In 2015, the Company revised the method to estimate the unbilled accounts receivable by using new technology that improved the estimation process. This change has been accounted for on a prospective basis in the consolidated financial statements at December 31, 2015. At December 31, 2015, the change in estimation technology resulted in a reduction in unbilled accounts receivable of approximately $121 million, with a corresponding offset to various components of the retail settlement variance accounts (RSVA). The change in estimate had no significant impact on 2015 net income. The following table shows the movements in the allowance for doubtful accounts for the years ended December 31, 2015 and 2014: Year ended December 31 (millions of Canadian dollars) 2015 2014 Allowance for doubtful accounts – January 1 (66 ) (36 ) Write-offs 37 24 Additions to allowance for doubtful accounts (32 ) (54 ) Allowance for doubtful accounts – December 31 (61 ) (66 ) |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 9. PROPERTY, PLANT AND EQUIPMENT December 31, 2015 (millions of Canadian dollars) Property, Accumulated Construction in Progress Total Transmission 13,803 4,625 853 10,031 Distribution 9,205 3,177 238 6,266 Communication 1,006 609 18 415 Administration and service 1,531 848 35 718 Easements 523 60 — 463 26,068 9,319 1,144 17,893 December 31, 2014 (millions of Canadian dollars) Property, Accumulated Construction in Progress Total Transmission 13,209 4,416 626 9,419 Distribution 9,076 3,225 320 6,171 Communication 1,100 615 56 541 Administration and service 1,502 793 23 732 Easements 623 85 — 538 25,510 9,134 1,025 17,401 Financing charges capitalized on property, plant and equipment under construction were $50 million in 2015 (2014 – $48 million). |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 10. INTANGIBLE ASSETS December 31, 2015 (millions of Canadian dollars) Intangible Accumulated Development in Progress Total Computer applications software 579 270 24 333 Other 7 4 — 3 586 274 24 336 December 31, 2014 (millions of Canadian dollars) Intangible Accumulated Development in Progress Total Computer applications software 573 303 3 273 Other 5 2 — 3 578 305 3 276 Financing charges capitalized to intangible assets under development were $1 million in 2015 (2014 – $1 million). The estimated annual amortization expense for intangible assets is as follows: 2016 – $57 million; 2017 – $57 million; 2018 – $57 million; 2019 – $47 million; and 2020 – $30 million. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Regulated Operations [Abstract] | |
Regulatory Assets and Liabilities | 11. REGULATORY ASSETS AND LIABILITIES Regulatory assets and liabilities arise as a result of the rate-setting process. Hydro One has recorded the following regulatory assets and liabilities: December 31 (millions of Canadian dollars) 2015 2014 Regulatory assets: Deferred income tax regulatory asset 1,445 1,327 Pension benefit regulatory asset 952 1,236 Post-retirement and post-employment benefits 240 273 Environmental 207 239 RSVA 110 11 Pension cost variance 37 90 2015-2017 rate rider 20 — DSC exemption 10 16 Share-based compensation 10 — B2M LP start-up costs 8 — OEB cost assessment differential — 12 Other 12 27 Total regulatory assets 3,051 3,231 Less: current portion 36 31 3,015 3,200 Regulatory liabilities: External revenue variance 87 54 Green Energy expenditure variance 76 83 CDM deferral variance 53 25 Deferred income tax regulatory liability 23 21 PST savings deferral 4 19 Other 12 13 Total regulatory liabilities 255 215 Less: current portion 19 47 236 168 Deferred Income Tax Regulatory Asset and Liability Deferred income taxes are recognized on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income. The Company has recognized regulatory assets and liabilities that correspond to deferred income taxes that flow through the rate-setting process. In the absence of rate-regulated accounting, the Company’s income tax expense would have been recognized using the liability method and there would be no regulatory accounts established for taxes to be recovered through future rates. As a result, the 2015 income tax expense would have been higher by approximately $101 million (2014 – $132 million). Pension Benefit Regulatory Asset In accordance with OEB rate orders, pension costs are recorded on a cash basis as employer contributions are paid to the pension fund in accordance with the Pension Benefits Act Post-Retirement and Post-Employment Benefits The Company recognizes the net unfunded status of post-retirement and post-employment obligations on the Consolidated Balance Sheets with an incremental offset to the associated regulatory assets. A regulatory asset is recognized because management considers it to be probable that post-retirement and post-employment benefit costs will be recovered in the future through the rate-setting process. The post-retirement and post-employment benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. In the absence of rate-regulated accounting, 2015 OCI would have been higher by $33 million (2014 – $35 million). Environmental Hydro One records a liability for the estimated future expenditures required to remediate environmental contamination. Because such expenditures are expected to be recoverable in future rates, the Company has recorded an equivalent amount as a regulatory asset. In 2015, the environmental regulatory asset decreased by $24 million (2014 – $33 million) to reflect related changes in the Company’s PCB liability, and increased by $1 million (2014 – $13 million) due to changes in the land assessment and remediation liability. The environmental regulatory asset is amortized to results of operations based on the pattern of actual expenditures incurred and charged to environmental liabilities. The OEB has the discretion to examine and assess the prudency and the timing of recovery of all of Hydro One’s actual environmental expenditures. In the absence of rate-regulated accounting, 2015 operation, maintenance and administration expenses would have been lower by $23 million (2014 – $20 million). In addition, 2015 amortization expense would have been lower by $19 million (2014 – $18 million), and 2015 financing charges would have been higher by $10 million (2014 – $11 million). RSVA Hydro One has deferred certain retail settlement variance amounts under the provisions of Article 490 of the OEB’s Accounting Procedures Handbook. In March 2015, the OEB approved the disposition of the total RSVA balance accumulated from January 2012 to December 2013, including accrued interest, to be recovered through the 2015-2017 Rate Rider. In 2015, the Company revised its method to estimate the unbilled accounts receivable based on new technology implemented to improve the accuracy of the estimation process. At December 31, 2015, the change in estimate reduced unbilled accounts receivable by approximately $121 million, with a corresponding offset to various components of RSVA. The change in estimate had no significant impact on 2015 net income. Pension Cost Variance A pension cost variance account was established for Hydro One Networks’ transmission and distribution businesses to track the difference between the actual pension expenses incurred and estimated pension costs approved by the OEB. The balance in this regulatory account reflects the excess of pension costs paid as compared to OEB-approved amounts. In March 2015, the OEB approved the disposition of the distribution business portion of the total pension cost variance account at December 31, 2013, including accrued interest, which will be recovered through the 2015-2017 Rate Rider. In the absence of rate-regulated accounting, 2015 revenue would have been lower by $6 million (2014 – $10 million). 2015-2017 Rate Rider In March 2015, as part of its decision on Hydro One Networks’ Distribution rate application for 2015-2019 the OEB approved the disposition of certain deferral and variance accounts, including RSVAs and accrued interest. The 2015-2017 Rate Rider account includes the balances approved for disposition by the OEB and will be disposed over a 32-month period in accordance with the OEB decision. DSC Exemption In June 2010, Hydro One Networks filed an application with the OEB regarding the OEB’s new cost responsibility rules contained in the OEB’s October 2009 Notice of Amendment to the Distribution System Code (DSC), with respect to the connection of certain renewable generators that were already connected or that had received a connection impact assessment prior to October 21, 2009. The application sought approval to record and defer the unanticipated costs incurred by Hydro One Networks that resulted from the connection of certain renewable generation facilities. The OEB ruled that identified specific expenditures can be recorded in a deferral account subject to the OEB’s review in subsequent Hydro One Network distribution applications. In March 2015, the OEB approved the disposition of the DSC exemption deferral account at December 31, 2013, including accrued interest, which will be recovered through the 2015-2017 Rate Rider. In addition, the OEB also approved Hydro One’s request to discontinue this deferral account, and there were no additions to this regulatory account in 2015. Share-based Compensation The Company recognizes costs associated with stock-based compensation in a regulatory asset as management considers it probable that stock-based compensation costs will be recovered in the future through the rate-setting process. At December 31, 2015 the stock-based compensation costs relate to the share grant plans, are measured at fair value estimated based on grant date Hydro One Limited share price and recognized using the graded-vesting attribution method. In the absence of rate-regulated accounting 2015 operation, maintenance and administration expenses would have been higher by $5 million (2014 – $nil). B2M LP Start-up Costs In December 2015, OEB issued its decision on B2M LP’s application for 2015-2019 and as part of the decision approved the recovery of $8 million of start-up costs relating to B2M LP. The costs will be recovered over a 4 year period beginning in 2016, in accordance with the OEB decision. OEB Cost Assessment Differential In April 2010, the OEB issued its Decision regarding Hydro One Networks’ distribution rate application for 2010 and 2011. As part of this decision, the OEB also approved the distribution-related OEB Cost Assessment Differential Account to record the difference between the amounts approved in rates and actual expenditures with respect to the OEB’s cost assessments. In March 2015, the OEB approved the disposition of the OEB Cost Assessment Differential Account at December 31, 2013, including accrued interest, which will be recovered through the 2015-2017 Rate Rider. In addition, the OEB also approved Hydro One’s request to discontinue this deferral account, and there were no additions to this regulatory account in 2015. External Revenue Variance In May 2009, the OEB approved forecasted amounts related to export service revenue, external revenue from secondary land use, and external revenue from station maintenance and engineering and construction work. In November 2012, the OEB again approved forecasted amounts related to these revenue categories and extended the scope to encompass all other external revenues. The external revenue variance account balance reflects the excess of actual external revenues compared to the OEB-approved forecasted amounts. Green Energy Expenditure Variance In April 2010, the OEB requested the establishment of deferral accounts which capture the difference between the revenue recorded on the basis of Green Energy Plan expenditures incurred and the actual recoveries received. CDM Deferral Variance Account As part of Hydro One Networks’ application for 2013 and 2014 transmission rates, Hydro One agreed to establish a new regulatory deferral variance account to track the impact of actual Conservation and Demand Management (CDM) and demand response results on the load forecast compared to the estimated load forecast included in the revenue requirement. At December 31, 2014, the balance in the CDM deferral variance account relates to the actual 2013 CDM compared to the amounts included in 2013 revenue requirement. At December 31, 2015, the balance also includes the difference between the actual 2014 CDM compared to the amounts included in 2014 revenue requirement. The OEB rate order specifically states that the IESO (Ontario Power Authority (OPA) prior to January 1, 2015) data used to calculate the difference between forecasted and actual savings will be provided one year in arrears, and as a result, no amount should be recorded in advance of notification from the IESO of actual results. PST Savings Deferral Account The provincial sales tax (PST) and goods and services tax (GST) were harmonized in July 2010. Unlike the GST, the PST was included in operation, maintenance and administration expenses or capital expenditures for past revenue requirements approved during a full cost-of-service hearing. Under the harmonized sales tax (HST) regime, the HST included in operation, maintenance and administration expenses or capital expenditures is not a cost ultimately borne by the Company and as such, a refund of the prior PST element in the approved revenue requirement is applicable, and calculations for tracking and refund were requested by the OEB. For Hydro One Networks’ transmission revenue requirement, PST was included between July 1, 2010 and December 31, 2010 and recorded in a deferral account, per direction from the OEB. For Hydro One Networks’ distribution revenue requirement, PST was included between July 1, 2010 and December 31, 2015 and recorded in a deferral account, as directed by the OEB. In March 2015, the OEB approved the disposition of the PST Savings Deferral account at December 31, 2013, including accrued interest, which will be recovered through the 2015-2017 Rate Rider. |
Debt and Credit Agreements
Debt and Credit Agreements | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Credit Agreements | 12. DEBT AND CREDIT AGREEMENTS Short-Term Notes and Credit Facilities Hydro One meets its short-term liquidity requirements in part through the issuance of commercial paper under its Commercial Paper Program which has a maximum authorized amount of $1.5 billion. These short-term notes are denominated in Canadian dollars with varying maturities not exceeding 365 days. The Commercial Paper Program is supported by the Company’s committed revolving credit facilities totalling $2.3 billion. At December 31, 2015, Hydro One had $1,491 million in commercial paper borrowings outstanding (December 31, 2014 – $nil). At December 31, 2015, Hydro One’s consolidated committed, unsecured and unused credit facilities totalling $2.3 billion consisted of the following: (millions of Canadian dollars) Maturity Amount Revolving standby credit facility June 2020 1,500 Three-year senior, revolving term credit facility October 2018 800 Total 2,300 The Company may use the credit facilities for working capital and general corporate purposes. If used, interest on the credit facilities would apply based on Canadian benchmark rates. The obligation of each lender to make any credit extension under its credit facility is subject to various conditions including, among other things, that no event of default has occurred or would result from such credit extension. Long-Term Debt The Company issues notes for long-term financing under its Medium-Term Note (MTN) Program. The maximum authorized principal amount of notes issuable under this program is $3.5 billion. At December 31, 2015, $3.5 billion remained available for issuance until January 2018. The following table presents the outstanding long-term debt at December 31, 2015 and 2014: December 31 (millions of Canadian dollars) 2015 2014 2.95% Series 21 notes due 2015 1 — 500 Floating-rate Series 22 notes due 2015 2 — 50 4.64% Series 10 notes due 2016 450 450 Floating-rate Series 27 notes due 2016 2 50 50 5.18% Series 13 notes due 2017 600 600 2.78% Series 28 notes due 2018 750 750 Floating-rate Series 31 notes due 2019 2 228 228 4.40% Series 20 notes due 2020 300 300 1.62% Series 33 notes due 2020 1 350 – 3.20% Series 25 notes due 2022 600 600 7.35% Debentures due 2030 400 400 6.93% Series 2 notes due 2032 500 500 6.35% Series 4 notes due 2034 385 385 5.36% Series 9 notes due 2036 600 600 4.89% Series 12 notes due 2037 400 400 6.03% Series 17 notes due 2039 300 300 5.49% Series 18 notes due 2040 500 500 4.39% Series 23 notes due 2041 300 300 6.59% Series 5 notes due 2043 315 315 4.59% Series 29 notes due 2043 435 435 4.17% Series 32 notes due 2044 350 350 5.00% Series 11 notes due 2046 325 325 4.00% Series 24 notes due 2051 225 225 3.79% Series 26 notes due 2062 310 310 4.29% Series 30 notes due 2064 50 50 8,723 8,923 Add: Unrealized mark-to-market loss 1 1 2 Less: Long-term debt payable within one year (500 ) (552 ) Long-term debt 8,224 8,373 1 The unrealized mark-to-market loss relates to $50 million of the Series 33 notes due 2020 (2014 – $250 million of the Series 21 notes due 2015). The unrealized mark-to-market loss is offset by a $1 million (2014 – $2 million) unrealized mark-to-market gain on the related fixed-to-floating interest-rate swap agreements, which are accounted for as fair value hedges. See Note 13 – Fair Value of Financial Instruments and Risk Management for details of fair value hedges. 2 The interest rates of the floating-rate notes are referenced to the 3-month Canadian dollar bankers’ acceptance rate, plus a margin. In 2015, Hydro One issued $350 million (2014 – $628 million) of long-term debt under the MTN Program, and repaid $550 million of long-term debt MTN Program notes (2014 – $750 million). Long-term debt totalling $35 million assumed by Hydro One as part of the Haldimand Hydro and Woodstock Hydro acquisitions was repaid in 2015. The long-term debt is unsecured and denominated in Canadian dollars. The long-term debt is summarized by the number of years to maturity in Note 13 – Fair Value of Financial Instruments and Risk Management. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Risk Management | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Risk Management | 13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The fair value definition focuses on an exit price, which is the price that would be received in the sale of an asset or the amount that would be paid to transfer a liability. Hydro One classifies its fair value measurements based on the following hierarchy, as prescribed by the accounting guidance for fair value, which prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Hydro One has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputs are those other than quoted market prices that are observable, either directly or indirectly, for an asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest-rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. A Level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs. Level 3 inputs are any fair value measurements that include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. A Level 3 measurement may be based primarily on Level 2 inputs. Non-Derivative Financial Assets and Liabilities At December 31, 2015 and 2014, the Company’s carrying amounts of accounts receivable, due from related parties, cash and cash equivalents, bank indebtedness, short-term notes payable, accounts payable, and due to related parties are representative of fair value because of the short-term nature of these instruments. Fair Value Measurements of Long-Term Debt The fair values and carrying values of the Company’s long-term debt at December 31, 2015 and 2014 are as follows: December 31 (millions of Canadian dollars) 2015 Carrying 2015 Fair 2014 Carrying 2014 Fair Long-term debt $250 million of MTN Series 21 notes 1 — — 252 252 $50 million of MTN Series 33 notes 1 51 51 — — Other notes and debentures 2 8,673 9,942 8,673 10,159 8,724 9,993 8,925 10,411 1 The fair value of the $50 million MTN Series 33 notes and $250 million of the MTN Series 21 notes subject to hedging is primarily based on changes in the present value of future cash flows due to a change in the yield in the swap market for the related swap (hedged risk). 2 The fair value of other notes and debentures, and the portion of the MTN Series 21 notes that are not subject to hedging, represents the market value of the notes and debentures and is based on unadjusted period-end market prices for the same or similar debt of the same remaining maturities. Fair Value Measurements of Derivative Instruments At December 31, 2015, Hydro One had an interest-rate swap in the amount of $50 million (2014 – $250 million) that was used to convert fixed-rate debt to floating-rate debt. This swap is classified as a fair value hedge. Hydro One’s fair value hedge exposure was equal to about 1% (2014 – 3%) of its total long-term debt of $8,724 million (2014 – $8,925 million). At December 31, 2015, Hydro One’s interest-rate swap designated as a fair value hedge was as follows: • a $50 million fixed-to-floating interest-rate swap agreement to convert $50 million of the $350 million MTN Series 33 notes maturing April 30, 2020 into three-month variable rate debt. At December 31, 2015, the Company had no interest-rate swaps classified as undesignated contracts (2014 – $409 million). As part of the Norfolk Power and Woodstock Hydro acquisitions, Hydro One assumed liabilities associated with unrealized losses on derivative instruments (interest-rate swaps) totalling $6 million. Hydro One extinguished the interest rate swaps and repaid these liabilities in 2015. Fair Value Hierarchy The fair value hierarchy of financial assets and liabilities at December 31, 2015 and 2014 is as follows: December 31, 2015 (millions of Canadian dollars) Carrying Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents 89 89 89 — — Derivative instruments Fair value hedge – interest-rate swap 1 1 1 — — 90 90 90 — — Liabilities: Short-term notes payable 1,491 1,491 1,491 — — Long-term debt 8,724 9,993 — 9,993 — 10,215 11,484 1,491 9,993 December 31, 2014 (millions of Canadian dollars) Carrying Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents 100 100 100 — — Derivative instruments Fair value hedges – interest-rate swaps 2 2 — 2 — 102 102 100 2 — Liabilities: Bank indebtedness 2 2 2 — — Derivative instruments Undesignated contracts – interest-rate swaps 3 3 — 3 — Long-term debt 8,925 10,411 — 10,411 — 8,930 10,416 2 10,414 — Cash and cash equivalents include cash and short-term investments. The carrying values are representative of fair value because of the short-term nature of these instruments. The fair value of the derivative instruments is determined using inputs other than quoted prices that are observable for these assets. The fair value is primarily based on the present value of future cash flows using a swap yield curve to determine the assumptions for interest rates. The fair value of the hedged portion of the long-term debt is primarily based on the present value of future cash flows using a swap yield curve to determine the assumption for interest rates. The fair value of the unhedged portion of the long-term debt is based on unadjusted period-end market prices for the same or similar debt of the same remaining maturities. There were no significant transfers between any of the fair value levels during the years ended December 31, 2015 and 2014. Risk Management Exposure to market risk, credit risk and liquidity risk arises in the normal course of the Company’s business. Market Risk Market risk refers primarily to the risk of loss that results from changes in costs, foreign exchange rates and interest rates. The Company is exposed to fluctuations in interest rates as its regulated return on equity is derived using a formulaic approach that takes into account anticipated interest rates, but is not currently exposed to material commodity price risk or material foreign exchange risk. The OEB-approved adjustment formula for calculating return on equity in a deemed regulatory capital structure of 60% debt and 40% equity provides for increases and decreases depending on changes in benchmark rates of return for Government of Canada debt. The Company estimates that a 1% decrease in the forecasted long-term Government of Canada bond yield used in determining its rate of return would reduce the Company’s transmission business’ 2015 net income by approximately $20 million (2014 – $20 million) and its distribution business’ 2015 net income by approximately $13 million (2014 – $10 million). The Company’s net income is adversely impacted by rising interest rates as Hydro One’s maturing long-term debt is refinanced at market rates. Hydro One periodically utilizes interest rate swap agreements to mitigate elements of interest rate risk. Hydro One uses a combination of fixed and variable-rate debt to manage the mix of its debt portfolio. Hydro One also uses derivative financial instruments to manage interest-rate risk. Hydro One utilizes interest-rate swaps, which are typically designated as fair value hedges, as a means to manage its interest rate exposure to achieve a lower cost of debt. In addition, the Company may utilize interest-rate derivative instruments to lock in interest-rate levels in anticipation of future financing. A hypothetical 10% increase in the interest rates associated with variable-rate debt would not have resulted in a significant decrease in Hydro One’s net income for the years ended December 31, 2015 or 2014. Fair Value Hedges For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in the Consolidated Statements of Operations and Comprehensive Income. The net unrealized loss (gain) on the hedged debt and the related interest-rate swaps for the years ended December 31, 2015 and 2014 are included in financing charges as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Unrealized loss (gain) on hedged debt (1 ) (3 ) Unrealized loss (gain) on fair value interest-rate swaps 1 3 Net unrealized loss (gain) — — At December 31, 2015, Hydro One had $50 million (2014 – $250 million) of notional amounts of fair value hedges outstanding related to interest-rate swaps, with assets at fair value of $1 million (2014 – $2 million). During the years ended December 31, 2015 and 2014, there was no significant impact on the results of operations as a result of any ineffectiveness attributable to fair value hedges. Credit Risk Financial assets create a risk that a counterparty will fail to discharge an obligation, causing a financial loss. At December 31, 2015 and 2014, there were no significant concentrations of credit risk with respect to any class of financial assets. The Company’s revenue is earned from a broad base of customers. As a result, Hydro One did not earn a significant amount of revenue from any single customer. At December 31, 2015 and 2014, there was no significant accounts receivable balance due from any single customer. At December 31, 2015, the Company’s provision for bad debts was $61 million (2014 – $66 million). Adjustments and write-offs were determined on the basis of a review of overdue accounts, taking into consideration historical experience. At December 31, 2015, approximately 6% (2014 – 6%) of the Company’s net accounts receivable were aged more than 60 days. Hydro One manages its counterparty credit risk through various techniques including: entering into transactions with highly-rated counterparties; limiting total exposure levels with individual counterparties consistent with the Company’s Board-approved Credit Risk Policy; entering into master agreements which enable net settlement and the contractual right of offset; and monitoring the financial condition of counterparties. In addition to payment netting language in master agreements, the Company establishes credit limits, margining thresholds and collateral requirements for each counterparty. Counterparty credit limits are based on an internal credit review that considers a variety of factors, including the results of a scoring model, leverage, liquidity, profitability, credit ratings and risk management capabilities. The determination of credit exposure for a particular counterparty is the sum of current exposure plus the potential future exposure with that counterparty. The current exposure is calculated as the sum of the principal value of money market exposures and the market value of all contracts that have a positive mark-to-market position on the measurement date. The Company would offset the positive market values against negative values with the same counterparty only where permitted by the existence of a legal netting agreement such as an International Swap Dealers Association master agreement. The potential future exposure represents a safety margin to protect against future fluctuations of interest rates, currencies, equities, and commodities. It is calculated based on factors developed by the Bank of International Settlements, following extensive historical analysis of random fluctuations of interest rates and currencies. To the extent that a counterparty’s margining thresholds are exceeded, the counterparty is required to post collateral with the Company as specified in each agreement. The Company monitors current and forward credit exposure to counterparties both on an individual and an aggregate basis. The Company’s credit risk for accounts receivable is limited to the carrying amounts on the Consolidated Balance Sheets. Derivative financial instruments result in exposure to credit risk since there is a risk of counterparty default. The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date. At December 31, 2015, the counterparty credit risk exposure on the fair value of these interest-rate swap contracts was $1 million (2014 – $3 million). At December 31, 2015, Hydro One’s credit exposure for all derivative instruments, and applicable payables and receivables, had a credit rating of investment grade, with one financial institution as the counterparty. Liquidity Risk Liquidity risk refers to the Company’s ability to meet its financial obligations as they come due. Hydro One meets its short-term liquidity requirements using cash and cash equivalents on hand, funds from operations, the issuance of commercial paper, and the revolving standby facilities totaling $2.3 billion. The short-term liquidity under the Commercial Paper Program, and anticipated levels of funds from operations should be sufficient to fund normal operating requirements. At December 31, 2015, accounts payable and accrued liabilities in the amount of $743 million (2014 – $784 million) were expected to be settled in cash at their carrying amounts within the next 12 months. At December 31, 2015, Hydro One had long-term debt in the principal amount of $8,723 million (2014 – $8,923 million). Principal repayments and related weighted average interest rates are summarized by the number of years to maturity in the following table: Years to Maturity Long-term Debt Principal Repayments (millions of Canadian dollars) Weighted Average Interest Rate (%) 1 year 500 4.3 2 years 600 5.2 3 years 750 2.8 4 years 228 1.2 5 years 650 2.9 2,728 3.5 6 – 10 years 600 3.2 Over 10 years 5,395 5.4 8,723 4.7 Interest payments on long-term debt are summarized by year in the following table: Year Interest Payments (millions of Canadian dollars) 2016 397 2017 386 2018 355 2019 332 2020 322 1,792 2021-2025 1,496 2026 + 4,080 7,368 |
Capital Management
Capital Management | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Capital Management | 14. CAPITAL MANAGEMENT The Company’s objectives with respect to its capital structure are to maintain effective access to capital on a long-term basis at reasonable rates, and to deliver appropriate financial returns. In order to ensure ongoing access to capital, the Company targets to maintain strong credit quality. The Company considers its capital structure to consist of shareholder’s equity, preferred shares, long-term December 31 (millions of Canadian dollars) 2015 2014 Long-term debt payable within one year 500 552 Short-term notes payable 1,491 — Less: cash and cash equivalents 89 100 1,902 452 Long-term debt 8,224 8,373 Preferred shares — 323 Common shares 6,000 3,314 Retained earnings 3,759 4,249 9,759 7,563 Total capital 19,885 16,711 The Company has customary covenants typically associated with long-term debt. Among other things, Hydro One’s long-term debt and credit facility covenants limit the permissible debt to 75% of its total capitalization, limit the ability to sell assets and impose a negative pledge provision, subject to customary exceptions. At December 31, 2015 and 2014, Hydro One was in compliance with all of these covenants and limitations. |
Pension and Post-Retirement and
Pension and Post-Retirement and Post-Employment Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Postemployment Benefits [Abstract] | |
Pension and Post-Retirement and Post-Employment Benefits | 15. PENSION AND POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS Hydro One has a defined benefit pension plan, a supplementary pension plan, and post-retirement and post-employment benefit plans. The defined benefit pension plan (Pension Plan) is contributory and covers all regular employees of Hydro One and its subsidiaries, except employees of Haldimand Hydro and Woodstock Hydro. Employees of Haldimand Hydro and Woodstock Hydro participate in the OMERS Plan. The supplementary pension plan provides members of the Pension Plan with benefits that would have been earned and payable under the Pension Plan but for limitations imposed by the Income Tax Act The OMERS Plan Hydro One contributions to the OMERS Plan for the year ended December 31, 2015 were $2 million (2014 – $2 million). At December 31, 2015, Company contributions payable included in accrued liabilities on the Consolidated Balance Sheets were less than $1 million (2014 – less than $1 million). Hydro One contributions do not represent more than 5% of total contributions to the OMERS Plan, as indicated in OMERS’ most recently available annual report for the year ended December 31, 2014. At December 31, 2014, the OMERS Plan was 90.8% funded, with an unfunded liability of $7.1 billion. This unfunded liability could result in future payments by participating employers and members. Hydro One future contributions could be increased substantially if other entities withdraw from the plan. Pension Plan, Post-Retirement and Post-Employment Plans The Pension Plan provides benefits based on highest three-year average pensionable earnings. For new management employees who commenced employment on or after January 1, 2004, and for new Society of Energy Professionals-represented staff hired after November 17, 2005, benefits are based on highest five-year average pensionable earnings. After retirement, pensions are indexed to inflation. Company and employee contributions to the Pension Plan are based on actuarial valuations performed at least every three years. Annual Pension Plan contributions for 2015 of $177 million (2014 – $174 million) were based on an actuarial valuation effective December 31, 2013 and the expected level of pensionable earnings. Estimated annual Pension Plan contributions for 2016 are approximately $180 million, based on the actuarial valuation as at December 31, 2013 and projected levels of pensionable earnings. Future minimum contributions beyond 2016 will be based on an actuarial valuation effective no later than December 31, 2016. Contributions are payable one month in arrears. All of the contributions are expected to be in the form of cash. Hydro One recognizes the overfunded or underfunded status of the Pension Plan, and post-retirement and post-employment benefit plans (Plans) as an asset or liability on its Consolidated Balance Sheets, with offsetting regulatory assets and liabilities as appropriate. The underfunded benefit obligations for the Plans, in the absence of regulatory accounting, would be recognized in AOCI. The impact of changes in assumptions used to measure pension, post-retirement and post-employment benefit obligations is generally recognized over the expected average remaining service period of the employees. The measurement date for the Plans is December 31. Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 (millions of Canadian dollars) 2015 2014 2015 2014 Change in projected benefit obligation Projected benefit obligation, beginning of year 7,535 6,576 1,582 1,531 Current service cost 186 145 43 41 Interest cost 302 312 64 73 Benefits paid (334 ) (319 ) (47 ) (45 ) Net actuarial loss (gain) (6 ) 821 (27 ) (18 ) Change due to Hydro One Brampton spin-off — — (5 ) — Change due to Hydro One Telecom spin-off — — (19 ) — Projected benefit obligation, end of year 7,683 7,535 1,591 1,582 Change in plan assets Fair value of plan assets, beginning of year 6,299 5,731 — — Actual return on plan assets 582 703 — — Benefits paid (334 ) (319 ) — — Employer contributions 177 174 — — Employee contributions 40 35 — — Administrative expenses (33 ) (25 ) — — Fair value of plan assets, end of year 6,731 6,299 — — Unfunded status 952 1,236 1,591 1,582 Hydro One presents its benefit obligations and plan assets net on its Consolidated Balance Sheets within the following line items: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of Canadian dollars) 2015 2014 2015 2014 Accrued liabilities — — 50 49 Pension benefit liability 952 1,236 — — Post-retirement and post-employment benefit liability — — 1,541 1,533 Unfunded status 952 1,236 1,591 1,582 The funded or unfunded status of the pension, post-retirement and post-employment benefit plans refers to the difference between the fair value of plan assets and the projected benefit obligations for the Plans. The funded/unfunded status changes over time due to several factors, including contribution levels, assumed discount rates and actual returns on plan assets. The following table provides the projected benefit obligation (PBO), accumulated benefit obligation (ABO) and fair value of plan assets for the Pension Plan: December 31 (millions of Canadian dollars) 2015 2014 PBO 7,683 7,535 ABO 7,020 6,887 Fair value of plan assets 6,731 6,299 On an ABO basis, the Pension Plan was funded at 96% at December 31, 2015 (2014 – 91%). On a PBO basis, the Pension Plan was funded at 88% at December 31, 2015 (2014 – 84%). The ABO differs from the PBO in that the ABO includes no assumption about future compensation levels. Components of Net Periodic Benefit Costs The following table provides the components of the net periodic benefit costs for the years ended December 31, 2015 and 2014 for the Pension Plan: Year ended December 31 (millions of Canadian dollars) 2015 2014 Current service cost, net of employee contributions 146 110 Interest cost 302 312 Expected return on plan assets, net of expenses (406 ) (369 ) Actuarial loss amortization 119 103 Prior service cost amortization 2 2 Net periodic benefit costs 163 158 Charged to results of operations 1 81 81 1 The Company follows the cash basis of accounting consistent with the inclusion of pension costs in OEB-approved rates. During the year ended December 31, 2015, pension costs of $177 million (2014 – $174 million) were attributed to labour, of which $81 million (2014 – $81 million) was charged to operations, and $96 million (2014 – $93 million) was capitalized as part of the cost of property, plant and equipment and intangible assets. The following table provides the components of the net periodic benefit costs for the years ended December 31, 2015 and 2014 for the post-retirement and post-employment benefit plans: Year ended December 31 (millions of Canadian dollars) 2015 2014 Current service cost, net of employee contributions 43 41 Interest cost 64 73 Actuarial loss amortization 14 18 Prior service cost amortization — 2 Net periodic benefit costs 121 134 Charged to results of operations 55 62 Assumptions The measurement of the obligations of the Plans and the costs of providing benefits under the Plans involves various factors, including the development of valuation assumptions and accounting policy elections. When developing the required assumptions, the Company considers historical information as well as future expectations. The measurement of benefit obligations and costs is impacted by several assumptions including the discount rate applied to benefit obligations, the long-term expected rate of return on plan assets, Hydro One’s expected level of contributions to the Plans, the incidence of mortality, the expected remaining service period of plan participants, the level of compensation and rate of compensation increases, employee age, length of service, and the anticipated rate of increase of health care costs, among other factors. The impact of changes in assumptions used to measure the obligations of the Plans is generally recognized over the expected average remaining service period of the plan participants. In selecting the expected rate of return on plan assets, Hydro One considers historical economic indicators that impact asset returns, as well as expectations regarding future long-term capital market performance, weighted by target asset class allocations. In general, equity securities, real estate and private equity investments are forecasted to have higher returns than fixed-income securities. The following weighted average assumptions were used to determine the benefit obligations at December 31, 2015 and 2014: Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 2015 2014 2015 2014 Significant assumptions: Weighted average discount rate 4.00 % 4.00 % 4.10 % 4.00 % Rate of compensation scale escalation (without merit) 2.50 % 2.50 % 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % 2.00 % 2.00 % Rate of increase in health care cost trends 1 — — 4.36 % 4.36 % 1 6.38% per annum in 2016, grading down to 4.36% per annum in and after 2031 (2014 – 6.52% in 2015, grading down to 4.36% per annum in and after 2031) The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2015 and 2014. Assumptions used to determine current year-end benefit obligations are the assumptions used to estimate the subsequent year’s net periodic benefit costs. Year ended December 31 2015 2014 Pension Benefits: Weighted average expected rate of return on plan assets 6.50 % 6.50 % Weighted average discount rate 4.00 % 4.75 % Rate of compensation scale escalation (without merit) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 13 11 Post-Retirement and Post-Employment Benefits: Weighted average discount rate 4.00 % 4.75 % Rate of compensation scale escalation (without merit) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 13.8 12 Rate of increase in health care cost trends 1 4.36 % 4.39 % 1 6.52% per annum in 2015, grading down to 4.36% per annum in and after 2031 (2014 – 6.81% in 2014, grading down to 4.39% per annum in and after 2031) The discount rate used to determine the current year pension obligation and the subsequent year’s net periodic benefit costs is based on a yield curve approach. Under the yield curve approach, expected future benefit payments for each plan are discounted by a rate on a third party bond yield curve corresponding to each duration. The yield curve is based on “AA” long-term corporate bonds. A single discount rate is calculated that would yield the same present value as the sum of the discounted cash flows. The effect of a 1% change in health care cost trends on the projected benefit obligation for the post-retirement and post-employment benefits at December 31, 2015 and 2014 is as follows: December 31 (millions of Canadian dollars) 2015 2014 Projected benefit obligation: Effect of a 1% increase in health care cost trends 252 248 Effect of a 1% decrease in health care cost trends (196 ) (193 ) The effect of a 1% change in health care cost trends on the service cost and interest cost for the post-retirement and post-employment benefits for the years ended December 31, 2015 and 2014 is as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Service cost and interest cost: Effect of a 1% increase in health care cost trends 22 23 Effect of a 1% decrease in health care cost trends (16 ) (17 ) The following approximate life expectancies were used in the mortality assumptions to determine the projected benefit obligations for the pension and post-retirement and post-employment plans at December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Life expectancy at 65 for a member currently at Life expectancy at 65 for a member currently at Age 65 Age 45 Age 65 Age 45 Male 23 Female 25 Male 24 Female 26 Male 23 Female 25 Male 24 Female 26 Estimated Future Benefit Payments At December 31, 2015, estimated future benefit payments to the participants of the Plans were: (millions of Canadian dollars) Pension Benefits Post-Retirement and Post-Employment Benefits 2016 316 53 2017 328 55 2018 339 57 2019 350 59 2020 360 61 2021 through to 2025 1,928 342 Total estimated future benefit payments through to 2025 3,621 627 Components of Regulatory Assets A portion of actuarial gains and losses and prior service costs is recorded within regulatory assets on Hydro One’s Consolidated Balance Sheets to reflect the expected regulatory inclusion of these amounts in future rates, which would otherwise be recorded in OCI. The following table provides the actuarial gains and losses and prior service costs recorded within regulatory assets: Year ended December 31 (millions of Canadian dollars) 2015 2014 Pension Benefits: Actuarial loss (gain) for the year (181 ) 511 Actuarial loss amortization (119 ) (103 ) Prior service cost amortization (2 ) (2 ) (302 ) 406 Post-Retirement and Post-Employment Benefits: Actuarial loss (gain) for the year (27 ) (18 ) Actuarial loss amortization (14 ) (18 ) Prior service cost amortization — (2 ) (41 ) (38 ) The following table provides the components of regulatory assets that have not been recognized as components of net periodic benefit costs for the years ended December 31, 2015 and 2014: Year ended December 31 (millions of Canadian dollars) 2015 2014 Pension Benefits: Prior service cost — 2 Actuarial loss 952 1,234 952 1,236 Post-Retirement and Post-Employment Benefits: Actuarial loss 240 273 240 273 The following table provides the components of regulatory assets at December 31 that are expected to be amortized as components of net periodic benefit costs in the following year: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of Canadian dollars) 2015 2014 2015 2014 Prior service cost — 2 — — Actuarial loss 96 119 8 10 96 121 8 10 Pension Plan Assets Investment Strategy On a regular basis, Hydro One evaluates its investment strategy to ensure that Pension Plan assets will be sufficient to pay Pension Plan benefits when due. As part of this ongoing evaluation, Hydro One may make changes to its targeted asset allocation and investment strategy. The Pension Plan is managed at a net asset level. The main objective of the Pension Plan is to sustain a certain level of net assets in order to meet the pension obligations of the Company. The Pension Plan fulfills its primary objective by adhering to specific investment policies outlined in its Summary of Investment Policies and Procedures (SIPP), which is reviewed and approved by the Human Resource Committee of Hydro One’s Board of Directors. The Company manages net assets by engaging knowledgeable external investment managers who are charged with the responsibility of investing existing funds and new funds (current year’s employee and employer contributions) in accordance with the approved SIPP. The performance of the managers is monitored through a governance structure. Increases in net assets are a direct result of investment income generated by investments held by the Pension Plan and contributions to the Pension Plan by eligible employees and by the Company. The main use of net assets is for benefit payments to eligible Pension Plan members. Pension Plan Asset Mix At December 31, 2015, the Pension Plan target asset allocations and weighted average asset allocations were as follows: Target Allocation Pension Plan Assets Equity securities 55.0 58.2 Debt securities 35.0 36.4 Other 1 10.0 5.4 100.0 100.0 1 Other investments include real estate and infrastructure investments. At December 31, 2015, the Pension Plan held $9 million Hydro One corporate bonds (2014 – $nil) and $420 million of debt securities of the Province (2014 – $340 million). Concentrations of Credit Risk Hydro One evaluated its Pension Plan’s asset portfolio for the existence of significant concentrations of credit risk as at December 31, 2015 and 2014. Concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, concentrations in a type of industry, and concentrations in individual funds. At December 31, 2015 and 2014, there were no significant concentrations (defined as greater than 10% of plan assets) of risk in the Pension Plan’s assets. The Pension Plan manages its counterparty credit risk with respect to bonds by investing in investment-grade and government bonds and with respect to derivative instruments by transacting only with financial institutions rated at least “A+” by Standard & Poor’s Rating Services, DBRS Limited, and Fitch Ratings Inc., and “A1” by Moody’s Investors Service, and also by utilizing exposure limits to each counterparty and ensuring that exposure is diversified across counterparties. The risk of default on transactions in listed securities is considered minimal, as the trade will fail if either party to the transaction does not meet its obligation. Fair Value Measurements The following tables present the Pension Plan assets measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy at December 31, 2015 and 2014: December 31, 2015 (millions of Canadian dollars) Level 1 Level 2 Level 3 Total Pooled funds — 23 299 322 Cash and cash equivalents 191 — — 191 Short-term securities — 80 — 80 Real estate — — 2 2 Corporate shares – Canadian 923 — — 923 Corporate shares – Foreign 2,931 — — 2,931 Bonds and debentures – Canadian — 2,074 — 2,074 Bonds and debentures – Foreign — 199 — 199 Total fair value of plan assets 1 4,045 2,376 301 6,722 1 At December 31, 2015, the total fair value of Pension Plan assets excludes $27 million of interest and dividends receivable, and $18 million relating to accruals for pension administration expense and foreign exchange contracts payable. December 31, 2014 (millions of Canadian dollars) Level 1 Level 2 Level 3 Total Pooled funds — 18 142 160 Cash and cash equivalents 166 — — 166 Short-term securities — 176 — 176 Real estate — — 2 2 Corporate shares – Canadian 1,008 — — 1,008 Corporate shares – Foreign 2,766 — — 2,766 Bonds and debentures – Canadian — 1,799 — 1,799 Bonds and debentures – Foreign — 211 — 211 Total fair value of plan assets 1 3,940 2,204 144 6,288 1 At December 31, 2014, the total fair value of Pension Plan assets excludes $18 million of interest and dividends receivable, and $7 million relating to accruals for pension administration expense. See Note 13 – Fair Value of Financial Instruments and Risk Management for a description of levels within the fair value hierarchy. Changes in the Fair Value of Financial Instruments Classified in Level 3 The following table summarizes the changes in fair value of financial instruments classified in Level 3 for the years ended December 31, 2015 and 2014. The Pension Plan classifies financial instruments as Level 3 when the fair value is measured based on at least one significant input that is not observable in the markets or due to lack of liquidity in certain markets. The gains and losses presented in the table below may include changes in fair value based on both observable and unobservable inputs. Year ended December 31 (millions of Canadian dollars) 2015 2014 Fair value, beginning of year 144 119 Realized and unrealized gains 51 30 Purchases 106 23 Sales and disbursements — (28 ) Fair value, end of year 301 144 There were no significant transfers between any of the fair value levels during the years ended December 31, 2015 and 2014. The Company performs sensitivity analysis for fair value measurements classified in Level 3, substituting the unobservable inputs with one or more reasonably possible alternative assumptions. These sensitivity analyses resulted in negligible changes in the fair value of financial instruments classified in this level. Valuation Techniques Used to Determine Fair Value Pooled Funds The pooled fund category mainly consists of private equity, real estate and infrastructure investments. Private equity investments represent private equity funds that invest in operating companies that are not publicly traded on a stock exchange. Investment strategies in private equity include limited partnerships in businesses that are characterized by high internal growth and operational efficiencies, venture capital, leveraged buyouts and special situations such as distressed investments. Real estate and infrastructure investments represent funds that invest in real assets which are not publicly traded on a stock exchange. Investment strategies in real estate include limited partnerships that seek to generate a total return through income and capital growth by investing primarily in global and Canadian limited partnerships. Investment strategies in infrastructure include limited partnerships in core infrastructure assets focusing on assets that generate stable, long-term cash flows and deliver incremental returns relative to conventional fixed-income investments. Private equity, real estate and infrastructure valuations are reported by the fund manager and are based on the valuation of the underlying investments which includes inputs such as cost, operating results, discounted future cash flows and market-based comparable data. Since these valuation inputs are not highly observable, private equity and infrastructure investments have been categorized as Level 3 within pooled funds. Cash Equivalents Demand cash deposits held with banks and cash held by the investment managers are considered cash equivalents and are included in the fair value measurements hierarchy as Level 1. Short-Term Securities Short-term securities are valued at cost plus accrued interest, which approximates fair value due to their short-term nature. Short-term securities have been categorized as Level 2. Real Estate Real estate investments represent investments in holding companies that invest in real estate properties. The investments in the holding companies are valued using net asset values reported by the fund manager. Real estate investments are categorized as Level 3. Corporate Shares Corporate shares are valued based on quoted prices in active markets and are categorized as Level 1. Investments denominated in foreign currencies are translated into Canadian currency at year-end rates of exchange. Bonds and Debentures Bonds and debentures are presented at published closing trade quotations, and are categorized as Level 2. |
Environmental Liabilities
Environmental Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Environmental Liabilities | 16. ENVIRONMENTAL LIABILITIES The following tables show the movements in environmental liabilities for the years ended December 31, 2015 and 2014: Year ended December 31, 2015 (millions of Canadian dollars) PCB Land Total Environmental liabilities, January 1 172 67 239 Interest accretion 8 2 10 Expenditures (8 ) (11 ) (19 ) Revaluation adjustment (24 ) 1 (23 ) Environmental liabilities, December 31 148 59 207 Less: current portion 12 10 22 136 49 185 Year ended December 31, 2014 (millions of Canadian dollars) PCB Land Total Environmental liabilities, January 1 201 65 266 Interest accretion 9 2 11 Expenditures (5 ) (13 ) (18 ) Revaluation adjustment (33 ) 13 (20 ) Environmental liabilities, December 31 172 67 239 Less: current portion 8 10 18 164 57 221 The following tables show the reconciliation between the undiscounted basis of the environmental liabilities and the amount recognized on the Consolidated Balance Sheets after factoring in the discount rate: December 31, 2015 (millions of Canadian dollars) PCB Land Total Undiscounted environmental liabilities 168 61 229 Less: discounting accumulated liabilities to present value 20 2 22 Discounted environmental liabilities 148 59 207 December 31, 2014 (millions of Canadian dollars) PCB Land Total Undiscounted environmental liabilities 195 70 265 Less: discounting accumulated liabilities to present value 23 3 26 Discounted environmental liabilities 172 67 239 At December 31, 2015, the estimated future environmental expenditures were as follows: (millions of Canadian dollars) 2016 22 2017 25 2018 26 2019 28 2020 30 Thereafter 98 229 Hydro One records a liability for the estimated future expenditures for land assessment and remediation and for the phase-out and destruction of PCB-contaminated mineral oil removed from electrical equipment when it is determined that future environmental remediation expenditures are probable under existing statute or regulation and the amount of the future expenditures can be reasonably estimated. There are uncertainties in estimating future environmental costs due to potential external events such as changes in legislation or regulations, and advances in remediation technologies. In determining the amounts to be recorded as environmental liabilities, the Company estimates the current cost of completing required work and makes assumptions as to when the future expenditures will actually be incurred, in order to generate future cash flow information. A long-term inflation rate assumption of approximately 2% has been used to express these current cost estimates as estimated future expenditures. Future expenditures have been discounted using factors ranging from approximately 2.0% to 6.3%, depending on the appropriate rate for the period when expenditures are expected to be incurred. All factors used in estimating the Company’s environmental liabilities represent management’s best estimates of the present value of costs required to meet existing legislation or regulations. However, it is reasonably possible that numbers or volumes of contaminated assets, cost estimates to perform work, inflation assumptions and the assumed pattern of annual cash flows may differ significantly from the Company’s current assumptions. In addition, with respect to the PCB environmental liability, the availability of critical resources such as skilled labour and replacement assets and the ability to take maintenance outages in critical facilities may influence the timing of expenditures. PCBs The Environment Canada regulations, enacted under the Canadian Environmental Protection Act, The Company’s best estimate of the total estimated future expenditures to comply with current PCB regulations is $168 million (2014 – $195 million). These expenditures are expected to be incurred over the period from 2016 to 2025. As a result of its annual review of environmental liabilities, the Company recorded a revaluation adjustment in 2015 to reduce the PCB environmental liability by $24 million (2014 – $33 million). Land Assessment and Remediation The Company’s best estimate of the total estimated future expenditures to complete its land assessment and remediation program is $61 million (2014 – $70 million). These expenditures are expected to be incurred over the period from 2016 to 2023. As a result of its annual review of environmental liabilities, the Company recorded a revaluation adjustment in 2015 to increase the land assessment and remediation environmental liability by $1 million (2014 – $13 million). |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | 17. ASSET RETIREMENT OBLIGATIONS Hydro One records a liability for the estimated future expenditures for the removal and disposal of asbestos-containing materials installed in some of its facilities and for the decommissioning of specific switching stations located on unowned sites. Asset retirement obligations, which represent legal obligations associated with the retirement of certain tangible long-lived assets, are computed as the present value of the projected expenditures for the future retirement of specific assets and are recognized in the period in which the liability is incurred, if a reasonable estimate of fair value can be made. If the asset remains in service at the recognition date, the present value of the liability is added to the carrying amount of the associated asset in the period the liability is incurred and this additional carrying amount is depreciated over the remaining life of the asset. If an asset retirement obligation is recorded in respect of an out-of-service asset, the asset retirement cost is charged to results of operations. Subsequent to the initial recognition, the liability is adjusted for any revisions to the estimated future cash flows associated with the asset retirement obligation, which can occur due to a number of factors including, but not limited to, cost escalation, changes in technology applicable to the assets to be retired, changes in legislation or regulations, as well as for accretion of the liability due to the passage of time until the obligation is settled. Depreciation expense is adjusted prospectively for any increases or decreases to the carrying amount of the associated asset. In determining the amounts to be recorded as asset retirement obligations, the Company estimates the current fair value for completing required work and makes assumptions as to when the future expenditures will actually be incurred, in order to generate future cash flow information. A long-term inflation assumption of approximately 2% has been used to express these current cost estimates as estimated future expenditures. Future expenditures have been discounted using factors ranging from approximately 3.0% to 5.0%, depending on the appropriate rate for the period when expenditures are expected to be incurred. All factors used in estimating the Company’s asset retirement obligations represent management’s best estimates of the cost required to meet existing legislation or regulations. However, it is reasonably possible that numbers or volumes of contaminated assets, cost estimates to perform work, inflation assumptions and the assumed pattern of annual cash flows may differ significantly from the Company’s current assumptions. Asset retirement obligations are reviewed annually or more frequently if significant changes in regulations or other relevant factors occur. Estimate changes are accounted for prospectively. At December 31, 2015, Hydro One had recorded asset retirement obligations of $9 million (2014 – $9 million), consisting of $8 million (2014 – $8 million) related to the estimated future expenditures associated with the removal and disposal of asbestos-containing materials installed in some of its facilities, as well as $1 million (2014 – $1 million) related to the future decommissioning and removal of two switching stations. The amount of interest recorded is nominal. |
Share Capital
Share Capital | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Share Capital | 18. SHARE CAPITAL Common Shares The Company is authorized to issue an unlimited number of common shares. At December 31, 2015, the Company had 142,239 common shares issued and outstanding. The amount and timing of any dividends payable by Hydro One is at the discretion of the Hydro One Board of Directors and is established on the basis of Hydro One’s results of operations, maintenance of its deemed regulatory capital structure, financial condition, cash requirements, the satisfaction of solvency tests imposed by corporate laws for the declaration and payment of dividends and other factors that the Board of Directors may consider relevant. Preferred Shares The Company is authorized to issue an unlimited number of preferred shares, issuable in series. At December 31, 2015, Hydro One had no issued and outstanding preferred shares. On November 2, 2015, a special resolution of Hydro One Limited (as sole shareholder of Hydro One) was made to amend the articles of Hydro One to delete the share ownership restrictions and to amend the Hydro One preferred share terms to provide for basic redeemable preferred shares. When issued, the Class A preferred shares will be redeemable at the option of the Company. The holders of the Class A preferred shares will be entitled to receive, if and when declared by the Hydro One Board of Directors, non-cumulative preferred share dividends at a rate per year to be determined by the Hydro One Board of Directors. The holders of the Class A preferred shares will not be entitled to receive notice of, or to attend or to vote at, any meeting of the shareholders of Hydro One. The holders of the Class A preferred shares will be entitled to receive, before any distributions to the holders of common shares and any other shares ranking junior to the Class A preferred shares, an amount equal to the amount paid for the Class A preferred shares together with all dividends declared and unpaid up to the date of liquidation, dissolution or winding up of Hydro One, or the date of redemption. Prior to October 31, 2015, the Company had 12,920,000 issued and outstanding 5.5% cumulative preferred shares held by the Province, with a redemption value of $25 per share or $323 million total value. These preferred shares were entitled to an annual cumulative dividend of $18 million, or $1.375 per share, which was payable on a quarterly basis. These preferred shares had conditions for their redemption that were outside the control of the Company because the Province could exercise its right to redeem in the event of change in ownership without approval of the Company’s Board of Directors. At December 31, 2014, these preferred shares were classified on the Consolidated Balance Sheet as temporary equity because the redemption feature was outside the control of the Company. On October 31, 2015, these preferred shares were purchased and cancelled by Hydro One. See “Reorganization” below for further details. Reorganization Prior to the completion of the IPO, Hydro One and Hydro One Limited completed a series of transactions (Pre-IPO Transactions) that resulted in, among other things, on October 31, 2015, Hydro One Limited acquiring all of the issued and outstanding shares of Hydro One from the Province. The following table presents the common shares issued during the year ended December 31, 2015. There were no common shares issued during the year ended December 31, 2014. Year ended December 31, 2015 (millions of Canadian dollars) (number of shares) Pre-Closing Transactions: Common shares issued – purchase and cancellation of preferred shares (a) 323 2,640 Common shares issued (b) 2,600 39,598 Common shares issued (c) — 1 Total common shares issued 2,923 42,239 (a) As part of the Pre-Closing Transactions, on October 31, 2015, Hydro One purchased and cancelled its 12,920,000 preferred shares previously held by the Province for cancellation at a price equal to the redemption price of the preferred shares totaling $323 million, which was satisfied by the issuance to the Province of 2,640 common shares of Hydro One. (b) On November 4, 2015, Hydro One issued 39,598 common shares to Hydro One Limited for proceeds of $2.6 billion. (c) On November 3, 2015, Hydro One declared a stock dividend on its common shares, which due to the number of shares issued and the resulting effect on the price per share was treated as a stock split. On November 5, 2015, Hydro One effected a reverse split and issued as consideration one common share to Hydro One Limited. There was no impact to the capital structure of Hydro One as a net result of the stock dividend and the reverse split. |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Dividends | 19. DIVIDENDS In 2015, preferred share dividends in the amount of $13 million (2014 – $18 million) and common share dividends in the amount of $875 million (2014 – $269 million) were declared. In August 2015, Hydro One declared a dividend in-kind on its common shares payable in all of the issued and outstanding shares of Hydro One Brampton. See Note 4 – Business Combinations. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 20. EARNINGS PER SHARE Basic and diluted earnings per common share (EPS) is calculated by dividing net income attributable to common shareholder of Hydro One by the weighted average number of common shares outstanding. The weighted average number of shares outstanding at December 31, 2015 was 107,116 (2014 – 100,000). There were no dilutive securities during 2015 or 2014. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 21. STOCK-BASED COMPENSATION The following compensation plans were established by Hydro One Limited, however they represent components of compensation costs of Hydro One in current and future periods. Share Grant Plans At December 31, 2015, Hydro One Limited had two share grant plans, one for the benefit of certain members of the Power Workers’ Union (the PWU Share Grant Plan) and one for the benefit of certain members of The Society of Energy Professionals (the Society Share Grant Plan). Hydro One and Hydro One Limited entered into an intercompany agreement, such that Hydro One will pay Hydro One Limited for the compensation costs associated with these plans. The PWU Share Grant Plan provides for the issuance of common shares of Hydro One Limited from treasury to certain eligible members of the Power Workers’ Union annually, commencing on April 1, 2017 and continuing until the earlier of April 1, 2028 or the date an eligible employee no longer meets the eligibility criteria of the PWU Share Grant Plan. To be eligible, an employee must be a member of the Pension Plan on April 1, 2015, be employed on the date annual share issuance occurs and continue to have under 35 years of service. The requisite service period for the PWU share grant plan begins on July 3, 2015, which is the date the share grant plans were ratified by the PWU. The number of common shares issued annually to each eligible employee will be equal to 2.7% of such eligible employee’s salary as at April 1, 2015, divided by $20.50, being the price of the common shares of Hydro One Limited in the IPO. The aggregate number of Hydro One Limited common shares issuable under the PWU Share Grant Plan shall not exceed 3,981,763 common shares. In 2015, 3,952,212 Hydro One Limited common shares were granted under the PWU Share Grant Plan relevant to the total share based compensation recognized by Hydro One. The Society Share Grant Plan provides for the issuance of common shares of Hydro One Limited from treasury to certain eligible members of The Society of Energy Professionals annually, commencing on April 1, 2018 and continuing until the earlier of April 1, 2029 or the date an eligible employee no longer meets the eligibility criteria of the Society Share Grant Plan. To be eligible, an employee must be a member of the Pension Plan on September 1, 2015, be employed on the date annual share issuance occurs and continue to have under 35 years of service. Therefore the requisite service period for the Society Share Grant Plan begins on September 1, 2015. The number of common shares issued annually to each eligible employee will be equal to 2.0% of such eligible employee’s salary as at September 1, 2015, divided by $20.50, being the price of the common shares of Hydro One Limited in the IPO. The aggregate number of Hydro One Limited common shares issuable under the Society Share Grant Plan shall not exceed 1,434,686 common shares. In 2015, 1,367,158 Hydro One Limited common shares were granted under the Society Share Grant Plan relevant to the total share based compensation recognized by Hydro One. The fair value of the Hydro One Limited share grants is estimated based on the grant date Hydro One Limited share price of $20.50 and is recognized using the graded-vesting attribution method as the share grant plans have both a performance condition and a service condition. Total fair value of shares granted in 2015 is $111 million (2014 – $nil). Total share based compensation recognized during 2015 was $10 million (2014 – $nil) and was recorded as a regulatory asset. The historical turnover rate relating to members of the Power Workers’ Union and The Society of Energy Professionals is not believed to be reflective of a future turnover rate due to benefits conferred by the share grant plans. At December 31, 2015 the Company expects all eligible employees to receive the share grants until such time that they no longer meet the eligibility criteria and therefore, a forfeiture rate of 0% is assumed in amounts recognized during 2015. The Company will reevaluate this assumption in subsequent periods based on actual experience. A summary of share grant activity under the Plan as of December 31, 2015 is presented below: Years ended December 31, 2015 Share Grants (Number) Weighted-Average Outstanding – beginning of year — — Granted (non-vested) 5,319,370 $ 20.50 Outstanding – end of year 5,319,370 — Directors’ DSU Plan Under the Directors’ DSU Plan, directors can elect to receive credit for their annual cash retainer in a notional account of DSUs in lieu of cash. Hydro One Limited’s Board of Directors may also determine from time to time that special circumstances exist that would reasonably justify the grant of DSUs to a director as compensation in addition to any regular retainer or fee to which the director is entitled. Each DSU represents a unit with an underlying value equivalent to the value of one common share of Hydro One Limited and is entitled to accrue Hydro One Limited common share dividend equivalents in the form of additional DSUs at the time dividends are paid, subsequent to declaration by Hydro One Limited’s Board of Directors. (number of DSUs) 2015 2014 DSUs outstanding – January 1 — — DSUs granted 20,525 — DSUs outstanding – December 31 20,525 — For the year ended December 31, 2015, an expense of less than $1 million (2014 – $nil) was recognized in earnings with respect to the DSU Plan. At December 31, 2015, a liability of less than $1 million (December 31, 2014 – $nil) related to outstanding DSUs has been recorded at the closing price of Hydro One Limited’s common shares of $22.29 and is included in accrued liabilities on the Balance Sheet. Employee Share Ownership Plan Effective December 15, 2015, Hydro One Limited established an Employee Share Ownership Plan (ESOP). Under the ESOP, certain eligible management and non-represented employees may contribute between 1% and 6% of their base salary towards purchasing common shares of Hydro One Limited. The Company will match 50% of the employee’s contributions, up to a maximum Company contribution of $25,000 per calendar year. No contributions were made under the ESOP during 2015. Long-term Incentive Plan Effective August 31, 2015, the Board of Directors of Hydro One Limited adopted a Long-term Incentive Plan (LTIP). Under the LTIP, long-term incentives will be granted to certain executive and management employees of Hydro One Limited and its subsidiaries, and all equity-based awards will be settled in newly-issued shares of Hydro One Limited from treasury, consistent with the provisions of the plan. The aggregate number of shares issuable under the LTIP shall not exceed 11,900,000 shares of Hydro One Limited. The LTIP provides flexibility to award a range of vehicles, including restricted share units, performance share units, stock options, share appreciation rights, restricted shares, deferred share units and other share-based awards. The mix of vehicles is intended to vary by role to recognize the level of executive accountability for overall business performance. No long-term incentives were awarded during 2015. |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 22. NONCONTROLLING INTEREST On December 16, 2014, the relevant Bruce to Milton Line transmission assets totalling $526 million were transferred from Hydro One Networks to B2M LP. This was financed by 60% debt ($316 million) and 40% equity ($210 million). On December 17, 2014, the Saugeen Ojibway Nation (SON) acquired a 34.2% equity interest in B2M LP for consideration of $72 million, representing the fair value of the equity interest acquired. The SON’s initial investment in B2M LP consists of $50 million of Class A units and $22 million of Class B units. The Class B units have a mandatory put option which requires that upon the occurrence of an enforcement event (i.e. an event of default such as a debt default by the SON or insolvency event), Hydro One purchase the Class B units of B2M LP for net book value on the redemption date. The noncontrolling interest relating to the Class B units is classified on the Consolidated Balance Sheet as temporary equity because the redemption feature is outside the control of the Company. The balance of the noncontrolling interest is classified within equity. The following tables show the movements in noncontrolling interest for the years ended December 31, 2015 and December 31, 2014: Year ended December 31, 2015 (millions of Canadian dollars) Temporary Equity Total Noncontrolling interest – January 1, 2015 21 49 70 Distributions to noncontrolling interest (1 ) (4 ) (5 ) Net income attributable to noncontrolling interest 3 7 10 Noncontrolling interest – December 31, 2015 23 52 75 Year ended December 31, 2014 (millions of Canadian dollars) Temporary Equity Total Noncontrolling interest – January 1, 2014 — — — Amount contributed by noncontrolling interest 22 50 72 Net income (loss) attributable to noncontrolling interest (1 ) (1 ) (2 ) Noncontrolling interest – December 31, 2014 21 49 70 22. NONCONTROLLING INTEREST On December 16, 2014, the relevant Bruce to Milton Line transmission assets totalling $526 million were transferred from Hydro One Networks to B2M LP. This was financed by 60% debt ($316 million) and 40% equity ($210 million). On December 17, 2014, the Saugeen Ojibway Nation (SON) acquired a 34.2% equity interest in B2M LP for consideration of $72 million, representing the fair value of the equity interest acquired. The SON’s initial investment in B2M LP consists of $50 million of Class A units and $22 million of Class B units. The Class B units have a mandatory put option which requires that upon the occurrence of an enforcement event (i.e. an event of default such as a debt default by the SON or insolvency event), Hydro One purchase the Class B units of B2M LP for net book value on the redemption date. The noncontrolling interest relating to the Class B units is classified on the Consolidated Balance Sheet as temporary equity because the redemption feature is outside the control of the Company. The balance of the noncontrolling interest is classified within equity. The following tables show the movements in noncontrolling interest for the years ended December 31, 2015 and December 31, 2014: Year ended December 31, 2015 (millions of Canadian dollars) Temporary Equity Total Noncontrolling interest – January 1, 2015 21 49 70 Distributions to noncontrolling interest (1 ) (4 ) (5 ) Net income attributable to noncontrolling interest 3 7 10 Noncontrolling interest – December 31, 2015 23 52 75 Year ended December 31, 2014 (millions of Canadian dollars) Temporary Equity Total Noncontrolling interest – January 1, 2014 — — — Amount contributed by noncontrolling interest 22 50 72 Net income (loss) attributable to noncontrolling interest (1 ) (1 ) (2 ) Noncontrolling interest – December 31, 2014 21 49 70 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 23. RELATED PARTY TRANSACTIONS Hydro One is owned by Hydro One Limited. The Province is the majority shareholder of Hydro One Limited. The OEFC, IESO, Ontario Power Generation Inc. (OPG), the OEB, Hydro One Brampton and Hydro One Telecom are related parties to Hydro One because they are controlled or significantly influenced by the Province or by Hydro One Limited. Effective January 1, 2015, the OPA and IESO have merged and are now operating as IESO. The Province • During 2015, Hydro One paid dividends to the Province totalling $888 million (2014 – $287 million). In addition, on August 31, 2015, Hydro One declared a dividend in-kind on its common shares payable in all of the issued and outstanding shares of Hydro One Brampton. See Note 4 – Business Combinations. IESO • In 2015, Hydro One purchased power in the amount of $2,318 million (2014 – $2,601 million) from the IESO-administered electricity market. • Hydro One receives revenues for transmission services from the IESO, based on OEB-approved uniform transmission rates. Transmission revenues for 2015 include $1,548 million (2014 – $1,556 million) related to these services. • Hydro One receives amounts for rural rate protection from the IESO. Distribution revenues for 2015 include $127 million (2014 – $127 million) related to this program. • Hydro One also receives revenues related to the supply of electricity to remote northern communities from the IESO. Distribution revenues for 2015 include $32 million (2014 – $32 million) related to these services. • The IESO (OPA prior to January 1, 2015) funds substantially all of the Company’s CDM programs. The funding includes program costs, incentives, and management fees. During 2015, Hydro One received $70 million (2014 – $33 million) related to these programs. OPG • In 2015, Hydro One purchased power in the amount of $11 million (2014 – $23 million) from OPG. • Hydro One has service level agreements with OPG. These services include field, engineering, logistics and telecommunications services. In 2015, revenues related to the provision of construction and equipment maintenance services with respect to these service level agreements were $7 million (2014 – $12 million), primarily for the Transmission Business. Operation, maintenance and administration costs in 2015 and 2014 related to the purchase of services with respect to these service level agreements were not significant. OEFC • In 2015, Hydro One made PILs to the OEFC totalling $2.9 billion (2014 – $86 million), including Departure Tax of $2.6 billion (2014 – $nil). • In 2015, Hydro One purchased power in the amount of $6 million (2014 – $9 million) from power contracts administered by the OEF C. • During 2015, Hydro One paid a $8 million (2014 – $5 million) fee to the OEFC for indemnification against adverse claims in excess of $10 million paid by the OEFC with respect to certain of Ontario Hydro’s businesses transferred to Hydro One on April 1, 1999. Hydro One has not made any claims under the indemnity since it was put in place in 1999. Hydro One and the OEFC, with the consent of the Minister of Finance, terminated the indemnity fee effective October 31, 2015. • PILs and payments in lieu of property taxes were paid to the OEFC. OEB • Under the Ontario Energy Board Act, 1998 Hydro One Brampton • Effective August 31, 2015, Hydro One Brampton is no longer a subsidiary of Hydro One, but is indirectly owned by the Province. For change in ownership of Hydro One Brampton, see Note 4 – Business Combinations. • Subsequent to August 31, 2015, Hydro One continues to provide certain management, administrative and smart meter network services to Hydro One Brampton pursuant to certain service level agreements, which are provided at market rates. These agreements will continue until the end of 2016 (except in the case of smart meter network services, which will continue until the end of 2017). Hydro One Brampton has the right to renew these agreements (other than smart meter network services) for additional one-year terms to end no later than December 31, 2019. Additionally, on August 31, 2015, Hydro One and Hydro One Brampton entered into a license agreement which permits Hydro One Brampton to use the “Hydro One” name and related licensed marks. These agreements will terminate if the Province disposes of its interest in Hydro One Brampton, except in the case of the smart meter network services agreement, which is anticipated to continue for a transition period after the Province disposes of its interest in Hydro One Brampton. During 2015, revenues related to the provision of services with respect to these service level agreements were $1 million. Hydro One Telecom • Effective November 6, 2015, Hydro One Telecom is no longer a subsidiary of Hydro One, but is owned by Hydro One Limited. For change in ownership of Hydro One Telecom, see Note 4 – Business Combinations. • Subsequent to November 6, 2015, Hydro One Telecom continues to provide certain network and carrier management, engineering, and Internet/LAN services to Hydro One. Costs relating to these services in 2015 were $6 million, of which $4 million was charged to OM&A, and $2 million was capitalized. In addition, Hydro One provides certain services to Hydro One Telecom, including management, corporate functions and services, supply management, network maintenance, customer support and asset construction. Revenues related to these services in 2015 were not significant. Hydro One Limited • During 2015, Hydro One incurred certain IPO related expenses totaling $7 million (2014 – $nil) which will be reimbursed to the Company by Hydro One Limited. • On November 4, 2015, Hydro One issued 39,598 common shares to Hydro One Limited for proceeds of $2.6 billion. • In 2015, Hydro One Limited established certain stock-based compensation plans, however they represent components of costs of Hydro One in current and future periods. Hydro One and Hydro One Limited entered into an intercompany agreement, such that Hydro One will pay Hydro One Limited for the compensation costs associated with the share grant plans, and at December 31, 2015, Hydro One had a payable of $10 million (2014 – $nil) to Hydro One Limited associated with these plans. See Note 21 – Stock-based Compensation. Sales to and purchases from related parties occur at normal market prices or at a proxy for fair value based on the requirements of the OEB’s Affiliate Relationships Code. Outstanding balances at period end are interest free and settled in cash. The amounts due to and from related parties as a result of the transactions referred to above are as follows: (millions of Canadian dollars) December 31, 2015 December 31, Due from related parties 184 224 Due to related parties 1 (142 ) (227 ) 1 Included in due to related parties at December 31, 2015 are amounts owing to the IESO in respect of power purchases of $134 million (2014 – $214 million). |
Consolidated Statements of Ca31
Consolidated Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Consolidated Statements of Cash Flows | 24. CONSOLIDATED STATEMENTS OF CASH FLOWS The changes in non-cash balances related to operations consist of the following: Year ended December 31 (millions of Canadian dollars) 2015 2014 Accounts receivable 244 (93 ) Due from related parties 40 (27 ) Materials and supplies 2 — Prepaid expenses and other assets 12 (13 ) Accounts payable (26 ) 39 Accrued liabilities (27 ) (35 ) Due to related parties (95 ) (3 ) Accrued interest (4 ) — Long-term accounts payable and other liabilities — (3 ) Post-retirement and post-employment benefit liability 41 80 187 (55 ) Capital Expenditures The following table illustrates the reconciliation between investments in property, plant and equipment and the amount presented in the Consolidated Statements of Cash Flows after accounting for capitalized depreciation and the net change in related accruals: Year ended December 31 (millions of Canadian dollars) 2015 2014 Capital investments in property, plant and equipment (1,622 ) (1,511 ) Capitalized depreciation and net change in accruals included in capital investments in property, plant and equipment 28 30 Capital expenditures – property, plant and equipment (1,594 ) (1,481 ) The following table illustrates the reconciliation between investments in intangible assets and the amount presented in the Consolidated Statements of Cash Flows after accounting for the net change in related accruals: Year ended December 31 (millions of Canadian dollars) 2015 2014 Capital investments in intangible assets (40 ) (19 ) Net change in accruals included in capital investments in intangible assets 3 (4 ) Capital expenditures – intangible assets (37 ) (23 ) Capital Contributions Hydro One enters into contracts governed by the OEB Transmission System Code when a transmission customer requests a new or upgraded transmission connection. The customer is required to make a capital contribution to Hydro One based on the shortfall between the present value of the costs of the connection facility and the present value of revenues. The present value of revenues is based on an estimate of load forecast for the period of the contract with Hydro One. Once the connection facility is commissioned, in accordance with the OEB Transmission System Code, Hydro One will periodically reassess the estimated of load forecast which will lead to a decrease, or an increase in the capital contributions from the customer. The increase or decrease in capital contributions is recorded directly to fixed assets in service. In 2015, capital contributions from these reassessments totalled $62 million, which represents the difference between the revised load forecast of electricity transmitted compared to the load forecast in the original contract, subject to certain adjustments. No reassessments occurred in 2014. Supplementary Information Year ended December 31 (millions of Canadian dollars) 2015 2014 Net interest paid 416 412 Income taxes / PILs paid 2,928 86 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 25. CONTINGENCIES Legal Proceedings Hydro One is involved in various lawsuits, claims and regulatory proceedings in the normal course of business. In the opinion of management, the outcome of such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. In September 2015, Hydro One and three of its subsidiaries were served with a class action suit in which the representative plaintiff is seeking up to $125 million in damages related to allegations of improper billing practices. Hydro One intends to defend the action. Due to the preliminary stage of legal proceedings, an estimate of a possible loss related to this claim cannot be made. Transfer of Assets The transfer orders by which the Company acquired certain of Ontario Hydro’s businesses as of April 1, 1999 did not transfer title to some assets located on Reserves (as defined in the Indian Act |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 26. COMMITMENTS Outsourcing Agreements Inergi LP (Inergi), an affiliate of Capgemini Canada Inc., provides services to Hydro One, including settlements, source to pay services, pay operations services, information technology, finance and accounting services. The agreement with Inergi for these services expires in December 2019. In addition, Inergi provides customer service operations outsourcing services to Hydro One. The agreement for these services expires in February 2018. Brookfield Global Integrated Solutions (formerly Brookfield Johnson Controls Canada LP) (Brookfield) provides services to Hydro One, including facilities management and execution of certain capital projects as deemed required by the Company. The current agreement with Brookfield expires in December 2024. At December 31, 2015, the annual commitments under the outsourcing agreements were as follows: 2016 – $167 million; 2017 – $138 million; 2018 – $106 million; 2019 – $99 million; 2020 – $2 million; and thereafter – $11 million. Trilliant Agreement In December 2015, Hydro One entered into an agreement with Trilliant Holdings Inc. and Trilliant Networks (Canada) Inc. (Trilliant) for the supply, maintenance and support services for smart meters and related hardware and software, including additional software licenses, as well as certain professional services. This agreement is for a term of ten years, from December 31, 2015 to December 31, 2025, with the option to renew for an additional term of five years at Hydro One’s sole discretion. At December 31, 2015, the annual commitments under the agreement were as follows: 2016 – $17 million; 2017 – $17 million; 2018 – $17 million; 2019 – $17 million; 2020 – $16 million; and thereafter – $6 million. Prudential Support Purchasers of electricity in Ontario, through the IESO, are required to provide security to mitigate the risk of their default based on their expected activity in the market. As at December 31, 2015, Hydro One provided prudential support to the IESO on behalf of its subsidiaries using parental guarantees of $329 million (2014 – $330 million), and on behalf of a distributor using guarantees of $1 million (2014 – $1 million). In addition, as at December 31, 2015, Hydro One has provided letters of credit in the amount of $15 million (2014 – $8 million) to the IESO. The IESO could draw on these guarantees and/or letters of credit if these subsidiaries or distributor fail to make a payment required by a default notice issued by the IESO. The maximum potential payment is the face value of any letters of credit plus the amount of the parental guarantees. Retirement Compensation Arrangements Bank letters of credit have been issued to provide security for the Company’s liability under the terms of a trust fund established pursuant to the supplementary pension plan for eligible employees of Hydro One. The supplementary pension plan trustee is required to draw upon these letters of credit if Hydro One is in default of its obligations under the terms of this plan. Such obligations include the requirement to provide the trustee with an annual actuarial report as well as letters of credit sufficient to secure the Company’s liability under the plan, to pay benefits payable under the plan and to pay the letter of credit fee. The maximum potential payment is the face value of the letters of credit. At December 31, 2015, Hydro One had letters of credit of $139 million (2014 – $126 million) outstanding relating to retirement compensation arrangements. Operating Leases Hydro One is committed as lessee to irrevocable operating lease contracts for buildings used in administrative and service-related functions. These leases have typical terms of between three and five years, but several leases have lesser or greater terms to address special circumstances and/or opportunities. Renewal options, which are generally prevalent in most leases, have similar terms of three to five years. All leases include a clause to enable upward revision of the rental charge on an annual basis or on renewal according to prevailing market conditions or pre-established rents. There are no restrictions placed upon Hydro One by entering into these leases. During the year ended December 31, 2015, the Company made lease payments totaling $6 million (2014 – $11 million). At December 31, 2015, the future minimum lease payments under non-cancellable operating leases were as follows; 2016 –$10 million; 2017 – $9 million; 2018 – $7 million; 2019 – $2 million; 2020 – $7 million; and thereafter – $3 million. |
Segmented Reporting
Segmented Reporting | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segmented Reporting | 27. SEGMENTED REPORTING Hydro One has three reportable segments: • The Transmission Business, which comprises the core business of transmitting high voltage electricity across the province, interconnecting more than 70 local distribution companies and certain large directly connected industrial customers throughout the Ontario electricity grid; • The Distribution Business, which comprises the core business of delivering electricity to end customers and certain other municipal electricity distributors; and • Other Business, which includes certain corporate activities, and the operations of the Company’s telecommunications business up to November 6, 2015. See Note 4 – Business Combinations for details of Hydro One Telecom spin-off. The designation of segments has been based on a combination of regulatory status and the nature of the products and services provided. Operating segments of the Company are determined based on information used by the chief operating decision maker in deciding how to allocate resources and evaluate the performance of each of the segments. The Company evaluates segment performance based on income before financing charges and income taxes from continuing operations (excluding certain allocated corporate governance costs). The accounting policies followed by the segments are the same as those described in the summary of significant accounting policies (see Note 2 – Significant Accounting Policies). Segment information on the above basis is as follows: Year ended December 31, 2015 (millions of Canadian dollars) Transmission Distribution Other Consolidated Revenues 1,536 4,949 44 6,529 Purchased power — 3,450 — 3,450 Operation, maintenance and administration 426 633 71 1,130 Depreciation and amortization 374 380 3 757 Income (loss) before financing charges and income taxes 736 486 (30 ) 1,192 Capital investments 943 711 8 1,662 Year ended December 31, 2014 (millions of Canadian dollars) Transmission Distribution Other Consolidated Revenues 1,588 4,903 57 6,548 Purchased power — 3,419 — 3,419 Operation, maintenance and administration 394 742 56 1,192 Depreciation and amortization 346 367 9 722 Income (loss) before financing charges and income taxes 848 375 (8 ) 1,215 Capital investments 845 680 5 1,530 Total Assets by Segment: December 31 (millions of Canadian dollars) 2015 2014 Transmission 12,066 12,540 Distribution 9,213 9,805 Other 2,924 205 Total assets 24,203 22,550 All revenues, costs and assets, as the case may be, are earned, incurred or held in Canada. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 28. SUBSEQUENT EVENTS Dividends and Return of Stated Capital On February 11, 2016, common share dividends in the amount of $2 million were declared, and a return of stated capital in the amount of $225 million was approved. Great Lakes Power Transmission Purchase Agreement On January 28, 2016, Hydro One reached an agreement to acquire from Brookfield Infrastructure various entities that own and control Great Lakes Power Transmission LP, an Ontario regulated electricity transmission business operating along the eastern shore of Lake Superior, north and east of Sault Ste. Marie, Ontario, for $222 million in cash, subject to customary adjustments, plus the assumption of approximately $151 million in outstanding indebtedness. The acquisition is pending a Competition Act |
Significant Accounting Polici36
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Basis of Consolidation | Basis of Consolidation These Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. On August 31, 2015, Hydro One completed the spin-off of its subsidiary, Hydro One Brampton Networks Inc. (Hydro One Brampton) to the Province. See note 4 – Business Combinations. These Consolidated Financial Statements include the results of operations of Hydro One Brampton up to August 31, 2015. In November 2015, Hydro One completed the spin-off of its subsidiaries, Hydro One Telecom Inc. (Hydro One Telecom) and Municipal Billing Services Inc. (MBSI). See note 4 – Business Combinations. These Consolidated Financial Statements include the results of operations of Hydro One Telecom and MBSI up to November 6, 2015. |
Basis of Accounting | Basis of Accounting These Consolidated Financial Statements are prepared and presented in accordance with United States (US) Generally Accepted Accounting Principles (GAAP) and in Canadian dollars. Hydro One performed an evaluation of subsequent events through to February 11, 2016, the date these Consolidated Financial Statements were issued, to determine whether any events or transactions warranted recognition and disclosure in these Consolidated Financial Statements. See Note 28 – Subsequent Events. |
Use of Management Estimates | Use of Management Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, gains and losses during the reporting periods. Management evaluates these estimates on an ongoing basis based upon historical experience, current conditions, and assumptions believed to be reasonable at the time the assumptions are made, with any adjustments being recognized in results of operations in the period they arise. Significant estimates relate to regulatory assets and regulatory liabilities, environmental liabilities, pension benefits, post-retirement and post-employment benefits, asset retirement obligations, goodwill and asset impairments, contingencies, unbilled revenues, allowance for doubtful accounts, derivative instruments, and deferred income tax assets and liabilities. Actual results may differ significantly from these estimates. |
Rate Setting | Rate Setting The Company’s Transmission Business consists of the transmission business of Hydro One Networks, as well as its 66% interest in B2M Limited Partnership (B2M LP). The Company’s Distribution Business consists of the distribution businesses of Hydro One Networks, Haldimand County Utilities Inc. (Haldimand Hydro), Hydro One Remote Communities Inc. (Hydro One Remote Communities), and Woodstock Hydro Holdings Inc. (Woodstock Hydro). The Ontario Energy Board (OEB) has approved the use of US GAAP for rate setting and regulatory accounting and reporting by Hydro One Networks’ transmission and distribution businesses, as well as by Hydro One Remote Communities. Transmission On January 8, 2015, pursuant to an application filed with the OEB, the OEB approved the 2015 Hydro One transmission rates revenue requirement, excluding the B2M LP revenue requirement, of $1,477 million. On June 30, 2015, B2M LP updated its application (originally filed March 30, 2015) with the OEB for 2015-2019 transmission rates, requesting approval of revenue requirement of $39 million, $36 million, $37 million, $38 million and $37 million for the respective years. On December 29, 2015, the OEB issued a Decision and Order approving the 2015-2019 rates revenue requirement, and on January 14, 2016, the OEB approved the B2M LP revenue requirement recovery through the 2016 Uniform Transmission Rates, and the establishment of a deferral account to capture costs of Tax Rate and Rule changes. Distribution On March 12, 2015, the OEB issued a Decision and Rate Order approving a revenue requirement of $1,326 million for 2015, $1,430 million for 2016 and $1,486 million for 2017. The revenue requirements for 2016 and 2017 are estimates that may change based on 2016 and 2017 Rate Orders. On April 23, 2015, the Final Rate Order for 2015 rates was approved by the OEB. On September 24, 2014, Hydro One Remote Communities filed an Incentive Regulation Mechanism application with the OEB for 2015 rates, seeking approval for increased base rates for the distribution and generation of electricity of 1.7%. On March 19, 2015, the OEB approved an increase of approximately 1.6% to basic rates for the distribution and generation of electricity, with an effective date of May 1, 2015. |
Regulatory Accounting | Regulatory Accounting The OEB has the general power to include or exclude revenues, costs, gains or losses in the rates of a specific period, resulting in a change in the timing of accounting recognition from that which would have been applied in an unregulated company. Such change in timing involves the application of rate-regulated accounting, giving rise to the recognition of regulatory assets and liabilities. The Company’s regulatory assets represent certain amounts receivable from future customers and costs that have been deferred for accounting purposes because it is probable that they will be recovered in future rates. In addition, the Company has recorded regulatory liabilities that generally represent amounts that are refundable to future customers. The Company continually assesses the likelihood of recovery of each of its regulatory assets and continues to believe that it is probable that the OEB will factor its regulatory assets and liabilities into the setting of future rates. If, at some future date, the Company judges that it is no longer probable that the OEB will include a regulatory asset or liability in setting future rates, the appropriate carrying amount will be reflected in results of operations in the period that the assessment is made. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments with an original maturity of three months or less. |
Revenue Recognition | Revenue Recognition Transmission revenues are collected through OEB-approved rates, which are based on an approved revenue requirement that includes a rate of return. Such revenue is recognized as electricity is transmitted and delivered to customers. Distribution revenues attributable to the delivery of electricity are based on OEB-approved distribution rates and are recognized on an accrual basis and include billed and unbilled revenues. Billed revenues are based on electricity delivered as measured from customer meters. Unbilled revenues are based on an estimate of electricity delivered determined by historical trends of consumption and are estimated at the end of each month. The unbilled revenue estimate is affected by energy consumption, weather, and changes in the composition of customer classes. Distribution revenue also includes an amount relating to rate protection for rural, residential and remote customers, which is received from the Independent Electricity System Operator (IESO) based on a standardized customer rate that is approved by the OEB. Revenues also include amounts related to sales of other services and equipment. Such revenue is recognized as services are rendered or as equipment is delivered. Revenues are recorded net of indirect taxes. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Billed accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Unbilled accounts receivable are recorded at their estimated value. Overdue amounts related to regulated billings bear interest at OEB-approved rates. The allowance for doubtful accounts reflects the Company’s best estimate of losses on billed accounts receivable balances. The Company estimates the allowance for doubtful accounts on customer receivables by applying internally developed loss rates to the outstanding receivable balances by aging category. Loss rates applied to the accounts receivable balances are based on historical overdue balances, customer payments and write-offs. Accounts receivable are written-off against the allowance when they are deemed uncollectible. The existing allowance for doubtful accounts will continue to be affected by changes in volume, prices and economic conditions. |
Noncontrolling interest | Noncontrolling interest Noncontrolling interest represents the portion of equity ownership in subsidiaries that is not attributable to shareholders of Hydro One. Noncontrolling interest is initially recorded at fair value and subsequently the amount is adjusted for the proportionate share of net income (loss) and other comprehensive income (loss) attributable to the noncontrolling interest and any dividends or distributions paid to the noncontrolling interest. If a transaction results in the acquisition of all, or part, of a noncontrolling interest in a subsidiary, the acquisition of the noncontrolling interest is accounted for as an equity transaction. No gain or loss is recognized in consolidated net income or comprehensive income as a result of changes in the noncontrolling interest, unless a change results in the loss of control by the Company. |
Corporate Income Taxes | Income Taxes By virtue of being wholly owned by the Province, Hydro One was exempt from tax under the Income Tax Act Taxation Act, 2007 Electricity Act In connection with the IPO of Hydro One Limited, Hydro One’s exemption from tax under the Federal Tax Regime ceased to apply. Upon exiting the PILs Regime, Hydro One is required to make corporate income tax payments to the Canada Revenue Agency (CRA) under the Federal Tax Regime. Current and deferred income taxes are computed based on the tax rates and tax laws enacted as at the balance sheet date. Tax benefits associated with income tax positions taken, or expected to be taken, in a tax return are recorded only when the “more-likely-than-not” recognition threshold is satisfied and are measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. Management evaluates each position based solely on the technical merits and facts and circumstances of the position, assuming the position will be examined by a taxing authority having full knowledge of all relevant information. Significant management judgment is required to determine recognition thresholds and the related amount of tax benefits to be recognized in the Consolidated Financial Statements. Management re-evaluates tax positions each period in which new information about recognition or measurement becomes available. Deferred Income Taxes Deferred income taxes are provided for using the liability method. Deferred income taxes are recognized based on the estimated future tax consequences attributable to temporary differences between the carrying amount of assets and liabilities in the Consolidated Financial Statements and their corresponding tax bases. Deferred income tax liabilities are generally recognized on all taxable temporary differences. Deferred tax assets are recognized to the extent that it is more-likely-than-not that these assets will be realized from taxable income available against which deductible temporary differences can be utilized. Deferred income taxes are calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on the tax rates and tax laws that have been enacted as at the balance sheet date. Deferred income taxes that are not included in the rate-setting process are charged or credited to the Consolidated Statements of Operations and Comprehensive Income. If management determines that it is more-likely-than-not that some or all of a deferred income tax asset will not be realized, a valuation allowance is recorded against the deferred income tax asset to report the net balance at the amount expected to be realized. Previously unrecognized deferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become more-likely-than-not that the tax benefit will be realized. The Company records regulatory assets and liabilities associated with deferred income taxes that will be included in the rate-setting process. The Company uses the flow-through method to account for investment tax credits (ITCs) earned on eligible scientific research and experimental development expenditures, and apprenticeship job creation. Under this method, only non-refundable ITCs are recognized as a reduction to income tax expense. |
Materials and Supplies | Materials and Supplies Materials and supplies represent consumables, small spare parts and construction materials held for internal construction and maintenance of property, plant and equipment. These assets are carried at average cost less any impairments recorded. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is recorded at original cost, net of customer contributions, and any accumulated impairment losses. The cost of additions, including betterments and replacement asset components, is included on the Consolidated Balance Sheets as property, plant and equipment. The original cost of property, plant and equipment includes direct materials, direct labour (including employee benefits), contracted services, attributable capitalized financing costs, asset retirement costs, and direct and indirect overheads that are related to the capital project or program. Indirect overheads include a portion of corporate costs such as finance, treasury, human resources, information technology and executive costs. Overhead costs, including corporate functions and field services costs, are capitalized on a fully allocated basis, consistent with an OEB-approved methodology. Property, plant and equipment in service consists of transmission, distribution, communication, administration and service assets and land easements. Property, plant and equipment also includes future use assets, such as land, major components and spare parts, and capitalized project development costs associated with deferred capital projects. Transmission Transmission assets include assets used for the transmission of high-voltage electricity, such as transmission lines, support structures, foundations, insulators, connecting hardware and grounding systems, and assets used to step up the voltage of electricity from generating stations for transmission and to step down voltages for distribution, including transformers, circuit breakers and switches. Distribution Distribution assets include assets related to the distribution of low-voltage electricity, including lines, poles, switches, transformers, protective devices and metering systems. Communication Communication assets include fibre optic and microwave radio systems, optical ground wire, towers, telephone equipment and associated buildings. Administration and Service Administration and service assets include administrative buildings, personal computers, transport and work equipment, tools and other minor assets. Easements Easements include statutory rights of use for transmission corridors and abutting lands granted under the Reliable Energy and Consumer Protection Act, 2002 |
Intangible Assets | Intangible Assets Intangible assets separately acquired or internally developed are measured on initial recognition at cost, which comprises purchased software, direct labour (including employee benefits), consulting, engineering, overheads and attributable capitalized financing charges. Following initial recognition, intangible assets are carried at cost, net of any accumulated amortization and accumulated impairment losses. The Company’s intangible assets primarily represent major computer applications. |
Capitalized Financing Costs | Capitalized Financing Costs Capitalized financing costs represent interest costs attributable to the construction of property, plant and equipment or development of intangible assets. The financing cost of attributable borrowed funds is capitalized as part of the acquisition cost of such assets. The capitalized financing costs are a reduction of financing charges recognized in the Consolidated Statements of Operations and Comprehensive Income. Capitalized financing costs are calculated using the Company’s weighted average effective cost of debt. |
Construction and Development in Progress | Construction and Development in Progress Construction and development in progress consists of the capitalized cost of constructed assets that are not yet complete and which have not yet been placed in service. |
Depreciation and Amortization | Depreciation and Amortization The cost of property, plant and equipment and intangible assets is depreciated or amortized on a straight-line basis based on the estimated remaining service life of each asset category, except for transport and work equipment, which is depreciated on a declining balance basis. The Company periodically initiates an external independent review of its property, plant and equipment and intangible asset depreciation and amortization rates, as required by the OEB. Any changes arising from OEB approval of such a review are implemented on a remaining service life basis, consistent with their inclusion in electricity rates. The last review resulted in changes to rates effective January 1, 2015. A summary of average service lives and depreciation and amortization rates for the various classes of assets is included below: Rate Average Service Life Range Average Transmission 56 years 1% – 2% 2 % Distribution 46 years 1% – 7% 2 % Communication 16 years 1% – 15% 6 % Administration and service 18 years 1% –20% 6 % The cost of intangible assets is included primarily within the administration and service classification above. Amortization rate for computer applications software and other intangible assets is 10%. In accordance with group depreciation practices, the original cost of property, plant and equipment, or major components thereof, and intangible assets that are normally retired, is charged to accumulated depreciation, with no gain or loss being reflected in results of operations. Where a disposition of property, plant and equipment occurs through sale, a gain or loss is calculated based on proceeds and such gain or loss is included in depreciation expense. Depreciation expense also includes the costs incurred to remove property, plant and equipment where no asset retirement obligations have been recorded. |
Goodwill | Goodwill Goodwill represents the cost of acquired local distribution companies that is in excess of the fair value of the net identifiable assets acquired at the acquisition date. Goodwill is not included in rate base. Goodwill is evaluated for impairment on an annual basis, or more frequently if circumstances require. The Company performs a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount. If the Company determines, as a result of its qualitative assessment, that it is not more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, no further testing is required. If the Company determines, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, a goodwill impairment assessment is performed using a two-step, fair value-based test. The first step compares the fair value of the applicable reporting unit to its carrying amount, including goodwill. If the carrying amount of the applicable reporting unit exceeds its fair value, a second step is performed. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount, an impairment loss is recorded as a reduction to goodwill and as a charge to results of operations. For the year ended December 31, 2015, based on the qualitative assessment performed as at September 30, 2015, the Company has determined that it is not more-likely-than-not that the fair value of each applicable reporting unit assessed is less than its carrying amount. As a result, no further testing was performed, and the Company has concluded that goodwill was not impaired at December 31, 2015. |
Long-Lived Asset Impairment | Long-Lived Asset Impairment When circumstances indicate the carrying value of long-lived assets may not be recoverable, the Company evaluates whether the carrying value of such assets, excluding goodwill, has been impaired. For such long-lived assets, the Company evaluates whether impairment may exist by estimating future estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. When alternative courses of action to recover the carrying amount of a long-lived asset are under consideration, a probability-weighted approach is used to develop estimates of future undiscounted cash flows. If the carrying value of the long-lived asset is not recoverable based on the estimated future undiscounted cash flows, an impairment loss is recorded, measured as the excess of the carrying value of the asset over its fair value. As a result, the asset’s carrying value is adjusted to its estimated fair value. Within its regulated business, the carrying costs of most of Hydro One’s long-lived assets are included in rate base where they earn an OEB-approved rate of return. Asset carrying values and the related return are recovered through approved rates. As a result, such assets are only tested for impairment in the event that the OEB disallows recovery, in whole or in part, or if such a disallowance is judged to be probable. Hydro One regularly monitored the assets of its unregulated Hydro One Telecom subsidiary prior to spin-off for indications of impairment. Management assessed the fair value of such long-lived assets using commonly accepted techniques, which included but were not limited to, the use of recent third party comparable sales for reference and internally developed discounted cash flow analysis. Significant changes in market conditions, changes to the condition of an asset, or a change in management’s intent to utilize the asset was generally viewed by management as triggering events to reassess the cash flows related to these long-lived assets. As at December 31, 2015 and 2014, no asset impairment had been recorded for assets within either the Company’s regulated or unregulated businesses. |
Costs of Arranging Debt Financing | Costs of Arranging Debt Financing For financial liabilities classified as other than held-for-trading, the Company defers the external transaction costs related to obtaining debt financing and presents such amounts as deferred debt issuance costs on the Consolidated Balance Sheets. Deferred debt issuance costs are amortized over the contractual life of the related debt on an effective-interest basis and the amortization is included within financing charges in the Consolidated Statements of Operations and Comprehensive Income. Transaction costs for items classified as held-for-trading are expensed immediately. |
Comprehensive Income | Comprehensive Income Comprehensive income is comprised of net income and other comprehensive income (OCI). Hydro One presents net income and OCI in a single continuous Consolidated Statement of Operations and Comprehensive Income. |
Financial Assets and Liabilities | Financial Assets and Liabilities All financial assets and liabilities are classified into one of the following five categories: held-to-maturity; loans and receivables; held-for-trading; other liabilities; or available-for-sale. Financial assets and liabilities classified as held-for-trading are measured at fair value. All other financial assets and liabilities are measured at amortized cost, except accounts receivable and amounts due from related parties, which are measured at the lower of cost or fair value. Accounts receivable and amounts due from related parties are classified as loans and receivables. The Company considers the carrying amounts of accounts receivable and amounts due from related parties to be reasonable estimates of fair value because of the short time to maturity of these instruments. Provisions for impaired accounts receivable are recognized as adjustments to the allowance for doubtful accounts and are recognized when there is objective evidence that the Company will not be able to collect amounts according to the original terms. All financial instrument transactions are recorded at trade date. Derivative instruments are measured at fair value. Gains and losses from fair valuation are included within financing charges in the period in which they arise. The Company determines the classification of its financial assets and liabilities at the date of initial recognition. The Company designates certain of its financial assets and liabilities to be held at fair value, when it is consistent with the Company’s risk management policy disclosed in Note 13 – Fair Value of Financial Instruments and Risk Management. |
Derivative Instruments and Hedge Accounting | Derivative Instruments and Hedge Accounting The Company closely monitors the risks associated with changes in interest rates on its operations and, where appropriate, uses various instruments to hedge these risks. Certain of these derivative instruments qualify for hedge accounting and are designated as accounting hedges, while others either do not qualify as hedges or have not been designated as hedges (hereinafter referred to as undesignated contracts) as they are part of economic hedging relationships. The accounting guidance for derivative instruments requires the recognition of all derivative instruments not identified as meeting the normal purchase and sale exemption as either assets or liabilities recorded at fair value on the Consolidated Balance Sheets. For derivative instruments that qualify for hedge accounting, the Company may elect to designate such derivative instruments as either cash flow hedges or fair value hedges. The Company offsets fair value amounts recognized on its Consolidated Balance Sheets related to derivative instruments executed with the same counterparty under the same master netting agreement. For derivative instruments that qualify for hedge accounting and which are designated as cash flow hedges, the effective portion of any gain or loss, net of tax, is reported as a component of accumulated OCI (AOCI) and is reclassified to results of operations in the same period or periods during which the hedged transaction affects results of operations. Any gains or losses on the derivative instrument that represent either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in results of operations. For fair value hedges, changes in fair value of both the derivative instrument and the underlying hedged exposure are recognized in the Consolidated Statements of Operations and Comprehensive Income in the current period. The gain or loss on the derivative instrument is included in the same line item as the offsetting gain or loss on the hedged item in the Consolidated Statements of Operations and Comprehensive Income. Additionally, the Company enters into derivative agreements that are economic hedges which either do not qualify for hedge accounting or have not been designated as hedges. The changes in fair value of these undesignated derivative instruments are reflected in results of operations. Embedded derivative instruments are separated from their host contracts and carried at fair value on the Consolidated Balance Sheets when: (a) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument is not measured at fair value, with changes in fair value recognized in results of operations each period; and (c) the embedded derivative itself meets the definition of a derivative. The Company does not engage in derivative trading or speculative activities and had no embedded derivatives at December 31, 2015 or 2014. Hydro One periodically develops hedging strategies taking into account risk management objectives. At the inception of a hedging relationship where the Company has elected to apply hedge accounting, Hydro One formally documents the relationship between the hedged item and the hedging instrument, the related risk management objective, the nature of the specific risk exposure being hedged, and the method for assessing the effectiveness of the hedging relationship. The Company also assesses, both at the inception of the hedge and on a quarterly basis, whether the hedging instruments are effective in offsetting changes in fair values or cash flows of the hedged items. |
Employee Future Benefits | Employee Future Benefits Employee future benefits provided by Hydro One include pension, post-retirement and post-employment benefits. The costs of the Company’s pension, post-retirement and post-employment benefit plans are recorded over the periods during which employees render service. The Company recognizes the funded status of its defined benefit pension, post-retirement and post-employment plans on its Consolidated Balance Sheets and subsequently recognizes the changes in funded status at the end of each reporting year. Defined benefit pension, post-retirement and post-employment plans are considered to be underfunded when the projected benefit obligation exceeds the fair value of the plan assets. Liabilities are recognized on the Consolidated Balance Sheets for any net underfunded projected benefit obligation. The net underfunded projected benefit obligation may be disclosed as a current liability, long-term liability, or both. The current portion is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next 12 months exceeds the fair value of plan assets. If the fair value of plan assets exceeds the projected benefit obligation of the plan, an asset is recognized equal to the net overfunded projected benefit obligation. The post-retirement and post-employment benefit plans are unfunded because there are no related plan assets. Pension benefits Pension costs are recorded on an accrual basis for financial reporting purposes. Pension costs are actuarially determined using the projected benefit method prorated on service and are based on assumptions that reflect management’s best estimate of the effect of future events, including future compensation increases. Past service costs from plan amendments and all actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service period of active employees in the plan, and over the estimated remaining life expectancy of inactive employees in the plan. Pension plan assets, consisting primarily of listed equity securities as well as corporate and government debt securities, are fair valued at the end of each year. Hydro One records a regulatory asset equal to the net underfunded projected benefit obligation for its pension plan. Post-retirement and post-employment benefits Post-retirement and post-employment benefits are recorded and included in rates on an accrual basis. Costs are determined by independent actuaries using the projected benefit method prorated on service and based on assumptions that reflect management’s best estimates. Past service costs from plan amendments are amortized to results of operations based on the expected average remaining service period. Hydro One records a regulatory asset equal to the incremental net unfunded projected benefit obligation for post-retirement and post-employment plans recorded at each year end based on annual actuarial reports. For post-retirement benefits, all actuarial gains or losses are deferred using the “corridor” approach. The amount calculated above the “corridor” is amortized to results of operations on a straight-line basis over the expected average remaining service life of active employees in the plan and over the remaining life expectancy of inactive employees in the plan. The post-retirement benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. For post-employment obligations, the associated regulatory liabilities representing actuarial gains on transition to US GAAP are amortized to results of operations based on the “corridor” approach. Post transition, the actuarial gains and losses on post-employment obligations that are incurred during the year are recognized immediately to results of operations. The post-employment benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. All post-retirement and post-employment future benefit costs are attributed to labour and are either charged to results of operations or capitalized as part of the cost of property, plant and equipment and intangible assets. |
Multiemployer Pension Plan | Multiemployer Pension Plan Former employees of Haldimand Hydro and Woodstock Hydro participate in the Ontario Municipal Employees Retirement System Fund (OMERS Plan), a multiemployer, contributory, defined benefit public sector pension fund. Former employees of Norfolk Power Inc. (Norfolk Power) ceased to contribute to the OMERS Plan upon integration of Norfolk Power into Hydro One Networks in September 2015. These employees are now included in Hydro One’s defined benefit pension plan. OMERS Plan provides retirement pension payments based on members’ length of service and salary. Both the participating employers and members are required to make plan contributions. The OMERS Plan assets are pooled together to provide benefits to all plan participants and the plan assets are not segregated by member entity. The OMERS Plan is registered with the Financial Services Commission of Ontario under Registration #0345983. The OMERS Plan is accounted for as a defined contribution plan by Hydro One because it is not practicable to determine the present value of the Company’s obligation, the fair value of plan assets or the related current service cost applicable to employees of Haldimand Hydro and Woodstock Hydro. Hydro One recognizes its contributions to the OMERS Plan as pension expense, with a portion being capitalized. The expensed amount is included in operation, maintenance and administration costs in the Consolidated Statements of Operations and Comprehensive Income. |
Stock-Based Compensation | Stock-Based Compensation Hydro One measures share grant plans based on fair value of share grants as estimated based on the grant date Hydro One Limited share price. The costs are recognized in the financial statements using the graded-vesting attribution method for share grant plans that have both a performance condition and a service condition. The Company records a regulatory asset equal to the accrued costs of share grant plans recognized in each period, as management considers it to be probable that such costs will be recovered in the future through the rate-setting process. The Company also records the liabilities associated with its Directors’ Deferred Share Unit (DSU) Plan at fair value at each reporting date until settlement, recognizing compensation expense over the vesting period on a straight-line basis. The fair value of the DSU liability is based on Hydro One Limited’s common share closing price at the end of each reporting period. |
Loss Contingencies | Loss Contingencies Hydro One is involved in certain legal and environmental matters that arise in the normal course of business. In the preparation of its Consolidated Financial Statements, management makes judgments regarding the future outcome of contingent events and records a loss for a contingency based on its best estimate when it is determined that such loss is probable and the amount of the loss can be reasonably estimated. Where the loss amount is recoverable in future rates, a regulatory asset is also recorded. When a range estimate for the probable loss exists and no amount within the range is a better estimate than any other amount, the Company records a loss at the minimum amount within the range. Management regularly reviews current information available to determine whether recorded provisions should be adjusted and whether new provisions are required. Estimating probable losses may require analysis of multiple forecasts and scenarios that often depend on judgments about potential actions by third parties, such as federal, provincial and local courts or regulators. Contingent liabilities are often resolved over long periods of time. Amounts recorded in the Consolidated Financial Statements may differ from the actual outcome once the contingency is resolved. Such differences could have a material impact on future results of operations, financial position and cash flows of the Company. Provisions are based upon current estimates and are subject to greater uncertainty where the projection period is lengthy. A significant upward or downward trend in the number of claims filed, the nature of the alleged injuries, and the average cost of resolving each claim could change the estimated provision, as could any substantial adverse or favourable verdict at trial. A federal or provincial legislative outcome or structured settlement could also change the estimated liability. Legal fees are expensed as incurred. |
Environmental Liabilities | Environmental Liabilities Environmental liabilities are recorded in respect of past contamination when it is determined that future environmental remediation expenditures are probable under existing statute or regulation and the amount of the future expenditures can be reasonably estimated. Hydro One records a liability for the estimated future expenditures associated with contaminated land assessment and remediation and for the phase-out and destruction of polychlorinated biphenyl (PCB)-contaminated mineral oil removed from electrical equipment, based on the present value of these estimated future expenditures. The Company determines the present value with a discount rate equal to its credit-adjusted risk-free interest rate on financial instruments with comparable maturities to the pattern of future environmental expenditures. As the Company anticipates that the future expenditures will continue to be recoverable in future rates, an offsetting regulatory asset has been recorded to reflect the future recovery of these environmental expenditures from customers. Hydro One reviews its estimates of future environmental expenditures annually, or more frequently if there are indications that circumstances have changed. |
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations are recorded for legal obligations associated with the future removal and disposal of long-lived assets. Such obligations may result from the acquisition, construction, development and/or normal use of the asset. Conditional asset retirement obligations are recorded when there is a legal obligation to perform a future asset retirement activity but where the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the Company. In such a case, the obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. When recording an asset retirement obligation, the present value of the estimated future expenditures required to complete the asset retirement activity is recorded in the period in which the obligation is incurred, if a reasonable estimate can be made. In general, the present value of the estimated future expenditures is added to the carrying amount of the associated asset and the resulting asset retirement cost is depreciated over the estimated useful life of the asset. Where an asset is no longer in service when an asset retirement obligation is recorded, the asset retirement cost is recorded in results of operations. Some of the Company’s transmission and distribution assets, particularly those located on unowned easements and rights-of-way, may have asset retirement obligations, conditional or otherwise. The majority of the Company’s easements and rights-of-way are either of perpetual duration or are automatically renewed annually. Land rights with finite terms are generally subject to extension or renewal. As the Company expects to use the majority of its facilities in perpetuity, no asset retirement obligations currently exist for these assets. If, at some future date, a particular facility is shown not to meet the perpetuity assumption, it will be reviewed to determine whether an estimable asset retirement obligation exists. In such a case, an asset retirement obligation would be recorded at that time. The Company’s asset retirement obligations recorded to date relate to estimated future expenditures associated with the removal and disposal of asbestos-containing materials installed in some of its facilities and with the decommissioning of specific switching stations located on unowned sites. |
New Accounting Pronouncements | Recent Accounting Guidance Not Yet Adopted In January 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This ASU eliminates the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary and to show the item separately in the income statement. This ASU is effective for fiscal years, and interim periods within these years, beginning after December 15, 2015. The adoption of this ASU is not anticipated to have an impact on the Company’s consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. This ASU provides guidance about the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The adoption of this ASU is not anticipated to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption of this ASU in the first quarter of 2016, the Company’s deferred debt issuance costs that are currently presented under other long-term assets will be reclassified as a deduction from the carrying amount of long-term debt. In April 2015, the FASB issued ASU 2015-04, Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets. This ASU permits an entity with a fiscal year-end that does not coincide with a month-end and an entity that has a significant event in an interim period that calls for a remeasurement of defined benefit plan assets and obligations to measure the defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end. This ASU is effective for fiscal years, and interim periods within these years, beginning after December 15, 2015. The adoption of this ASU is not anticipated to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license, as well as the related accounting for the arrangement. This ASU is effective for fiscal years, and interim periods within these years, beginning after December 15, 2015. The Company is currently assessing the impact of adoption of this ASU on its consolidated financial statements. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This ASU defers by one year the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) issued by the FASB in May 2014. ASU 2014-09 provides guidance on revenue recognition that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance in ASU 2014-09 is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the impact of adoption of ASU 2014-09 on its consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period of a business combination in the reporting period in which the adjustment amounts are determined. The amendments in this update require that the acquirer to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption of this ASU in the first quarter of 2016, the Company will apply the guidance in this ASU to future measurement adjustments related to business combinations, as applicable. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Upon adoption of this ASU in the first quarter of 2017, the current portions of the Company’s deferred income tax assets and liabilities will be reclassified as noncurrent assets and liabilities on the consolidated Balance Sheets. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU requires equity investments to be measured at fair value with changes in fair value recognized in net income, and requires enhanced disclosures and presentation of financial assets and liabilities in the financial statements. This ASU also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the impact of adoption of this ASU on its consolidated financial statements. |
Significant Accounting Polici37
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Average Service Lives and Depreciation and Amortization Rates | A summary of average service lives and depreciation and amortization rates for the various classes of assets is included below: Rate Average Service Life Range Average Transmission 56 years 1% – 2% 2 % Distribution 46 years 1% – 7% 2 % Communication 16 years 1% – 15% 6 % Administration and service 18 years 1% –20% 6 % |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Norfolk Power [Member] | |
Summary of Preliminary Determination of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the determination of the fair value of the assets acquired and liabilities assumed: (millions of Canadian dollars) Working capital 6 Property, plant and equipment 56 Deferred income tax assets 1 Goodwill 40 Bank indebtedness (3 ) Derivative instruments (3 ) Long-term debt (26 ) Post-retirement and post-employment benefit liability (1 ) Environmental liability (1 ) Long-term accounts payable and other liabilities (1 ) 68 |
Acquisition of Woodstock Hydro [Member] | |
Summary of Preliminary Determination of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary determination of the fair value of the assets acquired and liabilities assumed: (millions of Canadian dollars) Cash and cash equivalents 3 Working capital 4 Property, plant and equipment 28 Intangible assets 1 Deferred income tax assets 2 Goodwill 17 Long-term debt (17 ) Other long-term liabilities (2 ) Post-retirement and post-employment benefit liability (1 ) Derivative instruments (3 ) 32 |
Acquisition of Haldimand Hydro [Member] | |
Summary of Preliminary Determination of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the determination of the fair value of the assets acquired and liabilities assumed: (millions of Canadian dollars) Cash and cash equivalents 3 Working capital 5 Property, plant and equipment 52 Deferred income tax assets 1 Goodwill 33 Long-term debt (18 ) Regulatory liabilities (3 ) 73 |
Hydro One Brampton Networks Inc. spin-off [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | |
Summary of Spin-off, Assets and Liabilities Transferred | In connection with the Hydro One Brampton spin-off, the following assets and liabilities of Hydro One Brampton were transferred: (millions of Canadian dollars) Working capital 33 Property, plant and equipment and intangibles (net) 360 Other long-term assets 6 Long-term liabilities (205 ) |
Depreciation and Amortization (
Depreciation and Amortization (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Schedule of Depreciation and Amortization | Year ended December 31 (millions of Canadian dollars) 2015 2014 Depreciation of property, plant and equipment 594 565 Amortization of intangible assets 54 53 Asset removal costs 90 81 Amortization of regulatory assets 19 23 757 722 |
Financing Charges (Tables)
Financing Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift, Interest [Abstract] | |
Schedule of Financing Charges | Year ended December 31 (millions of Canadian dollars) 2015 2014 Interest on long-term debt 417 432 Other 16 12 Less: Interest capitalized on construction and development in progress (52 ) (49 ) Gain on interest-rate swap agreements (2 ) (10 ) Interest earned on investments (3 ) (6 ) 376 379 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Reconciliation between Statutory and Effective Tax Rates | The reconciliation between the statutory and the effective tax rates is provided as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Income taxes / provision for PILs at statutory rate 216 222 Increase (decrease) resulting from: Net temporary differences included in amounts charged to customers: Capital cost allowance in excess of depreciation and amortization (37 ) (72 ) Pension contributions in excess of pension expense (25 ) (24 ) Overheads capitalized for accounting but deducted for tax purposes (15 ) (15 ) Interest capitalized for accounting but deducted for tax purposes (13 ) (13 ) Environmental expenditures (5 ) (5 ) Non-refundable investment tax credits (2 ) (3 ) Post-retirement and post-employment benefit expense in excess of cash payments (1 ) 3 Prior year’s adjustments (1 ) (4 ) Other (2 ) (1 ) Net temporary differences (101 ) (134 ) Net tax benefit resulting from transition from PILs Regime to Federal Tax Regime (9 ) — Hydro One Brampton spin-off 7 — Net permanent differences 1 1 Total income taxes / provision for PILs 114 89 |
Major Components of Income Tax Expense | The major components of income tax expense are as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Current income taxes / provision for PILs 2,931 79 Deferred income taxes / provision for (recovery of) PILs (2,817 ) 10 Total income taxes / provision for PILs 114 89 Effective income tax rate 13.97 % 10.63 % |
Schedule of Deferred Income Tax Assets and Liabilities | At December 31, 2015 and 2014, deferred income tax assets and liabilities consisted of the following: December 31 (millions of Canadian dollars) 2015 2014 Deferred income tax assets Depreciation and amortization in excess of capital cost allowance 918 (4 ) Post-retirement and post-employment benefits expense in excess of cash payments 572 8 Environmental expenditures 75 4 Non-capital losses 62 — Other 2 (1 ) Total deferred income tax assets 1,629 7 Less: current portion 19 — 1,610 7 December 31 (millions of Canadian dollars) 2015 2014 Deferred income tax liabilities Regulatory amounts that are not recognized for tax purposes (153 ) (140 ) Partnership interest (41 ) (38 ) Goodwill (10 ) (21 ) Capital cost allowance in excess of depreciation and amortization (1 ) (1,713 ) Post-retirement and post-employment benefits expense in excess of cash payments — 559 Environmental expenditures — 59 Other (1 ) — Total deferred income tax liabilities (206 ) (1,294 ) Less: current portion — 19 (206 ) (1,313 ) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | December 31 (millions of Canadian dollars) 2015 2014 Accounts receivable – billed 374 496 Accounts receivable – unbilled 459 586 Accounts receivable, gross 833 1,082 Allowance for doubtful accounts (61 ) (66 ) Accounts receivable, net 772 1,016 |
Schedule of Allowance for Doubtful Accounts | The following table shows the movements in the allowance for doubtful accounts for the years ended December 31, 2015 and 2014: Year ended December 31 (millions of Canadian dollars) 2015 2014 Allowance for doubtful accounts – January 1 (66 ) (36 ) Write-offs 37 24 Additions to allowance for doubtful accounts (32 ) (54 ) Allowance for doubtful accounts – December 31 (61 ) (66 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | December 31, 2015 (millions of Canadian dollars) Property, Accumulated Construction in Progress Total Transmission 13,803 4,625 853 10,031 Distribution 9,205 3,177 238 6,266 Communication 1,006 609 18 415 Administration and service 1,531 848 35 718 Easements 523 60 — 463 26,068 9,319 1,144 17,893 December 31, 2014 (millions of Canadian dollars) Property, Accumulated Construction in Progress Total Transmission 13,209 4,416 626 9,419 Distribution 9,076 3,225 320 6,171 Communication 1,100 615 56 541 Administration and service 1,502 793 23 732 Easements 623 85 — 538 25,510 9,134 1,025 17,401 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | December 31, 2015 (millions of Canadian dollars) Intangible Accumulated Development in Progress Total Computer applications software 579 270 24 333 Other 7 4 — 3 586 274 24 336 December 31, 2014 (millions of Canadian dollars) Intangible Accumulated Development in Progress Total Computer applications software 573 303 3 273 Other 5 2 — 3 578 305 3 276 |
Regulatory Assets and Liabili45
Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Regulated Operations [Abstract] | |
Schedule of Regulatory Assets and Liabilities | Hydro One has recorded the following regulatory assets and liabilities: December 31 (millions of Canadian dollars) 2015 2014 Regulatory assets: Deferred income tax regulatory asset 1,445 1,327 Pension benefit regulatory asset 952 1,236 Post-retirement and post-employment benefits 240 273 Environmental 207 239 RSVA 110 11 Pension cost variance 37 90 2015-2017 rate rider 20 — DSC exemption 10 16 Share-based compensation 10 — B2M LP start-up costs 8 — OEB cost assessment differential — 12 Other 12 27 Total regulatory assets 3,051 3,231 Less: current portion 36 31 3,015 3,200 Regulatory liabilities: External revenue variance 87 54 Green Energy expenditure variance 76 83 CDM deferral variance 53 25 Deferred income tax regulatory liability 23 21 PST savings deferral 4 19 Other 12 13 Total regulatory liabilities 255 215 Less: current portion 19 47 236 168 |
Debt and Credit Agreements (Tab
Debt and Credit Agreements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Hydro One's Consolidated Committed, Unsecured and Unused Credit Facilities | At December 31, 2015, Hydro One’s consolidated committed, unsecured and unused credit facilities totalling $2.3 billion consisted of the following: (millions of Canadian dollars) Maturity Amount Revolving standby credit facility June 2020 1,500 Three-year senior, revolving term credit facility October 2018 800 Total 2,300 |
Schedule of Outstanding Long-Term Debt | The following table presents the outstanding long-term debt at December 31, 2015 and 2014: December 31 (millions of Canadian dollars) 2015 2014 2.95% Series 21 notes due 2015 1 — 500 Floating-rate Series 22 notes due 2015 2 — 50 4.64% Series 10 notes due 2016 450 450 Floating-rate Series 27 notes due 2016 2 50 50 5.18% Series 13 notes due 2017 600 600 2.78% Series 28 notes due 2018 750 750 Floating-rate Series 31 notes due 2019 2 228 228 4.40% Series 20 notes due 2020 300 300 1.62% Series 33 notes due 2020 1 350 – 3.20% Series 25 notes due 2022 600 600 7.35% Debentures due 2030 400 400 6.93% Series 2 notes due 2032 500 500 6.35% Series 4 notes due 2034 385 385 5.36% Series 9 notes due 2036 600 600 4.89% Series 12 notes due 2037 400 400 6.03% Series 17 notes due 2039 300 300 5.49% Series 18 notes due 2040 500 500 4.39% Series 23 notes due 2041 300 300 6.59% Series 5 notes due 2043 315 315 4.59% Series 29 notes due 2043 435 435 4.17% Series 32 notes due 2044 350 350 5.00% Series 11 notes due 2046 325 325 4.00% Series 24 notes due 2051 225 225 3.79% Series 26 notes due 2062 310 310 4.29% Series 30 notes due 2064 50 50 8,723 8,923 Add: Unrealized mark-to-market loss 1 1 2 Less: Long-term debt payable within one year (500 ) (552 ) Long-term debt 8,224 8,373 1 The unrealized mark-to-market loss relates to $50 million of the Series 33 notes due 2020 (2014 – $250 million of the Series 21 notes due 2015). The unrealized mark-to-market loss is offset by a $1 million (2014 – $2 million) unrealized mark-to-market gain on the related fixed-to-floating interest-rate swap agreements, which are accounted for as fair value hedges. See Note 13 – Fair Value of Financial Instruments and Risk Management for details of fair value hedges. 2 The interest rates of the floating-rate notes are referenced to the 3-month Canadian dollar bankers’ acceptance rate, plus a margin. |
Fair Value of Financial Instr47
Fair Value of Financial Instruments and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Values and Carrying Values of Long-Term Debt | The fair values and carrying values of the Company’s long-term debt at December 31, 2015 and 2014 are as follows: December 31 (millions of Canadian dollars) 2015 Carrying Value 2015 Fair Value 2014 Carrying Value 2014 Fair Value Long-term debt $250 million of MTN Series 21 notes 1 — — 252 252 $50 million of MTN Series 33 notes 1 51 51 — — Other notes and debentures 2 8,673 9,942 8,673 10,159 8,724 9,993 8,925 10,411 1 The fair value of the $50 million MTN Series 33 notes and $250 million of the MTN Series 21 notes subject to hedging is primarily based on changes in the present value of future cash flows due to a change in the yield in the swap market for the related swap (hedged risk). 2 The fair value of other notes and debentures, and the portion of the MTN Series 21 notes that are not subject to hedging, represents the market value of the notes and debentures and is based on unadjusted period-end market prices for the same or similar debt of the same remaining maturities. |
Summary of Fair Value Hierarchy of Financial Assets and Liabilities | The fair value hierarchy of financial assets and liabilities at December 31, 2015 and 2014 is as follows: December 31, 2015 (millions of Canadian dollars) Carrying Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents 89 89 89 — — Derivative instruments Fair value hedge – interest-rate swap 1 1 1 — — 90 90 90 — — Liabilities: Short-term notes payable 1,491 1,491 1,491 — — Long-term debt 8,724 9,993 — 9,993 — 10,215 11,484 1,491 9,993 December 31, 2014 (millions of Canadian dollars) Carrying Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents 100 100 100 — — Derivative instruments Fair value hedges – interest-rate swaps 2 2 — 2 — 102 102 100 2 — Liabilities: Bank indebtedness 2 2 2 — — Derivative instruments Undesignated contracts – interest-rate swaps 3 3 — 3 — Long-term debt 8,925 10,411 — 10,411 — 8,930 10,416 2 10,414 — |
Summary of Net Unrealized Loss (Gain) on Hedged Debt and Related Interest Rate Swaps | The net unrealized loss (gain) on the hedged debt and the related interest-rate swaps for the years ended December 31, 2015 and 2014 are included in financing charges as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Unrealized loss (gain) on hedged debt (1 ) (3 ) Unrealized loss (gain) on fair value interest-rate swaps 1 3 Net unrealized loss (gain) — — |
Summary of Principal Repayments and Related Weighted Average Interest Rates | Principal repayments and related weighted average interest rates are summarized by the number of years to maturity in the following table: Years to Maturity Long-term Debt Principal Repayments (millions of Canadian dollars) Weighted Average Interest Rate (%) 1 year 500 4.3 2 years 600 5.2 3 years 750 2.8 4 years 228 1.2 5 years 650 2.9 2,728 3.5 6 – 10 years 600 3.2 Over 10 years 5,395 5.4 8,723 4.7 |
Summary of Long Term Debt Interest Payments | Interest payments on long-term debt are summarized by year in the following table: Year Interest Payments (millions of Canadian dollars) 2016 397 2017 386 2018 355 2019 332 2020 322 1,792 2021-2025 1,496 2026 + 4,080 7,368 |
Capital Management (Tables)
Capital Management (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Summary of Company's Capital Structure | At December 31, 2015 and 2014, the Company’s capital structure was as follows: December 31 (millions of Canadian dollars) 2015 2014 Long-term debt payable within one year 500 552 Short-term notes payable 1,491 — Less: cash and cash equivalents 89 100 1,902 452 Long-term debt 8,224 8,373 Preferred shares — 323 Common shares 6,000 3,314 Retained earnings 3,759 4,249 9,759 7,563 Total capital 19,885 16,711 |
Pension and Post-Retirement a49
Pension and Post-Retirement and Post-Employment Benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Change in Projected Benefit Obligation and Change in Plan Assets | Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 (millions of Canadian dollars) 2015 2014 2015 2014 Change in projected benefit obligation Projected benefit obligation, beginning of year 7,535 6,576 1,582 1,531 Current service cost 186 145 43 41 Interest cost 302 312 64 73 Benefits paid (334 ) (319 ) (47 ) (45 ) Net actuarial loss (gain) (6 ) 821 (27 ) (18 ) Change due to Hydro One Brampton spin-off — — (5 ) — Change due to Hydro One Telecom spin-off — — (19 ) — Projected benefit obligation, end of year 7,683 7,535 1,591 1,582 Change in plan assets Fair value of plan assets, beginning of year 6,299 5,731 — — Actual return on plan assets 582 703 — — Benefits paid (334 ) (319 ) — — Employer contributions 177 174 — — Employee contributions 40 35 — — Administrative expenses (33 ) (25 ) — — Fair value of plan assets, end of year 6,731 6,299 — — Unfunded status 952 1,236 1,591 1,582 |
Schedule of Benefit Obligations and Plan Assets | Hydro One presents its benefit obligations and plan assets net on its Consolidated Balance Sheets within the following line items: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of Canadian dollars) 2015 2014 2015 2014 Accrued liabilities — — 50 49 Pension benefit liability 952 1,236 — — Post-retirement and post-employment benefit liability — — 1,541 1,533 Unfunded status 952 1,236 1,591 1,582 |
Schedule of Projected Benefit Obligation (PBO), Accumulated Benefit Obligation (ABO) and Fair Value of Plan Assets | The following table provides the projected benefit obligation (PBO), accumulated benefit obligation (ABO) and fair value of plan assets for the Pension Plan: December 31 (millions of Canadian dollars) 2015 2014 PBO 7,683 7,535 ABO 7,020 6,887 Fair value of plan assets 6,731 6,299 |
Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations | The following weighted average assumptions were used to determine the benefit obligations at December 31, 2015 and 2014: Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 2015 2014 2015 2014 Significant assumptions: Weighted average discount rate 4.00 % 4.00 % 4.10 % 4.00 % Rate of compensation scale escalation (without merit) 2.50 % 2.50 % 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % 2.00 % 2.00 % Rate of increase in health care cost trends 1 — — 4.36 % 4.36 % 1 6.38% per annum in 2016, grading down to 4.36% per annum in and after 2031 (2014 – 6.52% in 2015, grading down to 4.36% per annum in and after 2031) |
Schedule of Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs | The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2015 and 2014. Assumptions used to determine current year-end benefit obligations are the assumptions used to estimate the subsequent year’s net periodic benefit costs. Year ended December 31 2015 2014 Pension Benefits: Weighted average expected rate of return on plan assets 6.50 % 6.50 % Weighted average discount rate 4.00 % 4.75 % Rate of compensation scale escalation (without merit) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 13 11 Post-Retirement and Post-Employment Benefits: Weighted average discount rate 4.00 % 4.75 % Rate of compensation scale escalation (without merit) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 13.8 12 Rate of increase in health care cost trends 1 4.36 % 4.39 % 1 6.52% per annum in 2015, grading down to 4.36% per annum in and after 2031 (2014 – 6.81% in 2014, grading down to 4.39% per annum in and after 2031) |
Schedule of Effect of One Percent Change in Health Care Cost Trends on Projected Benefit Obligation | The effect of a 1% change in health care cost trends on the projected benefit obligation for the post-retirement and post-employment benefits at December 31, 2015 and 2014 is as follows: December 31 (millions of Canadian dollars) 2015 2014 Projected benefit obligation: Effect of a 1% increase in health care cost trends 252 248 Effect of a 1% decrease in health care cost trends (196 ) (193 ) |
Schedule of Effect of One Percent Change in Health Care Cost Trends on Service Cost and Interest Cost | The effect of a 1% change in health care cost trends on the service cost and interest cost for the post-retirement and post-employment benefits for the years ended December 31, 2015 and 2014 is as follows: Year ended December 31 (millions of Canadian dollars) 2015 2014 Service cost and interest cost: Effect of a 1% increase in health care cost trends 22 23 Effect of a 1% decrease in health care cost trends (16 ) (17 ) |
Approximate Life Expectancies Used to Determine Projected Benefit Obligations for Pension, Post-Retirement and Post-Employment Plans | The following approximate life expectancies were used in the mortality assumptions to determine the projected benefit obligations for the pension and post-retirement and post-employment plans at December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Life expectancy at 65 for a member currently at Life expectancy at 65 for a member currently at Age 65 Age 45 Age 65 Age 45 Male 23 Female 25 Male 24 Female 26 Male 23 Female 25 Male 24 Female 26 |
Schedule of Estimated Future Benefit Payments | At December 31, 2015, estimated future benefit payments to the participants of the Plans were: (millions of Canadian dollars) Pension Benefits Post-Retirement and Post-Employment Benefits 2016 316 53 2017 328 55 2018 339 57 2019 350 59 2020 360 61 2021 through to 2025 1,928 342 Total estimated future benefit payments through to 2025 3,621 627 |
Schedule of Actuarial Gains and Losses and Prior Service Costs Recorded Within Regulatory Assets | The following table provides the actuarial gains and losses and prior service costs recorded within regulatory assets: Year ended December 31 (millions of Canadian dollars) 2015 2014 Pension Benefits: Actuarial loss (gain) for the year (181 ) 511 Actuarial loss amortization (119 ) (103 ) Prior service cost amortization (2 ) (2 ) (302 ) 406 Post-Retirement and Post-Employment Benefits: Actuarial loss (gain) for the year (27 ) (18 ) Actuarial loss amortization (14 ) (18 ) Prior service cost amortization — (2 ) (41 ) (38 ) |
Components of Regulatory Assets That Have Not Been Recognized as Components of Net Periodic Benefit Costs | The following table provides the components of regulatory assets that have not been recognized as components of net periodic benefit costs for the years ended December 31, 2015 and 2014: Year ended December 31 (millions of Canadian dollars) 2015 2014 Pension Benefits: Prior service cost — 2 Actuarial loss 952 1,234 952 1,236 Post-Retirement and Post-Employment Benefits: Actuarial loss 240 273 240 273 |
Components of Regulatory Assets Expected to be Amortized as Components of Net Periodic Benefit Costs | The following table provides the components of regulatory assets at December 31 that are expected to be amortized as components of net periodic benefit costs in the following year: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of Canadian dollars) 2015 2014 2015 2014 Prior service cost — 2 — — Actuarial loss 96 119 8 10 96 121 8 10 |
Schedule of Pension Plan Target Asset and Weighted Average Asset Allocations | At December 31, 2015, the Pension Plan target asset allocations and weighted average asset allocations were as follows: Target Allocation (%) Pension Plan Assets (%) Equity securities 55.0 58.2 Debt securities 35.0 36.4 Other 1 10.0 5.4 100.0 100.0 1 Other investments include real estate and infrastructure investments. |
Pension Plan Assets Measured and Recorded at Fair Value on Recurring Basis | The following tables present the Pension Plan assets measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy at December 31, 2015 and 2014: December 31, 2015 (millions of Canadian dollars) Level 1 Level 2 Level 3 Total Pooled funds — 23 299 322 Cash and cash equivalents 191 — — 191 Short-term securities — 80 — 80 Real estate — — 2 2 Corporate shares – Canadian 923 — — 923 Corporate shares – Foreign 2,931 — — 2,931 Bonds and debentures – Canadian — 2,074 — 2,074 Bonds and debentures – Foreign — 199 — 199 Total fair value of plan assets 1 4,045 2,376 301 6,722 1 At December 31, 2015, the total fair value of Pension Plan assets excludes $27 million of interest and dividends receivable, and $18 million relating to accruals for pension administration expense and foreign exchange contracts payable. December 31, 2014 (millions of Canadian dollars) Level 1 Level 2 Level 3 Total Pooled funds — 18 142 160 Cash and cash equivalents 166 — — 166 Short-term securities — 176 — 176 Real estate — — 2 2 Corporate shares – Canadian 1,008 — — 1,008 Corporate shares – Foreign 2,766 — — 2,766 Bonds and debentures – Canadian — 1,799 — 1,799 Bonds and debentures – Foreign — 211 — 211 Total fair value of plan assets 1 3,940 2,204 144 6,288 1 At December 31, 2014, the total fair value of Pension Plan assets excludes $18 million of interest and dividends receivable, and $7 million relating to accruals for pension administration expense. |
Changes in Fair Value of Financial Instruments Classified in Level 3 | The following table summarizes the changes in fair value of financial instruments classified in Level 3 for the years ended December 31, 2015 and 2014. The Pension Plan classifies financial instruments as Level 3 when the fair value is measured based on at least one significant input that is not observable in the markets or due to lack of liquidity in certain markets. The gains and losses presented in the table below may include changes in fair value based on both observable and unobservable inputs. Year ended December 31 (millions of Canadian dollars) 2015 2014 Fair value, beginning of year 144 119 Realized and unrealized gains 51 30 Purchases 106 23 Sales and disbursements — (28 ) Fair value, end of year 301 144 |
Pension Plan [Member] | |
Components of Net Periodic Benefit Costs | The following table provides the components of the net periodic benefit costs for the years ended December 31, 2015 and 2014 for the Pension Plan: Year ended December 31 (millions of Canadian dollars) 2015 2014 Current service cost, net of employee contributions 146 110 Interest cost 302 312 Expected return on plan assets, net of expenses (406 ) (369 ) Actuarial loss amortization 119 103 Prior service cost amortization 2 2 Net periodic benefit costs 163 158 Charged to results of operations 1 81 81 1 The Company follows the cash basis of accounting consistent with the inclusion of pension costs in OEB-approved rates. During the year ended December 31, 2015, pension costs of $177 million (2014 – $174 million) were attributed to labour, of which $81 million (2014 – $81 million) was charged to operations, and $96 million (2014 – $93 million) was capitalized as part of the cost of property, plant and equipment and intangible assets. |
Post-Retirement and Post-Employment Benefits [Member] | |
Components of Net Periodic Benefit Costs | The following table provides the components of the net periodic benefit costs for the years ended December 31, 2015 and 2014 for the post-retirement and post-employment benefit plans: Year ended December 31 (millions of Canadian dollars) 2015 2014 Current service cost, net of employee contributions 43 41 Interest cost 64 73 Actuarial loss amortization 14 18 Prior service cost amortization — 2 Net periodic benefit costs 121 134 Charged to results of operations 55 62 |
Environmental Liabilities (Tabl
Environmental Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Schedule of Movements in Environmental Liabilities | The following tables show the movements in environmental liabilities for the years ended December 31, 2015 and 2014: Year ended December 31, 2015 (millions of Canadian dollars) PCB Land Total Environmental liabilities, January 1 172 67 239 Interest accretion 8 2 10 Expenditures (8 ) (11 ) (19 ) Revaluation adjustment (24 ) 1 (23 ) Environmental liabilities, December 31 148 59 207 Less: current portion 12 10 22 136 49 185 Year ended December 31, 2014 (millions of Canadian dollars) PCB Land Total Environmental liabilities, January 1 201 65 266 Interest accretion 9 2 11 Expenditures (5 ) (13 ) (18 ) Revaluation adjustment (33 ) 13 (20 ) Environmental liabilities, December 31 172 67 239 Less: current portion 8 10 18 164 57 221 |
Reconciliation between Undiscounted Basis of Environmental Liabilities and Amount Recognized on Consolidated Balance Sheets | The following tables show the reconciliation between the undiscounted basis of the environmental liabilities and the amount recognized on the Consolidated Balance Sheets after factoring in the discount rate: December 31, 2015 (millions of Canadian dollars) PCB Land Total Undiscounted environmental liabilities 168 61 229 Less: discounting accumulated liabilities to present value 20 2 22 Discounted environmental liabilities 148 59 207 December 31, 2014 (millions of Canadian dollars) PCB Land Total Undiscounted environmental liabilities 195 70 265 Less: discounting accumulated liabilities to present value 23 3 26 Discounted environmental liabilities 172 67 239 |
Schedule of Estimated Future Environmental Expenditures | At December 31, 2015, the estimated future environmental expenditures were as follows: (millions of Canadian dollars) 2016 22 2017 25 2018 26 2019 28 2020 30 Thereafter 98 229 |
Share Capital (Tables)
Share Capital (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Number of Common Shares | The following table presents the common shares issued during the year ended December 31, 2015. There were no common shares issued during the year ended December 31, 2014. Year ended December 31, 2015 (millions of Canadian dollars) (number of shares) Pre-Closing Transactions: Common shares issued – purchase and cancellation of preferred shares (a) 323 2,640 Common shares issued (b) 2,600 39,598 Common shares issued (c) — 1 Total common shares issued 2,923 42,239 (a) As part of the Pre-Closing Transactions, on October 31, 2015, Hydro One purchased and cancelled its 12,920,000 preferred shares previously held by the Province for cancellation at a price equal to the redemption price of the preferred shares totaling $323 million, which was satisfied by the issuance to the Province of 2,640 common shares of Hydro One. (b) On November 4, 2015, Hydro One issued 39,598 common shares to Hydro One Limited for proceeds of $2.6 billion. (c) On November 3, 2015, Hydro One declared a stock dividend on its common shares, which due to the number of shares issued and the resulting effect on the price per share was treated as a stock split. On November 5, 2015, Hydro One effected a reverse split and issued as consideration one common share to Hydro One Limited. There was no impact to the capital structure of Hydro One as a net result of the stock dividend and the reverse split. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share Grant Activity | A summary of share grant activity under the Plan as of December 31, 2015 is presented below: Years ended December 31, 2015 Share Grants (Number) Weighted-Average Outstanding – beginning of year — — Granted (non-vested) 5,319,370 $ 20.50 Outstanding – end of year 5,319,370 — |
Summary of Number of DSUs | Each DSU represents a unit with an underlying value equivalent to the value of one common share of Hydro One Limited and is entitled to accrue Hydro One Limited common share dividend equivalents in the form of additional DSUs at the time dividends are paid, subsequent to declaration by Hydro One Limited’s Board of Directors. (number of DSUs) 2015 2014 DSUs outstanding – January 1 — — DSUs granted 20,525 — DSUs outstanding – December 31 20,525 — |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Schedule of Movements in Noncontrolling Interest | The following tables show the movements in noncontrolling interest for the years ended December 31, 2015 and December 31, 2014: Year ended December 31, 2015 (millions of Canadian dollars) Temporary Equity Total Noncontrolling interest – January 1, 2015 21 49 70 Distributions to noncontrolling interest (1 ) (4 ) (5 ) Net income attributable to noncontrolling interest 3 7 10 Noncontrolling interest – December 31, 2015 23 52 75 Year ended December 31, 2014 (millions of Canadian dollars) Temporary Equity Total Noncontrolling interest – January 1, 2014 — — — Amount contributed by noncontrolling interest 22 50 72 Net income (loss) attributable to noncontrolling interest (1 ) (1 ) (2 ) Noncontrolling interest – December 31, 2014 21 49 70 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Amounts Due to and from Related Parties | The amounts due to and from related parties as a result of the transactions referred to above are as follows: (millions of Canadian dollars) December 31, 2015 December 31, Due from related parties 184 224 Due to related parties 1 (142 ) (227 ) 1 Included in due to related parties at December 31, 2015 are amounts owing to the IESO in respect of power purchases of $134 million (2014 – $214 million). |
Consolidated Statements of Ca55
Consolidated Statements of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Consolidated Statement of Cash Flows | The changes in non-cash balances related to operations consist of the following: Year ended December 31 (millions of Canadian dollars) 2015 2014 Accounts receivable 244 (93 ) Due from related parties 40 (27 ) Materials and supplies 2 — Prepaid expenses and other assets 12 (13 ) Accounts payable (26 ) 39 Accrued liabilities (27 ) (35 ) Due to related parties (95 ) (3 ) Accrued interest (4 ) — Long-term accounts payable and other liabilities — (3 ) Post-retirement and post-employment benefit liability 41 80 187 (55 ) Capital Expenditures The following table illustrates the reconciliation between investments in property, plant and equipment and the amount presented in the Consolidated Statements of Cash Flows after accounting for capitalized depreciation and the net change in related accruals: Year ended December 31 (millions of Canadian dollars) 2015 2014 Capital investments in property, plant and equipment (1,622 ) (1,511 ) Capitalized depreciation and net change in accruals included in capital investments in property, plant and equipment 28 30 Capital expenditures – property, plant and equipment (1,594 ) (1,481 ) The following table illustrates the reconciliation between investments in intangible assets and the amount presented in the Consolidated Statements of Cash Flows after accounting for the net change in related accruals: Year ended December 31 (millions of Canadian dollars) 2015 2014 Capital investments in intangible assets (40 ) (19 ) Net change in accruals included in capital investments in intangible assets 3 (4 ) Capital expenditures – intangible assets (37 ) (23 ) Supplementary Information Year ended December 31 (millions of Canadian dollars) 2015 2014 Net interest paid 416 412 Income taxes / PILs paid 2,928 86 |
Segmented Reporting (Tables)
Segmented Reporting (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The accounting policies followed by the segments are the same as those described in the summary of significant accounting policies (see Note 2 – Significant Accounting Policies). Segment information on the above basis is as follows: Year ended December 31, 2015 (millions of Canadian dollars) Transmission Distribution Other Consolidated Revenues 1,536 4,949 44 6,529 Purchased power — 3,450 — 3,450 Operation, maintenance and administration 426 633 71 1,130 Depreciation and amortization 374 380 3 757 Income (loss) before financing charges and income taxes 736 486 (30 ) 1,192 Capital investments 943 711 8 1,662 Year ended December 31, 2014 (millions of Canadian dollars) Transmission Distribution Other Consolidated Revenues 1,588 4,903 57 6,548 Purchased power — 3,419 — 3,419 Operation, maintenance and administration 394 742 56 1,192 Depreciation and amortization 346 367 9 722 Income (loss) before financing charges and income taxes 848 375 (8 ) 1,215 Capital investments 845 680 5 1,530 Total Assets by Segment: December 31 (millions of Canadian dollars) 2015 2014 Transmission 12,066 12,540 Distribution 9,213 9,805 Other 2,924 205 Total assets 24,203 22,550 |
Description of the Business - A
Description of the Business - Additional Information (Detail) - shares shares in Millions | 1 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Dec. 31, 2015 | |
Business And Organization [Line Items] | ||
Date of incorporation | Dec. 1, 1998 | |
Hydro One Limited [Member] | Initial Public Offering [Member] | ||
Business And Organization [Line Items] | ||
Common Stock, Shares, Outstanding | 595 | |
Initial Public Offering Percentage | 15.00% |
Significant Accounting Polici58
Significant Accounting Policies - Additional Information (Detail) - CAD | Dec. 31, 2015 | Dec. 29, 2015 | Mar. 12, 2015 | Jan. 08, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Line Items] | ||||||
Short-term investments original maturity | 3 months | |||||
Income tax examination, Likelihood of unfavorable settlement | Tax benefits associated with income tax positions taken, or expected to be taken, in a tax return are recorded only when the "more-likely-than-not" recognition threshold is satisfied and are measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. | |||||
Threshold probability for recognition | 50.00% | |||||
Asset impairment charges | CAD 0 | CAD 0 | ||||
Embedded derivatives | CAD 0 | CAD 0 | CAD 0 | |||
Computer Applications Software and Other Intangible Assets [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Amortization rate | 10.00% | |||||
Hydro One Networks [Member] | 2015 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Transmission revenue requirement | CAD 1,477,000,000 | |||||
Distribution revenue requirement | CAD 1,326,000,000 | |||||
Hydro One Networks [Member] | 2016 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Distribution revenue requirement | 1,430,000,000 | |||||
Hydro One Networks [Member] | 2017 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Distribution revenue requirement | CAD 1,486,000,000 | |||||
Hydro One Remote Communities [Member] | Requested Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Increase in basic rate, distribution and generation of electricity | 1.70% | |||||
Hydro One Remote Communities [Member] | Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Increase in basic rate, distribution and generation of electricity | 1.60% | |||||
B2M Limited Partnership [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Ownership interest in related party | 66.00% | 66.00% | ||||
B2M Limited Partnership [Member] | 2015 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Transmission revenue requirement | CAD 39,000,000 | |||||
B2M Limited Partnership [Member] | 2016 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Transmission revenue requirement | 36,000,000 | |||||
B2M Limited Partnership [Member] | 2017 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Transmission revenue requirement | 37,000,000 | |||||
B2M Limited Partnership [Member] | 2018 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Transmission revenue requirement | 38,000,000 | |||||
B2M Limited Partnership [Member] | 2019 Approved Revenue Requirement [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Transmission revenue requirement | CAD 37,000,000 |
Significant Accounting Polici59
Significant Accounting Policies - Average Service Lives and Depreciation and Amortization Rates (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Transmission [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average Service Life | 56 years |
Annual average rate of depreciation and amortization | 2.00% |
Distribution [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average Service Life | 46 years |
Annual average rate of depreciation and amortization | 2.00% |
Communication [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average Service Life | 16 years |
Annual average rate of depreciation and amortization | 6.00% |
Administration and Service [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average Service Life | 18 years |
Annual average rate of depreciation and amortization | 6.00% |
Minimum [Member] | Transmission [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 1.00% |
Minimum [Member] | Distribution [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 1.00% |
Minimum [Member] | Communication [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 1.00% |
Minimum [Member] | Administration and Service [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 1.00% |
Maximum [Member] | Transmission [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 2.00% |
Maximum [Member] | Distribution [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 7.00% |
Maximum [Member] | Communication [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 15.00% |
Maximum [Member] | Administration and Service [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization | 20.00% |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - CAD | Nov. 06, 2015 | Aug. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2015 | Jun. 30, 2015 | Aug. 29, 2014 |
Business Acquisition [Line Items] | |||||||
Goodwill | CAD 163,000,000 | CAD 173,000,000 | |||||
Value of common shares subscribed | CAD 2,600,000,000 | ||||||
Hydro One Telecom spin-off [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Transfer of common shares | CAD (17,000,000) | ||||||
Total debt receivable | (21,000,000) | ||||||
Return of stated capital | (38,000,000) | ||||||
Municipal Billing Services Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Return of stated capital | CAD (3,000,000) | ||||||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | Hydro One Brampton Networks Inc. spin-off [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of common shares subscribed by Hydro One Inc., shares | 357 | ||||||
Value of common shares subscribed | CAD 53,000,000 | ||||||
Long-term intercompany debt aggregate principal amount | 193,000,000 | ||||||
Accrued interest | 3,000,000 | ||||||
Goodwill | 60,000,000 | ||||||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | Hydro One Brampton Networks Inc. spin-off [Member] | Common Shares [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Return of stated capital | CAD (196,000,000) | ||||||
Acquisition of Woodstock Hydro [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of common shares acquired | 100.00% | ||||||
Date of acquisition agreement | Oct. 31, 2015 | ||||||
Purchase price of acquisition | CAD 32,000,000 | ||||||
Goodwill | CAD 17,000,000 | ||||||
Goodwill expected tax deductible amount | 0 | ||||||
Revenues | 12,000,000 | ||||||
Net income | CAD 2,000,000 | ||||||
Acquisition of Haldimand Hydro [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of common shares acquired | 100.00% | ||||||
Date of acquisition agreement | Jun. 30, 2015 | ||||||
Purchase price of acquisition | CAD 73,000,000 | ||||||
Goodwill | CAD 33,000,000 | ||||||
Revenues | 32,000,000 | ||||||
Net income | 6,000,000 | ||||||
Norfolk Power [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of common shares acquired | 100.00% | ||||||
Date of acquisition agreement | Aug. 29, 2014 | ||||||
Purchase price of acquisition | CAD 68,000,000 | ||||||
Goodwill | CAD 40,000,000 | ||||||
Goodwill expected tax deductible amount | CAD 0 | ||||||
Revenues | 18,000,000 | ||||||
Norfolk Power [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Net income | CAD 1,000,000 |
Business Combinations - Summary
Business Combinations - Summary of Preliminary Determination of Fair Value of Assets Acquired and Liabilities Assumed (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||
Goodwill | CAD 163 | CAD 173 |
Norfolk Power [Member] | ||
Business Acquisition [Line Items] | ||
Working capital | 6 | |
Property, plant and equipment | 56 | |
Deferred income tax assets | 1 | |
Goodwill | 40 | |
Long-term debt | (26) | |
Bank indebtedness | (3) | |
Long-term accounts payable and other liabilities | (1) | |
Post-retirement and post-employment benefit liability | (1) | |
Derivative instruments | (3) | |
Environmental liability | (1) | |
Total | CAD 68 | |
Acquisition of Woodstock Hydro [Member] | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | 3 | |
Working capital | 4 | |
Property, plant and equipment | 28 | |
Intangible assets | 1 | |
Deferred income tax assets | 2 | |
Goodwill | 17 | |
Long-term debt | (17) | |
Long-term accounts payable and other liabilities | (2) | |
Post-retirement and post-employment benefit liability | (1) | |
Derivative instruments | (3) | |
Total | 32 | |
Acquisition of Haldimand Hydro [Member] | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | 3 | |
Working capital | 5 | |
Property, plant and equipment | 52 | |
Deferred income tax assets | 1 | |
Goodwill | 33 | |
Long-term debt | (18) | |
Regulatory liabilities | (3) | |
Total | CAD 73 |
Business Combinations - Summa62
Business Combinations - Summary of Spin-off, Assets and Liabilities Transferred (Detail) - Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] - Hydro One Brampton Networks Inc. spin-off [Member] CAD in Millions | Dec. 31, 2015CAD |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Working capital | CAD 33 |
Property, plant and equipment and intangibles (net) | 360 |
Other long-term assets | 6 |
Long-term liabilities | CAD (205) |
Depreciation and Amortization -
Depreciation and Amortization - Schedule of Depreciation and Amortization (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Depreciation, Depletion and Amortization [Abstract] | ||
Depreciation of property, plant and equipment | CAD 594 | CAD 565 |
Amortization of intangible assets | 54 | 53 |
Asset removal costs | 90 | 81 |
Amortization of regulatory assets | 19 | 23 |
Total depreciation and amortization | CAD 757 | CAD 722 |
Financing Charges - Schedule of
Financing Charges - Schedule of Financing Charges (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Interest Income And Interest Expense [Abstract] | ||
Interest on long-term debt | CAD 417 | CAD 432 |
Other | 16 | 12 |
Less: Interest capitalized on construction and development in progress | (52) | (49) |
Gain on interest-rate swap agreements | (2) | (10) |
Interest earned on investments | (3) | (6) |
Net financing charges | CAD 376 | CAD 379 |
Income Taxes - Reconciliation b
Income Taxes - Reconciliation between Statutory and Effective Tax Rates (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net temporary differences | ||
Total income taxes / provision for PILs | CAD 114 | CAD 89 |
PILs [Member] | ||
Reconciliation Of Statutory Federal Tax Rate [Line Items] | ||
Income taxes / provision for PILs at statutory rate | 216 | 222 |
Net temporary differences | ||
Capital cost allowance in excess of depreciation and amortization | (37) | (72) |
Pension contributions in excess of pension expense | (25) | (24) |
Overheads capitalized for accounting but deducted for tax purposes | (15) | (15) |
Interest capitalized for accounting but deducted for tax purposes | (13) | (13) |
Environmental expenditures | (5) | (5) |
Non-refundable investment tax credits | (2) | (3) |
Post-retirement and post-employment benefit expense in excess of cash payments | (1) | 3 |
Prior year's adjustments | (1) | (4) |
Other | (2) | (1) |
Net temporary differences | (101) | (134) |
Net tax benefit resulting from transition from PILs Regime to Federal Tax Regime | (9) | |
Net permanent differences | 1 | 1 |
Total income taxes / provision for PILs | 114 | CAD 89 |
PILs [Member] | Hydro One Brampton Networks Inc. spin-off [Member] | ||
Net temporary differences | ||
Hydro One Brampton spin-off | CAD 7 |
Income Taxes - Major Components
Income Taxes - Major Components of Income Tax Expense (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Components Of Income Tax Expense Benefit [Line Items] | ||
Deferred income taxes / provision for (recovery of) PILs | CAD (2,817) | CAD 10 |
Total income taxes / provision for PILs | 114 | 89 |
PILs [Member] | ||
Components Of Income Tax Expense Benefit [Line Items] | ||
Current income taxes / provision for PILs | 2,931 | 79 |
Deferred income taxes / provision for (recovery of) PILs | (2,817) | 10 |
Total income taxes / provision for PILs | CAD 114 | CAD 89 |
Effective income tax rate | 13.97% | 10.63% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - CAD shares in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Expenses [Line Items] | ||
Current income taxes / provision due from related parties | CAD 184,000,000 | CAD 224,000,000 |
Current income taxes / provision due from prepaid expenses and other assets | 24,000,000 | 35,000,000 |
Payments in lieu of tax | CAD 2,600,000,000 | |
Common shares subscribed | 39,598 | |
Value of common shares subscribed | CAD 2,600,000,000 | |
Valuation allowance in respect of capital property | 278,000,000 | 0 |
PILs [Member] | ||
Income Tax Expenses [Line Items] | ||
Deferred provision (recovery) for income taxes / PILs | (2,817,000,000) | 10,000,000 |
Deferred provision (recovery) for income taxes / PILs from tax regime transition | 2,798,000,000 | 0 |
PILs [Member] | CRA [Member] | ||
Income Tax Expenses [Line Items] | ||
Current income taxes / provision due from prepaid expenses and other assets | 1,000,000 | 0 |
PILs [Member] | OEFC [Member] | ||
Income Tax Expenses [Line Items] | ||
Current income taxes / provision due from related parties | CAD 12,000,000 | CAD 39,000,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred income tax assets | ||
Depreciation and amortization in excess of capital cost allowance | CAD 918 | CAD (4) |
Post-retirement and post-employment benefits expense in excess of cash payments | 572 | 8 |
Environmental expenditures | 75 | 4 |
Non-capital losses | 62 | |
Other | 2 | (1) |
Total deferred income tax assets | 1,629 | 7 |
Total deferred income tax assets | 1,629 | 7 |
Less: current portion | 19 | |
Deferred income tax assets, Noncurrent | 1,610 | 7 |
Deferred income tax liabilities | ||
Regulatory amounts that are not recognized for tax purposes | (153) | (140) |
Partnership interest | (41) | (38) |
Goodwill | (10) | (21) |
Capital cost allowance in excess of depreciation and amortization | (1) | (1,713) |
Post-retirement and post-employment benefits expense in excess of cash payments | 559 | |
Environmental expenditures | 59 | |
Other | (1) | |
Total deferred income tax liabilities | (206) | (1,294) |
Total deferred income tax liabilities | (206) | (1,294) |
Less: current portion | 19 | |
Deferred income tax liabilities, Noncurrent | CAD (206) | CAD (1,313) |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | CAD 833 | CAD 1,082 | |
Allowance for doubtful accounts | (61) | (66) | CAD (36) |
Accounts receivable, net | 772 | 1,016 | |
Accounts Receivable - Billed [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | 374 | 496 | |
Accounts Receivable - Unbilled [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | CAD 459 | CAD 586 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reduction in unbilled accounts receivable | CAD (244) | CAD 93 |
Accounts Receivable - Unbilled [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reduction in unbilled accounts receivable | CAD (121) |
Accounts Receivable - Schedul71
Accounts Receivable - Schedule of Allowance for Doubtful Accounts (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | ||
Allowance for doubtful accounts beginning balance | CAD (66) | CAD (36) |
Write-offs | 37 | 24 |
Additions to allowance for doubtful accounts | (32) | (54) |
Allowance for doubtful accounts ending balance | CAD (61) | CAD (66) |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant Equipment, Gross | CAD 26,068 | CAD 25,510 |
Accumulated Depreciation | 9,319 | 9,134 |
Construction in progress | 1,144 | 1,025 |
Property, plant and equipment, Total | 17,893 | 17,401 |
Transmission [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant Equipment, Gross | 13,803 | 13,209 |
Accumulated Depreciation | 4,625 | 4,416 |
Construction in progress | 853 | 626 |
Property, plant and equipment, Total | 10,031 | 9,419 |
Distribution [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant Equipment, Gross | 9,205 | 9,076 |
Accumulated Depreciation | 3,177 | 3,225 |
Construction in progress | 238 | 320 |
Property, plant and equipment, Total | 6,266 | 6,171 |
Communication [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant Equipment, Gross | 1,006 | 1,100 |
Accumulated Depreciation | 609 | 615 |
Construction in progress | 18 | 56 |
Property, plant and equipment, Total | 415 | 541 |
Administration and Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant Equipment, Gross | 1,531 | 1,502 |
Accumulated Depreciation | 848 | 793 |
Construction in progress | 35 | 23 |
Property, plant and equipment, Total | 718 | 732 |
Easements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant Equipment, Gross | 523 | 623 |
Accumulated Depreciation | 60 | 85 |
Property, plant and equipment, Total | CAD 463 | CAD 538 |
Property, Plant and Equipment73
Property, Plant and Equipment - Additional Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant and Equipment Useful Life and Values [Abstract] | ||
Financing charges capitalized on property, plant and equipment | CAD 50 | CAD 48 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | CAD 586 | CAD 578 |
Accumulated Amortization | 274 | 305 |
Development in Progress | 24 | 3 |
Total | 336 | 276 |
Computer Applications Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 579 | 573 |
Accumulated Amortization | 270 | 303 |
Development in Progress | 24 | 3 |
Total | 333 | 273 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 7 | 5 |
Accumulated Amortization | 4 | 2 |
Total | CAD 3 | CAD 3 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Financing charges related to intangible assets under development | CAD 1 | CAD 1 |
Amortization expense for intangible assets, 2016 | 57 | |
Amortization expense for intangible assets, 2017 | 57 | |
Amortization expense for intangible assets, 2018 | 57 | |
Amortization expense for intangible assets, 2019 | 47 | |
Amortization expense for intangible assets, 2020 | CAD 30 |
Regulatory Assets and Liabili76
Regulatory Assets and Liabilities - Schedule of Regulatory Assets and Liabilities (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Regulatory assets: | ||
Total regulatory assets | CAD 3,051 | CAD 3,231 |
Total regulatory assets | 3,051 | 3,231 |
Less: current portion | 36 | 31 |
Regulatory assets | 3,015 | 3,200 |
Regulatory liabilities: | ||
Total regulatory liabilities | 255 | 215 |
Total regulatory liabilities | 255 | 215 |
Less: current portion | 19 | 47 |
Regulatory liabilities | 236 | 168 |
Deferred Income Tax Regulatory Asset [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 1,445 | 1,327 |
Total regulatory assets | 1,445 | 1,327 |
Pension Benefit Regulatory Asset [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 952 | 1,236 |
Total regulatory assets | 952 | 1,236 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 240 | 273 |
Total regulatory assets | 240 | 273 |
Environmental [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 207 | 239 |
Total regulatory assets | 207 | 239 |
RSVA [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 110 | 11 |
Total regulatory assets | 110 | 11 |
Pension Cost Variance [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 37 | 90 |
Total regulatory assets | 37 | 90 |
2015 - 2017 Rate Rider [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 20 | |
Total regulatory assets | 20 | |
Share-Based Compensation [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 10 | |
Total regulatory assets | 10 | |
DSC Exemption [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 10 | 16 |
Total regulatory assets | 10 | 16 |
B2M LP Start-Up Costs [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 8 | |
Total regulatory assets | 8 | |
OEB Cost Assessment Differential [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 12 | |
Total regulatory assets | 12 | |
Other Regulatory Assets [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 12 | 27 |
Total regulatory assets | 12 | 27 |
External Revenue Variance [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 87 | 54 |
Total regulatory liabilities | 87 | 54 |
Green Energy Expenditure Variance [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 76 | 83 |
Total regulatory liabilities | 76 | 83 |
CDM Deferral Variance [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 53 | 25 |
Total regulatory liabilities | 53 | 25 |
Deferred Income Tax Regulatory Liability [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 23 | 21 |
Total regulatory liabilities | 23 | 21 |
PST Savings Deferral [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 4 | 19 |
Total regulatory liabilities | 4 | 19 |
Other Regulatory Liabilities [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 12 | 13 |
Total regulatory liabilities | CAD 12 | CAD 13 |
Regulatory Assets and Liabili77
Regulatory Assets and Liabilities - Additional Information (Detail) - CAD | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Regulatory Matters [Line Items] | ||
Increase (Decrease) in income tax expense including the impact of a change in enacted tax rates | CAD (101,000,000) | CAD (132,000,000) |
Reduction in unbilled accounts receivable | (244,000,000) | 93,000,000 |
Accounts Receivable - Unbilled [Member] | ||
Regulatory Matters [Line Items] | ||
Reduction in unbilled accounts receivable | (121,000,000) | |
Post-Retirement and Post-Employment Benefits [Member] | ||
Regulatory Matters [Line Items] | ||
Increase (Decrease) in other comprehensive income | (33,000,000) | (35,000,000) |
PCB Liability [Member] | ||
Regulatory Matters [Line Items] | ||
Regulatory asset increase (decrease) | (24,000,000) | (33,000,000) |
Land Assessment and Remediation Liability [Member] | ||
Regulatory Matters [Line Items] | ||
Regulatory asset increase (decrease) | 1,000,000 | 13,000,000 |
Environmental Expenditure [Member] | ||
Regulatory Matters [Line Items] | ||
Increase (decrease) in operation, maintenance and administration expenses | 23,000,000 | 20,000,000 |
Increase (decrease) in amortization expense | 19,000,000 | 18,000,000 |
Increase (decrease) in financing chargers | (10,000,000) | (11,000,000) |
Pension Cost Variance [Member] | ||
Regulatory Matters [Line Items] | ||
Increase (decrease) in revenue | 6,000,000 | 10,000,000 |
Pension Benefit Regulatory Asset [Member] | ||
Regulatory Matters [Line Items] | ||
Increase (Decrease) in other comprehensive income | CAD (284,000,000) | 391,000,000 |
2015 - 2017 Rate Rider [Member] | ||
Regulatory Matters [Line Items] | ||
Disposal period of approved balances for disposition | 32 months | |
Share-Based Compensation [Member] | ||
Regulatory Matters [Line Items] | ||
Increase (decrease) to operation, maintenance, administration and depreciation expenses | CAD (5,000,000) | CAD 0 |
B2M LP Start-Up Costs [Member] | ||
Regulatory Matters [Line Items] | ||
Approved recovery start up costs | CAD 8,000,000 | |
Start up costs recovery period | 4 years |
Debt and Credit Agreements - Ad
Debt and Credit Agreements - Additional Information (Detail) - CAD | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Commercial paper borrowings outstanding | CAD 1,491,000,000 | CAD 0 |
Maximum authorized principal amount | 8,723,000,000 | 8,923,000,000 |
Issuance of long-term debt under MTN Program | 350,000,000 | 628,000,000 |
Haldimand Hydro and Woodstock Hydro [Member] | ||
Debt Instrument [Line Items] | ||
MTN loan repaid and redeemed | 35,000,000 | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Maximum authorized principal amount | 3,500,000,000 | |
Medium-Term Note [Member] | ||
Debt Instrument [Line Items] | ||
Remaining borrowing capacity | CAD 3,500,000 | |
Remaining available for issuance period | January 2,018 | |
Issuance of long-term debt under MTN Program | CAD 350,000,000 | 628,000,000 |
MTN loan repaid and redeemed | 550,000,000 | CAD 750,000,000 |
Commercial Paper [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | CAD 2,300,000,000 | |
Maturities days of commercial paper | 365 days | |
Committed, Unsecured and Unused Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | CAD 2,300,000,000 | |
Remaining borrowing capacity | CAD 2,300,000,000 |
Debt and Credit Agreements - Sc
Debt and Credit Agreements - Schedule of Hydro One's Consolidated Committed, Unsecured and Unused Credit Facilities (Detail) | 12 Months Ended |
Dec. 31, 2015CAD | |
Revolving Stand By Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Revolving credit facility maturity period | 2020-06 |
Maximum borrowing capacity | CAD 1,500,000,000 |
Three Year Senior Revolving Term Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Revolving credit facility maturity period | 2018-10 |
Maximum borrowing capacity | CAD 800,000,000 |
Committed, Unsecured and Unused Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | CAD 2,300,000,000 |
Debt and Credit Agreements - 80
Debt and Credit Agreements - Schedule of Outstanding Long-Term Debt (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long-term debt, Total | CAD 8,723 | CAD 8,923 |
Add: Unrealized mark-to-market loss | 1 | 2 |
Less: Long-term debt payable within one year | (500) | (552) |
Long-term debt, Total | 8,224 | 8,373 |
2.95% Series 21 Notes Due 2015 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 500 | |
Floating-Rate Series 22 Notes Due 2015 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 50 | |
4.64% Series 10 Notes Due 2016 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 450 | 450 |
Floating-Rate Series 27 Notes Due 2016 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 50 | 50 |
5.18% Series 13 Notes Due 2017 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 600 | 600 |
2.78% Series 28 Notes due 2018 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 750 | 750 |
Floating-Rate Series 31 Notes Due 2019 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 228 | 228 |
4.40% Series 20 Notes Due 2020 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 300 | 300 |
1.62% Series 33 Notes Due 2020 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 350 | |
3.20% Series 25 Notes Due 2022 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 600 | 600 |
7.35% Debentures Due 2030 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 400 | 400 |
6.93% Series 2 Notes Due 2032 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 500 | 500 |
6.35% Series 4 Notes Due 2034 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 385 | 385 |
5.36% Series 9 Notes Due 2036 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 600 | 600 |
4.89% Series 12 Notes Due 2037 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 400 | 400 |
6.03% Series 17 Notes Due 2039 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 300 | 300 |
5.49% Series 18 Notes Due 2040 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 500 | 500 |
4.39% Series 23 Notes Due 2041 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 300 | 300 |
6.59% Series 5 Notes Due 2043 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 315 | 315 |
4.59% Series 29 Notes Due 2043 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 435 | 435 |
4.17% Series 32 Notes Due 2044 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 350 | 350 |
5.00% Series 11 Notes Due 2046 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 325 | 325 |
4.00% Series 24 Notes Due 2051 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 225 | 225 |
3.79% Series 26 Notes Due 2062 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | 310 | 310 |
4.29% Series 30 Notes Due 2064 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Total | CAD 50 | CAD 50 |
Debt and Credit Agreements - 81
Debt and Credit Agreements - Schedule of Outstanding Long-Term Debt (Parenthetical) (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Interest-Rate Swaps [Member] | ||
Debt Instrument [Line Items] | ||
Unrealized mark-to-market gain (loss) | CAD 1 | CAD 2 |
2.95% Series 21 Notes Due 2015 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 2.95% | 2.95% |
Long-term debt, Maturity year | 2,015 | 2,015 |
2.95% Series 21 Notes Due 2015 [Member] | Medium-Term Note [Member] | ||
Debt Instrument [Line Items] | ||
Unrealized mark-to-market gain (loss) | CAD 250 | |
Floating-Rate Series 22 Notes Due 2015 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Maturity year | 2,015 | 2,015 |
4.64% Series 10 Notes Due 2016 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.64% | 4.64% |
Long-term debt, Maturity year | 2,016 | 2,016 |
Floating-Rate Series 27 Notes Due 2016 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Maturity year | 2,016 | 2,016 |
5.18% Series 13 Notes Due 2017 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 5.18% | 5.18% |
Long-term debt, Maturity year | 2,017 | 2,017 |
2.78% Series 28 Notes due 2018 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 2.78% | 2.78% |
Long-term debt, Maturity year | 2,018 | 2,018 |
Floating-Rate Series 31 Notes Due 2019 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Maturity year | 2,019 | 2,019 |
4.40% Series 20 Notes Due 2020 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.40% | 4.40% |
Long-term debt, Maturity year | 2,020 | 2,020 |
1.62% Series 33 Notes Due 2020 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 1.62% | 1.62% |
Long-term debt, Maturity year | 2,020 | 2,020 |
1.62% Series 33 Notes Due 2020 [Member] | Medium-Term Note [Member] | ||
Debt Instrument [Line Items] | ||
Unrealized mark-to-market gain (loss) | CAD 50 | |
3.20% Series 25 Notes Due 2022 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 3.20% | 3.20% |
Long-term debt, Maturity year | 2,022 | 2,022 |
7.35% Debentures Due 2030 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 7.35% | 7.35% |
Long-term debt, Maturity year | 2,030 | 2,030 |
6.93% Series 2 Notes Due 2032 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 6.93% | 6.93% |
Long-term debt, Maturity year | 2,032 | 2,032 |
6.35% Series 4 Notes Due 2034 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 6.35% | 6.35% |
Long-term debt, Maturity year | 2,034 | 2,034 |
5.36% Series 9 Notes Due 2036 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 5.36% | 5.36% |
Long-term debt, Maturity year | 2,036 | 2,036 |
4.89% Series 12 Notes Due 2037 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.89% | 4.89% |
Long-term debt, Maturity year | 2,037 | 2,037 |
6.03% Series 17 Notes Due 2039 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 6.03% | 6.03% |
Long-term debt, Maturity year | 2,039 | 2,039 |
5.49% Series 18 Notes Due 2040 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 5.49% | 5.49% |
Long-term debt, Maturity year | 2,040 | 2,040 |
4.39% Series 23 Notes Due 2041 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.39% | 4.39% |
Long-term debt, Maturity year | 2,041 | 2,041 |
6.59% Series 5 Notes Due 2043 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 6.59% | 6.59% |
Long-term debt, Maturity year | 2,043 | 2,043 |
4.59% Series 29 Notes Due 2043 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.59% | 4.59% |
Long-term debt, Maturity year | 2,043 | 2,043 |
4.17% Series 32 Notes Due 2044 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.17% | 4.17% |
Long-term debt, Maturity year | 2,044 | 2,044 |
5.00% Series 11 Notes Due 2046 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 5.00% | 5.00% |
Long-term debt, Maturity year | 2,046 | 2,046 |
4.00% Series 24 Notes Due 2051 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.00% | 4.00% |
Long-term debt, Maturity year | 2,051 | 2,051 |
3.79% Series 26 Notes Due 2062 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 3.79% | 3.79% |
Long-term debt, Maturity year | 2,062 | 2,062 |
4.29% Series 30 Notes Due 2064 [Member] | Medium Term Note Program [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest rate | 4.29% | 4.29% |
Long-term debt, Maturity year | 2,064 | 2,064 |
Fair Value of Financial Instr82
Fair Value of Financial Instruments and Risk Management - Summary of Fair Values and Carrying Values of Long-Term Debt (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Carrying Value | CAD 8,724 | CAD 8,925 |
Fair Value | 9,993 | 10,411 |
$250 Million of MTN Series 21 Notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Carrying Value | 252 | |
Fair Value | 252 | |
$50 Million of MTN Series 33 Notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Carrying Value | 51 | |
Fair Value | 51 | |
Other Notes and Debentures [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Carrying Value | 8,673 | 8,673 |
Fair Value | CAD 9,942 | CAD 10,159 |
Fair Value of Financial Instr83
Fair Value of Financial Instruments and Risk Management - Summary of Fair Values and Carrying Values of Long-Term Debt (Parenthetical) (Detail) - CAD | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long term debt, face value | CAD 8,723,000,000 | CAD 8,923,000,000 |
$250 Million of MTN Series 21 Notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long term debt, face value | 250,000,000 | |
$50 Million of MTN Series 33 Notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long term debt, face value | CAD 50,000,000 |
Fair Value of Financial Instr84
Fair Value of Financial Instruments and Risk Management - Fair Value of Financial Instruments - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2015CADAgreement | Dec. 31, 2014CAD | |
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fair value hedge exposure | 1.00% | 3.00% |
Assets at fair value | CAD 1,000,000 | CAD 2,000,000 |
1.62% Series 33 Notes Due 2020 [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fixed-to-floating interest-rate swap | CAD 50,000,000 | |
Number of agreements | Agreement | 1 | |
Conversion of debt | CAD 50,000,000 | |
Long-term debt | CAD 350,000,000 | |
Debt maturity date | Apr. 30, 2020 | |
Fair Value Hedges [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long-term debt | CAD 8,724,000,000 | 8,925,000,000 |
Interest-Rate Swaps [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fixed-to-floating interest-rate swap | 50,000,000 | 250,000,000 |
Notional value | 0 | 409,000,000 |
Unrealized losses on derivative instruments | 6,000,000 | |
Interest-Rate Swaps [Member] | Fair Value Hedges [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Notional value | CAD 50,000,000 | CAD 250,000,000 |
Fair Value of Financial Instr85
Fair Value of Financial Instruments and Risk Management - Fair Value Hierarchy of Financial Assets and Liabilities (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | |||
Cash and cash equivalents | CAD 89 | CAD 100 | CAD 565 |
Fair value hedge - interest-rate swap | 1 | 0 | |
Liabilities: | |||
Short-term notes payable | 1,491 | 0 | |
Long-term debt | 8,724 | 8,925 | |
Total liabilities | 14,378 | 14,603 | |
Level 1 [Member] | |||
Assets: | |||
Cash and cash equivalents | 89 | 100 | |
Fair value hedge - interest-rate swap | 1 | ||
Total assets | 90 | 100 | |
Liabilities: | |||
Bank indebtedness | 2 | ||
Total liabilities, Fair value | 1,491 | 2 | |
Level 2 [Member] | |||
Assets: | |||
Fair value hedge - interest-rate swap | 2 | ||
Total assets | 2 | ||
Liabilities: | |||
Long-term debt, Fair value | 9,993 | 10,411 | |
Total liabilities, Fair value | 9,993 | 10,414 | |
Level 2 [Member] | Undesignated Contracts [Member] | Interest-Rate Swaps [Member] | |||
Liabilities: | |||
Undesignated contracts - interest-rate swaps | 3 | ||
Reported Value Measurement [Member] | |||
Assets: | |||
Cash and cash equivalents | 89 | 100 | |
Fair value hedge - interest-rate swap | 1 | 2 | |
Total assets | 90 | 102 | |
Liabilities: | |||
Short-term notes payable | 1,491 | ||
Bank indebtedness | 2 | ||
Long-term debt | 8,724 | 8,925 | |
Total liabilities | 10,215 | 8,930 | |
Reported Value Measurement [Member] | Undesignated Contracts [Member] | Interest-Rate Swaps [Member] | |||
Liabilities: | |||
Undesignated contracts - interest-rate swaps | 3 | ||
Estimate of Fair Value Measurement [Member] | |||
Assets: | |||
Cash and cash equivalents | 89 | 100 | |
Fair value hedge - interest-rate swap | 1 | 2 | |
Total assets | 90 | 102 | |
Liabilities: | |||
Short-term notes payable | 1,491 | ||
Bank indebtedness | 2 | ||
Long-term debt, Fair value | 9,993 | 10,411 | |
Total liabilities, Fair value | CAD 11,484 | 10,416 | |
Estimate of Fair Value Measurement [Member] | Undesignated Contracts [Member] | Interest-Rate Swaps [Member] | |||
Liabilities: | |||
Undesignated contracts - interest-rate swaps | CAD 3 |
Fair Value of Financial Instr86
Fair Value of Financial Instruments and Risk Management - Risk Management - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2015CADCounterparty | Dec. 31, 2014CAD | Dec. 31, 2013CAD | |
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Percentage of increase/(decrease) in interest rate | (1.00%) | ||
Transmission business' annual net income | CAD (20,000,000) | CAD (20,000,000) | |
Distribution business' annual net income | CAD (13,000,000) | (10,000,000) | |
Deemed regulatory capital debt percentage | 60.00% | ||
Deemed regulatory capital equity percentage | 40.00% | ||
Provision for bad debts | CAD 61,000,000 | 66,000,000 | CAD 36,000,000 |
Counterparty credit risk exposure on the fair value | CAD 1,000,000 | 3,000,000 | |
Number of counterparties | Counterparty | 1 | ||
Accounts payable and accrued liabilities | CAD 743,000,000 | 784,000,000 | |
Long-term debt in principal amount | CAD 8,723,000,000 | CAD 8,923,000,000 | |
Minimum [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Account receivable, Period | 60 days | 60 days | |
Revolving Standby Facilities [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Commercial paper program debt | CAD 2,300,000,000 | ||
Customer Concentration Risk [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Accounts receivable | CAD 0 | CAD 0 | |
Variable Interest Rate [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Percentage of increase/(decrease) in interest rate | 10.00% | 10.00% | |
Impact on net income | CAD 0 | CAD 0 | |
Aged More Than 60 Days [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Account receivable, Percentage | 6.00% | 6.00% |
Fair Value of Financial Instr87
Fair Value of Financial Instruments and Risk Management - Summary of Net Unrealized Loss (Gain) on Hedged Debt and Related Interest Rate Swaps (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Unrealized loss (gain) on hedged debt | CAD (1) | CAD (3) |
Unrealized loss (gain) on fair value interest-rate swaps | 1 | 3 |
Net unrealized loss (gain) | CAD 0 | CAD 0 |
Fair Value of Financial Instr88
Fair Value of Financial Instruments and Risk Management - Summary of Principal Repayments, Interest Payments and Related Weighted Average Interest Rates (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long-term Debt Principal Repayments, 1 year | CAD 500 | |
Long-term Debt Principal Repayments, 2 years | 600 | |
Long-term Debt Principal Repayments, 3 years | 750 | |
Long-term Debt Principal Repayments, 4 years | 228 | |
Long-term Debt Principal Repayments, 5 years | 650 | |
Long-term Debt Principal Repayments during 5 years | 2,728 | |
Long-term Debt Principal Repayments, 6 - 10 years | 600 | |
Long-term Debt Principal Repayments, Over 10 years | 5,395 | |
Long-term debt, Total | CAD 8,723 | CAD 8,923 |
Weighted Average Interest Rate | 4.70% | |
1 Year [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 4.30% | |
2 Years [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 5.20% | |
3 Years [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 2.80% | |
4 Years [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 1.20% | |
5 Years [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 2.90% | |
5 Years, Total [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 3.50% | |
6-10 Years [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 3.20% | |
Over 10 Years [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 5.40% |
Fair Value of Financial Instr89
Fair Value of Financial Instruments and Risk Management - Summary of Long Term Debt Interest Payments (Detail) CAD in Millions | 12 Months Ended |
Dec. 31, 2015CAD | |
Debt Instrument [Line Items] | |
Interest Payments | CAD 7,368 |
1 Year [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 397 |
2 Years [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 386 |
3 Years [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 355 |
4 Years [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 332 |
5 Years [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 322 |
5 Years, Total [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 1,792 |
6-10 Years [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | 1,496 |
Over 10 Years [Member] | |
Debt Instrument [Line Items] | |
Interest Payments | CAD 4,080 |
Capital Management - Summary of
Capital Management - Summary of Company's Capital Structure (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | |||
Long-term debt payable within one year | CAD 500 | CAD 552 | |
Short-term notes payable | 1,491 | 0 | |
Less: cash and cash equivalents | 89 | 100 | CAD 565 |
Net Long-term debt payable within one year | 1,902 | 452 | |
Long-term debt | 8,224 | 8,373 | |
Preferred shares | 323 | ||
Common shares | 6,000 | 3,314 | |
Retained earnings | 3,759 | 4,249 | |
Total stockholders equity excluding accumulated other comprehensive income | 9,759 | 7,563 | |
Total capital | CAD 19,885 | CAD 16,711 |
Capital Management - Additional
Capital Management - Additional Information (Detail) | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | |
Permissible limit on debt to total capital percentage | 75.00% |
Pension and Post-Retirement a92
Pension and Post-Retirement and Post-Employment Benefits - Additional Information (Detail) - CAD | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Accrued liabilities | CAD 591,000,000 | CAD 611,000,000 |
Pension plan average pensionable earnings | 3 years | |
New pension plan average pensionable earnings | 5 years | |
Annual pension plan contributions | CAD 177,000,000 | CAD 174,000,000 |
Estimated annual pension plan contributions for 2016 | CAD 180,000,000 | |
Percentage of assets to ascertain concentration of credit risk | 10.00% | |
ABO [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Funded percentage | 96.00% | 91.00% |
PBO [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Funded percentage | 88.00% | 84.00% |
OMERS [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Employers contributions | CAD 2,000,000 | CAD 2,000,000 |
Contribution not more than maximum of total contribution | 5.00% | |
Funded percentage | 90.80% | |
Unfunded liability | CAD 7,100,000,000 | |
Corporate Bond Securities [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Pension plan | 9,000,000 | 0 |
Province Of Ontario [Member] | Debt Securities [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Pension plan | 420,000,000 | 340,000,000 |
Maximum [Member] | OMERS [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Accrued liabilities | CAD 1,000,000 | CAD 1,000,000 |
Pension and Post-Retirement a93
Pension and Post-Retirement and Post-Employment Benefits - Change in Projected Benefit Obligation and Change in Plan Assets (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Change in plan assets | ||
Employer contributions | CAD 177 | CAD 174 |
Pension Benefits [Member] | ||
Change in projected benefit obligation | ||
Projected benefit obligation, beginning of year | 7,535 | 6,576 |
Current service cost | 186 | 145 |
Interest cost | 302 | 312 |
Benefits paid | (334) | (319) |
Net actuarial loss (gain) | (6) | 821 |
Projected benefit obligation, end of year | 7,683 | 7,535 |
Change in plan assets | ||
Fair value of plan assets, beginning of year | 6,299 | 5,731 |
Actual return on plan assets | 582 | 703 |
Benefits paid | (334) | (319) |
Employer contributions | 177 | 174 |
Employee contributions | 40 | 35 |
Administrative expenses | (33) | (25) |
Fair value of plan assets, end of year | 6,731 | 6,299 |
Unfunded status | 952 | 1,236 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Change in projected benefit obligation | ||
Projected benefit obligation, beginning of year | 1,582 | 1,531 |
Current service cost | 43 | 41 |
Interest cost | 64 | 73 |
Benefits paid | (47) | (45) |
Net actuarial loss (gain) | (27) | (18) |
Projected benefit obligation, end of year | 1,591 | 1,582 |
Change in plan assets | ||
Benefits paid | (47) | (45) |
Unfunded status | 1,591 | CAD 1,582 |
Post-Retirement and Post-Employment Benefits [Member] | Hydro One Brampton [Member] | ||
Change in projected benefit obligation | ||
Change due to Hydro One Brampton spin-off | (5) | |
Post-Retirement and Post-Employment Benefits [Member] | Hydro One Telecom spin-off [Member] | ||
Change in projected benefit obligation | ||
Change due to Hydro One Brampton spin-off | CAD (19) |
Pension and Post-Retirement a94
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Benefit Obligations and Plan Assets (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Accrued liabilities | CAD 591 | CAD 611 |
Pension benefit liability | 952 | 1,236 |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Pension benefit liability | 952 | 1,236 |
Unfunded status | 952 | 1,236 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Accrued liabilities | 50 | 49 |
Post-retirement and post-employment benefit liability | 1,541 | 1,533 |
Unfunded status | CAD 1,591 | CAD 1,582 |
Pension and Post-Retirement a95
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Projected Benefit Obligation (PBO), Accumulated Benefit Obligation (ABO) and Fair Value of Plan Assets (Detail) - Pension Benefits [Member] - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
PBO | CAD 7,683 | CAD 7,535 | CAD 6,576 |
ABO | 7,020 | 6,887 | |
Fair value of plan assets | CAD 6,731 | CAD 6,299 | CAD 5,731 |
Pension and Post-Retirement a96
Pension and Post-Retirement and Post-Employment Benefits - Components of Net Periodic Benefit Costs (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plan [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Current service cost, net of employee contributions | CAD 146 | CAD 110 |
Interest cost | 302 | 312 |
Expected return on plan assets, net of expenses | (406) | (369) |
Actuarial loss amortization | 119 | 103 |
Prior service cost amortization | 2 | 2 |
Net periodic benefit costs | 163 | 158 |
Charged to results of operations | 81 | 81 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Current service cost, net of employee contributions | 43 | 41 |
Interest cost | 64 | 73 |
Actuarial loss amortization | 14 | 18 |
Prior service cost amortization | 2 | |
Net periodic benefit costs | 121 | 134 |
Charged to results of operations | CAD 55 | CAD 62 |
Pension and Post-Retirement a97
Pension and Post-Retirement and Post-Employment Benefits - Components of Net Periodic Benefit Costs (Parenthetical) (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ||
Pension costs | CAD 177 | CAD 174 |
Pension costs charged to operations | 81 | 81 |
Pension costs capitalized | CAD 96 | CAD 93 |
Pension and Post-Retirement a98
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Benefits [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Weighted average discount rate | 4.00% | 4.00% |
Rate of compensation scale escalation (without merit) | 2.50% | 2.50% |
Rate of cost of living increase | 2.00% | 2.00% |
Post-Retirement and Post-Employment Benefits [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Weighted average discount rate | 4.10% | 4.00% |
Rate of compensation scale escalation (without merit) | 2.50% | 2.50% |
Rate of cost of living increase | 2.00% | 2.00% |
Rate of increase in health care cost trends | 4.36% | 4.36% |
Pension and Post-Retirement a99
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations (Parenthetical) (Detail) - Minimum [Member] | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Grading Down in and After 2031 [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Assumed health care cost trend, percentage | 6.38% | 4.36% |
2015 [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Assumed health care cost trend, percentage | 4.36% | 6.52% |
Pension and Post-Retirement 100
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs (Detail) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Benefits [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Weighted average expected rate of return on plan assets | 6.50% | 6.50% |
Weighted average discount rate | 4.00% | 4.75% |
Rate of compensation scale escalation (without merit) | 2.50% | 2.50% |
Rate of cost of living increase | 2.00% | 2.00% |
Average remaining service life of employees (years) | 13 years | 11 years |
Post-Retirement and Post-Employment Benefits [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Weighted average discount rate | 4.00% | 4.75% |
Rate of compensation scale escalation (without merit) | 2.50% | 2.50% |
Rate of cost of living increase | 2.00% | 2.00% |
Average remaining service life of employees (years) | 13 years 9 months 18 days | 12 years |
Rate of increase in health care cost trends | 4.36% | 4.39% |
Pension and Post-Retirement 101
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs (Parenthetical) (Detail) - Maximum [Member] | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Grading Down in and After 2031 [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Assumed health care cost trend, percentage | 6.52% | 6.81% |
2014 [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Assumed health care cost trend, percentage | 4.36% | 4.39% |
Pension and Post-Retirement 102
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Effect of One Percent Change in Health Care Cost Trends on Projected Benefit Obligation (Detail) - Post-Retirement and Post-Employment Benefits [Member] - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule Of Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Line Items] | ||
Effect of a 1% increase in health care cost trends | CAD 252 | CAD 248 |
Effect of a 1% decrease in health care cost trends | CAD (196) | CAD (193) |
Pension and Post-Retirement 103
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Effect of One Percent Change in Health Care Cost Trends on Service Cost and Interest Cost (Detail) - Post-Retirement and Post-Employment Benefits [Member] - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule Of Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Line Items] | ||
Effect of a 1% increase in health care cost trends | CAD 22 | CAD 23 |
Effect of a 1% decrease in health care cost trends | CAD (16) | CAD (17) |
Pension and Post-Retirement 104
Pension and Post-Retirement and Post-Employment Benefits - Approximate Life Expectancies Used to Determine Projected Benefit Obligations for Pension, Post-Retirement and Post-Employment Plans (Detail) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Life Expectancy At Age Sixty Five [Member] | Male [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 23 years | 23 years |
Life Expectancy At Age Sixty Five [Member] | Female [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 25 years | 25 years |
Life Expectancy At Age Forty Five [Member] | Male [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 24 years | 24 years |
Life Expectancy At Age Forty Five [Member] | Female [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 26 years | 26 years |
Pension and Post-Retirement 105
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Estimated Future Benefit Payments (Detail) CAD in Millions | Dec. 31, 2015CAD |
Pension Benefits [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2,016 | CAD 316 |
2,017 | 328 |
2,018 | 339 |
2,019 | 350 |
2,020 | 360 |
2021 through to 2025 | 1,928 |
Total estimated future benefit payments through to 2025 | 3,621 |
Post-Retirement and Post-Employment Benefits [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2,016 | 53 |
2,017 | 55 |
2,018 | 57 |
2,019 | 59 |
2,020 | 61 |
2021 through to 2025 | 342 |
Total estimated future benefit payments through to 2025 | CAD 627 |
Pension and Post-Retirement 106
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Actuarial Gains and Losses and Prior Service Costs Recorded Within Regulatory Assets (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Actuarial loss (gain) for the year | CAD (6) | CAD 821 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Actuarial loss (gain) for the year | (27) | (18) |
Pension Benefit Regulatory Asset [Member] | Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Actuarial loss (gain) for the year | (181) | 511 |
Actuarial loss amortization | (119) | (103) |
Prior service cost amortization | (2) | (2) |
Total actuarial gains and losses and prior service costs | (302) | 406 |
Post Retirement and Employment Benefits Regulatory Assets [Member] | Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Actuarial loss (gain) for the year | (27) | (18) |
Actuarial loss amortization | (14) | (18) |
Prior service cost amortization | (2) | |
Total actuarial gains and losses and prior service costs | CAD (41) | CAD (38) |
Pension and Post-Retirement 107
Pension and Post-Retirement and Post-Employment Benefits - Components of Regulatory Assets That Have Not Been Recognized as Components of Net Periodic Benefit Costs (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Net actuarial loss (gain) | CAD (6) | CAD 821 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Net actuarial loss (gain) | (27) | (18) |
Not Recognized as Combined Net Period Benefit Cost [Member] | Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Prior service cost | 2 | |
Net actuarial loss (gain) | 952 | 1,234 |
Net periodic benefit costs | 952 | 1,236 |
Not Recognized as Combined Net Period Benefit Cost [Member] | Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Net actuarial loss (gain) | 240 | 273 |
Net periodic benefit costs | CAD 240 | CAD 273 |
Pension and Post-Retirement 108
Pension and Post-Retirement and Post-Employment Benefits - Components of Regulatory Assets Expected to be Amortized as Components of Net Periodic Benefit Costs (Detail) - Regulatory Assets [Member] - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Benefits [Member] | ||
Schedule Of Components Of Regulatory Assets Expected To Be Amortized As Components Of Net Periodic Benefit Cost [Line Items] | ||
Prior service cost | CAD 2 | |
Actuarial loss | CAD 96 | 119 |
Net periodic benefit costs to be amortized from regulatory assets | 96 | 121 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Schedule Of Components Of Regulatory Assets Expected To Be Amortized As Components Of Net Periodic Benefit Cost [Line Items] | ||
Actuarial loss | 8 | 10 |
Net periodic benefit costs to be amortized from regulatory assets | CAD 8 | CAD 10 |
Pension and Post-Retirement 109
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Pension Plan Target Asset and Weighted Average Asset Allocations (Detail) | Dec. 31, 2015 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 100.00% |
Pension Plan Assets | 100.00% |
Equity Securities [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 55.00% |
Pension Plan Assets | 58.20% |
Debt Securities [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 35.00% |
Pension Plan Assets | 36.40% |
Other [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 10.00% |
Pension Plan Assets | 5.40% |
Pension and Post-Retirement 110
Pension and Post-Retirement and Post-Employment Benefits - Pension Plan Assets Measured and Recorded at Fair Value on Recurring Basis (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | CAD 6,722 | CAD 6,288 |
Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 322 | 160 |
Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 191 | 166 |
Short-term Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 80 | 176 |
Real Estate [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2 | 2 |
Corporate Shares - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 923 | 1,008 |
Corporate Shares - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,931 | 2,766 |
Bonds and Debentures - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,074 | 1,799 |
Bonds and debentures - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 199 | 211 |
Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 4,045 | 3,940 |
Level 1 [Member] | Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 191 | 166 |
Level 1 [Member] | Corporate Shares - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 923 | 1,008 |
Level 1 [Member] | Corporate Shares - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,931 | 2,766 |
Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,376 | 2,204 |
Level 2 [Member] | Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 23 | 18 |
Level 2 [Member] | Short-term Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 80 | 176 |
Level 2 [Member] | Bonds and Debentures - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,074 | 1,799 |
Level 2 [Member] | Bonds and debentures - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 199 | 211 |
Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 301 | 144 |
Level 3 [Member] | Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 299 | 142 |
Level 3 [Member] | Real Estate [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | CAD 2 | CAD 2 |
Pension and Post-Retirement 111
Pension and Post-Retirement and Post-Employment Benefits - Pension Plan Assets Measured and Recorded at Fair Value on Recurring Basis (Parenthetical) (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Interest and dividend receivable excluded from fair value of pension plan assets | CAD 27 | CAD 18 |
Accruals for pension administration expense excluded from fair value of pension plan assets | CAD 18 | CAD 7 |
Pension and Post-Retirement 112
Pension and Post-Retirement and Post-Employment Benefits - Changes in Fair Value of Financial Instruments Classified in Level 3 (Detail) - Level 3 [Member] - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Of Financial Instruments [Line Items] | ||
Fair value of plan assets, beginning of year | CAD 144 | CAD 119 |
Realized and unrealized gains | 51 | 30 |
Purchases | 106 | 23 |
Sales and disbursements | (28) | |
Fair value of plan assets, end of year | CAD 301 | CAD 144 |
Environmental Liabilities - Sch
Environmental Liabilities - Schedule of Movements in Environmental Liabilities (Detail) - CAD CAD in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Environmental Liabilities [Line Items] | ||||
Environmental liabilities, Beginning balance | CAD 239 | CAD 266 | ||
Interest accretion | 10 | 11 | ||
Expenditures | (19) | (18) | ||
Revaluation adjustment | (23) | (20) | ||
Environmental liabilities, Ending balance | 207 | 239 | ||
Environmental liabilities: | ||||
Environmental liabilities | 239 | 266 | CAD 207 | CAD 239 |
Less: current portion | 22 | 18 | ||
Environmental liabilities non current portion | 185 | 221 | ||
PCB [Member] | ||||
Environmental Liabilities [Line Items] | ||||
Environmental liabilities, Beginning balance | 172 | 201 | ||
Interest accretion | 8 | 9 | ||
Expenditures | (8) | (5) | ||
Revaluation adjustment | (24) | (33) | ||
Environmental liabilities, Ending balance | 148 | 172 | ||
Environmental liabilities: | ||||
Environmental liabilities | 172 | 201 | 148 | 172 |
Less: current portion | 12 | 8 | ||
Environmental liabilities non current portion | 136 | 164 | ||
Land Assessment and Remediation [Member] | ||||
Environmental Liabilities [Line Items] | ||||
Environmental liabilities, Beginning balance | 67 | 65 | ||
Interest accretion | 2 | 2 | ||
Expenditures | (11) | (13) | ||
Revaluation adjustment | 1 | 13 | ||
Environmental liabilities, Ending balance | 59 | 67 | ||
Environmental liabilities: | ||||
Environmental liabilities | CAD 67 | CAD 65 | 59 | 67 |
Less: current portion | 10 | 10 | ||
Environmental liabilities non current portion | CAD 49 | CAD 57 |
Environmental Liabilities - Rec
Environmental Liabilities - Reconciliation between Undiscounted Basis of Environmental Liabilities and Amount Recognized on Consolidated Balance Sheets (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | CAD 229 | CAD 265 |
Less: discounting accumulated liabilities to present value | 22 | 26 |
Discounted environmental liabilities | 207 | 239 |
PCB [Member] | ||
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | 168 | 195 |
Less: discounting accumulated liabilities to present value | 20 | 23 |
Discounted environmental liabilities | 148 | 172 |
Land Assessment and Remediation [Member] | ||
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | 61 | 70 |
Less: discounting accumulated liabilities to present value | 2 | 3 |
Discounted environmental liabilities | CAD 59 | CAD 67 |
Environmental Liabilities - 115
Environmental Liabilities - Schedule of Estimated Future Environmental Expenditures (Detail) CAD in Millions | Dec. 31, 2015CAD |
Environmental Expense and Liabilities [Abstract] | |
2,016 | CAD 22 |
2,017 | 25 |
2,018 | 26 |
2,019 | 28 |
2,020 | 30 |
Thereafter | 98 |
Total | CAD 229 |
Environmental Liabilities - Add
Environmental Liabilities - Additional Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Environmental Liabilities [Line Items] | ||
Long-term inflation rate assumption of current costs | 2.00% | |
Reduction of environmental liability due to revaluation adjustment | CAD (23) | CAD (20) |
Minimum [Member] | ||
Environmental Liabilities [Line Items] | ||
Future environmental expenditure discount rate | 2.00% | |
Maximum [Member] | ||
Environmental Liabilities [Line Items] | ||
Future environmental expenditure discount rate | 6.30% | |
PCB [Member] | ||
Environmental Liabilities [Line Items] | ||
Reduction of environmental liability due to revaluation adjustment | CAD (24) | (33) |
Land Assessment and Remediation [Member] | ||
Environmental Liabilities [Line Items] | ||
Reduction of environmental liability due to revaluation adjustment | CAD 1 | CAD 13 |
Asset Retirement Obligations -
Asset Retirement Obligations - Additional Information (Detail) CAD in Millions | 12 Months Ended | |
Dec. 31, 2015CADSwitchingStation | Dec. 31, 2014CAD | |
Asset Retirement Obligations [Line Items] | ||
Long-term inflation assumption of current costs | 2.00% | |
Asset retirement obligations recorded | CAD 9 | CAD 9 |
Removal and Disposal of Asbestos [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Asset retirement obligations recorded | 8 | 8 |
Facility Decommissioning Costs [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Asset retirement obligations recorded | CAD 1 | CAD 1 |
Number of assets retired in future | SwitchingStation | 2 | |
Minimum [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Discounted future expenditures | 3.00% | |
Maximum [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Discounted future expenditures | 5.00% |
Share Capital - Additional Info
Share Capital - Additional Information (Detail) - CAD CAD / shares in Units, CAD in Millions | Oct. 30, 2015 | Dec. 31, 2015 | Nov. 04, 2015 | Oct. 31, 2015 | Dec. 31, 2014 |
Class of Stock [Line Items] | |||||
Common shares, issued and outstanding | 142,239 | ||||
Preferred shares issued | 0 | ||||
Preferred shares outstanding | 0 | ||||
Common shares, issued | 42,239 | 39,598 | 2,640 | ||
Cumulative Preferred Shares [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares, issued | 12,920,000 | ||||
Preferred shares, outstanding | 12,920,000 | ||||
Cumulative preferred shares, percentage | 5.50% | ||||
Cumulative preferred shares value per share | CAD 25 | ||||
Cumulative preferred shares, total value | CAD 323 | ||||
Preferred shares dividend, amount | CAD 18 | ||||
Preferred shares dividend, per share | CAD 1.375 |
Share Capital - Number of Commo
Share Capital - Number of Common Shares (Detail) - CAD CAD in Millions | Nov. 05, 2015 | Dec. 31, 2015 | Nov. 04, 2015 | Oct. 31, 2015 | Dec. 31, 2014 |
Common Equity [Line Items] | |||||
Common value issued | CAD 2,923 | ||||
Common shares issued | 42,239 | 39,598 | 2,640 | ||
Common shares issued, reverse split | 1 | ||||
Common Stock Issued on October 31, 2015 [Member] | |||||
Common Equity [Line Items] | |||||
Common value issued | CAD 323 | ||||
Common shares issued | 2,640,000,000 | ||||
Common Stock Issued on November 4, 2015 [Member] | |||||
Common Equity [Line Items] | |||||
Common value issued | CAD 2,600 | ||||
Common shares issued | 39,598,000,000 | ||||
Common Stock Issued on November 3, 2015 [Member] | |||||
Common Equity [Line Items] | |||||
Common shares issued | 1,000,000 |
Share Capital - Number of Co120
Share Capital - Number of Common Shares (Parenthetical) (Detail) - CAD CAD in Millions | Nov. 04, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2015 |
Common Equity [Line Items] | ||||
Common shares issued | 39,598 | 42,239 | 2,640 | |
Proceeds from issuance of common stock | CAD 2,600 | CAD 2,600 | CAD 0 | |
Cumulative Preferred Shares [Member] | ||||
Common Equity [Line Items] | ||||
Preferred share value purchased and cancelled | CAD 323 | |||
Preferred share purchased and cancelled, shares | 12,920,000 |
Dividends - Additional Informat
Dividends - Additional Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Dividends [Abstract] | ||
Dividends on preferred shares | CAD 13 | CAD 18 |
Common share dividends | CAD 875 | CAD 269 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||
Weighted average number of shares outstanding | 107,116 | 100,000 |
Dilutive securities | 0 | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - CAD | Dec. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 01, 2015 | Apr. 01, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-Average price, Granted (non-vested) | CAD 20.50 | ||||
Regulatory assets | CAD 3,015,000,000 | CAD 3,200,000,000 | |||
Share based compensation forfeiture rate | 0.00% | ||||
Deferred Share Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | 0 | ||||
Liability related to outstanding DSUs | CAD 0 | ||||
Employee Share Ownership Plan (ESOP) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Highest percentage of participant's salary towards purchasing common shares | 6.00% | ||||
Lowest percentage of participant's salary towards purchasing common shares | 1.00% | ||||
Employer matching contribution, percent of match | 50.00% | ||||
Maximum amount contributed by employer | CAD 25,000 | ||||
Contribution under the plan | CAD 0 | ||||
Hydro One Limited [Member] | Deferred Share Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing share price of common shares | CAD 22.29 | ||||
Maximum [Member] | Deferred Share Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | CAD 1,000,000 | ||||
Liability related to outstanding DSUs | CAD 1,000,000 | ||||
PWU Share Grant Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period, Beginning date | Jul. 3, 2015 | ||||
Highest percentage of participant's salary towards purchasing common shares | 2.70% | ||||
Share granted | 3,952,212 | ||||
PWU Share Grant Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period | 35 years | ||||
Aggregate number of common shares issuable under the plan | 3,981,763 | ||||
Society Share Grant Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period, Beginning date | Sep. 1, 2015 | ||||
Highest percentage of participant's salary towards purchasing common shares | 2.00% | ||||
Share granted | 1,367,158 | ||||
Society Share Grant Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period | 35 years | ||||
Aggregate number of common shares issuable under the plan | 1,434,686 | ||||
Share Grant Plans [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share granted | 5,319,370 | ||||
Weighted-Average price, Granted (non-vested) | CAD 20.50 | ||||
Fair value of shares granted | CAD 111,000,000 | ||||
Compensation expenses | CAD 10,000,000 | ||||
Long Term Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate number of common shares issuable under the plan | 11,900,000 | ||||
Shares awarded under the plan | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Share Grant Activity (Detail) | 12 Months Ended |
Dec. 31, 2015CAD / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-Average price, Granted (non-vested) | CAD 20.50 |
Share Grant Plans [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Granted (non-vested) | shares | 5,319,370 |
Share Grants, Outstanding, Ending | shares | 5,319,370 |
Weighted-Average price, Outstanding, Beginning | CAD 0 |
Weighted-Average price, Granted (non-vested) | 20.50 |
Weighted-Average price, Outstanding, Ending | CAD 0 |
Stock-Based Compensation - S125
Stock-Based Compensation - Summary of Number of DSUs (Detail) - Deferred Share Units [Member] | 12 Months Ended |
Dec. 31, 2015shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
DSUs granted | 20,525 |
DSUs outstanding - December 31 | 20,525 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Detail) - B2M Limited Partnership [Member] - CAD CAD in Millions | Dec. 17, 2014 | Dec. 16, 2014 |
Noncontrolling Interest [Line Items] | ||
Business combination assets transferred | CAD 526 | |
Debt [Member] | ||
Noncontrolling Interest [Line Items] | ||
Business combination assets transferred | CAD 316 | |
Business combination percentage transferred | 60.00% | |
Equity [Member] | ||
Noncontrolling Interest [Line Items] | ||
Business combination assets transferred | CAD 210 | |
Business combination percentage transferred | 40.00% | |
Saugeen Ojibway Nation (SON) [Member] | ||
Noncontrolling Interest [Line Items] | ||
Percentage of common shares acquired | 34.20% | |
Business acquisition, consideration paid | CAD 72 | |
Class A Units [Member] | Saugeen Ojibway Nation (SON) [Member] | ||
Noncontrolling Interest [Line Items] | ||
Capital units in initial investment | 50 | |
Class B Units [Member] | Saugeen Ojibway Nation (SON) [Member] | ||
Noncontrolling Interest [Line Items] | ||
Capital units in initial investment | CAD 22 |
Noncontrolling Interest - Sched
Noncontrolling Interest - Schedule of Movements in Noncontrolling Interest (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Noncontrolling Interest [Abstract] | ||
Noncontrolling interest - Beginning balance, Temporary Equity | CAD 21 | |
Distributions to noncontrolling interest, Temporary Equity | (1) | |
Amount contributed by noncontrolling interest, Temporary Equity | CAD 22 | |
Net income (loss) attributable to noncontrolling interest, Temporary Equity | 3 | (1) |
Noncontrolling interest - Ending balance, Temporary Equity | 23 | 21 |
Noncontrolling interest - Beginning balance, Equity | 49 | |
Distributions to noncontrolling interest, Equity | (4) | |
Amount contributed by noncontrolling interest, Equity | 50 | |
Net income (loss) attributable to noncontrolling interest, Equity | 7 | (1) |
Noncontrolling interest - Ending balance, Equity | 52 | 49 |
Noncontrolling interest - Beginning balance | 70 | |
Distributions to noncontrolling interest | (5) | |
Amount contributed by noncontrolling interest | 72 | |
Net income (loss) attributable to noncontrolling interest | 10 | (2) |
Noncontrolling interest - Ending balance | CAD 75 | CAD 70 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - CAD | Nov. 06, 2015 | Nov. 04, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2015 |
Related Party Transaction [Line Items] | |||||
Amount of power purchased | CAD 3,450,000,000 | CAD 3,419,000,000 | |||
Transmission revenue | 1,536,000,000 | 1,588,000,000 | |||
Distribution revenue | 4,949,000,000 | 4,903,000,000 | |||
Payment made in lieu of corporate income taxes | CAD 2,928,000,000 | CAD 86,000,000 | |||
Common shares issued | 39,598 | 42,239 | 2,640 | ||
Proceeds from issuance of common stock | CAD 2,600,000,000 | CAD 2,600,000,000 | CAD 0 | ||
Share based compensation recognized as regulatory asset | 3,015,000,000 | 3,200,000,000 | |||
Province Of Ontario [Member] | |||||
Related Party Transaction [Line Items] | |||||
Dividends paid | 888,000,000 | 287,000,000 | |||
IESO [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amount of power purchased | 2,318,000,000 | 2,601,000,000 | |||
Transmission revenue | 1,548,000,000 | 1,556,000,000 | |||
Distribution revenues for rural rate protection | 127,000,000 | 127,000,000 | |||
Distribution revenue | 32,000,000 | 32,000,000 | |||
Funding received for program costs, incentives and management fees | 70,000,000 | 33,000,000 | |||
OPG [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amount of power purchased | 11,000,000 | 23,000,000 | |||
OPG [Member] | Transmission [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues with respect to service level agreements | 7,000,000 | 12,000,000 | |||
OEFC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amount of power purchased | 6,000,000 | 9,000,000 | |||
Payment made in lieu of corporate income taxes | 2,900,000,000 | 86,000,000 | |||
Departure tax included in income tax paid | 2,600,000,000 | 0 | |||
Annual fee to the OEFC for indemnification against adverse claims | 8,000,000 | 5,000,000 | |||
Minimum claim amount under indemnification | CAD 10,000,000 | ||||
Businesses transferred date | Apr. 1, 1999 | ||||
Indemnity fee termination date | Oct. 31, 2015 | ||||
Hydro One Brampton [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues with respect to service level agreements | CAD 1,000,000 | ||||
Agreement renewal description | Hydro One Brampton has the right to renew these agreements (other than smart meter network services) for additional one-year terms to end no later than December 31, 2019. | ||||
Agreement description | These agreements will continue until the end of 2016 (except in the case of smart meter network services, which will continue until the end of 2017). | ||||
Hydro One Telecom [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cost of technology services | CAD 6,000,000 | ||||
Hydro One Telecom [Member] | Operating Expense [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cost of technology services | 4,000,000 | ||||
Hydro One Telecom [Member] | Capitalized Costs [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cost of technology services | CAD 2,000,000 | ||||
Hydro One Limited [Member] | |||||
Related Party Transaction [Line Items] | |||||
IPO related cost | CAD 7,000,000 | 0 | |||
Common shares issued | 39,598 | ||||
Proceeds from issuance of common stock | CAD 2,600,000,000 | ||||
Intercompany Payable [Member] | |||||
Related Party Transaction [Line Items] | |||||
Share based compensation recognized as regulatory asset | 10,000,000 | 0 | |||
OEB [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expenses reimbursed to related party | CAD 12,000,000 | CAD 12,000,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Amounts Due to and from Related Parties (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | ||
Due from related parties | CAD 184 | CAD 224 |
Due to related parties | CAD (132) | CAD (227) |
Related Party Transactions -130
Related Party Transactions - Schedule of Amounts Due to and from Related Parties (Parenthetical) (Detail) - CAD CAD in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction Due From To Related Party [Line Items] | ||
Due to related parties, amounts owing on power purchases | CAD 132 | CAD 227 |
IESO [Member] | ||
Related Party Transaction Due From To Related Party [Line Items] | ||
Due to related parties, amounts owing on power purchases | CAD 134 | CAD 214 |
Consolidated Statements of C131
Consolidated Statements of Cash Flows - Schedule of Consolidated Statement of Cash Flows (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | CAD 244 | CAD (93) |
Due from related parties | 40 | (27) |
Materials and supplies | 2 | |
Prepaid expenses and other assets | 12 | (13) |
Accounts payable | (26) | 39 |
Accrued liabilities | (27) | (35) |
Due to related parties | (95) | (3) |
Accrued interest | (4) | |
Long-term accounts payable and other liabilities | (3) | |
Post-retirement and post-employment benefit liability | 41 | 80 |
Changes in non-cash balances related to operations, Total | 187 | (55) |
Capital Expenditures | ||
Capital investments in property, plant and equipment | (1,622) | (1,511) |
Capitalized depreciation and net change in accruals included in capital investments in property, plant and equipment | 28 | 30 |
Capital expenditures - property, plant and equipment | (1,594) | (1,481) |
Capital investments in intangible assets | (40) | (19) |
Net change in accruals included in capital investments in intangible assets | 3 | (4) |
Capital expenditures - intangible assets | (37) | (23) |
Supplementary Information | ||
Net interest paid | 416 | 412 |
Income taxes / PILs paid | CAD 2,928 | CAD 86 |
Consolidated Statements of C132
Consolidated Statements of Cash Flows - Additional Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Capital contribution received | CAD 62 | CAD 0 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - CAD | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loss Contingencies [Line Items] | |||
Payments made | CAD 1,000,000 | CAD 1,000,000 | |
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Plaintiff sought value | CAD 125,000,000 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) CAD in Millions | 12 Months Ended | |
Dec. 31, 2015CADDistributor | Dec. 31, 2014CAD | |
Commitments [Line Items] | ||
Annual commitments for 2016 | CAD 167 | |
Annual commitments for 2017 | 138 | |
Annual commitments for 2018 | 106 | |
Annual commitments for 2019 | 99 | |
Annual commitments for 2020 | 2 | |
Annual commitments for thereafter | CAD 11 | |
Number of distributor | Distributor | 1 | |
Letters of credit provided | CAD 15 | CAD 8 |
Letters of credit outstanding relating to retirement compensation arrangements | 139 | 126 |
Lease payments | 6 | 11 |
Future minimum lease payments for 2016 | 10 | |
Future minimum lease payments for 2017 | 9 | |
Future minimum lease payments for 2018 | 7 | |
Future minimum lease payments for 2019 | 2 | |
Future minimum lease payments for 2020 | 7 | |
Future minimum lease payments, thereafter | CAD 3 | |
Inergi LP [Member] | Customer Service Operations Outstanding Services [Member] | ||
Commitments [Line Items] | ||
Agreement expiry date | Feb. 28, 2018 | |
Inergi LP [Member] | Services Including Settlements, Source to Pay, Information Technology, Pay Operation, Finance and Accounting [Member] | ||
Commitments [Line Items] | ||
Agreement expiry date | Dec. 31, 2019 | |
Brookfield Global Integrated Solutions [Member] | Services Including Facilities Management And Execution Of Certain Capital Projects [Member] | ||
Commitments [Line Items] | ||
Agreement expiry date | Dec. 31, 2024 | |
Trilliant Agreement [Member] | ||
Commitments [Line Items] | ||
Annual commitments for 2016 | CAD 17 | |
Annual commitments for 2017 | 17 | |
Annual commitments for 2018 | 17 | |
Annual commitments for 2019 | 17 | |
Annual commitments for 2020 | 16 | |
Annual commitments for thereafter | CAD 6 | |
Agreement term | 10 years | |
Agreement beginning date | Dec. 31, 2015 | |
Agreement ending date | Dec. 31, 2025 | |
Agreement renewal term | 5 years | |
Minimum [Member] | ||
Commitments [Line Items] | ||
Typical terms of irrevocable operating lease | 3 years | |
Operating lease renewal options | 3 years | |
Maximum [Member] | ||
Commitments [Line Items] | ||
Typical terms of irrevocable operating lease | 5 years | |
Operating lease renewal options | 5 years | |
Subsidiaries [Member] | ||
Commitments [Line Items] | ||
Parental guarantees | CAD 329 | 330 |
Distributor [Member] | ||
Commitments [Line Items] | ||
Parental guarantees | CAD 1 | CAD 1 |
Segmented Reporting - Additiona
Segmented Reporting - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015CompaniesSegment | |
Segment Reporting Disclosure [Line Items] | |
Number of reportable segments | Segment | 3 |
Minimum [Member] | |
Segment Reporting Disclosure [Line Items] | |
Number of local distribution companies | Companies | 70 |
Segmented Reporting - Summary o
Segmented Reporting - Summary of Segment Information (Detail) - CAD CAD in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Revenues | CAD 6,529 | CAD 6,548 |
Purchased power | 3,450 | 3,419 |
Operation, maintenance and administration | 1,130 | 1,192 |
Depreciation and amortization | 757 | 722 |
Income (loss) before financing charges and income taxes | 1,192 | 1,215 |
Capital investments | 1,662 | 1,530 |
Total assets | 24,203 | 22,550 |
Transmission [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,536 | 1,588 |
Operation, maintenance and administration | 426 | 394 |
Depreciation and amortization | 374 | 346 |
Income (loss) before financing charges and income taxes | 736 | 848 |
Capital investments | 943 | 845 |
Total assets | 12,066 | 12,540 |
Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,949 | 4,903 |
Purchased power | 3,450 | 3,419 |
Operation, maintenance and administration | 633 | 742 |
Depreciation and amortization | 380 | 367 |
Income (loss) before financing charges and income taxes | 486 | 375 |
Capital investments | 711 | 680 |
Total assets | 9,213 | 9,805 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 44 | 57 |
Operation, maintenance and administration | 71 | 56 |
Depreciation and amortization | 3 | 9 |
Income (loss) before financing charges and income taxes | (30) | (8) |
Capital investments | 8 | 5 |
Total assets | CAD 2,924 | CAD 205 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - CAD CAD in Millions | Feb. 11, 2016 | Jan. 28, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | ||||
Common share dividends declared amount | CAD 875 | CAD 269 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common share dividends declared amount | CAD 2 | |||
Dividends declared, date | Feb. 11, 2016 | |||
Return of stated capital, total amount approved | CAD 225 | |||
Subsequent Event [Member] | Great Lakes Power Transmission LP [Member] | ||||
Subsequent Event [Line Items] | ||||
Business acquisition, consideration in cash | CAD 222 | |||
Business acquisition, consideration outstanding indebtedness | CAD 151 |