2013 Annual Report - Veridian Corporation

Transcription

veridian corporation
2013 annual report
delivering peace of mind
2013 highlights
639 sq. km
$11.9 million
2,539 km
$8.2 million
of service territory
of distribution lines
516 MW
peak demand
2,645 GWh
annual electric demand
net income
dividends & interest
10.5%
return on equity
$116.2 million
117,462
customers
1.2%
customer growth average
over the past two years
93%
how are we delivering
peace of mind?
3
6
8
13
14 18 21
22 26 32 41 36 message from the chair and president & CEO
corporate leadership and philosophy
december 2013 ice storm
power restoration plan
engineering
operations
human resources
customer service
sustainability
community outreach
2013 board
2013 financial summary
overall customer
satisfaction score
in shareholders’ equity
Veridian Corporation owns and
operates Veridian Connections Inc.,
a subsidiary company that distributes electricity,
generates power and provides energy services.
9.7 MW, 75.4 GWh
electricity demand and
usage reductions from
conservation and demand
management programs
(2011-2013 unverified)
Gravenhurst
Veridian’s 200-plus employees focus on providing reliable, efficient and sustainable
energy solutions and services, while maintaining the highest standards in health and
safety within the workplace and in the communities they serve. Veridian is committed to
providing value and healthy financial returns to its shareholders – the City of Pickering,
the Town of Ajax, the Municipality of Clarington and the City of Belleville.
227
400,000 hours
without a lost-time injury
one of
Canada’s
Greenest
Employers
for 2013
Beaverton
Cannington
Sunderland
recognized as a
Smart Commute
Workplace
(Gold)
Uxbridge
Port
Perry
C
employees
Veridian Connections is the seventh largest, municipally owned electricity distributor
in Ontario. The company safely and reliably delivers electricity to more than
117,000 customers in the cities of Pickering and Belleville, the towns of Ajax,
Port Hope and Gravenhurst, and the communities of Uxbridge, Bowmanville,
Newcastle, Orono, Port Perry, Beaverton, Sunderland and Cannington.
la
Belleville
to
ring n
Orono
Newcastle
Bowmanville
Pickering
Ajax
Port Hope
message from the chair and president & CEO
delivering peace of mind
is our business
We are living in uncertain times. Extreme weather events,
such as the December 2013 ice storm that paralyzed
large sections of southern Ontario, bring into sharp focus
the concerns many feel about the future – everything from
the prospect of rising utility costs to whether we, as citizens
and as service providers, are prepared to manage the worst
Mother Nature can send our way. Rest assured, at Veridian
we’re not just in the business of delivering electricity.
We’re in the business of delivering peace of mind.
Doug Dickerson, Chair (left) and Michael Angemeer, President & CEO (right)
veridian corporation 2013 ANNUAL REPORT
message
from the
chair and
president
& CEO
of which will influence our business operations for the
Weather-wise, 2013 certainly was
coming five years. Rate filing also provides a perfect
a stormy year. In July, a violent
opportunity to look back on our accomplishments over
windstorm in Gravenhurst turned
the past regulatory cycle – investments in our distribution
the lights out on the entire town.
system and customer peace of mind totaling $50 million,
We invested close to a million
including $20 million in 2013 alone.
dollars to replace damaged equipment and restore power
as quickly as possible, including rushing in crews from
These investments are all part of our efforts to prudently
other Veridian service territories to deal with the aftermath
pace improvements to our infrastructure that will provide
of the storm. Then there was the ice storm that struck
more reliable service for existing customers, additional
on the evening of December 21. The 30 mm of ice that fell
capacity to build our customer base and increased value for
toppled tree limbs and downed overhead lines throughout
shareholders. We’ve been
major portions of our service
doing all this and at the same
territories. With 50 per cent of
time keeping rates reasonable.
our customers without power
Third-party confirmation of a
at the peak of the outage,
At the same time THAT we’re
job well done was welcomed
our entire team was tested as
making infrastructure
last year in the form of the
never before. Once again, crews
improvements
throughout
2013 MEARIE Utility
from Veridian territories not
our service territories and
Performance Management
impacted by the storm arrived to
keeping rates reasonable,
report, which showed that we
offer support. Amazingly, 90 per
we’re producing a significant
had lower controllable costs
cent of our affected customers
dividend and interest stream
per customer than most other
had their power restored within
for our shareholders –
participating local distribution
the first 48 hours – a testament
$8.2 million in 2013.
companies. So when it comes
to the strength of our team,
to both improving reliability and
the effectiveness of our
maintaining affordability, we’re
24/7 system control centre
delivering peace of mind.
and the resilience of our
distribution network.
Gravenhurst serves as a perfect example of this strategy
in action. When we purchased Gravenhurst Hydro in 2005,
As the most significant outage we’ve faced since Veridian
we made a commitment to the municipality to improve
was formed in 1999, there is much to be learned from
reliability, provide competitive rates and maintain a strong
the ice storm. With this in mind, we continue to consult
presence in the community. We’ve delivered on that
with our municipalities and customers as we revamp our
promise – strengthening electrical infrastructure, increasing
Power Restoration Plan and roll out other important changes.
automation, responding quickly to devastating storms
We want all of our stakeholders to have the peace of mind
(including a tornado in August of 2009) with crews from
that Veridian will be even better prepared for the next major
other Veridian service territories and ensuring a forum for
service disruption.
continued community feedback through the Gravenhurst
Advisory Committee. As part of our rate application in 2013,
Also in 2013, we prepared and submitted our 2014
we went even further by stating our intention to harmonize
Cost of Service Rate Application to the Ontario Energy
our rates for Gravenhurst customers with those paid by
Board. This was a significant undertaking, the outcome
first year of roving energy managers and won awards
for our sustainability efforts. We also invested in the
future of the communities we serve by contributing
to important causes that support youth engagement,
arts and culture, and health care.
Veridian customers in other territories. How is Veridian
delivering peace of mind to our northern-most service
territory? Better service for less money – that’s how.
At the same time that we’re making infrastructure
improvements throughout our service territories and keeping
rates reasonable, we’re producing a significant dividend
and interest stream for our shareholders – $8.2 million in
2013 – all while continuing to increase shareholder equity.
We’re proud of our customer service
track record in 2013, including 93
per cent customer satisfaction and
lower than average bill cancellation
and reissue rates compared to
our peers – both verified through
third-party independent surveys.
Our work’s not done, however.
In 2013, we launched a number
of initiatives designed to improve
our customers’ experience
of Veridian’s services, both
on line and on the phone.
97.0
At Veridian, we’re delivering peace of mind throughout
all our service territories by responsibly strengthening
our existing system while building towards a smarter,
greener, more prosperous future.
We’re successfully adapting to
116.2
109.1
technological advances, regulatory
100.3 103.6
challenges and climate change.
We’re offering reasonable rates,
excellent returns and outstanding
customer service. We continue
to invest in the communities
we serve. And we’re learning
how to do what we do better.
Our stakeholders – close to
120,000 customers, four
shareholder municipalities,
shareholder’s equity $
seven acquired service territories
(millions)
and 200-plus employees –
A strong focus on the future is an
can feel confident that we’re ready for tomorrow.
important way that Veridian is delivering peace of mind to
Together, we’ll weather the storms and harness
our stakeholders – and their children and grandchildren.
the sunshine for a better future.
We continued our commitment to investing in renewable
generation projects in 2013, saw results from our
Michael Angemeer, P.Eng, President & CEO
2009 2010
2011
Doug Dickerson,
Chair
2012
2013
corporate
leadership
and
philosophy
2013
executive team
corporate
philosophy
mission
To provide reliable, efficient and sustainable energy services
to our customers while delivering optimal return on investment
to our shareholders and promoting economic growth
in the communities we serve.
vision
We will be unsurpassed in providing innovative energy solutions
that are the cornerstone for creating the sustainable communities
of tomorrow.
values
• Integrity in dealing with our customers, employees,
shareholders and business partners
• Health and safety of our employees and members of the public
• Growth and development of our employees in a challenging,
rewarding and innovative work environment
• Social and environmental responsibility
• Value creation for our customers and shareholders
• Excellence in all aspects of our business
Front row (left to right): Rob Scarffe, Executive Vice President, Customer Services & Information Technology;
Laurie McLorg, Vice President, Financial Services & Chief Financial Officer; Diana Hills-Milligan, Manager, Public Affairs;
and Michael Angemeer, President & CEO.
Back row (left to right): Mark Turney, Vice President, Operations; George Armstrong, Vice President, Corporate Services;
and Peter Petriw, Vice President, Engineering.
The Statement of 2013 Executive Compensation is available as an appendix to the online version of this report.
Visit www.veridiancorporation.ca for details.
december
2013
ice storm
quickly,
effectively
and safely
responding
to extreme
conditions
builds peace
of mind
Without a doubt, 2013 was a year of
storms – and with increasingly severe
weather events anticipated due to climate
change, it’s safe to assume there is more
of the same to come. Veridian’s electricity
distribution service area is one of the most
geographically diverse in the province,
which is both a blessing and a challenge.
On one hand it allows the company to
draw on resources from across a broad
area to deal with localized problems.
On the other hand, it exposes the utility
to more varied extreme weather events.
Fortunately, Veridian’s power restoration
team has the experience, capability
and flexibility to deal with Mother Nature
at her worst.
A huge thank you
to the mayors,
councillors and
support staff for
supporting Veridian’s
customer communications,
providing warming centres to
those who needed relief, and
assisting with the removal of
hazardous trees and branches.
And for the businesses who
provided crews with materials,
lodging and meals – I personally
thank you. The goodwill by so
many has not gone unnoticed,
and has played a major role in
keeping our restoration
efforts moving along.
Doug Dickerson,
Chair, Veridian Board of Directors
December 21, 2013,
was the longest night of the year
Veridian’s corporate communications point person, Chris Mace, calls
the ice storm that affected 65,000 Veridian customers in Ajax, Pickering,
Clarington and Port Hope the “perfect storm.” “In addition to it being
a significant weather event, it occurred just before Christmas and
at the time of the year with minimum daylight hours,” he states.
The extent of the damage was unprecedented in Veridian’s
14-year history. The team rallied as never before, restoring power to
90 per cent of affected customers within 48 hours. Employees cancelled
their holidays, volunteered for extra duties and toiled through 16-hour
shifts to provide 24-hour restoration coverage, often in brutally cold and
icy conditions, and all without a single serious safety incident. “It was a
real test of people’s ability to stay calm and focused,” says Mark Turney,
Veridian’s Vice President of Operations. “I’m pleased and honoured
to say the group really did hang together well through all eight days
of the restoration.” Company President & CEO, Michael Angemeer,
likes to say that the selfless dedication of Veridian employees saved lives.
Customers were undeniably inconvenienced at a very important
time of the year. Some were without power for days. However,
it’s also important to look at the many significant accomplishments
over that difficult week in December.
Recognized engineering standards established by the CSA Group
require that electrical infrastructure be built to withstand high winds
and ice of up to 12.5 mm thick. Even though December’s storm
coated Veridian’s poles and wires with over 30 mm of ice, only four
poles were damaged – proof that the distribution system has been
built to last. Recent “smart” upgrades to infrastructure, as well as
technology investments in Veridian’s system control centre,
were invaluable in speeding restoration.
december
2013
ice storm
Immediately following the storm, Veridian deployed all available crews to the affected areas,
working around the clock and through the holidays with support from Lakeland Power,
Orillia Power, Oshawa PUC Networks Inc., Parry Sound Power, Peterborough Utilities,
Whitby Hydro, tree trimming operators and contractors.
Starting in the early hours of the outage, Veridian staff stepped up
to working long hours in difficult conditions – line staff repairing
and re-energizing damaged distribution infrastructure; system operators
monitoring developments on the network; and call centre staff answering
hundreds of phone calls and emails – all forfeited planned vacations
to work 16-hour days to restore service for Veridian customers impacted
by the ice storm.
Veridian’s Power Restoration Plan
proved to be an effective blueprint for getting
the system back online
Direct communication
with municipal partners
was another success
Based on the plan, the company immediately reached out to six other Ontario local distribution
companies – Lakeland Power, Orillia Power, Oshawa PUC Networks Inc., Parry Sound Power,
Peterborough Utilities and Whitby Hydro – to seek help with the restoration effort. It also drew on
its own resources from the five Veridian communities not impacted by the storm and retained
the services of all available line and tree trimming contractors. With these significant resources,
power restoration efforts were simultaneously carried out in all affected communities.
Veridian designated one person to be on call as a single
point of contact for all municipal coordinators during the outage.
Teleconferences were also conducted involving the mayors and
senior staff from each of the affected municipalities. This allowed
for constructive dialogue, problem solving and real-time learning
as each community shared its experiences in an open forum.
Thanking our everyday heroes
Shortly after the storm, Graeme Davis, the general manager of Harvey’s
in Ajax, sent a tweet inviting Veridian crews for a free lunch – then delivered
hot meals to Veridian’s corporate headquarters for the hard-working system
control centre and call centre employees. Ian Hills, a pub manager, spent his
Christmas morning in his restaurant’s kitchen so that he could
bring a festive meal of wings, pizza and Caesar salad to Veridian staff.
Peter Hunt, a Veridian retiree in Port Hope, even opened his home to crews
on Christmas Day. Countless residents offered thermoses of hot coffee, fresh
baked goods and grateful best wishes to the teams working tirelessly to restore
power over the holidays. Such spontaneous and heartfelt generosity made the
intensely challenging working conditions a little easier for employees to bear.
Veridian takes the lead in
emergency preparedness
Veridian’s President & CEO, Michael Angemeer, was chosen to chair
a provincial task force established by the Electrical Distributors Association
(EDA) following the December ice storm. The panel, which includes utilities
involved in ice storm restoration, have shared their experiences and
consulted with key stakeholders, including Emergency Management Ontario
and the Ministry of Energy. The task force’s report will be submitted
to the EDA in 2014. Angemeer, who chaired the EDA in 2006, believes
it will offer valuable recommendations for all utilities to increase their
level of preparedness for future events.
The restoration
plan is critical
in times of crisis.
When everything’s
coming apart around you,
it’s your go-to document
to keep you organized,
Focused and on track.
Mark Turney,
Vice President of Operations
(in charge of Veridian’s
Power Restoration Plan)
december
2013
ice storm
Veridian
responds to an
April ice storm
in Trenton
April showers are supposed to bring
May flowers, not mayhem. Unfortunately, that
wasn’t the case in April 2013, when winter’s
last gasp brought ice and high winds across
much of southern Ontario. Fortunately,
customers in Veridian’s service area suffered
only minor outages. Crews quickly and safely
restored power, then answered a call for help
from Trenton, joining Hydro One crews for a
two-day restoration marathon. President &
CEO, Michael Angemeer, praises Veridian’s
employees for their dedication and safe work
both at home and in Trenton. “I’m very proud
of our crew who, on short notice and without
hesitation, volunteered to assist Hydro One
in restoring power to their customers as quickly
as possible,” says Angemeer. “They gave up
their personal time to help those in need,
which speaks volumes to their character
and the company as a whole.”
When an idyllic
July afternoon
turns nasty in
Gravenhurst,
Veridian crews from
unaffected service
areas quickly arrive
to help with the
extensive 10-day
restoration effort
On July 19, 2013, high winds and heavy rainfall
in Veridian’s northern-most community caused
significant damage to electrical infrastructure
and left more than 6,000 customers without
power. Entire trees were uprooted by the storm
and tossed onto Veridian’s lines, making
restoration a challenging and lengthy process.
Ten days after the storm, when fewer than
100 customers were still off line, Veridian’s
President & CEO thanked the Gravenhurst
community for its patience and understanding.
He also commended Veridian crews from
other service areas who arrived quickly to
help with the extensive restoration effort,
without compromising service back home.
Learning valuable lessons in the wake of the single
worst outage experienced by Veridian since it was founded
The company has invested many hours in consultations with employees, its Board, representatives from the affected
municipalities and customers – all with a single goal: to do better next time. In the end, Veridian has accumulated
a list of more than 100 improvements it plans to put into action. Here are some highlights.
Customer education
To enable effective communication
with callers during outages, Veridian
will provide its customer care representatives with detailed training on the
Power Restoration Plan and ensure the
reps have access to real-time outage
information. Veridian’s website, newsletter
and social media will be used as tools
to educate customers on the power
restoration process so that they will be
better able to understand the utility’s
responsibilities in the event of an outage.
Situational awareness
The company will increase its ability to
get information from the field to
the 24/7 system control centre so
restoration planning can be based on
a better understanding of what is really
happening “out there.”
can automatically receive real-time
information on outages.
Customer
communications
Veridian plans to increase the resources
it can draw on in the event of an outage
by expanding the number of mutual
service agreements it has with other
electrical utilities.
Veridian will ensure every customer care
representative has a phone capable
of queuing incoming calls and will use
integrated voice response technology –
an automated system that answers
each call – to provide immediate outage
and restoration updates. Veridian will
make a real-time outage map available
on its website. The phone system,
Twitter account and new outage map
will be integrated so that customers
Veridian’s
Power Restoration Plan
The overall restoration plan is revisited and refined on an annual basis
and following any major restoration event. December’s ice storm,
which put the plan through an unprecedented test, resulted in
several recommendations for changes.
The detailed strategy that comes into
action the minute an outage begins
Veridian’s plan, first drafted in the early 2000s and overhauled
in 2010, defines the levels of response depending on the
severity of the outage. Veridian’s 24/7 system control centre
becomes command central whenever the Power Restoration
Plan is enacted. During an outage, at least two qualified
distribution system operators are on duty at all times to ensure
that Veridian is able to devise the safest, fastest restoration
process given the specific circumstances.
During major feeder outages, thousands of customers
can sometimes be restored in a few minutes through
the operators’ use of automated substation and
distribution feeder technology. At the most severe level –
which December’s ice storm certainly reached – the plan
recommends calling in additional outside assistance
and lists six utilities, as well as external contractors,
that Veridian can contact for assistance.
The plan sets out to protect public safety first,
then maximize the number of customers
restored in the shortest time possible
1
2
3
4
Response time
System automation
Veridian will continue to invest in
“smart” and “self-healing” technology
that enables easy, fast and sometimes
automatic power restoration after a
failure on the system.
Start with emergency
services, hospitals,
seniors’ homes, water and
sewage treatment plants
and pumping stations.
...and finally
reconnecting
individual homes
and businesses.
Focus next on feeders
(which supply power
to substations)...
...then specific
streets...
engineering
peace of mind
comes from
building today
with tomorrow
always in mind
Aging distribution system
infrastructure can be a
blessing in disguise. It offers
opportunities to enhance
reliability by replacing old
with new, while at the same
time prudently planning for
future needs. When Veridian’s
engineering group tackles a
project – whether it’s renewing
a substation, replacing
underground cable, adding
a feeder or moving poles
to make way for municipal
growth – it thinks first of what
will be needed down the road.
Rather than overbuilding, the
team carefully looks to lay
groundwork that will prepare
for and allow future system
enhancements to be built in
the most cost-effective and
easy manner possible.
The Highway 407
ETR extension
represents the
largest infrastructure
relocation project
in Veridian’s history
(pole relocation work making
way for 407 construction
shown at left and above)
Veridian’s assets (poles,
wires, transformers, substations,
etc.) get a routine checkup
In August 2013, Veridian finalized an asset condition assessment as
an ongoing part of its asset management process. The exercise provides
a “health” snapshot of the condition of the assets, comparable to an
annual medical physical, allowing the utility to make better informed
decisions regarding where to invest in system upgrades and overhauls
and where potential problems may arise. By examining equipment
records and testing for failures, each of Veridian’s most important assets
was evaluated, then plotted on a health index. Decisions to take action
are made based on the condition of equipment, its criticality to the system
and its risk of failure. From a customer perspective, the asset condition
assessment will enable Veridian to more effectively manage its distribution
system, appropriately prioritizing and scheduling improvements so
that customers will benefit from a system with increased reliability,
while minimizing the chance of abrupt rate increases. The assessment,
and future annual updates, show Veridian’s commitment to developing
a formal asset management plan, which establishes a logical, quantifiable
rationale for prudent planning and capital investment
through identifying priorities for system renewal
over the next 30 years.
Given the project’s ambitious timeline, the utility
assigned significant resources so its portion of
the work could be completed on time and
on budget. The work involves detailed
planning and coordination with the Ministry of
Transportation, project consultants, contractors
and other utilities. Come 2014, Veridian will be
installing more steel poles – these ones soaring
to 105 feet – to safely carry lines over the new
highway. As part of road construction, the
company will be installing underground ducts
that will allow circuits to be added in
the future to supply additional capacity for
planned development north of the toll road.
engineering
The Seaton
field of dreams
in Pickering
becomes a reality
Investing in distribution infrastructure
to increase reliability
Given their critical importance in delivering electricity to thousands of customers, substations top Veridian’s
list of infrastructure renewal projects. Over the past several years, the utility has upgraded one of its 53 substations
each year. In 2013, Veridian took on two.
Newcastle receives
a state-of-the-art
substation
Wilmot substation in Newcastle
was small, aging and nearly at its
loading capacity. The new substation
(shown above) has sufficient
capacity to carry Newcastle’s entire
load should the town’s second
substation be off line for any reason.
The station was built to accommodate
automated “smart” technology
that is currently used on Veridian’s
network, as well as easily incorporate
enhancements planned for the
future. The ultimate beneficiaries are
Newcastle customers, who receive
a state-of-the art system that will
perform reliably for decades to come.
Second transformer
added to Pickering
Beach substation
in south Ajax
Wisely, the substation had been built
with the knowledge that a second
unit would be required in the future,
so it was able to accept the second
transformer easily and in a reduced
time frame. Each unit is capable of
carrying the station’s entire load on its
own. Today, Ajax customers can feel
confident that in the future they will be
well looked after.
2013 sees two-year
underground cable
replacement project
wrap up in
south-west Ajax
Mature cables were beginning to
experience failures, resulting in
longer-term or “sustained” outages
for area residents. Solid construction
practices, clear and frequent
communication, fair and consistent
treatment of residents, and the
use of a highly competent contractor
to complete the upgrade, were
the critical keys to success.
The Seaton development in north-central Pickering
(shown above) requires Veridian to
begin the substantial planning required to ensure
electrical infrastructure can meet future need.
It is estimated that the new community will see
an impressive 1,500 new connections a year for
seven years starting in 2016. Veridian is doing
its homework to ensure that when the new
community is finally powered up, all the electrical
infrastructure will be in place and it’s literally
as simple as closing a switch to bring power
to the new residents of this community.
Helping build a
better Belleville
When one of its municipalities has big dreams,
Veridian is there to help the dreams come true.
That’s certainly the case in Belleville, where an
ambitious infrastructure renewal program called
Build Belleville is widening roads, replacing water
mains, upgrading parks and pouring sidewalks
throughout the city. Veridian, as a responsive partner
and highly capable problem solver, is working
with the city and all stakeholders to relocate poles
and wires that are in the way of development.
The utility is also enhancing the electrical system
in a cost-effective and prudent manner, supporting
the municipality’s dreams of a brighter future.
Relocating infrastructure
to make way for Durham
Rapid Transit (DRT)
provides opportunity to
improve reliability and safety
Veridian has approached infrastructure relocations required for DRT’s
first bus-only lane and on-road buffered bicycle lane along Highway 2
in Ajax (shown above) with the same “building today with
tomorrow in mind” philosophy. Where cost-effective, the utility is installing
taller poles that have room for expanded circuits if required in the future.
Taller poles also allow for increased clearances between wires. This helps
prevent outages due to animal interference and provides safer working
conditions for line crews. Unlike the company’s work for the Highway
407 ETR expansion – which is taking place in a largely undeveloped
area – DRT’s relocations require working around existing property lines,
cemeteries and off-kilter intersections. “At times, it’s like moving
a large couch into a small apartment,” says Peter Petriw,
Veridian’s Vice President of Engineering. “You’ve got to
figure out the angles and tip it just right to get it
around tight corners. It takes a different
kind of planning, design and construction
which is more complicated
in today’s utility world.”
operations
delivering
peace of mind
through
technological
innovation
It takes a great deal of ingenuity
to find cost-effective ways to bring
20th century infrastructure into
today’s era of real-time data-driven
technology. Veridian is committed
to maximizing reliability through
“smart” systems – everything from
its 24/7 system control centre,
complete with a table-sized touchscreen map of its service territories,
to automated switching systems
that offer the potential to restore
power to customers affected by
an outage within the first five
minutes of an event. Veridian
shareholders and customers alike
benefit directly from the improved
performance of a company that’s
an early adopter of technology;
in several cases even developing
customized solutions in-house.
Taking control with a
new SCADA system
Veridian replaced its supervisory control and data acquisition
(SCADA) system in 2013, an investment in communications
technology that singlehandedly upgraded the most critical piece
of equipment in the company’s 24/7 system control centre.
The SCADA system monitors and directs the automated
aspects of Veridian’s electricity infrastructure, ensuring prompt
response to problems and proactive assessment to avoid
future issues. Unlike the previous 12-year-old system, the new
SCADA system is completely compatible with today’s “smart”
technology. Now, Veridian can add an outage management
system, increasing real-time visibility from the system control
centre of what is happening in the field and allowing for more
immediate response to issues. Over the next couple of years,
Veridian will expand its new SCADA system to include an
advanced distribution management system.
With this technology in place, system control centre operators
will be able to monitor system loading, disturbances
and power quality so that the company can take
corrective action before customers experience any issues
(shown above and left).
During the December 2013 ice storm, the new SCADA
system was running in parallel with the old system. This
allowed operators to continue working with a system that
they were fully familiar with throughout the crisis. However,
during future outage events, Veridian’s system operators
will greatly benefit from the advanced technological
capabilities of the updated SCADA system.
progressive
workplaces deliver
peace of mind
operations
human
resources
Veridian executive
appointed to
provincial
safety board
Veridian’s ‘smart’
transformers:
more than meets the eye
In 2013, Veridian collaborated with a transformer and
meter manufacturer, a communications company and a
system integrator – all from the local area – to develop a
revolutionary “smart meter” for the company’s pole-top
and pad-mount transformers (Veridian’s smart
transformer development team
shown above).
The new system will put real-time communication capability
into transformers, allowing them to send status and loading
information directly to Veridian’s system control centre.
There will be three direct benefits for customers. First,
immediate notifications of outages will be sent by affected
transformers, allowing operators to pinpoint the location of
the outage and then preemptively connect with customers
impacted by the event to provide restoration updates.
Second, smart transformers will include thermal sensors
that will inform operators when transformers are overheating
due to excessive load. With wide-spread adoption of
electrical vehicles on the horizon, overloading is a growing
concern for utilities. Third, where discrepancies exist
between a home’s smart meter reading and the loading
shown on the transformer, the system operators’
attention will be drawn to situations where theft
of electricity could be occurring. A key challenge
of the project was adding all of this smart meter
functionality while only minimally increasing
the cost of the transformer, thus keeping the
technology cost-effective for utilities. Veridian’s
prototype will go into operation in spring 2014.
A map for a
mobile future
Over the past number of years, Veridian has continued to
enhance its geographic information system (GIS). The pace
and scope of change peaked in 2013 in advance of the
company’s major deployment plans for 2014.
Half a dozen rugged field computers were tested in 2013
and feedback from staff was encouraging. The wireless tablets
give outside crews real-time access to Veridian’s mapping
system – right in the field. Any updates they make are first
verified back at the office then input into the GIS. This creates
a highly effective communication loop and enables field staff
to more efficiently and successfully resolve issues by using
the most up-to-date information available.
In 2013, Veridian purchased the platform and software to
integrate its GIS with its new SCADA system and customer
service tools. To reduce cost, decrease development time and
create a truly customized solution, Veridian is handling the
programming for this project in-house. Integrating the systems
will allow for the development of a real-time outage map that
will automatically update Veridian’s phone system and website,
as well as send “tweets” to provide customers with immediate
and convenient access to system
status information during outages.
87 per cent of Veridian employees
participated in a 2013 online workplace
engagement survey
State-of-the-art smart distribution systems and
devices can only take an electric utility so far. Creativity,
problem-solving expertise and the dedication of
Veridian staff are what gives the company its true power.
Veridian strives to engage its employees by conducting ongoing employee
engagement surveys and using the results to continue to create a work
environment that inspires engagement. The company’s most recent employee
engagement survey was conducted in the spring of 2013. “Employee engagement”
is defined as a person’s emotional connection and commitment to his or her
organization and role within it. Employee engagement is also key to achieving the
company’s goals. Studies in this area have shown that engaged employees feel
energized, passionate and are highly involved with their work – a “win-win-win”
for the individual staff members, the company and Veridian’s customers.
Results pointed to three key areas to further engage employees:
• Customer focus (showing employees the company
is putting customers first)
• Training and development (access to career advancement
and educational opportunities)
• Company potential (helping employees understand Veridian’s
strong future opportunities)
To address the highest-valued areas of engagement, department-level
and enterprise-level action plans and a revamped employee orientation
process are being developed with input from all staff.
Mark Turney, Veridian’s Vice President
of Operations, was appointed as the
sole electrical utility representative to the
Infrastructure Health & Safety Association’s
(IHSA) Board of Directors in 2013. In his
new role, Mark represents the interests of a
diverse group of utilities, including electrical,
oil, power, water distribution and natural
gas. He will work to further health and
safety programming of the IHSA and foster
a safety-oriented culture in the utility sector.
The IHSA is a cross-industry association,
giving Veridian access to insights from the
construction and transportation sectors that
will directly benefit Veridian shareholders.
Safety is a
core value of
Veridian’s and
we strive to
send everyone
home healthy at the end
of the day. Promotion and
enhancement of public
safety is also
paramount
and is another
way we deliver
peace of mind.
Michael Angemeer, P.Eng,
President & CEO
customer
service
peace of mind
comes from
continuously
improving the
customer’s
experience
Veridian’s customer satisfaction scores
continue to be well above the provincial
average, as measured by an annual
survey conducted by an independent
third party. In 2013, 93 per cent of the
customers surveyed reported they were
fairly or very satisfied with Veridian’s
service, compared to a province-wide
score of 90 per cent. The utility received
an “A” on customer care and scored
above the provincial average in all
customer service categories, including
helpfulness, knowledge, courtesy and
quality of information provided. However,
for Veridian, past success isn’t cause for
complacency. Making it easier and more
enjoyable to connect with the company,
be it over the Internet or the telephone,
were definite priorities in 2013. The utility
made it happen using innovative software
solutions that increased convenience
and efficiency of service.
my.veridian – the new
online one-stop shop
for Veridian customers
One of the biggest customer service accomplishments of 2013
was the development of my.veridian, a highly secure, user-friendly
self-serve web portal that allows customers to monitor and
manage their electricity use patterns, download conservation
and educational material, view and pay bills, link accounts
and much more – all using a single login.
The project, which required significant coordination between
different software vendors, was driven by feedback from Veridian’s
residential and small business customers, who wanted to be able
to seamlessly access all their information from a single point
of entry. my.veridian provides direct, web-based
access to information and bill payments 24 hours
a day, seven days a week, often eliminating
the need to contact Veridian’s Customer Care
department. The platform’s open architecture
allows new features to be added over time.
Access
your account
information...
Enrol in our
pre-authorized
payment plan...
...online.
...eBill or
pay your bill
using EZ-PAY.
Download...
Address
account
questions...
SIGN UP
Q A
...conservation
and educational
material.
SIGN UP
...without having
to contact
our Call Centre.
Q A
Sign up >
Veridian Connections
@VeridianTweets
Sign in >
Follow
Welcome to the Official Twitter
account of Veridian Connections.
Veridian Tweets Monday to Friday,
between 8 a.m. and 4:30 p.m.
Outage Hotline: 1-866-579-6819
customer
service
http://veridian.on.ca
Followers 3,259
Following 180
Tweets
12/27/13
Veridian Connections @VeridianTweets
THANK YOU to everyone who was or still remains
affected by the storm for your patience. Crews
continue to make significant progress.
12/27/13
Anis Farooqui @anis_farooqui
@VeridianTweets Awesome job guys. It's tough out
there but you are even tougher. Keep it up fellas.
12/27/13
Town of Ajax @townofajax
@VeridianTweets BIG thanks to control staff &
crews for working so hard to get Ajax back online.
Veridian developed three secure,
convenient, online bill payment options
to help customers save time and avoid late fees
The utility developed
its own free mobile app
for iPhone and
Android devices
The simple-to-use app lets customers
view their bill, make one-time
payments, see system messages,
read through frequently asked
questions and seamlessly connect
with Veridian’s Customer Care
department by phone or email
(shown above left).
Online bill payment
streamlined with
Veridian’s EZ-Pay
This integrated and secure thirdparty service accepts one-time
bank account and credit card
payments. EZ-Pay is available through
my.veridian, the utility’s new customer
portal, and the smartphone app.
Veridian made bill
delivery and payment
possible through Canada
Post’s epost digital
mailbox system
The utility joined the 100-plus
businesses and government agencies
that make bill delivery and payment
possible through Canada Post’s epost
digital mailbox system, allowing users
to manage bills from various vendors
from a single secure site.
New phone system improves
call centre responsiveness
No matter how great the music, no one likes being on hold. In 2013, Veridian installed a new phone system for its
Customer Care department, complete with state-of-the-art technology to help manage call volumes in real-time.
The information collected by the phone system is easy to access and understand, allowing managers to use it
proactively in planning and on-the-fly to adapt to increased call volumes caused by issues such as outages.
Veridian
goes social
The ice storm at the end of December was a tough test for Veridian’s
fledgling Twitter account (@VeridianTweets), which had been active
for a scant two weeks prior to the worst outage in the company’s
history. A Veridian staff person was tweeting for close to 14 hours a day
(shown right) during the worst of the storm’s aftermath and it
was an extremely effective way to connect with customers, keeping them
informed of developments at the utility and retweeting information from
the municipalities. It also provided a means for grateful customers to share
words of encouragement with the Veridian power restoration team.
12/26/13
Pls call our Outage Hotline 1-866-579-6819 if
you're still without power & not listed to let us know
your location: http://ow.ly/s4QWi
candy @_luvcandy
12/26/13
@VeridianTweets Harveys Ajax would love to buy
your staff lunch for all your hard work! 9054289763
for more info! HAPPY HOLIDAYS :)
12/25/13
We have 67 staff and contractors working hard
to restore power in the communities affected
by the severe ice storm.
View Veridian Connections’s full profile
Privacy is paramount
Veridian put its advanced metering infrastructure – commonly
referred to as “smart meters” – under the security microscope
in 2013. The third-party audit ensured that all usage data
collected by the meters was protected from prying eyes
and “hackers.” Veridian also did an internal evaluation
of security on its customer information system, creating
new protocols for how information is locked and who can
have access. Customers can rest assured that the information
they share – whether through their smart meters
or their phone calls – is in safe hands.
sustainability
peace of mind
comes from
showing
green leadership
Veridian believes in being a careful
steward of Earth’s finite resources and
taking steps to minimize the impacts of
climate change. With this in mind, the
company is investing in clean energy
technology that makes communities
more sustainable while providing healthy
returns for shareholders. Veridian also
delivers the full suite of the Ontario Power
Authority’s (OPA) saveONenergyOM
conservation and demand management
(CDM) programs to customers, helping
residents save money and businesses
maximize their competitiveness through
the efficient use of electricity.
SOME EMPLOYERS
MISTAKENLY THINK ‘GOING
GREEN’ IS TOO EXPENSIVE,
TOO DIFFICULT OR
SOMEHOW MAKES YOUR
ORGANIZATION UNCOMPETITIVE. WE
SEE THE OPPOSITE: INCORPORATING
ENVIRONMENTAL VALUES INTO YOUR
CULTURE ENCOURAGES EFFICIENCY,
ATTRACTS TOP TALENT
AND MAKES YOUR
ORGANIZATION MORE
COMPETITIVE.
Richard Yerema,
Managing Editor,
Canada’s Top 100 Employers project
Canada’s Greenest
Employer – 4 years in a row
In 2013, Veridian was named one of Canada’s Greenest Employers for
a fourth consecutive year. The company was recognized for its efforts
at environmental leadership, including the recently expanded solar
panel installation on the rooftop of its corporate headquarters in Ajax,
electric vehicle initiatives, a bike sharing program, interest-free loans
for employees purchasing hybrid and electric vehicles, and support of
employees who volunteer with environmental stewardship programs.
In 2013, Veridian also won a silver award from Smart Commute Durham
for its efforts to help employees explore greener commuting choices
such as carpooling, cycling and public transit. Veridian’s programs
include allowing employees to work from home one or more days a
week, offering subsidies for employees to take public transit, encouraging
carpooling with an electronic ride-matching service and priority carpool
parking spots, and providing on-site bike racks and shower facilities
for employees who cycle to work.
Veridian may earn the awards, but the biggest winner is the planet.
In the words of the company’s President & CEO, “Our message
out to our employees and communities is that we have to be
more sustainable, working to reduce local pollution and climate
change through actions each one of us can take.”
Veridian has a number of employee and customer
programs to reduce its own energy consumption
and environmental footprint. The company has
also implemented fleet programs to reduce idling
and purchased hybrid and electric vehicles,
including two Chevrolet Volts.
Delivering peace of mind through a
long-term commitment to conservation
sustainability
Veridian promotes the OPA’s saveONenergy programs, providing residential and
business customers with education, resources, tools and incentives for better
managing their electricity consumption and reducing their electricity costs.
HAP makes low-income
customers in
Ajax ‘HAPpy’
Helping residential customers
saveONenergy
Veridian promotes the OPA’s saveONenergy programs,
providing residential customers with education, resources and
tools to better manage their electricity consumption and reduce
their electricity costs. Throughout 2013, Veridian could be
seen actively engaging customers in conversations about
the benefits of the saveONenergy programs at community
festivals and retailer-hosted events across each of its service
territories – 68 days at 44 events in total.
Updates to the peaksaver® program were welcomed
with enthusiasm by Veridian customers in 2013. Since
the pilot program in 2006 and the official launch in 2007,
Veridian’s peaksaver participants have received a free
thermostat designed to make slight adjustments to reduce
consumption during periods when the Ontario electricity grid
is experiencing peak demand. In 2013 the program became
peaksaver PLUS®, the “PLUS” being a free in-home energy
display (shown above) that both new and existing
participants receive as an incentive for participating. Feedback
indicates that the real-time usage information provided by
the energy display is helping to change energy use behaviour
and is a great teaching tool for families.
In collaboration with Whitby Hydro and Oshawa PUC
Networks Inc., Veridian partnered with Windfall Ecology
Centre to deliver the saveONenergy HOME ASSISTANCEOM
program (HAP). This program helps low-income households
save on their energy bills while reducing greenhouse
gas emissions through the installation of energy efficient
measures. Participants receive home energy assessments
conducted by certified energy advisors who perform
top-to-bottom inspections of their residences to identify
energy saving opportunities, then complete basic upgrades
– installing energy-efficient lighting, replacing faucet aerators,
providing programmable power bars and more. The energy
advisors also assess whether residents are eligible to receive
more substantial upgrades of ENERGY STAR® qualified
appliances, such as a refrigerators, freezers, dehumidifiers
or window air conditioners.
Westwood Manor,
in Ajax – HAP’s capacity
to make a difference
The 70-unit seniors’ apartment building (shown
at top) uses electricity to heat both the building and its
water supply, making it a perfect candidate for energy saving
measures. With tenants on fixed incomes, many may lack
the resources needed to make investments in energy saving
appliances and upgrades. After a thorough examination of
the building, nine new fridges, one new window air
conditioning unit, one freezer, approximately 350 compact
fluorescent light bulbs, 25 low-flow shower heads and two
kitchen faucet aerators were installed, for a total savings of
33,676 kWh, 4.5 metric tonnes of CO2 and $2,500 annually.
FRIDGE & FREEZER PICKUPOM
SMALL BUSINESS LIGHTINGOM
Participants have their old energy-guzzling fridge
or freezer (and eligible window air conditioners and
dehumidifiers) picked up and decommissioned for free.
Component parts are recycled in an environmentally
responsible way to minimize the amount of waste
materials that end up at landfill sites.
Energy efficient upgrades go a long way toward reducing
electricity consumption and managing monthly electricity
costs. Qualifying businesses can get up to $1,500
in energy-efficient lighting and equipment upgrades
and gain access to further incentives. After a no-risk
assessment, an authorized, licensed electrical contractor
will make an appointment to complete the retrofit,
which includes recycling and proper disposal of
the old lighting equipment.
4,123
fridges and freezers
decommissioned since 2009
peaksaver PLUS
3,419 lighting upgrades since 2009
®
Participants have a device installed on their central
air conditioner, electric water heater or pool pump,
so that their equipment can be remotely cycled on
and off to reduce the stress on Ontario’s electricity
system during periods of peak demand. Participants
also receive an in-home energy display (IHD) for
monitoring household appliance energy use in real-time.
10,304 peaksaver devices
(thermostats/IHD’s) installed since 2009
HEATING & COOLING
INCENTIVEOM
With as much as 60% of annual household energy
costs going towards heating and cooling, investing in
energy-efficient central heating and cooling systems
makes sense. Participants receive rebates of up to $250
when replacing old furnaces with high-efficiency models
and up to $400 when replacing central air conditioners.
15,553
incentives for
energy efficient furnaces and
central air conditioners since 2009
RETROFIT PROGRAMOM
Businesses can install and benefit from newer, more
energy efficient solutions that will help them operate
more efficiently and improve their bottom line. Incentives
are available for high efficiency equipment upgrades
such as lighting, motors and heating and for installing
new control systems to improve the overall efficiency
of their building. Participants can receive up to 50%
of their project costs.
665 retrofit projects since 2009
sustainability
Recognizing businesses
of all sizes throughout
Veridian’s territories
for leadership in
reducing energy
consumption
In 2013, Veridian designated the following
companies as its Conservation Champions
for using saveONenergy FOR BUSINESSOM
programs to make significant reductions
in their energy consumption:
•
•
•
•
•
•
•
•
•
•
•
•
Autosystems Magna – Belleville
Bardon Supplies Limited – Belleville
Cameco – Port Hope
Cineplex Entertainment – Ajax, Pickering
and Belleville
CpK Interior Products – Port Hope
Durham Condo Corp. – Ajax
Giant Tiger Stores Limited – Ajax and Belleville
Greif Bros. – Belleville
Lakeridge Health – Port Perry
Loblaws (Atlas Logistics) – Ajax
Premier Real Estate Holdings Ltd. – Pickering
Regional Municipality of Durham – Ajax
Developing renewable
hydroelectric power from
the Moira River in Belleville –
dam, that’s a great idea
Veridian, the City of Belleville, Quinte Conservation and Peterborough
Utilities are taking the plunge in an innovative hydraulic power generation
partnership to pursue investments in run-of-the-river electricity generation
projects at three existing dams along the Moira River. If accepted under
the OPA Feed-in Tariff (FIT) program, highly engineered turbines will use
the flow of the river to generate an estimated total of 1.5 MW of power.
As an additional benefit, the turbines will help the City of Belleville manage
ice problems that occur along the river during the annual spring thaw.
The projects will be jointly owned and operated by Veridian, Peterborough
Utilities and the City of Belleville. The application to the OPA’s FIT program
was submitted in 2013.
Building strong
partnerships
builds strong CDM programs
Thanks to the strength of Veridian’s staff and channel partners,
who provide their energy-efficiency expertise to its customers,
Veridian was able to get closer to achieving its CDM targets in 2013.
Pickering HVAC company, Advantage Air Tech, is a perfect example.
They offer a one-stop shop to Veridian customers – selling, installing
and maintaining HVAC equipment while promoting the saveONenergy
Retrofit ProgramOM. They even go as far as completing
paperwork so customers can take advantage of incentives provided
by the OPA through Veridian.
Other commercial, municipal
and industrial customers
are taking advantage
of Veridian’s two
saveONenergy roving
energy managers
Working out of Veridian’s corporate headquarters in Ajax,
the pair (shown above) provide conservation
expertise to companies looking to improve energy
performance and discover energy saving options.
Helping major
Port Hope employer
be more competitive
by better managing
their energy use
Solar projects see the light
in Claremont and
Belleville
Pickering’s energy future got a little greener in 2013 when
OPA approved a 99 kW rooftop solar array for the Claremont
Community Centre (shown above). Under the OPA’s
FIT 2.1 program, projects built through partnerships with
cooperatives are more likely to be approved. In order to meet
the OPA’s requirements, Queen Street Solar Cooperative –
Veridian’s partner of choice – required that at least 50 Region
of Durham homeowners join as members. More than 30
Veridian employees stepped up. With the OPA’s approval
and a strong joint venture already underway, Veridian is set
to install the solar array in 2014.
Also in 2013, Veridian created a new company – Quinte Solar
Generation – to apply to the OPA for two rooftop solar projects
totalling 250 kW in Belleville. Public works buildings owned
by the City of Belleville were selected as sites for the project.
Cameco, a uranium conversion facility in Port Hope and one
of Veridian’s largest industrial customers, has expanded its
industrial saveONenergy projects beyond updating lighting,
installing variable frequency drives and upgrading HVAC
systems. In 2013, Cameco applied through Veridian for the
saveONenergy Embedded Energy Manager program,
which provides 80 per cent of the wages (paid for by the
OPA) for an on-site energy expert. As a driving force behind
additional savings, the full-time energy manager, works at
the facility to develop energy management plans, implement
conservation measures, and apply for saveONenergy
incentives for the company.
community
outreach
Veridian is more than an electricity
distributor – it’s a dedicated partner
that is committed to investing in
the communities it serves, through
a particular focus on efforts that
support youth, arts and culture,
and health. With customers in
nine municipalities, the company
is careful to equitably distribute
its generosity. Veridian provides a
business bursary for one science,
engineering or business student
from every high school across
each of its service territories.
It also funds initiatives that speak
to the needs of each community.
In 2013, these included: a pavilion
project on Zwicks Island in Belleville,
the Clarington Museums and
Archives initiative, the Gravenhurst
Winter Carnival, Port Hope’s Jazz
Festival, Earth Day in Bowmanville
and Scugog Memorial Library’s
fundraiser. This all added up to
more than $230,000 of support.
Putting the
Boys and Girls
Club of Durham
back on the road
peace of mind
comes from making
communities stronger,
one cause at a time
When the Boys and Girls Club of Durham’s
1995 van was taken off the road due to extensive
vandalism in mid-2013, Veridian was among
the business leaders that responded to the call
for new wheels. The company contributed
$5,000 to a community-wide fundraising effort
that resulted in the purchase of a new van
(shown left) so kids can once again
be transported to after-school programs
and community events, keeping them off
the streets and involved in positive activities.
Doing Durham
Region’s heart good
Veridian’s 2013 support of the Advanced Coronary
Treatment (ACT) Foundation helped more than 7,000 high
school students in Durham acquire the skills and knowledge
needed to save lives. The program, part of a national effort
to provide free CPR and defibrillator training in high schools,
saw the donation of 201 mannequins, 112 automated
external defibrillator training units and teacher education with
the aim of sustaining the program into the future in Durham.
Grade nine students in all 25 Durham Region high schools
participated in the program during 2013. Encouraging this
increase in community safety knowledge is sure to make
a difference – the Heart and Stroke Foundation notes that
early CPR and use of an automated external defibrillator
improves cardiac arrest survival rates by up to 75 per cent.
With 13 service territories
of various sizes,
Veridian takes care
to equitably distribute
its generosity
community
outreach
In 2013, the company was proud to have helped to support more than
228 worthy causes that included:
Abilities Centre
Multiple Sclerosis Society of Canada
Ajax Creative Arts
Northumberland Hills Hospital
All-Canadian Jazz Festival
Ontario Shores Centre for Mental Health
Beaverton Lions Club
Parkinson Society Canada
Belleville General Hospital Foundation
Quinte Ballet School of Canada
Bethesda House
Royal Canadian Legion
Boys and Girls Club of Durham
Salvation Army
Camp Bucko
Scientists in Schools
Cannington Lions Club
Tamil Cultural and Academic Society of Durham
Clarington Museums and Archives
The Firehouse Youth Centre
Community Justice Alternative of Durham Region
The Ontario Regiment Foundation
‘Caught in the act’
of kindness
in Durham Region
Crime Stoppers
Terry Fox Foundation
Durham Children’s Aid Society
WindReach Farm
Durham Family Court Clinic
Young Singers
In 2013, Durham Regional Police teamed up with the
Herbert H. Carnegie Future ACES Foundation and Veridian
to help students from Kindergarten to Grade 12 pay it forward,
using presentations in schools to motivate kids to be
responsible, respectful, peaceful, confident and caring
citizens. Drawing on the inspiring story of Herbert Carnegie,
presenters encourage the students to practice good
citizenship and reduce incidents of bullying. Police officers
issue “tickets of kindness” to students who are “caught in the
act” of demonstrating positive behaviour and good decisionmaking skills in schools and the community. The tickets can
be redeemed for free merchandise. Veridian was proud to
sponsor a number of these presentations in Ajax and Pickering
schools and plans to continue its involvement in the future.
Durham Outlook for the Needy
Scoring a huge $42,000 hole-in-one
in support of community organizations
with Veridian’s 2013 charity golf tournament
Two hundred and thirty golfers and dozens of sponsors gathered at Deer Creek Golf & Banquet Facility
in Ajax on August 22, 2013, to raise a record-breaking $42,000 in support of a number of worthy
causes in each of the communities served by Veridian, including hospices in Durham, Quinte and
Muskoka, the United Way and Special Olympics Ontario.
During the Buy-a-Bed
campaign, you answered
our call to help fund
new hospital beds for
Lakeridge Health’s
Whitby site. Your support was
instrumental in helping us exceed
our fundraising goal. That’s why
I’m so glad to let you know that
42 new hospital beds have arrived
and are being put to good
use at our Whitby site.
Robert A. Baker,
Chief Executive Officer,
Lakeridge Health Foundation
Gleaners Food Bank
Grandview Children’s Centre
Habitat Muskoka
Hospice Quinte
Humane Society of Durham Region
Jennifer Ashleigh Children’s Charity
2013
financial
summary
2013 directors
meeting
attendance
During 2013, the Boards of Directors of Veridian Corporation
and Veridian Connections Inc. met four times each.
Board
Meetings
Committee
Meetings
Jack Alexander (2)
4/4
5/5
Kevin Ashe (3)
4/4
3/4
Veridian Corporation
Board
Meetings
Committee
Meetings
Doug Dickerson Chair (1,2,3,5)
4/4
19/19
Joanne Dies (2)
4/4
5/5
Eldon Dixon (1)
4/4
4/4
Neil Ellis Vice Chair (3,4,5)
4/4
10/10
Cindy Holland (2)
3/4
4/5
Colleen Jordan (3,5)
3/4
10/10
James Mason (5)
4/4
6/6
Veridian Connections Inc.
Doug Dickerson Chair (1,2,3,5)
4/4
19/19
Joanne Dies (2)
4/4
5/5
Neil Ellis Vice Chair (3,4,5)
4/4
10/10
Adrian Foster (4,5)
4/4
5/6
Colleen Jordan (3,5)
3/4
10/10
James Macpherson (1)
4/4
4/4
Mary Novak (2)
3/4
5/5
David McGregor (3)
4/4
4/4
Doug Parker (1)
3/4
2/4
Joe Neal (1)
4/4
3/4
David Pickles (2)
4/4
5/5
David Pickles (2)
4/4
5/5
Frank Stapleton (3)
3/4
4/4
David Ryan (4,5)
4/4
4/6
Sylvain Trépanier (1)
4/4
4/4
Frank Stapleton (3)
3/4
4/4
Ralph Sutton (5)
4/4
5/6
Doug Dickerson
Chair
Neil Ellis
Vice Chair
Councillor and Deputy
Mayor, City of Pickering
Eldon Dixon
FCCA CGA MBA C.Dir.
Director, Financial Shared
Services Parmalat Canada
James Mason
Member of:
Jack Alexander
Kevin Ashe
Joanne Dies
Mayor,
City of Belleville
Electrical Generation
Consultant,
J.W.A. Enterprises Inc.
Councillor,
City of Pickering
Councillor,
Town of Ajax
Adrian Foster
Cindy Holland
Colleen Jordan
James Macpherson
Mayor,
Municipality of Clarington
Marketing Manager,
Constellation Brands
Canada
Regional Councillor,
Town of Ajax
C.Dir.
President, Macpherson
& Associates Inc.
David McGregor
Joe Neal
Mary Novak
Douglas Parker
President,
Pefco Ontario
CHRP, HRCCC
Retired VP of
Human Resources,
Wrigley Canada
David Pickles
Councillor,
City of Pickering
1. Audit & Risk Management Committee
Councillor,
C.Dir.
Regional Councillor,
David Ryan
Frank Stapleton
Ralph Sutton
Sylvain Trépanier
Mayor,
City of Pickering
Owner & Operator,
Stapleton Auctions/Grist
Mill Auction Centre Ltd.
Retired Manager,
Bell Canada
Director,
International Financial Data
Services (IFDS Canada)
Retired General Manager
& Secretary, Belleville
Utilities Commission
2. Governance Committee
3. Human Resources & Compensation Committee
4. Nominating Committee (the Committee did not meet in 2013)
5. Business Development Committee Meeting
Management’s
Discussion and Analysis
consolidated financial statements
The following discussion and analysis should be read in conjunction with the audited consolidated
financial statements and accompanying notes of Veridian Corporation (“Veridian” or the “Corporation”)
for the year ended December 31, 2013. The consolidated financial statements are prepared
in accordance with Canadian generally accepted accounting principles.
management’s
discussion
and analysis
vision, core businesses
and strategy
Veridian Corporation’s Shareholders
City of Pickering
41.0%
13.3%
Veridian’s vision is to be a local, provincial and global
leader in the provision of innovative energy solutions
that are the cornerstone for creating the sustainable
communities of tomorrow.
Veridian’s Strategic Goals and Objectives:
Veridian Connections Inc.
Service Area
City of Belleville
• Growth and improvement in core distribution business
• Optimize operational efficiency and effectiveness
• Maintain high returns for shareholders
• Be a leader in customer satisfaction
• Provide a high level of power system reliability
• Achieve zero lost time injuries
• Provide a workplace for employees that is
engaging and rewarding.
Veridian provides, through affiliated companies,
energy-related services to 117,462 customers located
in nine municipalities in east-central Ontario. The core
business is distribution of electricity and is provided
through the wholly-owned regulated subsidiary,
Veridian Connections Inc. (“VCI”). Historically, ancillary
businesses were operated within Veridian Energy Inc.
(“VEI”), a wholly-owned unregulated subsidiary.
Town of Ajax
32.1%
Municipality
of Clarington
13.6%
Veridian Corporation is owned by four shareholders:
the City of Pickering (41.0%), the Town of Ajax (32.1%),
the Municipality of Clarington (13.6%) and the
City of Belleville (13.3%).
Veridian Corporation Enterprise Structure
Veridian Energy Inc. in prior years had operated
non-regulated businesses such as water heater and
equipment rentals as well as other energy-related
services. VEI disposed of its non-regulated water
heater and sentinel light operations in 2011 for the
purposes of regulatory compliance and strategic
alignment of investments. As a result, VEI became
dormant in 2011 and has continued to remain
dormant in 2013.
Veridian Connections Inc. is granted a distribution license
by the Ontario Energy Board (“OEB” or “the Board”)
that entitles the local distribution company (“LDC”) the
exclusive right to distribute electricity to all customers
within Veridian’s prescribed service territories.
21
Veridian Corporation wholly owns
Veridian Connections Inc. and Veridian Energy Inc.
112
113
115
116
117
11.9
11.0
8.5
2009 2010
2011
2012
2013
customers
246 256
2012
2013
total revenue $
103.6
97.0 100.3
2009 2010
2011
219
109.1
2012
116.2
2013
12.8
187
9.3 9.5
2009 2010
2013
(millions)
212
189
2012
shareholder’s equity $
(thousands)
190
2011
(millions)
286 296 295
2011
Growth and Operational Efficiency
net income $
(thousands)
2009 2010
2009 2010
9.4
10.2
2011
2012
2013
cost per customer $
8.2 8.2 8.2
2009 2010 2011 2012 2013 2014
dividends & interest $
(millions)
Years 2009 to 2013: Actual dividends & interest
Year 2014: Forecast dividends & interest
21
key performance
drivers
Growth is an important measure for Veridian’s success.
Historically, Veridian has been able to achieve
administrative and operational efficiencies derived
from both: natural customer growth, and growth
through mergers and acquisitions. Natural customer
growth over the last two years has averaged 1.2%.
Management has projected that natural customer
growth during 2014 will increase slightly to 1.3%.
Veridian has a strategic objective to grow and improve
the electricity distribution business and actively seeks
merger and acquisition opportunities focused on
this core business. Veridian is ideally positioned to
participate in further utility consolidation with other
organizations that have a similar low cost, innovative
profile with reasonable customer rates. Higher levels
of customer value and satisfaction and increased
shareholder value will be the result.
Electricity distribution revenues, excluding Smart Meter
activities, have increased $3.8 million to $49.0 million
from 2009. Distribution revenues decreased slightly by
$1.6 million, or 3.2%, from 2012 due to decreases in
revenues related to: Smart Meter activities ($1.2 million
in 2013 compared to $2.4 million in 2012), lower Lost
Revenue Adjustment Mechanism (“LRAM”) revenues,
and marginally lower distribution consumption
(2,645 GWh in 2013 compared to 2,707 GWh in 2012).
In 2013, Veridian effectively managed costs and the VCI
cost per customer increase of $7 is primarily attributable
to an unprecedented ice storm that occurred in late
December. Ice storm costs of $0.6 million are included
in operating costs, and if not for these unforeseen costs;
the cost per customer would have increased marginally
by $2 due to inflationary increases on purchased
services and increased labour costs. Veridian made a
prospective accounting change in 2012 whereby certain
overheads that were capitalized previously are now
charged as a period expense. In 2012, this accounting
change was one of the primary reasons for the cost per
customer increasing $25 to $212. Veridian will continue
to focus on operational efficiencies through process
improvement and adoption of new technologies. Long
term reductions in operation costs benefit distribution
customers through lower distribution rates in the
regulated cost of service process. Distribution rates
are approved by the OEB to recover operating and
capital costs of the LDC.
Returns for Shareholders
Strong growth in shareholder’s equity, while maintaining
robust interest and dividend payments, has been
the long term trend at Veridian. Shareholder’s equity
has increased, $12.6 million, or 6% since 2011,
which is double the growth rate from 2009 to 2011.
Municipal shareholders benefit from distributions of
Veridian’s earnings. The Board of Directors of Veridian
Corporation approved a dividend policy for the years
2012 to 2016 with base dividends of $4.7 million each
year subject to certain provisions. Veridian paid a total
of $8.2 million to shareholders in 2013 which included
$3.5 million in interest payments on shareholder
promissory notes. For 2014, strong interest and
dividend payments are also forecast.
Reliability and Customer Service Quality
Reliability and customer service quality standards
related to Veridian’s electricity distribution system are
key performance measurements, and these metrics
remain high on the priority list to ensure Veridian is
meeting its customers’ expectations. Results are
reported annually to the OEB and form a basis for
corporate performance measurement.
Specific reliability measures are tracked and reported
such as System Average Interruption Duration Index
(“SAIDI”) and System Average Interruption Frequency
Index (“SAIFI”).
Veridian’s distribution system is predominantly overhead
and as a result is susceptible to weather and storm
events as well as tree and wildlife contact, affecting
SAIDI and SAIFI in a negative manner. Investments in
technologies that automate the distribution system are
made each year and these new smart grid technologies
assist in improving the reliability and quality of electricity
supply for customers. Veridian has an aggressive
vegetation management program in place; however
complete elimination of tree contact with the distribution
system is not possible given community standards and
aesthetics with regards to trimming trees. In addition,
Veridian has continued its deployment of devices on the
distribution system that will prevent contact between
wildlife and the distribution system preventing outages
for its customers.
Veridian’s reliability indices are competitive when
compared with other Ontario utilities and an annual
improvement measured against historical results
remains a key business goal. Reliability as a key
management’s
discussion
and analysis
business goal ensures the appropriate attention is
paid with regards to operations, maintenance and
capital spend decisions on the distribution system,
allowing distribution system reliability and quality to
continue to meet customer expectations.
to document their health and safety management
system, perform internal audits and subject their system
documentation and practices to external audit.
capability to
deliver results
Resources
To provide benchmark measures of customer
satisfaction, Veridian annually participates in a
province-wide utility satisfaction survey. Veridian’s
performance on overall customer satisfaction ranking
is routinely above the average Ontario electricity
consumer customer satisfaction level. In 2013,
Veridian’s performance was 3% above this benchmark.
conservation and
demand management
(“CDM”)
Growth of the core electricity distribution system,
together with prudent investment in non-regulated
businesses that earn returns for shareholders, is
the strategic direction for Veridian. Financial and
human capital and internal process and systems
developments are all necessary resources to support
this growth.
CDM Targets and Program Delivery
Human Capital
During 2013, Veridian continued to enroll both
management and outside trades employees into
two core training programs: the Management Syllabus
training program and Skilled Trades Training program.
With these programs, Veridian’s primary objective
remains a highly trained and skilled workforce.
This will ensure that operations will continue in an
effective and efficient manner despite retirements in
the organization over the next five to seven years.
To date, 74% of the Management Syllabus training
program is complete. During 2013, both programs
became the direct administrative responsibility of
Human Resources to ensure the most timely and
cost-effective program management.
Safety
Safety is of utmost importance to Veridian. The
management of employee health and safety begins
with every employee and supervisor understanding the
Occupational Health and Safety Act (“OHSA”) and its
relationship to their role. The development of policies
and work procedures within the context of the OHSA
reinforces this internal responsibility system, providing
the framework for safe work performance.
In 2013, Veridian recorded one lost-time injury and
achieved 400,000 hours before year-end without
another lost time injury. By encouraging injured
employees to seek medical aid immediately following
an injury and providing work accommodations based
on identified restrictions, Veridian helps reduce
the impact of injuries on individuals and on the
organization. By formally investigating incidents that
had the potential to result in a critical injury, Veridian
learns more about the hazards and root causes of
incidents so that future incidents can be avoided.
Continuous improvement is the foundation of all
health and safety management systems. Veridian
is committed to completing the requirements of
the Certificate of Recognition (“COR”), a nationally
trademarked certification endorsed by participating
members of the Canadian Federation of Construction
Safety Associations and delivered in Ontario by the
Infrastructure Health and Safety Association (“IHSA”), its
industry safety association. COR requires those certified
21
Through provisions of the Province of Ontario’s
Green Energy and Green Economy Act, 2009
(“Green Energy Act”), Veridian’s electricity distribution
license was amended in December 2010 to include
a condition that it meet established CDM targets by
December 31, 2014. Under the terms of its license,
Veridian must achieve a 2014 net annual peak demand
savings target of 29.05 MWs, and a 2011-2014 net
cumulative energy savings target of 115.74 GWhs.
During 2011, Veridian contracted with the Ontario
Power Authority (“OPA”) to deliver a suite of provincewide CDM programs during 2011-2014. Funding
for delivery of the programs is provided by the OPA.
Through these programs, Veridian achieved unverified
savings of 9.0 MWs and 68.7 GWhs by the end of
Q3 2013. The results of all 2013 CDM programs
will be verified by the OPA in September 2014.
Lost Revenue Adjustment
Mechanism (“LRAM”)
On October 31, 2013, Veridian filed an application with
the OEB that included a request for recovery of foregone
distribution revenues related to CDM program activities
during the years 2011 and 2012. This amount is included
in the LRAM Variance Account which, if approved for
disposition by the OEB, will allow Veridian to recover
$292,767 from its customers over a period of 12 months.
Financial Capital
Veridian’s debt to capitalization ratio at December 31,
2013 was 54%. The Corporation’s debt includes
$60.8 million in shareholder promissory note debt,
as well as committed reducing term facilities, and
a revolving demand facility which are held with a
Canadian chartered bank. These credit facilities
have customary covenants normally associated with
long-term debt, including debt to capitalization and
debt service coverage ratios. Veridian is in compliance
with all the bank covenants as at December 31, 2013.
In 2013, the Dominion Bond Rating Service (“DBRS”)
confirmed the Issuer Rating of Veridian Corporation at
“A” with a stable trend. The DBRS report noted that
the rating continues to reflect Veridian’s low business
risk profile, stemming from its regulated electricity
distribution business, reasonable regulated framework
and good credit metrics.
Veridian’s operating activities and these credit facilities
are the primary sources of funds for liquidity and capital
resource requirements. These resources are required
for: capital expenditures to maintain, improve and
modernize the electricity distribution system; servicing
and repayment of debt; purchased power expense;
prudential requirements; other investing activities;
and dividends. Management has assessed that there
is sufficient financial capacity to meet all stated
corporate strategic objectives.
Veridian’s continued commitment to the training and
development of its staff, coupled with progressive
employee programs, has created an organization with a
low turn-over rate of 0.47% (excluding retirees) in 2013.
Veridian continues to endeavour toward providing all its
staff with a creative and engaging work environment.
In 2013, Veridian experienced an employee turnover
due to retirements of 2.35%. Based on OMERS pension
eligibility statistics an additional 12.2% of the workforce,
or 26 employees, could qualify for an unreduced
pension prior to December 31, 2014, however it is
not expected that all of these employees will retire
based on the historical average retirement age of 61.
The Corporation’s ongoing training programs will
continue to address the aging demography of our
workforce by providing career-specific training to
existing staff to prepare them for future higher-level
positions vacated by retirees. Dedicated training
programs will also assist all staff to strengthen their
general skills required to make them effective and
efficient in their current positions.
The organization will also continue to develop junior
trades staff via robust apprenticeship programs that
will ensure that these employees become qualified
journeypersons within the lines, metering and other
technical trades.
management’s
discussion
and analysis
The President and CEO, with the oversight of the
Veridian Board’s Human Resources and Compensation
Committee, continues to monitor all training and
compensation initiatives to ensure that they remain
relevant to the needs of general and management staff.
The objective of Veridian’s compensation, training
and employee program initiatives is to attract, retain
and engage employees in the work that they do.
Veridian has continued with the ongoing use of both
compensation and employee engagement surveys
during 2013 to ensure that compensation plans remain
competitive and that the appropriate engagement
activities are in place.
Veridian’s upgraded 24/7 control centre and attached
situation management room proved very valuable
in the December 2013 ice storm. A review of
procedures and technology that will further enhance
productivity, customer service and emergency
preparedness is underway. A recently implemented
high-availability site for IT systems combined with
enhancements in backup control centre facilities,
as well as more integrated customer and stakeholder
communication enhancements, will provide greater
peace of mind to customers and community
stakeholders that Veridian services.
Veridian routinely seeks opportunities to contain costs
and improve productivity and encourages innovative
and efficient cost structures.
Internal Processes and Systems
Annually, operating and capital financial plans
are developed to support Veridian’s key business
objectives. Continual improvements in internal
processes and systems are an integral part of
these plans.
Veridian continues to invest in technology platforms
such as distribution automation, mobile workforce
management, enhanced customer service interfaces
and improved business information systems to better
manage its assets and improve customer service.
With completion of its Smart Meter Initiatives in 2011
and a significant upgrade to its Customer Information
System (“CIS”) in 2012, Veridian continued with
improvements in customer service interfaces with
online and mobile applications for customers in
2013. Veridian’s billing platform is one of the most
cost effective in the industry from a capital cost per
customer perspective and it is expandable to service
more than quadruple its current level of customers.
Very low billing error rates give customers peace
of mind and new technologies deployed, or being
deployed, provide customers opportunities for energy
conservation and increased levels of customer service.
In 2013, Veridian continued to deploy mobile workforce
management technologies to streamline processes
and improve the overall productivity of its workforce.
21
risk
Regulatory Environment
As an electricity distributor in the Province of Ontario,
VCI is licensed and regulated by the OEB which is a
quasi-judicial tribunal, and is responsible for oversight
and ensuring that electric monopoly utilities comply
with Board decisions and orders.
In a cost of service proceeding, the OEB approves
distribution rates based on forecasted electricity
deliveries and customer levels. VCI assumes the
revenue risk associated with these forecast levels.
Veridian’s last OEB approved cost of service rate
application was in 2010. On October 31, 2013,
Veridian filed a 2014 cost of service rate rebasing
application with the Ontario Energy Board for rates
effective May 1, 2014.
All VCI investments in distribution assets are reviewed
for prudence by the OEB through cost of service rates
proceedings. Veridian expects that all investments in
the coming years, including smart grid technologies
and connection of new communities, to be fully
recoverable through distribution rates but any future
regulatory decision to limit the recovery of such costs
could negatively impact operation results.
The interests of external stakeholders are argued
before the Board and these interests, if supported,
may have the impact of reducing the returns that VCI
earns from distribution rates charged to customers.
Additionally, VCI’s distribution revenue declines as
CDM targets are met or exceeded and the LRAM
established by the OEB may not fully compensate
VCI for lost revenue.
Credit Risk
As a result of the Green Energy Act, Veridian’s
permitted business activities were expanded to include
the ownership and operation of generation and energy
storage facilities under established criteria.
The rates that VCI may charge for distribution services
are set or approved by the OEB through an incentive
regulation mechanism (“IRM”). Under IRM base rates
are set through a cost of service application once every
five years on a forecast basis. In the subsequent years
in which no cost of service application is filed, rates
are adjusted by an inflation factor net of a deemed
productivity factor and a stretch factor determined
by the relative efficiency of an LDC.
VCI is subject to credit risk with respect to non-payment
by customers. VCI and other Ontario LDC’s are
billing agents for a number of different organizations.
In addition to billing customers for distribution of
electricity charges, Veridian bills and collects on
behalf of others: charges for the electricity commodity
and other charges (Independent Electricity System
Operator - “IESO”); and transmission of electricity
(Hydro One and IESO). VCI bears the entire credit risk
for collection of all these charges.
VCI mitigates this risk by employing the maximum credit
protection measures allowed by the Board including:
security deposits, late payment penalties, pre-payment,
disconnection and load limiters. VCI’s customer base
is diversified and at year-end no single customer
accounted for more than 1% of accounts receivable.
Furthermore, with this diversification credit losses related
to an industry segment downturn are not expected
to have a material impact upon earnings. The credit
status of all accounts, with particular emphasis on the
largest accounts, is reviewed frequently. The economic
recovery is modest resulting in greater risk to the
Corporation for losses related to business bankruptcies
and downturns in business energy consumption.
Weather and Equipment Failure
VCI’s major electric distribution grid consists of
substations, overhead lines; including poles, wires,
transformers, and switches, and underground lines;
including cables and surface mounted or underground
transformers and switches. Wind, ice, snow and
extreme weather conditions can have damaging
impacts, particularly on the overhead distribution
system as evidenced with the July 2013 wind storm
in Gravenhurst, and the December 2013 ice storm
in VCI’s southern service areas.
While underground systems are less susceptible
to certain weather risks, they also have inherent failure
modes and failures can have greater impacts and
longer restoration times with higher costs. Most assets
in new residential subdivisions are of underground
design, and local services in heavily treed areas
may be placed underground where cost justified,
all contributing to improved reliability.
To manage risks, VCI follows targeted cyclic programs
for vegetation control in the overhead areas, as well
as a full program of equipment testing and inspection
activities on all assets. When combined with
condition-based replacement activities as an integrated
activity, these programs improve system performance,
minimize premature failures, and improve resistance
to adverse weather. To help focus these activities and
maximize the effectiveness of annual expenditures,
specific work plans are developed using localized
performance metrics.
management’s
discussion
and analysis
A significant milestone in a documented Asset
Condition Assessment (“ACA”) was completed in
mid 2013. This represents a major step forward from
a continuous improvement perspective as it allows
Veridian to begin to transition from its qualitative
approach to a more quantitative approach in making
lifecycle decisions using the results of the ACA as
inputs into Veridian’s asset management process.
The ACA is an assessment of the health of Veridian’s
current major distribution assets categories and will
serve as the basis of the Asset Management Plan
(“AMP”). The ACA output results will continue to be
improved as more asset condition data is collected
over the next three years. Overall, the AMP will
introduce a formal documented process, rationale
and decision-making structure on capital investment
for equipment replacement on a proactive basis that
balances the capital cost to replace the equipment
against managing the risk of failure of the equipment.
Energy Supply Risk
VCI relies upon the provincially administered power
grid for the supply of electricity. The Electricity
Restructuring Act, 2004 outlines the mandate of
the OPA to ensure an adequate, reliable and secure
supply of electricity in Ontario for the medium and
long term. The IESO is responsible for the operation
and reliability of the power system. Veridian is also
served via combinations of Hydro One-owned
transmission and distribution assets. Consequently,
there is significant electricity supply reliance upon
these three organizations. To the extent that these
three organizations are unable to fulfill their mandate,
VCI would be exposed to the risk associated with
an inadequate supply or a decline in reliability.
accounting estimates
Management uses judgement in assessing certain
accounting estimates required to determine reported
amounts for assets, liabilities, revenues and costs and
related disclosure of contingencies at the date of the
financial statements. Management bases its estimates
and judgements on historical experience, current
conditions and various other assumptions believed to
be reasonable under the circumstances. Actual results
may differ from these estimates. The following critical
accounting estimates were used in the preparation of
Veridian’s financial statements.
Estimated Service Lives
Veridian has estimated service lives of property,
plant and equipment, as well as intangible assets
as found in the corporation’s accompanying notes
to the consolidated financial statements, Notes 1(f)
and 1(g) respectively.
Regulatory Assets and Liabilities
Regulatory assets amount to $10.5 million and relate
primarily to: retail settlement variances that have
accrued since January 1, 2011, deferral amounts,
and the costs of stranded legacy meters and smart
meter receivables that are expected to be recovered
from future rates. Management believes that the costs
allocated to these variance and deferral accounts
meet the tests of prudence as established by the
OEB through past hearings and that these costs
will be fully recoverable.
Regulatory liabilities of $13.8 million relate to:
$7.3 million for future income taxes, $6.3 million due
to changes in estimates of useful lives of capital assets
and allocation of indirect costs subject to capitalization,
and $0.2 million due to other deferred credits. These
regulatory liabilities are expected to be returned to
customers through future rates.
21
Allowance for Doubtful Accounts
Accounts receivable and unbilled revenue
totalled $56.9 million as at December 31, 2013.
Past experience with the collection of accounts
has been used to estimate amounts that may not
be collected. An allowance of $960 thousand is
estimated as a reasonable amount of receivables
that may not be collected.
Unbilled Revenue
Unbilled revenue balances are based upon estimates
of customer electricity consumption to the end of
the financial reporting period. Electricity consumption
estimates are required at the end of the financial
reporting period when meter readings are unavailable.
These estimates are based on the historical usage of
customer electricity consumption. Unbilled revenue
totalled $30.3 million as at December 31, 2013
and consists of commodity and distribution revenue
components.
Employee Future Liability
Veridian has commitments to pay post-retirement
benefits for employees. Actuarial assumptions are
employed for the valuation of this future liability.
The assumptions were determined by management
recognizing the recommendations of actuaries.
Goodwill
Accounting principles require that goodwill be
assessed for impairment. Management has reviewed
the goodwill related to acquisitions and believes
that the value ascribed to goodwill is not impaired.
Management relies upon discounted cash flow
projections and other fair market value evidence
to support this review.
future accounting
changes
Transition to International Financial
Reporting Standards (“IFRS”)
In accordance with Canadian generally accepted
accounting principles (“GAAP”), Veridian currently
follows specific accounting policies unique to rateregulated entities. Veridian recognizes regulatory assets
and liabilities in its financial statements. Regulatory
assets and liabilities generally represent settlement
variances arising from differences in amounts collected
by a rate-regulated entity from its customers on behalf
of another unrelated entity and the amounts billed by
the unrelated entity to the rate-regulated entity.
In February 2008, the Canadian Accounting Standards
Board (“AcSB”) announced the adoption of IFRS for
publicly accountable enterprises in Canada for fiscal
years beginning on or after January 1, 2011.
On July 23, 2009, the International Accounting
Standards Board (“IASB”) issued an Exposure Draft
– Rate-Regulated Activities (“ED”) regarding the
proposed standard for the recognition, measurement,
presentation and disclosure of rate-regulated activities
(“RRA”) under IFRS. The IASB received a significant
number of comment letters in response to this ED
with divergent views on RRA and the IASB concluded
that the matter would take some time to resolve and
decided to defer further consideration of the ED.
The RRA project was suspended in 2010.
On September 10, 2010, the AcSB granted an
option to permit rate-regulated entities to defer IFRS
implementation to January 1, 2012 and then again on
March 30, 2012, the AcSB announced its decision
to extend, by an additional year, the mandatory
changeover date to IFRS for rate-regulated entities
to January 1, 2013.
management’s
discussion
and analysis
In September 2012, the AcSB announced its decision
to extend, by an additional year, the mandatory
changeover date to IFRS for rate-regulated entities
to January 1, 2014.
At its December 2012 meeting, the IASB considered a
project plan proposal for a Discussion paper (“DP”) and
development of an interim standard for rate-regulated
activities that would permit grandfathering of existing
recognition and measurement policies for those entities
that currently recognize regulatory assets and liabilities
in accordance with their local accounting requirements.
In February 2013, the AcSB decided to extend the
existing deferral of the mandatory IFRS changeover
date for entities with qualifying rate-regulated activities
by an additional year to January 1, 2015.
On January 30, 2014, the IASB issued an interim
Standard, IFRS 14 Regulatory Deferral Accounts
(“IFRS 14”). The standard is effective from January 1,
2016, with earlier application permitted. The aim of
this interim Standard is to enhance the comparability
of financial reporting by entities that are engaged in
rate-regulated activities.
IFRS 14 introduces limited changes to some previous
GAAP accounting practices for regulatory deferral
account balances, which are primarily related to the
presentation of these accounts.
This is a short-term interim solution for first time
adopters of IFRS that recognize regulatory deferral
account balances in accordance with their previous
GAAP. The IASB has a longer-term comprehensive
project for all rate-regulated entities and a DP is
expected to be issued in 2014 Q2.
21
The interim IFRS 14 standard requires:
(a) limited changes to the accounting policies that
were applied in accordance with previous GAAP
for regulatory deferral account balances, which
are primarily related to the presentation of these
accounts; and
(b) disclosures that:
(i) identify and explain the amounts recognized
in the entity’s financial statements that arise
from rate regulation; and
(ii) help users of the financial statements to
understand the amount, timing and uncertainty
of future cash flows from any regulatory deferral
account balances that are recognized.
AcSB deferral for IFRS expires at the end of 2014
and accordingly Veridian will early adopt IFRS 14
on January 1, 2015.
outlook
Veridian will continue to focus on its mission to
provide reliable, efficient, sustainable energy services
to its customers while delivering optimal return on
investment to shareholders and promoting economic
growth in its service communities.
Veridian remains committed to its strategic objectives
of growth and improvement in its core distribution
business, financial strength and solid returns, providing
excellent customer service and reliability and providing
an engaging and safe workplace for its employees.
The corporation’s future sees continued natural
growth and development opportunities such as in
north Pickering (Seaton). Opportunities for growth and
economies of scale through acquisitions, mergers
and potential electricity industry sector restructuring
continue to be investigated, as do investments
in renewable generation and combined heat and
power. Prudent distribution system renewal capital
investments through proactive planned sustainment
programs will replace or refurbish the corporation’s
distribution assets in order that they continue to meet
all corporate and customer performance expectations.
Veridian is able to respond effectively to the changing
environment of the industry, regulatory and legislative
landscapes, pursuing the goals and opportunities
to create an energy conservation culture in Ontario.
Health and safety for our employees and the public
remains a top priority.
Through the leadership of the Veridian Board,
shareholders and executive management team,
Veridian is well positioned to continue its track record of
strong financial performance and operational excellence.
Veridian had planned to adopt IFRS effective January
1, 2012 and as such has substantively completed
its IFRS conversion project which included the
phases of: scoping, evaluation and design, as well as
implementation and review. Veridian has implemented
significant changes such as changing its depreciation
and capitalization policies effective January 1, 2012
to align CGAAP statements with IFRS.
Veridian is examining the recently released IFRS
14 with the new presentation and disclosure
requirements and management’s view is that the
remaining accounting and reporting changes to
convert to IFRS on January 1, 2015 are not significant.
The Corporation’s IFRS conversion work has been
managed in such a way that transition to IFRS will be
smoothly and efficiently completed.
management’s
discussion
and analysis
KPMG LLP
Chartered Accountants
Yonge Corporate Centre
4100 Yonge Street Suite 200
Toronto ON M2P 2H3 Canada
Telephone (416) 228-7000
Fax
(416) 228-7123
Internetwww.kpmg.ca
Independent auditors’ report
To the Shareholders of Veridian Corporation
We have audited the accompanying consolidated financial statements of Veridian Corporation, which comprise
the consolidated balance sheet as at December 31, 2013, the consolidated statements of earnings and retained
earnings and cash flows for the year then ended, and notes, comprising a summary of significant accounting
policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with Canadian generally accepted accounting principles, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
consolidated balance sheet
(In thousands of dollars) December 31, 2013, with comparative figures for 2012
2013
Assets
Current assets:
Cash and cash equivalents
Accounts receivable (note 2)
Inventory
Income taxes recoverable
Prepaid expenses
Current portion of regulatory assets (note 5)
Assets of discontinued operations (note 13)
Other non-current assets
Property, plant and equipment (note 3)
Intangible assets (note 4)
Goodwill
Future income tax assets (note 6)
Regulatory assets (note 5)
Unrealized gain on interest rate swaps (note 20)
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgment, including the assessment of
the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making
those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial
position of Veridian Corporation as at December 31, 2013, and its consolidated results of operations and its
consolidated cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.
$
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities (note 7)
Short-term loan (note 8)
Advance payments - construction deposits
Current portion of regulatory liabilities (note 5)
Developer obligations
Deferred revenue (note 9)
Future income tax liabilities (note 6)
Current portion of long-term debt (note 11)
20,965
55,960
2,089
1,283
1,252
891
68
82,508
2012
$
204
187,085
5,070
8,746
8,166
9,503
1,471
220,245
24,117
57,594
1,704
1,214
893
813
259
86,594
142
177,414
5,368
8,746
11,152
10,625
–
213,447
$
302,753
$
300,041
$
31,248
14,300
1,276
–
1,184
1,695
30
3,356
53,089
$
36,890
1,600
763
3,306
1,509
1,831
30
3301
49,230
Long-term liabilities:
Long-term debt (note 11)
Unrealized loss on interest rate swaps (note 20)
Regulatory liabilities (note 5)
Employee future benefits (note 12)
Customer deposits
Future income tax liabilities (note 6)
Shareholders’ equity:
Share capital (note 14)
Contributed capital
Retained earnings
112,197
–
13,816
2,218
4,829
389
133,449
115,553
2,711
15,995
2,049
5,029
418
141,755
67,260
25
48,930
116,215
67,260
25
41,771
109,056
Contingencies and guarantees (note 16)
Lease commitments (note 17)
$
Chartered Professional Accountants, Licensed Public Accountants
March 27, 2014
Toronto, Canada
21
302,753
See accompanying notes to consolidated financial statements.
On behalf of the Board:
Chair, Board of Directors
Chair, Audit and Risk Management Committee
$
300,041
consolidated
financial
statements
consolidated statement
of earnings and retained earnings
consolidated
financial
statements
consolidated statement of cash flows
(In thousands of dollars) Year ended December 31, 2013, with comparative figures for 2012
(In thousands of dollars) Year ended December 31, 2013, with comparative figures for 2012
2013
2013
Commodity revenue
Commodity cost
$
246,386
(246,386)
–
2012
$
245,349
(245,349)
–
Distribution revenue
48,985
50,608
Gross margin
48,985
50,608
8,778
17,253
10,278
36,309
8,486
16,768
8,758
34,012
12,676
16,596
987
732
4,182
(6,286)
(385)
(864)
981
(67)
(6,272)
(6,222)
12,291
10,374
301
(82)
11,990
10,456
(131)
(268)
Net earnings
11,859
10,188
Retained earnings, beginning of year
41,771
36,283
(4,700)
(4,700)
Expenses:
Operating and maintenance
Administration
Amortization
Operating income before the undernoted
Other income (loss) (note 18)
Finance income
Unrealized gain (loss) on interest rate swaps (note 20)
Interest on long-term debt (note 11)
Earnings before income taxes and discontinued operations
Income tax expense (recovery) (note 6)
Earnings from continuing operations
Loss from discontinued operations (note 13)
Dividends paid (note 15)
Retained earnings, end of year
$
48,930
$
41,771
Cash provided by (used in):
Operating activities:
Earnings from continuing operations
Items not affecting cash:
Amortization of property, plant and equipment
Amortization of intangible assets
Increase in employee future benefits obligation
Future income taxes
Net change in regulatory assets/liabilities
Unrealized loss (gain) on interest rate swaps
Other non-current assets
$
Change in non-cash operating working capital (note 19)
Financing activities:
Increase (decrease) in long-term debt
Increase (decrease) in short-term loan
Dividends paid
Increase (decrease) in customer deposits and contractor obligations
Investing activities:
Additions to property, plant and equipment, net of contributed capital
Additions to intangible assets
Increase (decrease) in cash and cash equivalents from continuing operations
Increase (decrease) in cash from discontinued operations (note 13)
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental cash flow information:
Interest received
Interest paid
Income taxes paid
21
2012
11,990
$
10,456
8,179
2,445
169
104
(1,588)
(4,182)
(62)
17,055
(4,769)
12,286
7,568
1,295
368
(1,343)
1,112
67
136
19,659
(5,591)
14,068
(3,301)
12,700
(4,700)
(200)
4,499
12,004
(3,400)
(4,700)
115
4,019
(17,850)
(2,147)
(19,997)
(14,480)
(2,016)
(16,496)
(3,212)
1,591
60
(3)
24,117
22,529
$
20,965
$
24,117
$
365
6,073
290
$
332
5,667
2,026
notes to consolidated financial statements
(In thousands of dollars) Year ended December 31, 2013
Veridian Corporation (the “Corporation”) was incorporated on July 1, 1999 under the Ontario Business
Corporations Act and was formed to conduct electricity distribution and non-regulated utility service ventures
through its subsidiaries.
1. Significant accounting policies:
(a) Basis of presentation:
These consolidated financial statements have
been prepared in accordance with Canadian
generally accepted accounting principles
(“Canadian GAAP”), including accounting
principles prescribed by the Ontario Energy
Board (“OEB”) in the handbook “Accounting
Procedures Handbook for Electric Distribution
Utilities” and include the accounts of the
Corporation and its wholly owned subsidiaries,
Veridian Connections Inc. (“VCI”) and Veridian
Energy Inc.
(b) Revenue recognition:
(i) Electricity distribution and sale:
Revenue from the sale of electricity is
recognized on the basis of cyclical billings
based on electricity usage and includes
an estimate of unbilled revenue accrued in
respect of electricity delivered but not yet
billed. Unbilled revenue included within
accounts receivable as at December
31, 2013 amounted to $30,264 (2012 $28,056). Actual results could differ from
estimates made of actual electricity usage.
(ii) Other revenue:
Other revenue, which includes revenue
from electricity distribution-related services,
is recognized as services are rendered.
21
(iii)Deferred revenue:
Amounts received in advance are presented
as deferred revenue (note 9).
(c) Rate setting:
VCI is regulated by the OEB under authority of
the Ontario Energy Board Act, 1998. The OEB
is charged with the responsibility of approving
or setting rates for the transmission and
distribution of electricity and the responsibility
for ensuring that distribution companies fulfill
obligations to connect and service customers.
The OEB has the general power to include
or exclude costs, revenue, losses or gains
in the rates of a specific period, resulting
in the change in the timing of accounting
recognition from that which would have
applied in an unregulated company. Such
change in the timing involves the application
of rate-regulated accounting, giving rise
to the recognition of regulatory assets and
liabilities. The Corporation’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 Corporation
has recorded regulatory liabilities, which
represent obligations that are expected to
be refunded to customers. Specifically, the
following regulatory treatments have resulted
in accounting treatments that differ from
Canadian GAAP for enterprises operating in
a non-regulated environment:
(i) An amount to represent the cost of funds
used during construction and development
has been applied based on the value of
construction in progress;
(ii) The Corporation records future income
tax assets and a corresponding regulatory
tax liability, as the recovery from, or refund
to, customers is expected to be included
in future distribution rates for its regulated
business activities;
(iii)The Corporation has deferred certain
post-market opening retail settlement
variances which are comprised of the
variances between amounts charged
by the Corporation to customers based
on regulated rates and wholesale rates
incurred for the cost of electricity service;
(iv)The Corporation has deferred certain
variances related to property, plant and
equipment transitional amounts for:
(a) decrease in amortization expense
resulting from changes in useful lives
of assets, and (b) increase in operating
expenses resulting from changes in
estimation and allocation of overheads;
(v)The Corporation has deferred stranded
meter costs which are recorded in the
smart meter variance accounts, as directed
by the OEB; and
(vi)The Corporation has deferred costs
related to: International Financial Reporting
Standards (“IFRS”) implementation,
smart grid costs, lost revenue adjustment
mechanism costs and ice storm costs.
(d) Cash and cash equivalents:
Cash and cash equivalents are defined as
cash and bank term deposits or equivalent
financial instruments with original maturities
upon issue of less than 90 days.
(e)Inventory:
Inventory, which consists of parts and
supplies acquired for internal construction or
consumption, is valued at the lower of cost
and net realizable value. Cost is determined
on a weighted moving average basis.
Any impairment losses taken on inventory
are reversed if and when net realizable value
subsequently recovers. Major spare parts and
standby equipment are recorded as part of
property, plant and equipment and amortized
once they are put into use.
(f) Property, plant and equipment:
Property, plant and equipment are recorded
at cost and include contracted services,
materials, labour, engineering costs, overheads
and an allowance for the cost of funds used
during construction when applied. Certain
assets may be acquired or constructed with
financial assistance in the form of contributions
from developers or customers. The OEB
requires that such contributions be offset
against the related asset cost.
Upon energization of residential subdivision
assets, a developer liability is accrued (as per
the offer to connect contract) for the amounts
payable to the developer for the Corporation’s
investment in the subdivision.
When identifiable assets, such as buildings,
distribution station equipment and office
equipment, are retired or otherwise disposed
of, their original cost and accumulated
amortization are removed from the accounts
and the related gain or loss is included in the
operating results for the related fiscal year.
The cost and related accumulated amortization
of a pool of like assets, such as transmission
and distribution system, are removed at the
end of their estimated service lives.
consolidated
financial
statements
During 2012, the Corporation changed its
estimates of useful lives and componentized
certain items of property, plant and equipment.
The changes have been applied prospectively.
The change in the basis of amortization has
had the effect of decreasing amortization
expense by approximately $4,244 in 2013
(2012 - $5,210).
In addition, during 2012, the Corporation
changed its estimation and allocation of
indirect costs subject to capitalization,
resulting in a change in estimation of costs
directly attributable to capital projects. These
changes have been applied prospectively and
result in an increase in operating expenses by
approximately $2,026 in 2013 (2012 - $1,102).
In compliance with OEB directions, the
changes mentioned above were accounted
for through a variance account, resulting in
an increase in regulatory liability (note 5) and
decrease in other income by $2,218 in 2013
(2012 - $4,108) (note 18).
Amortization of property, plant and equipment
is charged to operations on a straight-line
basis over their estimated service lives at
the following annual rates:
Land rights
2.0% - 6.7%
Distribution station
equipment
1.7% - 4.0%
Transmission and
distribution system
1.7% - 10.0%
Office equipment
Computer hardware
Vehicle fleet
Renewable power
generation
4.0% - 6.7%
10.00%
20.0% - 33.3%
6.7% - 16.7%
4.00%
Construction in progress comprises property,
plant and equipment under construction,
assets not yet placed into service and
21
Assets under construction, land, major spare
parts and standby equipment are not subject
to amortization.
associated with the asset are compared to the
carrying amount of the asset to determine if a
write-down is required. The impairment loss is
measured as the amount by which the carrying
amount of the asset exceeds its fair value.
(i)Goodwill:
An allowance for the cost of funds used during
the construction period has been applied.
The rate applied is equal to the rate prescribed
in each quarter by the OEB. The average rate
for the current fiscal year in respect of long-term
borrowings is 3.35% (2012 - 3.57%).
When portions of the Corporation’s distribution
facilities are replaced or relocated, the asset
is charged with the costs of construction less
the salvage value of any material returned to
inventory. Amortization is then provided at
the same rate used for the original asset.
Goodwill relates to the cost of acquired local
distribution companies and non-regulated
businesses in excess of fair value of the
net identifiable assets purchased and is
evaluated for impairment on an annual basis,
or more frequently, if circumstances require.
Goodwill impairment is assessed based on
a comparison of the fair value of the assets
acquired to the underlying carrying value of
those net assets, including goodwill, with any
write-down of the carrying value of goodwill
being charged to operations. The Corporation
has determined that goodwill is not impaired.
(g) Intangible assets:
(j) Customer deposits and advance payments:
Amortization of intangible assets is provided
on a straight-line basis over the estimated
service lives at the following annual rates:
Application software and
miscellaneous intangible plant
33.3%
Internally generated software
20.0%
2.00%
Buildings
Meters
pre-construction activities related to specific
projects expected to be constructed.
Software in development is not subject to
amortization.
Customers may be required to post security
to obtain electricity or other services.
Interest is paid on customer balances at
rates established from time to time by the
Corporation. The current portion of customer
deposits are included in accounts payable and
accrued liabilities.
The Corporation receives advance payments
from customers and recognizes it as a liability
until the construction project is completed.
defined benefit obligations. The Corporation
applies the projected benefit method, prorated
on service and based on management’s best
estimates. Under this method, the projected
post-retirement benefit is deemed to be
earned on a pro rata basis over the years of
service in the attribution period commencing at
date of hire, and ending at the earliest age the
employee could retire and qualify for benefits.
(l) Income taxes:
Under the Electricity Act, 1998, the
Corporation is required to make payments
in lieu of corporate income taxes (“PILs”)
to Ontario Electricity Financial Corporation.
These payments are calculated in accordance
with the rules for computing income and other
relevant amounts contained in the Income Tax
Act (Canada) and the Corporations Tax Act
(Ontario) as modified by the Electricity Act,
1998, and related regulations. References in
these financial statements to income taxes are
with respect to PILs.
The Corporation uses the asset and
liability method of accounting for the tax
effect of temporary differences between
the carrying amount and the tax bases
of the Corporation’s assets and liabilities.
Temporary differences arise when the
realization of an asset or the settlement of a
liability would give rise to either an increase
or decrease in the Corporation’s income
taxes payable in the year or a later period.
(h) Impairment of long-lived assets:
(k) Pension and other post-employment benefits:
Long-lived assets are reviewed for impairment
whenever events or circumstances indicate
that the carrying amount of the long-lived
assets is not recoverable. Any resulting
impairment loss is recorded in the year in
which the impairment occurs. In the event that
facts and circumstances indicate that property,
plant and equipment may be impaired,
an evaluation of recoverability is performed.
For purposes of such an evaluation, the
estimated future undiscounted cash flows
The Corporation accounts for its participation
in the Ontario Municipal Employees Retirement
System (“OMERS”), a multi-employer
public sector pension fund, as a defined
contribution plan.
The Corporation actuarially determines
the cost of other employment and postemployment benefits offered to employees.
These unfunded plans are accounted for as
Future income tax assets and liabilities are
measured using enacted or substantively
enacted tax rates expected to apply to
taxable income in the years in which those
temporary differences are expected to be
recovered or settled. The effect on future
tax assets and liabilities of a change in tax
rates is recognized in earnings in the year that
includes the date of enactment or substantive
enactment. A valuation allowance is recorded
against a future income tax asset to the
extent that the Corporation determines that
consolidated
financial
statements
it is more likely than not that a future income
tax asset will not be realized in the future.
Where the Corporation expects the future
income taxes to be recovered from or
refunded to customers as part of the rate
setting process, the future income tax assets
and liabilities result in regulatory liabilities and
assets, respectively; otherwise, the future
income tax assets and liabilities result in a
future tax provision that is charged to the
statement of earnings and retained earnings.
(m)Use of estimates:
The preparation of financial statements
requires management to make estimates and
assumptions that affect the reported amounts
of assets and liabilities and disclosure of
contingent assets and liabilities at the date
of the financial statements and the reported
amounts of revenue and expenses during
the year. Accounts receivable and regulatory
assets are reported based on amounts
expected to be recovered and an appropriate
allowance for unrecoverable amounts.
Inventory is recorded net of provisions for
obsolescence. Other significant areas
requiring the use of management estimates
relate to unbilled revenue, revenue recognition,
employee future benefits, developer obligations
and future income taxes. Due to inherent
uncertainty involved in making such estimates,
actual results reported in future years could
differ from those estimates recorded in
preparing these financial statements, including
changes as a result of future decisions made
by the OEB or the Minister of Energy.
(n) Financial instruments:
The Corporation categorizes its financial
instruments as follows:
Accounts receivable
Loans and
receivables
Due from related parties
Loans and
receivables
Accounts payable and
accrued liabilities
Other financial
liabilities
Short-term loan
Other financial
liabilities
Advance payments construction deposits
Other financial
liabilities
Other financial
liabilities
Long-term debt
Other financial
liabilities
Customer deposits
Other financial
liabilities
(o) Derivative financial instruments:
Derivative financial instruments are measured
at their fair value upon initial recognition
and on each subsequent reporting date.
The Corporation has not elected to apply
hedge accounting for its interest rate swap
contracts and does not enter into derivative
agreements for speculative purposes.
Changes in the fair value of the derivatives
are recorded each year in the consolidated
statement of earnings and retained earnings.
(p) Capital disclosures:
The Corporation’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 the
appropriate financial returns. As at December
31, 2013, the Corporation’s definition of capital
includes: shareholders’ equity; long-term
debt, including the shareholders’ promissory
notes, and a short-term loan facility from a
Canadian chartered bank.
(q) Future accounting changes:
Transition to International Financial Reporting
Standards:
The Canadian Accounting Standards Board
(“AcSB”) adopted a new strategic plan that
will have Canadian GAAP converge with IFRS,
effective January 1, 2011.
On September 10, 2010, the AcSB granted
an option to permit rate-regulated entities
to defer IFRS implementation to January 1,
2012 and then again on March 30, 2012, the
AcSB announced its decision to extend, by
an additional year, the mandatory changeover
date to IFRS for rate-regulated entities to
January 1, 2013. This decision was made
in light of discussions that the International
Accounting Standards Board (“IASB”) may
address rate-regulated activities as part of
its future agenda. In September 2012, the
AcSB decided to extend the existing deferral
of the mandatory IFRS changeover date for
entities with qualifying rate-regulated activities
by an additional year to January 1, 2014.
The AcSB extended the deferral because an
interim solution for entities with rate-regulated
activities remained a possibility.
On February 13, 2013, the AcSB decided to
extend the existing deferral of the mandatory
IFRS changeover date for entities with
qualifying rate-regulated activities by an
additional year to January 1, 2015. The
decision was taken in anticipation of the IASB
issuing an interim ifrs on rate-regulated
activities by the end of 2013 and in order to
provide first-time adopters of IFRS adequate
time to prepare comparative figures based on
such a standard.
On January 30, 2014, the IASB issued
an interim standard, IFRS 14, Regulatory
Deferral Accounts (“IFRS 14”), to enhance the
comparability of financial reporting by entities
that are engaged in rate-regulated activities.
The interim standard introduces limited new
presentation requirements and permits first-time
adopters to continue to recognize amounts
related to rate regulation in accordance with
their previous Canadian GAAP requirements
and is effective from January 1, 2016, with early
application permitted.
AcSB deferral for IFRS expires at the end of
2014 and, accordingly, the Corporation will
avail early adoption of IFRS 14 and:
(i) Adopt IFRS on January 1, 2015;
(ii) Present comparative figures for 2014
under IFRS; and
(iii)Present an opening balance sheet
on January 1, 2014 under IFRS.
2. Accounts receivable:
Energy revenue
Unbilled revenue
Project expenditures
recoverable from
customers
Other
Less allowance for
doubtful accounts
During the year, there have been no changes
to how the Corporation assesses its capital
structure.
21
2013
2012
$ 20,267
30,264
$ 22,605
28,056
2,103
4,286
56,920
3,588
3,998
58,247
960
653
$ 55,960
$ 57,594
consolidated
financial
statements
3. Property, plant and equipment:
5. Regulatory assets and liabilities:
Cost
Land
Land rights
Buildings
Distribution station equipment
Transmission and distribution system
Meters
Office equipment
Computer hardware
Vehicle fleet
Renewable power generation
Construction in progress
Contributions in aid of construction
$
1,777
771
23,316
38,399
345,536
19,831
4,777
7,714
10,696
671
7,339
(66,273)
$ 394,554
2013
Net book
value
Accumulated
amortization
$
–
380
7,641
18,172
172,624
7,437
3,624
6,819
7,029
40
–
(16,297)
$ 207,469
$
1,777
391
15,675
20,227
172,912
12,394
1,153
895
3,667
631
7,339
(49,976)
$ 187,085
2012
Net book
value
$
1,777
393
16,091
18,712
161,169
12,742
1,313
807
3,994
709
5,237
(45,530)
2013
Regulatory assets:
Other deferred
costs (a)
$
Cost
Application software and other
Construction in progress related
to application software and other
Capital contributions
(notes 7(a) and 16(b))
$
$
17,942
2013
Net book
value
$
14,405
$
3,537
2012
Net book
value
$
3,953
321
–
321
203
1,212
–
1,212
1,212
19,475
$
14,405
$
5,070
$
5,368
2,070
5,109
Retail settlement
and low voltage
variances (c)
3,613
4,788
10,522
11,967
Valuation allowance
128
529
Amounts expected
to be settled in
the next year (a)
891
813
1,019
1,342
$
9,503
$ 10,625
$
7,320
$ 10,173
23
61
6,473
4,635
Less:
Regulatory liabilities:
Future income tax
assets
Other regulatory
liabilities (e)
Accumulated
amortization
$
4,325
Retail services
variances (d)
4. Intangible assets:
2,584
Smart meter (b)
$ 177,414
During the year, $95 (2012 - $197), representing an allowance for the cost of funds used during construction,
was capitalized.
2012
Balance of
amounts approved
to be refunded to
customers through
distribution rates
Less amounts
expected to
be settled in
the next year (f)
$
–
4,432
13,816
19,301
–
3,306
13,816
$ 15,995
(a) Deferral accounts have been established for
one-time administrative costs during transition
to IFRS of $414, smart grid costs of $318, and
lost revenue adjustment mechanism costs of
$294. Also included in other deferred costs are
approved recoverable amounts of $916. In 2013,
a new variance account has been established for
future recovery of ice storm costs of $642.
21
(b) The net book value of stranded meter costs
remain in the smart meter variance accounts.
The Corporation has filed for recovery of
stranded meter costs of $4,325 in its 2014
cost of service application.
(c) In 2013, the OEB approved the disposition
of the Corporation’s retail settlement variance
accounts as at December 31, 2011.
The retail settlement variances for 2013 are
variances that have accrued since January 1,
2012. Specifically, these amounts include
variances between the amount charged by
the Independent Electricity System Operator
(“IESO”) for the operation of the markets
and grid, as well as various wholesale
market settlement charges and transmission
charges, as compared to the amount billed to
consumers based on the OEB-approved rates.
This amount also includes variances between
the amounts charged by Hydro One for low
voltage services and the amount billed to
consumers based on the OEB-approved rates.
In the absence of rate-regulated accounting,
interest expense in 2013 would have been
lower by $255 (2012 - $712) and interest
revenue in 2013 would have been lower by
$359 (2012 - $641).
(d) The retail services variance is the difference
between the revenue charged to retailers
and the retail services costs associated with
providing the retail services.
(e) Other regulatory liabilities include $6,326 as
a variance for property, plant and equipment
transitional amounts for decrease in
amortization expense resulting from changes in
useful lives of assets and increase in operating
expenses resulting from changes in estimation
and allocation of overheads effective January 1,
2012 due to anticipated changeover to IFRS,
and $147 for other deferred variance amounts.
(f) The amounts expected to be settled are
approved dispositions for retail settlement
variances up to December 31, 2010.
consolidated
financial
statements
Management continues to assess the likelihood
of recovery of its regulatory assets and believes
that it is probable that its regulatory asset and
liability balances will be factored into setting of
future rates. In the event that recovery from future
rates is no longer considered probable or portions
of amounts deferred are determined not to be
recoverable, such amounts will be expensed in
the year this determination is made.
6. Income taxes:
The provision for income taxes 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 effective tax rates is provided as
follows:
2013
Earnings before
provision for
income taxes
anddiscontinued
operations
$ 12,291 $
Federal and
Ontario statutory
income tax rate
Provision for
income taxes at
statutory rate
26.50%
$
Decrease
resulting from:
Temporary
differences
expected to be
recovered from
customers
Legislative change
in tax rate
Change in
valuation allowance
Other miscellaneous
Income tax
expense (recovery)
21
3,257 $
(1,547)
$
2012
10,374
26.50%
2,749
(1,891)
–
(43)
(75)
(1,334)
(77)
(820)
301 $
(82)
2013
Allocated:
Current
Future, operating
activities
Future, discontinued
activities
Total income tax
expense (recovery)
$
$
201
2012
$
1,317
100
(1,343)
–
(56)
301
$
Future income
tax assets:
Property, plant
and equipment
and intangible
assets
Employee future
benefits
Non-capital losses
and other
Unrealized loss on
interest rate swaps
Deferred revenue
and contingent
liability
$
Valuation allowance
Total future income
tax assets
Future income tax
liabilities:
Regulatory assets
and liabilities
Unrealized gain on
interest rate swaps
Net future income
tax assets
$
2012
7,410
$ 10,294
800
739
76
77
–
718
886
9,172
(191)
977
12,805
(271)
8,981
12,534
844
1,830
390
1,234
–
1,830
7,747
$ 10,704
7. Accounts payable and accrued
liabilities:
Power bill accrual
Current portion of
customer deposits
Customer credit
balances
Other accounts
payable and
accrued liabilities
Hydro One
contractual
obligation (a)
(a) Uncommitted revolving demand credit facility.
The facility at all times is required to be the
lesser of $20,000 with a letter of credit (“L/C”)
carve-out availability of up to $807;
(b) Committed reducing term facility with a credit
limit of $20,000 and amortization term of
10 years (note 11);
(c) Committed reducing term facility with a credit
20 years with an optional exit strategy at
10 years and 15 year (note 11); and
(82)
Future income tax assets and liabilities arise from
differences between the carrying amounts and tax
bases of the Corporation’s assets and liabilities.
The tax effects of these differences are as follows:
2013
The Corporation has losses for income tax
purposes of $217 (2012 - $191) available to
reduce future years’ income for tax purposes,
which will expire between 2031 to 2033. The
potential future tax benefit of these losses has
not been recognized since management has
determined that it is more likely than not that these
amounts will not be realized in the foreseeable
future.
2013
2012
$ 14,720
$ 18,074
430
1,153
6,346
6,767
8,540
9,684
1,212
1,212
$ 31,248
$ 36,890
(a) The Corporation is party to a connection and
cost recovery agreement with Hydro One
Networks Inc. (“Hydro One”) related to the
construction by Hydro One of a transformer
station designed to meet the Corporation’s
anticipated electricity load growth (notes 4
and 16(b)). Hydro One is expected to perform
a true-up, based on actual load at the end of
the fifth, tenth and fifteenth anniversaries of
the in-service date.
8. Credit facilities and short-term loan:
As at December 31, 2013, the Corporation had
the following external credit facilities with
a Canadian chartered bank (the “Bank”):
(d) Committed reducing term facility with a credit
30 years with an optional exit strategy at
10 years and 15 years (note 11).
The financial covenants for the above facilities
require a funded debt to capitalization ratio of
no greater than 0.60:1, and maintain a debt
service coverage ratio of not less than 1.20:1.
The Corporation has been in compliance with
all the covenants included in its long-term debt
agreements and the short-term loan.
As at December 31, 2013, $14,300 was
drawn out of the facility (a); $12,101
was outstanding out of the facility (b);
$27,923 was outstanding out of facility
(c); and $14,735 was outstanding out of
the facility (d) above. To cover the risk of
fluctuating interest rates, facilities (b), (c)
and (d) were structured with interest rate
swap agreements with the Bank effectively
converting the obligations into fixed interest
rate loans of approximately 4.76%, 4.24%
and 3.99%, respectively.
The Corporation utilized $807 to issue an
irrevocable L/C in favour of the IESO. The
IESO requires all purchasers of electricity in
Ontario to provide security to mitigate the
risk of their default based on their expected
purchases from the IESO-administered spot
market. The IESO could draw on the L/C if
the Corporation defaults on its payments.
consolidated
financial
statements
2013
Revolving,
uncommitted
demand credit
facility with
a Canadian
chartered bank
sat prime rate
$ 14,300 $
2012
1,600
Interest on long-term debt includes interest of
$3,460 (2012 - $3,458) on the notes paid to
the shareholders.
At December 31, 2013, accounts receivable
include $782 (2012 - $952) due from the
shareholders.
11. Long-term debt:
9. Deferred revenue:
2013
Deferred revenue represents the balance at
year end of unearned revenue from funding
received from the Ontario Power Authority
(“OPA”) to deliver OPA Conservation and Demand
Management (“CDM”) programs. On February 3,
2011, the Corporation entered into an agreement
to deliver these CDM programs. All programs
to be delivered under the OPA agreement are
expected to be fully funded and paid in advance
by the OPA.
10.Related party transactions:
The Corporation provides electricity and services
to its principal shareholders, the Town of Ajax,
the Municipality of Clarington, the City of
Pickering and the City of Belleville (collectively,
the “shareholders”). Electrical energy is sold to
the shareholders at the same prices and terms as
other electricity customers consuming equivalent
amounts of electricity. The Corporation also
provides power line maintenance services to the
shareholders on a contract basis. The charges
for these services are at rates similar to those
charged to other customers of maintenance
services. A summary of amounts charged by the
Corporation to the shareholders is as follows:
2013
Electrical energy
and services
$
7,219 $
Notes payable to
shareholders, due on
November 1, 2039,
at a rate equal to
the OEB-deemed
long-term debt rate,
less 30 basis points
Notes payable to
shareholders, due on
December 31, 2015,
at a rate equal to
the greater of 6%
or the OEB-deemed
long-term debt rate
Long-term debt
from a Canadian
chartered bank,
maturing on
November 3, 2031
(note 8)
Long-term debt
from a Canadian
chartered bank,
maturing on
November 23, 2019
(note 8)
Long-term debt
from a Canadian
chartered bank,
maturing on
December 20, 2032
(note 8)
2012
6,464
Less current portion
2012
The notes payable with the maturity date of
December 31, 2015 are convertible on or before
the maturity date at the option of the noteholders
on the basis of one common share for each
$1,000 of principal amount.
Scheduled payments for the next five years and
thereafter are as follows:
$
43,588 $
43,588
2014
17,206
17,206
$
3,356
2015
20,620
2016
3,473
2017
3,535
2018
3,600
Thereafter
12.Employee benefits:
(a)Pensions:
During 2013, the Corporation made contributions
totalling $1,959 (2012 - $1,717) to OMERS.
(b) Employee future benefits:
The Corporation pays certain benefits on behalf
of its retired employees. The Corporation
recognizes these post-retirement costs in
the period in which the employees render
the services.
A retiree health spending account (“HCSA”)
was implemented in the collective agreement
between the Corporation and the International
Brotherhood of Electrical Workers effective
April 1, 2011 to March 31, 2015.
Information about the Corporation’s noncontributory defined benefit plan to fund life
insurance and health and dental care benefits
and a retiree HCSA is as follows:
80,969
2013
115,553
Less current portion
27,923
Accrued benefit
liability recognized
at January 1
Current service
costs and interest
expense on accrued
benefit obligation
Benefit payments
3,356
$ 112,197
28,942
Interest on long-term debt comprises:
2013
12,101
14,118
14,735
15,000
115,553
118,854
3,356
3,301
$ 112,197 $ 115,553
21
The notes payable with the maturity date of
November 1, 2039 are repayable prior to the
maturity date based on certain conditions. The
noteholders have the right to demand repayment
of this note (in whole or in part) at any time upon
six months prior written notice to the Corporation
provided that a duly enacted resolution or by-law
is passed by the noteholders certifying that the
funds are required for municipal purposes.
Interest on:
Notes payable
and loans
Regulatory liabilities
Customer deposits
and other
$
Less allowance for
funds used during
construction
$
5,924
255
2012
$
5,537
712
202
6,381
220
6,469
95
197
6,286
$
consolidated
financial
statements
Accrued benefit
liability at
December 31
2012
$ 2,049 $ 1,681
232
(63)
424
(56)
$ 2,218 $ 2,049
The amounts presented are based upon
an actuarial valuation performed as at
December 31, 2011 with a measurement
date of January 1, 2011. The next valuation
is expected to be performed for the year
ending December 31, 2014.
6,272
The main actuarial assumptions employed
for the valuations are as follows:
15.Dividends:
Summarized financial information for the
discontinued operations is as follows:
(b) Contractual obligation - Hydro One
Networks Inc.:
The Corporation’s current dividend policy states:
(i) General inflation:
Future general inflation levels, as measured
by changes in the Consumer Price Index,
are assumed at 2.00% for future years.
(ii) Interest (discount) rate:
Amounts were determined using an annual
discount rate of 4.00% (2012 - 4.00%).
(iii)Salary levels:
Future general salary and wage levels were
assumed to increase at 3.60% (2012 3.60%) per annum.
(iv)Health and dental care:
The health and dental care cost increases
are 7.25% and 5.00% (2012 - 7.63% and
5.00%), respectively.
2013
2012
Current assets
$
68
$
259
(a) a base annual dividend to the shareholders be
set at $4,700 from 2012 to 2016;
Revenue
$
–
$
163
(b) the base dividend to the shareholders may be:
Expenses:
Operating
131
207
Loss before income taxes
(131)
(44)
–
(224)
(131) $
(268)
PILs of corporate income
taxes
Loss from discontinued
operations
Statement of cash flows:
Cash provided by
(used in) discontinued
operations:
Operating activities
$
On August 15, 2011, the Corporation disposed
of certain assets and liabilities previously
employed in its water heater and sentinel lights
business as operated by Veridian Energy Inc.
Under the terms of the sale agreement, the
Corporation did not transfer the accounts
receivable or accounts payable of the business
arising prior to August 15, 2011. Consequently,
at December 31, 2013, assets and liabilities of
discontinued operations represent remaining
amounts related to periods prior to the sale.
As a result of the sale of the water heater and
sentinel lights business, the results of operations
for the discontinued operations have been
reported separately in the consolidated statement
of earnings and retained earnings.
21
(ii) increased if there is any cash surplus
available; and
(iii)increased/decreased due to higher/lower
dividends from VCI to the Corporation.
During 2013, the Board of Directors of the
Corporation declared and paid dividends totalling
$4,700 (2012 - $4,700) to the shareholders.
$
60
$
(3)
16.Contingencies and guarantees:
14.Share capital:
13.Discontinued operations:
(i) increased due to earnings favourable
to the forecast;
2013
2012
Number
Number
of shares Amount of shares Amount
Authorized:
Unlimited
common
shares
Issued
10,000 $ 67,260 10,000 $ 67,260
(a) Insurance claims:
The Corporation is a member of the
Municipal Electric Association Reciprocal
Insurance Exchange (“MEARIE”), which was
created on January 1, 1987. A reciprocal
insurance exchange may be defined as a
group of persons formed for the purpose of
exchanging reciprocal contracts of indemnity
or inter-insurance with each other. MEARIE
provides general liability insurance to member
electric utilities.
Insurance premiums charged to each member
electric utility consist of a levy per $1 of service
revenue subject to a credit or surcharge based
on each electric utility’s claims experience.
Insurance limits of $30,000 per occurrence
are covered by MEARIE.
The Corporation’s subsidiary, VCI, is party to
a connection and cost recovery agreement
with Hydro One related to the construction by
Hydro One of a transformer station designated
to meet VCI’s anticipated electricity load
growth. Construction of the project was
completed during 2007 and VCI connected to
the transformer station during 2008.
To the extent that the cost of the project is
not recoverable from future transformation
connection revenues, VCI is obliged to pay
a capital contribution equal to the difference
between these revenues and the construction
costs allocated to VCI. The construction costs
allocated to VCI for the project are $9,975.
The Corporation has recorded a liability and
a corresponding intangible asset for $1,212
as at December 31, 2013 (2012 - $1,212),
based on management’s best estimate of
the future transformation connection revenue
shortfall. Hydro One is expected to perform
a true-up based on actual load at the end of
the fifth, tenth and fifteenth anniversaries of the
in-service date.
(c) Environmental matters:
In 2008, Environment Canada issued its
final regulations governing the management
of PCBs. Under the regulations, assets
remaining to be disposed of by 2025 primarily
consist of pole-mounted distribution line
transformers. Costs associated with the
removal and destruction of PCB-contaminated
transformers and remediation of chemically
contaminated lands has been incurred over the
past four years. As at December 31, 2013,
the Corporation’s remaining liability was nil
(2012 - $206) for equipment testing and future
remediation. Replacement of contaminated
distribution equipment is expected to be
completed by 2025.
consolidated
financial
statements
19.Change in non-cash operating
working capital:
17. Lease commitments:
Future minimum lease payment obligations under
operating leases are as follows:
2014
$
34
2015
34
2016
27
2017
3
2018
3
Thereafter
66
$
167
2013
Accounts receivable
Income taxes
recoverable
Inventory
Prepaid expenses
Accounts payable and
accrued liabilities
Advance payments construction deposits
Deferred revenue
$
18.Other income (loss):
2013
Third-party revenue
Late payment
charges
Customer charges
Pole rentals
Gain on disposal
of property, plant
and equipment
Foreign exchange
loss
Change in estimates
and allocation of
indirect costs (note 1(f))
$
$
$
304 $
$
(4,802)
(69)
(385)
(359)
(688)
(39)
115
(5,642)
(498)
513
(136)
(325)
213
630
(522)
(4,769)
$
(5,591)
2012
533
489
1,952
471
460
1,793
444
2
17
(13)
(3)
(2,218)
(4,108)
987 $
1,634
2012
(864)
20.Financial instruments:
The carrying amounts of all financial instruments,
except long-term debt, approximate fair values
due to the immediate or short-term maturity of
these financial instruments. It is not practicable
to estimate the fair value of long-term debt as
it is not publicly traded.
(a) Market risk:
Market risk refers primarily to risk of loss that
results from changes in commodity prices,
foreign exchange rates and interest rates.
The Corporation does not have commodity risk
and its foreign exchange risk is considered not
material and is limited to U.S. dollar cash and
cash equivalents holdings of $247 (2012 - $87)
as at December 31, 2013.
The Corporation enters into fixed interest rate
long-term debt agreements to minimize cash
flow and interest rate fluctuation exposure.
Long-term debt for $20,000 for a 10year
fixed rate term loan was arranged in 2010.
Additionally, long-term debt for $30,000
in 2011 and $15,000 in 2012 for 20-year
fixed rate term loans were arranged from a
Canadian chartered bank (the “Bank”). The
Corporation entered into interest rate swap
derivative agreements with the Bank to
exchange interest rate cash flows. Under
these agreements, the Corporation and the
Bank have the periodic exchange of payments
without exchanging the notional principal
amount on which the payments are based.
This effectively provided the Corporation with
fixed rate loans, which reduces the impact of
fluctuating interest rates on long-term debt.
The Corporation does not enter into any such
financial instrument for speculative purposes.
(c) Credit risk:
Financial assets create credit risk that a
counterparty will fail to discharge an obligation,
causing a financial loss. The Corporation’s
distribution revenue is earned on a broad base of
customers. As a result, the Corporation did not
earn a significant amount of revenue from any
individual customer. As at December 31, 2013,
there were no significant balances of accounts
receivable due from any single customer.
The Corporation manages counterparty
credit risk through various techniques,
including limiting total exposure levels with
individual counterparties consistent with the
Corporation’s policies and monitoring the
financial condition of counterparties.
Management believes that the credit risk
of accounts receivable is limited due to
the following reasons:
(i) There is a broad base of customers with
no one customer that accounts for revenue
or an accounts receivable balance in
excess of 10% of the respective balance.
(ii) The Corporation, as permitted by the OEB’s
Retail Settlement and Distribution System
Code, may obtain a security deposit or L/C
from customers to mitigate risk of payment
default.
(iii)The percentage of accounts receivable
that is outstanding more than 90 days is
approximately 2.32% (2012 - 1.94%) of
the total net outstanding balance.
(iv)The Corporation includes an amount of
accounts receisvable write-offs within
operating and maintenance expense for
rate-setting purposes.
Distribution rates and charges are currently
based on a revenue requirement less other
income, which includes interest income.
The difference in the interest revenue reduction
and the actual interest income earned by the
Corporation is currently insignificant.
(b) Interest rate risk:
21
consolidated
financial
statements
Pursuant to their respective terms, accounts
receivable are aged as follows as at
December 31:
Total accounts
receivable
Less allowance for
doubtful accounts
Total accounts
receivable, net
2013
2012
$ 56,920
$ 58,247
960
653
$ 55,960
$ 57,594
$ 30,264
$ 28,056
Liquidity risk is the risk that the Corporation
will not be able to meet its financial obligations
as they become due. Short-term liquidity is
provided through cash and cash equivalents on
hand and funds from operations. Short-term
liquidity is expected to be sufficient to fund
normal operating requirements. The liquidity
risks associated with financial commitments
are as follows:
Of which:
Unbilled revenue
Outstanding
1 day but
not more than
30 days
Outstanding
31 days but
not more than
60 days
Outstanding
61 days but
not more than
90 days
Due within
one year
Due
between
one and Due past
five years five years
Financial
liabilities:
24,118
763
477
27,471
1,171
431
Outstanding
91 days but
not more than
120 days
868
717
Outstanding more
than 120 days
430
401
56,920
58,247
960
653
$ 55,960
$ 57,594
Less allowance for
doubtful accounts
(e) Fair values:
(d) Liquidity risk:
Accounts
payable and
accrued
liabilities
$ 31,248 $
Short-term
loan
Long-term
debt
Lease
commitments
– $
–
14,300
–
–
3,356
31,228
80,969
34
67
66
The Corporation included $1,471 of unrealized
gain (2012 - $2,711 unrealized loss) in its
financial statements, which represents the
amount that the Corporation would have
received to unwind its position as at December
31, 2013. This is the fair value of the interest
rate swap derivatives as at December 31,
2013. This unrealized gain or loss is not
expected to affect cash as the Corporation
intends to hold the financial instruments until
its maturity.
Fair value measurements recognized in the
statement of earnings are categorized using a
fair value hierarchy that reflects the significance
of inputs used in determining the fair values.
· Level 1 - unadjusted quoted prices in active
markets for identical assets or liabilities;
· Level 2 - inputs other than quoted prices
included in Level 1 that are observable
for the asset or liability, either directly or
indirectly; and
· Level 3 - inputs for assets and liabilities that
are not based on observable market data.
The interest rate swap derivatives are all Level 1
as at December 31, 2013.
There were no transfers between levels during
the year.
21.Comparative figures:
Certain comparative figures have been reclassified
to conform with the financial statement
presentation adopted in the current year.
21
consolidated
financial
statements
Veridian is proud to be a member of:
OEA LOGOS:
Print Colours (Pantone / CMYK)
saveONenergyOM, DEMAND RESPONSEOM, FOR BUSINESSOM, FRIDGE & FREEZER PICKUPOM, HEATING & COOLING INCENTIVEOM,
HOME ASSISTANCEOM, RETROFIT PROGRAMOM and SMALL BUSINESS LIGHTINGOM are Official Marks of the Ontario Power Authority.
Used under licence.
peaksaver PLUS® is a registered trade-mark of Toronto Hydro Corporation. Used under sublicence.
peaksaver ® is a registered trade-mark of Toronto Hydro Corporation. Used under sublicence.
55 Taunton Rd. E., Ajax, Ontario L1T 3V3
www.veridiancorporation.ca
905-427-9870 or 1-888-445-2881

2013 Annual Report - Veridian Corporation

Transcription

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