While we were also faced with a number of industry challenges including: rising interest rates, a lower regulated return on equity that impacted transmission and distribution revenues and extended unseasonably milder weather affecting 2017 total shareholder return; we have acted with a high degree of discipline to moderate these events and we remain committed to delivering value for our shareholders and other stakeholders.
Unveiling our strategy
In 2017, our Board of Directors approved Hydro One's strategy which outlines our plan to become one of North America's leading utilities.
1. Optimization and Innovation
In 2015, our public listing was the fourth-largest IPO in Canadian history. While Hydro One is now a commercially focused shareholder-owned company, we remain committed to the people and creating a customer-oriented culture.
Privatization has made it possible for us to enact powerful change at Hydro One: improved customer service, acting on efficiency and productivity opportunities, and greater corporate social responsibility. We have attracted a market-leading team of professionals to drive Hydro One to further successes. As shareholders, you have the unique opportunity to participate in our transformation and to invest in a premium, large-scale utility.
In 2016, on behalf of our 1.3 million customers, we advocated to the provincial government about the need for rate relief for Customers. We inspired and led the electricity utility industry in our province to proactively reconnect vulnerable customers before the coldest months of the year. Following our lead, in October 2017, the Ontario Energy Board (OEB) announced that all electric distribution companies operating in Ontario would be required to reconnect power for vulnerable individuals and families in the winter.
Optimization and Innovation: We have delivered approximately $114.4 million in productivity savings in 2016 and 2017. We continue to review processes and implement initiatives across our entire platform to drive efficiencies and generate cost savings as our contribution to critical infrastructure.
Application of technology in the field, and the elimination of a paper-based system through Move-to-Mobile has provided our people with the necessary tools to optimize both volume and quality of service. Fleet telematics led to a net reduction of hundreds of units in our fleet, while improving safe driving and reducing costs.
We have designed and implemented a new vegetation maintenance strategy and program called the Optimal Cycle Protocol transitioning from a 10-year cycle to a 3-year maintenance cycle to reduce safety risks, improve reliability, reduce unit cost, and improve customer satisfaction.
Customer Focus: We achieved the lowest accounts receivable balance in our history — a $40 million reduction, while achieving a reduction in customer disconnections for nonpayment declining by 57 per cent in 2017.
Through the Province's Fair Hydro Plan, a typical Hydro One residential customer will see savings on their monthly bills of 31 per cent. We have seen significant improvement in customer service statistics this past year, including:
The highest customer satisfaction rate in four years for our distribution customers; and
10 per cent increase in transmission customer satisfaction.
Diversification: The electricity industry is transforming from a system based on large centralized generation, transmission and distribution, to a localized distributed generation systems to leverage capacity. Hydro One is developing its strategy to adapt our grid investments to reflect this new reality, and to provide new energy services that customers are demanding.
Growth: We announced our intention to acquire Avista Corporation (Avista) to create a growing North American utility leader with a combined pro forma asset value of over CAD $34.9 billion. With Avista, Hydro One is strengthening its core by diversity of geography, regulation and service offerings to include gas distribution in a vertically integrated platform.
I would like to thank the thousands of Hydro One employees across Ontario who are committed to advocating on behalf of our customers. I also extend my gratitude to our Board of Directors for its support and confidence in Hydro One's leadership team.
President and Chief Executive Officer