The Financial Post has seen some holes in Ontario Power Generation’s financial numbers.
On the surface, they look good. The state-owned power generation company generated $10.5 billion in revenue and $1.2 billion in net income. And while revenue rose only 1% from last year, its net income enjoyed a 13.4% increase. That seems good, right?Overhead for OPG has increased while it employed 20 fewer workers. The company’s debt also increased $1.2 billion, a 10.4% increase. A close look also uncovers some other problems. In the Financial Post’s words,
OPG was profitable because its nuclear decommissioning fund had a market gain of $668-million. OPG, with hundreds of millions in unfunded pension and benefit liabilities, doesn’t make money on what it actually produces -electricity.
Some of OPG’s largest projects—two large hydro power generation projects and several nuclear power-related projects—have all come in over budget.
And, as seen in its American neighbor, Canada’s OPG is also seeing some tension with its workforce, 90% of which has a collective bargaining agreement. Overall, OPG looks to be likely to increase its power rates during the year in order to keep up with its budgeting needs.To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com
