I am incredibly proud of the resilience employees have shown this past year, doing everything possible to maintain the critical supply of electricity to customers across the province — keeping loved ones safe, hospitals running, protecting the most vulnerable in communities, and providing financial relief across Ontario.

This effort required strong leadership and a focused strategy as the COVID-19 pandemic fundamentally changed how we live and work. I know Mark and his team will retain the insights gained from the pandemic to help Ontario emerge stronger, as we work together to create a better and brighter future for all.

Our primary focus at the Board level has been to support Hydro One’s executive team, ensuring they have the tools and capacity to achieve our two pandemic priorities — to protect our employees and to maintain the safe and reliable supply of electricity to Hydro One customers.

They have successfully delivered on these priorities, while simultaneously executing our corporate strategy and capital investment commitments. As a result, Hydro One added 18.5% in total returns to our shareholders and acquired the Orillia Power Distribution Corporation and the business and assets of Peterborough Distribution Inc. this past year.

Equally important in this time of great need, Hydro One has stood with our communities and charitable organizations across Ontario to respond to the urgent challenges presented by COVID-19, lending a helping hand to those making a lasting difference in the communities we serve.

As we move forward into the future, we will continue to fulfill our mission of energizing life for people and communities through a network built for the possibilities of tomorrow.

Our corporate strategy supports that mission, driving us to deliver an improved safety culture, a more reliable grid for our customers, high customer satisfaction, sustainable business practices and a lower environmental footprint.

In 2020, the Board revamped the structure and mandates of its committees to support Hydro One’s new corporate strategy and further embed our vision across the organization. We established the Indigenous Peoples, Safety & Operations Committee1 in order to elevate the importance of improving our safety culture and strengthening our partnerships with First Nations. We also elevated the review of Hydro One’s annual sustainability report to the full Board, underscoring the improved transparency and accountability of our environmental, social and governance (ESG) disclosures. Finally, we recognized the importance of regulatory and public policy matters within the electricity sector by expanding our Governance & Regulatory Committee.2

The Board met virtually and frequently throughout 2020 to ensure Mark and his team had the support they needed to execute Hydro One’s corporate strategy and achieve our pandemic priorities. Technology allowed more people from more places to participate virtually in our annual general meeting. While we anticipate hosting a virtual AGM in 2021, we look forward to hosting our next in-person gathering.

Throughout the pandemic, the Board has deepened our level of engagement with Hydro One stakeholders. We have been extremely supportive of Hydro One’s Pandemic Relief Program, established in mid-March to assist customers affected by COVID. We applaud management for pledging its support for the anti-racism BlackNorth Initiative, as well as to Indigenous Peoples and People of Colour. We will continue to collectively work toward ending systemic racism and ensuring our organization reflects the communities we serve.

We welcomed Stacey Mowbray to the Board of Directors in July, who brings extensive CEO and public company board experience. Her strong track record in leading successful and high profile publicly traded consumer brands reinforces our Board and reaffirms our support of management's focus on delivering exceptional customer service in the digital age. The Board thanks Anne Giardini for her service and for spearheading our First Nations partnership strategy and our renewed commitment to safety. Our Independent Non-Executive Board Members remain composed of 50% women and 50% men, again reflecting best practices in board diversity and surpassing our Catalyst Accord commitment.

On behalf of my Board colleagues and all Hydro One stakeholders, I would like to thank Mark and his executive team for their steady leadership in these uncertain times. We also want to recognize the resilience and dedication of Hydro One’s 8,700 employees, particularly those on the frontlines who continued to support our customers and communities across the province. Together, we are confident that Hydro One will continue to energize life for families, businesses and communities across Ontario.

Timothy Hodgson

Chair of the Board of Directors

1 Previously the Health, Safety, Environment and Indigenous Peoples Committee
2 Previously the Governance Committee

Message from Mark Poweska  
 

Power is a lifeline connecting families, businesses and communities, especially during times of crisis. During this historic moment governments, companies, and individuals are being evaluated for their commitment to helping people and communities, standing up for equity and inclusion, and contributing to a more sustainable world.

Our employees are our greatest asset and through their passion, determination and ingenuity, we came together, dug deep and emerged from 2020 even stronger. We have kept our colleagues and workplaces safe, and maintained the critical supply of electricity to the benefit of all Ontarians.

Hydro One achieved strong performance despite facing unprecedented challenges — we strengthened our customer advocacy, deepened our community partnerships, and increased our productivity savings by 41.4%, while never losing our focus on safety.

Living Our Strategy

More than simply aspirational words on paper, our new corporate strategy, along with our vision and mission, have been our guidepost in navigating our way through the pandemic. It has anchored us to our purpose, while providing us with the flexibility to quickly respond to evolving stakeholder needs. Despite a pause in our operations early in the pandemic to introduce new practices to ensure the safety of our crews on the front lines, we successfully executed Hydro One’s 2020 workplan. This is not only vital to ensuring system safety and reliability for today, but also for longer-term work that will help restart and sustain the economy in the future.

Build a Grid for the Future: In 2020, we continued to invest in the reliability and performance of our transmission and distribution systems, renew aging infrastructure, connect new load customers and generation sources, and improve our service to customers. We made capital investments of approximately $1.9 billion, placed approximately $1.6 billion in projects into service and supported the economy through buying approximately $1.7 billion of goods and services.

While our restoration times were impacted by challenging weather, and the pandemic, we were still able to improve our transmission reliability and maintain the frequency of customer interruptions on our distribution network.

We continue to invest in infrastructure and technology to build a sustainable grid for the future — investments that harden and protect our assets against the changing climate. As part of our ESG commitments, we are working to align our climate-related disclosures with the Taskforce on Climate-related Financial Disclosures, reduce our carbon footprint, and manage the impacts of climate change on our business. For example, we remain on track to convert 50% of our fleet of sedans and SUVs to electric vehicles or hybrids by 2025 in order to reduce carbon emissions.

Safety & Efficiency: Protecting the health and safety of our employees has been our top priority throughout the pandemic. While we were successful in minimizing the impact of the pandemic on our employees, our success is muted because we sadly lost an employee during the year to a motor vehicle crash. Our entire executive team will continue to focus on transforming our safety culture and implement the concrete recommendations made by our Safety Improvement Team to improve our safety culture and eliminate serious injuries at Hydro One.

In 2020, we continued to engage with employees on transforming work processes to drive productivity, reliability and efficiency. Through this work and other initiatives, we achieved $286.0 million in annual total productivity savings and reduced our operating costs by approximately $111 million.

Trusted Partner: We continued to strengthen our community and Indigenous partnerships in 2020. We contributed $42 million to the Indigenous economy by sourcing goods and services from Indigenous businesses — this represents the highest spend to date. We also launched a new fund to support those who provide services to Ontarians, helping to strengthen community resiliency and safety.

Our ability to problem-solve and be nimble would not have been possible without the devotion and hard work of our employees and the partnership of our unions. We were pleased that despite COVID-19, we were able to renew two collective agreements with the Power Workers’ Union, covering a large sector of our employees, which will be critical to our journey toward zero serious injuries.

On the regulatory front, we continued to work constructively with the Ontario Energy Board (OEB) and secured approval for our 2020-2022 transmission rate application.

We also collaborated with others in the electricity sector, including the Ontario Energy Association and the Electricity Distributors Association, to bring a united voice to government and to regulatory policy decisions.

Customer Advocacy: In addition to the Pandemic Relief Program, we undertook a number of initiatives that put people first and supported customers through COVID-19. Our customer advocacy efforts, for example, successfully led to residential customers – for the first time ever — having choice in their pricing plans.

We voluntarily deferred rate increases for our transmission customers and extended financial relief and flexibility to small businesses that have been experiencing hardship. We applaud the Ontario government’s decision to help our commercial and industrial customers save between 14%-16%, enabling Ontario businesses to be competitive with other North American jurisdictions. We also supported the government’s decision to introduce a temporary electricity relief rate for residential, small business and farm customers.

Customers responded to our efforts to keep them connected to safe and reliable power while helping them access financial relief programs and more flexible service options. We received a record high residential and small business customer satisfaction rate of 87%.

Innovate and Grow the Business: We are pursuing investments designed to energize life for Ontarians well into the future. As part of our strategy to be the provider of choice for Ontario communities, we successfully completed the acquisition of Orillia Power Distribution Corporation and the business assets of Peterborough Distribution Inc. Joining the Hydro One family are approximately 51,000 new customers and over 75 employees. This consolidation of our business benefits all Hydro One customers because it makes the provincial grid more efficient, while reducing costs across the system.

We officially launched our innovative joint venture Ivy Charging Network™ (Ivy) in 2020 to support a greener transportation sector. Ivy opened 23 fast charging sites across Ontario, and is on track to have over 160 fast chargers across approximately 60 locations in Ontario by the end of 2021.

Our IT team leveraged our secure technology environment to seamlessly transition a large portion of employees to work-from-home. Additionally, the substantial increase in Ontarians working from home increased demand for Hydro One Telecom’s service, resulting in the expansion of its fibre connectivity options and more cloud services, data backup tools and secure data storage for business customers to choose from.

Strong Foundation, Sustainable Future

Looking forward, we are energized by the possibilities ahead. While COVID-19 has brought new challenges to Hydro One, our ability to quickly learn and adapt gives me great confidence that we will emerge from this pandemic as a stronger organization. To us, energizing life doesn't just mean supplying safe and reliable power, it also means we are a company that puts people first, especially when they need it most.

We stand ready to help power Ontario’s economic recovery from this global pandemic. To that end, we are preparing for the upcoming joint rate application for both our transmission and distribution businesses. As a company that puts customers first we engaged in an extensive customer outreach to inform the development of our investment plan. This plan will inform our views and plans on affordability, service levels, and sustainability over the next five years, starting in 2023. We expect to file our application later this year, and we look forward to a regulatory decision that will provide clarity and stability in our transmission and distribution capital plans, allowing us to focus on executing our strategy.

On behalf of everyone at Hydro One, I thank Darlene Bradley and Saylor Militz-Lee for their service to our organization and I welcome Lyla Garzouzi, our new Chief Safety Officer and Megan Telford, our new Chief Human Resources Officer, to our leadership team. Finally, I want to thank Hydro One employees for the incredible passion, pride, ingenuity and resilience you have shown during these uncertain times. Your commitment has enabled us to deliver great results to our shareholders and proudly energize life for our customers and communities across Ontario.

Mark Poweska

President and Chief Executive Officer

Message from Timothy Hodgson