Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document And Entity Information [Abstract] | |
Document Type | 40-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | HYDRO ONE INC |
Entity Central Index Key | 0001114445 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Common Stock, Shares Outstanding | 142,239 |
Entity Emerging Growth Company | false |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | ||
Revenues | $ 6,442 | $ 6,110 |
Costs | ||
Purchased power (includes $1,818 related party costs; 2018 - $1,648) (Note 28) | 3,111 | 2,899 |
Operation, maintenance and administration (Note 28) | 991 | 1,055 |
Depreciation, amortization and asset removal costs (Note 5) | 871 | 830 |
Total costs | 4,973 | 4,784 |
Income before financing charges and income tax expense | 1,469 | 1,326 |
Financing charges (Note 6) | 460 | 418 |
Income before income tax expense | 1,009 | 908 |
Income tax expense (Note 7) | 51 | 933 |
Net income (loss) | 958 | (25) |
Other comprehensive income | 1 | 2 |
Comprehensive income (loss) | 959 | (23) |
Net income (loss) attributable to: | ||
Noncontrolling interest (Note 27) | 6 | 6 |
Preferred shareholder | 2 | 9 |
Common shareholder | 950 | (40) |
Net income (loss) | 958 | (25) |
Comprehensive income (loss) attributable to: | ||
Noncontrolling interest (Note 27) | 6 | 6 |
Common shareholder | $ 951 | $ (38) |
Earnings per common share (Note 25) | ||
Basic (in dollars per share) | $ 6,679 | $ (281) |
Diluted (in dollars per share) | 6,679 | (281) |
Dividends per common share declared (Note 22) (in dollars per share) | $ 7 | $ 42 |
Distribution [Member] | ||
Revenues | ||
Revenues | $ 4,788 | $ 4,422 |
Transmission [Member] | ||
Revenues | ||
Revenues | $ 1,654 | $ 1,688 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 6,442 | $ 6,110 |
Purchased power | 3,111 | 2,899 |
Related Party [Member] | ||
Purchased power | 1,818 | 1,648 |
Distribution [Member] | ||
Revenues | 4,788 | 4,422 |
Distribution [Member] | Related Party [Member] | ||
Revenues | 282 | 280 |
Transmission [Member] | ||
Revenues | 1,654 | 1,688 |
Transmission [Member] | Related Party [Member] | ||
Revenues | $ 1,640 | $ 1,677 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 7 | $ 492 |
Accounts receivable (Note 8) | 699 | 625 |
Due from related parties (Note 28) | 500 | 324 |
Other current assets (Note 9) | 114 | 99 |
Total current assets | 1,320 | 1,540 |
Property, plant and equipment (Note 10) | 21,418 | 20,605 |
Other long-term assets: | ||
Regulatory assets (Note 12) | 2,676 | 1,721 |
Deferred income tax assets (Note 7) | 643 | 964 |
Intangible assets (Note 11) | 455 | 409 |
Goodwill | 325 | 325 |
Other assets | 80 | 5 |
Total other long-term assets | 4,179 | 3,424 |
Total assets | 26,917 | 25,569 |
Current liabilities: | ||
Short-term notes payable (Note 16) | 1,143 | 1,252 |
Long-term debt payable within one year (Notes 16, 17) | 653 | 731 |
Accounts payable and other current liabilities (Note 14) | 974 | 936 |
Due to related parties (Note 28) | 301 | 129 |
Total current liabilities | 3,071 | 3,048 |
Long-term liabilities: | ||
Long-term debt (includes $351 measured at fair value; 2018 - $845) (Notes 16, 17) | 10,822 | 9,978 |
Regulatory liabilities (Note 12) | 167 | 326 |
Deferred income tax liabilities (Note 7) | 61 | 55 |
Other long-term liabilities (Note 15) | 3,073 | 2,164 |
Total Long-term liabilities | 14,123 | 12,523 |
Total liabilities | 17,194 | 15,571 |
Contingencies and Commitments (Notes 30, 31) | ||
Subsequent Events (Note 33) | ||
Preferred shares (Note 23) | 0 | 486 |
Noncontrolling interest subject to redemption (Note 27) | 20 | 21 |
Equity | ||
Common shares (Note 23) | 3,564 | 4,312 |
Retained earnings | 6,086 | 5,137 |
Accumulated other comprehensive loss | (6) | (7) |
Hydro One shareholder’s equity | 9,644 | 9,442 |
Noncontrolling interest (Note 27) | 59 | 49 |
Total equity | 9,703 | 9,491 |
Total liabilities, preferred shares, noncontrolling interest subject to redemption and equity | $ 26,917 | $ 25,569 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Long-term debt measured at fair value | $ 351 | $ 845 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - CAD ($) $ in Millions | Total | Common Shares [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Hydro One [Member] | Non-controlling Interest [Member] |
Beginning balance at Dec. 31, 2017 | $ 10,080 | $ 4,856 | $ 5,183 | $ (9) | $ 10,030 | $ 50 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (27) | (31) | (31) | 4 | ||
Other comprehensive income | 2 | 2 | 2 | |||
Distributions to noncontrolling interest | (5) | (5) | ||||
Dividends on preferred shares | (9) | (9) | (9) | |||
Dividends on common shares | (6) | (6) | (6) | |||
Return of stated capital (Note 23) | (544) | (544) | (544) | |||
Ending balance at Dec. 31, 2018 | 9,491 | 4,312 | 5,137 | (7) | 9,442 | 49 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 956 | 952 | 952 | 4 | ||
Other comprehensive income | 1 | 1 | 1 | |||
Distributions to noncontrolling interest | (6) | |||||
Contributions from sale of noncontrolling interest (Note 4) | 12 | 12 | ||||
Dividends on preferred shares | (2) | (2) | (2) | |||
Dividends on common shares | (1) | (1) | (1) | |||
Return of stated capital (Note 23) | (748) | (748) | (748) | |||
Ending balance at Dec. 31, 2019 | $ 9,703 | $ 3,564 | $ 6,086 | $ (6) | $ 9,644 | $ 59 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | ||
Net income (loss) | $ 958 | $ (25) |
Environmental expenditures | (25) | (22) |
Adjustments for non-cash items: | ||
Depreciation and amortization (Note 5) | 770 | 740 |
Regulatory assets and liabilities | (48) | 35 |
Deferred income tax expense | 23 | 909 |
Other | 14 | 17 |
Changes in non-cash balances related to operations (Note 29) | 27 | (50) |
Net cash from operating activities | 1,719 | 1,604 |
Financing activities | ||
Long-term debt issued | 1,500 | 1,400 |
Long-term debt repaid | (730) | (753) |
Short-term notes issued | 4,047 | 4,242 |
Short-term notes repaid | (4,156) | (3,916) |
Return of stated capital | (748) | (544) |
Preferred shares redeemed | (486) | 0 |
Dividends paid | (3) | (15) |
Distributions paid to noncontrolling interest | (9) | (8) |
Contributions received from sale of noncontrolling interest (Note 4) | 12 | 0 |
Change in bank indebtedness | 0 | (3) |
Costs to obtain financing | (8) | (6) |
Net cash from (used in) financing activities | (581) | 397 |
Investing activities | ||
Property, plant and equipment | (1,510) | (1,411) |
Intangible assets | (115) | (120) |
Capital contributions received (Note 29) | 3 | 7 |
Other | (1) | 15 |
Net cash used in investing activities | (1,623) | (1,509) |
Net change in cash and cash equivalents | (485) | 492 |
Cash and cash equivalents, beginning of year | 492 | 0 |
Cash and cash equivalents, end of year | $ 7 | $ 492 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | DESCRIPTION OF THE BUSINESS Hydro One Inc. (Hydro One or the Company) was incorporated on December 1, 1998 , under the Business Corporations Act (Ontario) and is wholly-owned by Hydro One Limited. The principal businesses of Hydro One are the transmission and distribution of electricity to customers within Ontario. Rate Setting The Company's transmission business consists of the transmission system operated by its subsidiaries, Hydro One Networks Inc. (Hydro One Networks) and Hydro One Sault Ste. Marie LP (HOSSM), as well as an approximately 66% interest in B2M Limited Partnership (B2M LP), a limited partnership between Hydro One and the Saugeen Ojibway Nation (SON), and an approximately 75% interest in Niagara Reinforcement Limited Partnership (NRLP), a limited partnership between Hydro One and Six Nations of the Grand River Development Corporation and the Mississaugas of the Credit First Nation (collectively, the First Nations Partners). See Note 4 - Business Combinations and Note 33 - Subsequent Events for additional information. Hydro One’s distribution business consists of the distribution system operated by its subsidiaries, Hydro One Networks and Hydro One Remote Communities Inc. (Hydro One Remote Communities). Transmission On March 7, 2019, the Ontario Energy Board (OEB) issued a decision on its reconsideration of its decision and order on Hydro One Networks' 2017 and 2018 transmission rates revenue requirement dated September 28, 2017 (Original Decision) with respect to the rate-setting treatment of the benefits of the deferred tax asset resulting from the transition from the payments in lieu of tax regime under the Electricity Act, 1998 (Ontario) to tax payments under the federal and provincial tax regimes which occurred when Hydro One Limited became a public company listed on the Toronto Stock Exchange. See Note 12 - Regulatory Assets and Liabilities for additional information. On October 26, 2018, Hydro One filed a one-year inflation-based application with the OEB for 2019 transmission revenue requirement. On April 25, 2019, the OEB issued its decision on Hydro One Networks’ 2019 transmission rate application, and set the revenue index at 1.4% on a final basis effective May 1, 2019. In December 2015, the OEB approved B2M LP’s 2015-2019 rates revenue requirements of $39 million , $36 million , $37 million , $38 million and $37 million for the respective years. On November 23, 2018, B2M LP filed a revised 2019 revenue requirement with the OEB using the updated cost of capital parameters. On December 20, 2018, the OEB issued its decision approving the requested 2019 revenue requirement of $33 million , effective January 1, 2019. HOSSM is under a 10 -year deferred rebasing period for years 2017-2026, as approved in the OEB Mergers Acquisitions Amalgamations and Divestitures (MAAD) decision dated October 13, 2016. In July 2018, HOSSM filed a 2019 application for permission to include a revenue cap escalator index, which would allow for inflationary increases to its previously approved revenue requirement. On June 20, 2019, the OEB approved the revenue cap escalator index at 1.1% (net) which was applied to HOSSM's base revenue requirement for 2019, effective February 1, 2019, and also approved the 2019-2026 revenue cap framework. On September 26, 2019, the OEB approved NRLP’s request to establish a deferral account to record NRLP’s 2019 revenue requirement prior to its inclusion in the Uniform Transmission Rates (UTRs). Distribution In March 2017, Hydro One Networks filed an application with the OEB for 2018-2022 distribution rates. On March 7, 2019, the OEB rendered its decision on the distribution rates application. In accordance with the OEB decision, the Company filed its draft rate order reflecting updated revenue requirements of $1,459 million for 2018, $1,498 million for 2019, $1,532 million for 2020, $1,578 million for 2021, and $1,624 million for 2022. On June 11, 2019, the OEB approved the rate order confirming these updated revenue requirements. See Note 12 - Regulatory Assets and Liabilities for additional information. On March 26, 2019, the Company filed a motion to review and vary the OEB's decision with respect to recovery of pension costs. On December 19, 2019, the OEB affirmed its earlier decision with respect to recovery of the pension costs. See Note 12 - Regulatory Assets and Liabilities for additional information. On November 5, 2018, Hydro One Remote Communities filed an application with the OEB seeking approval for increased base rates of 1.8% effective May 1, 2019. On March 28, 2019, the OEB issued a decision approving the requested increase. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation and Presentation These Consolidated Financial Statements (Consolidated Financial Statements) include the accounts of the Company and its subsidiaries. Inter-company transactions and balances have been eliminated. On March 25, 2019, the Company filed amended consolidated financial statements as at and for the year ended December 31, 2018 to reflect the impact of the March 7, 2019 decision issued by the OEB relating to the Deferred Tax Asset portion of the OEB's decision on Hydro One Networks' 2017 and 2018 transmission revenue requirement, for which the OEB previously granted a Motion to Review and Vary. The comparative information in these Consolidated Financial Statements reflects the amended consolidated financial statements as at and for the year ended December 31, 2018. Basis of Accounting These Consolidated Financial Statements are prepared and presented in accordance with United States (US) Generally Accepted Accounting Principles (GAAP) and in Canadian dollars. Use of Management Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, gains and losses during the reporting periods. Management evaluates these estimates on an ongoing basis based upon historical experience, current conditions, and assumptions believed to be reasonable at the time the assumptions are made, with any adjustments being recognized in results of operations in the period they arise. Significant estimates relate to regulatory assets and regulatory liabilities, environmental liabilities, pension benefits, post-retirement and post-employment benefits, asset retirement obligations, goodwill and asset impairments, contingencies, unbilled revenues, and deferred income tax assets and liabilities. Actual results may differ significantly from these estimates. Regulatory Accounting The OEB has the general power to include or exclude revenues, costs, gains or losses in the rates of a specific period, resulting in a change in the timing of accounting recognition from that which would have been applied in an unregulated company. Such change in timing involves the application of rate-regulated accounting, giving rise to the recognition of regulatory assets and liabilities. The Company’s regulatory assets represent amounts receivable from future customers and costs that have been deferred for accounting purposes because it is probable that they will be recovered in future rates. In addition, the Company has recorded regulatory liabilities that generally represent amounts that are refundable to future customers. The Company continually assesses the likelihood of recovery of each of its regulatory assets and continues to believe that it is probable that the OEB will include its regulatory assets and liabilities in setting future rates. If, at some future date, the Company judges that it is no longer probable that the OEB will include a regulatory asset or liability in setting future rates, the appropriate carrying amount would be reflected in results of operations prospectively from the date the Company’s assessment is made, unless the change meets the requirements for a subsequent event adjustment. Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments with an original maturity of three months or less. Revenue Recognition Nature of Revenues Transmission revenues predominantly consist of transmission tariffs, which are collected through OEB-approved UTRs which are applied against the monthly peak demand for electricity across Hydro One's high-voltage network. OEB-approved UTRs are based on an approved revenue requirement that includes a rate of return. The transmission tariffs are designed to recover revenues necessary to support the Company's transmission system with sufficient capacity to accommodate the maximum expected demand which is influenced by weather and economic conditions. Transmission revenues are recognized as electricity is transmitted and delivered to customers. Distribution revenues attributable to the delivery of electricity are based on OEB-approved distribution rates and are recognized on an accrual basis and include billed and unbilled revenues. Billed revenues are based on electricity delivered as measured from customer meters. At the end of each month, electricity delivered to customers since the date of the last billed meter reading is estimated, and the corresponding unbilled revenue is recorded. The unbilled revenue estimate is affected by energy consumption, weather, and changes in the composition of customer classes. Revenues also include amounts related to sales of other services and equipment. Such revenue is recognized as services are rendered or as equipment is delivered. Revenues are recorded net of indirect taxes. Accounts Receivable and Allowance for Doubtful Accounts The Company early-adopted Accounting Standard Update (ASU) 2016-13 Financial Instruments - Credit Losses (along with related ASUs as disclosed in Note 3 - New Accounting Pronouncements) with a transition date of January 1, 2019 using the modified retrospective method. Upon adoption, there was no material impact to the Consolidated Financial Statements, and no adjustments were made to prior period financial statements. Billed accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Unbilled accounts receivable are recorded at their estimated value, net of allowance for doubtful accounts. Overdue amounts related to regulated billings bear interest at OEB-approved rates. The allowance for doubtful accounts reflects the Company’s current lifetime expected credit losses (CECL) for all accounts receivable balances. The Company estimates the CECL by applying internally developed loss rates to all outstanding receivable balances by aging category. Loss rates applied to the accounts receivable balances are based on historical overdue balances, customer payments and write-offs. Accounts receivable are written-off against the allowance when they are deemed uncollectible. The allowance for doubtful accounts is affected by changes in volume, prices and economic conditions. Noncontrolling interest Noncontrolling interest represents the portion of equity ownership in subsidiaries that is not attributable to the shareholder of Hydro One. Noncontrolling interest is initially recorded at fair value and subsequently the amount is adjusted for the proportionate share of net income and other comprehensive income (OCI) attributable to the noncontrolling interest and any dividends or distributions paid to the noncontrolling interest. If a transaction results in the acquisition of all, or part, of a noncontrolling interest in a subsidiary, the acquisition of the noncontrolling interest is accounted for as an equity transaction. No gain or loss is recognized in consolidated net income or comprehensive income as a result of changes in the noncontrolling interest, unless a change results in the loss of control by the Company. Income Taxes Current and deferred income taxes are computed based on the tax rates and tax laws enacted as at the balance sheet date. Tax benefits associated with income tax positions are recorded only when the more-likely-than-not recognition threshold is satisfied and are measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. Management evaluates each position based solely on the technical merits and facts and circumstances of the position, assuming the position will be examined by a taxing authority having full knowledge of all relevant information. Significant management judgment is required to determine recognition thresholds and the related amount of tax benefits to be recognized in the Consolidated Financial Statements. Management re-evaluates tax positions each period using new information about recognition or measurement as it becomes available. Deferred Income Taxes Deferred income taxes are provided for using the liability method. Under this method, deferred income tax assets and liabilities are recognized on all temporary differences between the tax bases and carrying amounts of assets and liabilities, including the carry forward unused tax credits and tax losses to the extent that it is more-likely-than-not that these deductions, credits, and losses can be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on the tax rates and tax laws that have been enacted as at the balance sheet date. Deferred income taxes that are not included in the rate-setting process are charged or credited to the consolidated statements of operations and comprehensive income. Management reassesses the deferred income tax assets at each balance sheet date and reduces the amount to the extent that it is more likely than not that the deferred income tax asset will not be realized. Previously unrecognized deferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become more likely than not that the tax benefit will be realized. The Company recognizes deferred income taxes associated with its regulated operations and records offsetting regulatory assets and liabilities for the deferred income taxes that are expected to be recovered or refunded in future regulated rates charged to customers. Investment tax credits are recorded as a reduction of the related expenses or income tax expense in the current or future period to the extent it is more likely than not that the credits can be utilized. Materials and Supplies Materials and supplies represent consumables, small spare parts and construction materials held for internal construction and maintenance of property, plant and equipment. These assets are carried at average cost less any impairments recorded. Property, Plant and Equipment Property, plant and equipment is recorded at original cost, net of customer contributions, and any accumulated impairment losses. The cost of additions, including betterments and replacement asset components, is included on the Consolidated Balance Sheets as property, plant and equipment. The original cost of property, plant and equipment includes direct materials, direct labour (including employee benefits), contracted services, attributable capitalized financing costs, asset retirement costs, and direct and indirect overheads that are related to the capital project or program. Indirect overheads include a portion of corporate costs such as finance, treasury, human resources, and information technology (IT). Overhead costs, including corporate functions and field services costs, are capitalized on a fully allocated basis, consistent with an OEB-approved methodology. Property, plant and equipment in service consists of transmission, distribution, communication, administration and service assets and land easements. Property, plant and equipment also includes future use assets, such as land, major components and spare parts, and capitalized project development costs associated with deferred capital projects. Transmission Transmission assets include assets used for the transmission of high-voltage electricity, such as transmission lines, support structures, foundations, insulators, connecting hardware and grounding systems, and assets used to step up the voltage of electricity from generating stations for transmission and to step down voltages for distribution, including transformers, circuit breakers and switches. Distribution Distribution assets include assets related to the distribution of low-voltage electricity, including lines, poles, switches, transformers, protective devices and metering systems. Communication Communication assets include fibre optic and microwave radio systems, optical ground wire, towers, telephone equipment and associated buildings. Administration and Service Administration and service assets include administrative buildings, personal computers, transport and work equipment, tools and other minor assets. Easements Easements include statutory rights of use for transmission corridors and abutting lands granted under the Reliable Energy and Consumer Protection Act, 2002 , as well as other land access rights. Intangible Assets Intangible assets separately acquired or internally developed are measured on initial recognition at cost, which comprises purchased software, direct labour (including employee benefits), consulting, engineering, overheads and attributable capitalized financing charges. Following initial recognition, intangible assets are carried at cost, net of any accumulated amortization and accumulated impairment losses. The Company’s intangible assets primarily represent major computer applications. Capitalized Financing Costs Capitalized financing costs represent interest costs attributable to the construction of property, plant and equipment or development of intangible assets. The financing cost of attributable borrowed funds is capitalized as part of the acquisition cost of such assets. The capitalized financing costs are a reduction of financing charges recognized in the Consolidated Statements of Operations and Comprehensive Income. Capitalized financing costs are calculated using the Company’s weighted average effective cost of debt. Construction and Development in Progress Construction and development in progress consists of the capitalized cost of constructed assets that are not yet complete and which have not yet been placed in service. Depreciation and Amortization The cost of property, plant and equipment and intangible assets is depreciated or amortized on a straight-line basis based on the estimated remaining service life of each asset category, except for transport and work equipment, which is depreciated on a declining balance basis. The Company periodically initiates an external independent review of its property, plant and equipment and intangible asset depreciation and amortization rates, as required by the OEB. Any changes arising from OEB approval of such a review are implemented on a remaining service life basis, consistent with their inclusion in electricity rates. The most recent reviews resulted in changes to rates effective January 1, 2015 and January 1, 2017 for Hydro One Networks’ distribution and transmission businesses, respectively. A summary of average service lives and depreciation and amortization rates for the various classes of assets is included below: Average Rate Service Life Range Average Property, plant and equipment: Transmission 55 years 1% - 3% 2 % Distribution 46 years 1% - 7% 2 % Communication 16 years 1% - 15% 5 % Administration and service 21 years 1% - 20% 5 % Intangible assets 10 years 10 % 10 % In accordance with group depreciation practices, the original cost of property, plant and equipment, or major components thereof, and intangible assets that are normally retired, is charged to accumulated depreciation, with no gain or loss being reflected in results of operations. Where a disposition of property, plant and equipment occurs through sale, a gain or loss is calculated based on proceeds and such gain or loss is included in depreciation expense. Acquisitions and Goodwill The Company accounts for business acquisitions using the acquisition method of accounting and, accordingly, the assets and liabilities of the acquired entities are primarily measured at their estimated fair value at the date of acquisition. Costs associated with pending acquisitions are expensed as incurred. Goodwill represents the cost of acquired companies that is in excess of the fair value of the net identifiable assets acquired at the acquisition date. Goodwill is not included in rate base. Goodwill is evaluated for impairment on an annual basis, or more frequently if circumstances require. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of the applicable reporting unit is less than its carrying amount. If the Company determines, as a result of its qualitative assessment, that it is not more likely than not that the fair value of the applicable reporting unit is less than its carrying amount, no further testing is required. If the Company determines, as a result of its qualitative assessment, that it is more likely than not that the fair value of the applicable reporting unit is less than its carrying amount, a goodwill impairment assessment is performed using a two-step, fair value-based test. The first step compares the fair value of the applicable reporting unit to its carrying amount, including goodwill. If the carrying amount of the applicable reporting unit exceeds its fair value, a second step is performed. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount, an impairment loss is recorded as a reduction to goodwill and as a charge to results of operations. Based on assessment performed as at September 30, 2019, the Company has concluded that goodwill was not impaired at December 31, 2019. Long-Lived Asset Impairment When circumstances indicate the carrying value of long-lived assets may not be recoverable, the Company evaluates whether the carrying value of such assets, excluding goodwill, has been impaired. For such long-lived assets, the Company evaluates whether impairment may exist by estimating future estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. When alternative courses of action to recover the carrying amount of a long-lived asset are under consideration, a probability-weighted approach is used to develop estimates of future undiscounted cash flows. If the carrying value of the long-lived asset is not recoverable based on the estimated future undiscounted cash flows, an impairment loss is recorded, measured as the excess of the carrying value of the asset over its fair value. As a result, the asset’s carrying value is adjusted to its estimated fair value. Within its regulated business, the carrying costs of most of Hydro One’s long-lived assets are included in rate base where they earn an OEB-approved rate of return. Asset carrying values and the related return are recovered through approved rates. As a result, such assets are only tested for impairment in the event that the OEB disallows recovery, in whole or in part, or if such a disallowance is judged to be probable. As at December 31, 2019 and 2018, no asset impairment had been recorded. Costs of Arranging Debt Financing For financial liabilities classified as other than held-for-trading, the Company defers the external transaction costs related to obtaining financing and presents such amounts net of related debt on the Consolidated Balance Sheets. Deferred issuance costs are amortized over the contractual life of the related debt on an effective-interest basis and the amortization is included within financing charges in the Consolidated Statements of Operations and Comprehensive Income. Transaction costs for items classified as held-for-trading are expensed immediately. Comprehensive Income Comprehensive income is comprised of net income and OCI. Hydro One presents net income and OCI in a single continuous Consolidated Statement of Operations and Comprehensive Income. Financial Assets and Liabilities All financial assets and liabilities are classified into one of the following five categories: held-to-maturity; loans and receivables; held-for-trading; other liabilities; or available-for-sale. Financial assets and liabilities classified as held-for-trading are measured at fair value. All other financial assets and liabilities are measured at amortized cost, except accounts receivable and amounts due from related parties, which are measured at the lower of cost or fair value. Accounts receivable and amounts due from related parties are classified as loans and receivables. The Company considers the carrying amounts of accounts receivable and amounts due from related parties to be reasonable estimates of fair value because of the short time to maturity of these instruments. The Company estimates the CECL for all accounts receivable balances, which are recognized as adjustments to the allowance for doubtful accounts. Accounts receivable are written-off against the allowance when they are deemed uncollectible. All financial instrument transactions are recorded at trade date. The Company determines the classification of its financial assets and liabilities at the date of initial recognition. The Company designates certain of its financial assets and liabilities to be held at fair value, when it is consistent with the Company’s risk management policy disclosed in Note 17 - Fair Value of Financial Instruments and Risk Management. Derivative Instruments and Hedge Accounting The Company closely monitors the risks associated with changes in interest rates on its operations and, where appropriate, uses various instruments to hedge these risks. Certain of these derivative instruments qualify for hedge accounting and are designated as accounting hedges, while others either do not qualify as hedges or have not been designated as hedges (hereinafter referred to as undesignated contracts) as they are part of economic hedging relationships. The accounting guidance for derivative instruments requires the recognition of all derivative instruments not identified as meeting the normal purchase and sale exemption as either assets or liabilities recorded at fair value on the consolidated balance sheets. For derivative instruments that qualify for hedge accounting, the Company may elect to designate such derivative instruments as either cash flow hedges or fair value hedges. The Company offsets fair value amounts recognized on its consolidated balance sheets related to derivative instruments executed with the same counterparty under the same master netting agreement. For derivative instruments that qualify for hedge accounting and which are designated as cash flow hedges, any unrealized gain or loss, net of tax, is recorded as a component of accumulated OCI (AOCI). Amounts in AOCI are reclassified to results of operations in the same period or periods during which the hedged transaction affects results of operations and presented in the same line item as the earnings effect of the hedged item. Any gains or losses on the derivative instrument that represent hedge components excluded from the assessment of effectiveness are recognized in the same line item of the consolidated statements of operations as the hedged item. For fair value hedges, changes in fair value of both the derivative instrument and the underlying hedged exposure are recognized in the consolidated statements of operations and comprehensive income in the current period. The gain or loss on the derivative instrument is included in the same line item as the offsetting gain or loss on the hedged item in the consolidated statements of operations and comprehensive income. The changes in fair value of the undesignated derivative instruments are reflected in results of operations. Embedded derivative instruments are separated from their host contracts and are carried at fair value on the consolidated balance sheets when: (a) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument is not measured at fair value, with changes in fair value recognized in results of operations each period; and (c) the embedded derivative itself meets the definition of a derivative. The Company does not engage in derivative trading or speculative activities and had no embedded derivatives that required bifurcation at December 31, 2019 or 2018. Hydro One periodically develops hedging strategies taking into account risk management objectives. At the inception of a hedging relationship where the Company has elected to apply hedge accounting, Hydro One formally documents the relationship between the hedged item and the hedging instrument, the related risk management objective, the nature of the specific risk exposure being hedged, and the method for assessing the effectiveness of the hedging relationship. The Company also assesses, both at the inception of the hedge and on a quarterly basis, whether the hedging instruments are effective in offsetting changes in fair values or cash flows of the hedged items. Employee Future Benefits Employee future benefits provided by Hydro One include pension, post-retirement and post-employment benefits. The costs of the Company’s pension, post-retirement and post-employment benefit plans are recorded over the periods during which employees render service. The Company recognizes the funded status of its defined benefit pension, post-retirement and post-employment plans on its consolidated balance sheets and subsequently recognizes the changes in funded status at the end of each reporting year. Defined benefit pension, post-retirement and post-employment plans are considered to be underfunded when the projected benefit obligation (PBO) exceeds the fair value of the plan assets. Liabilities are recognized on the consolidated balance sheets for any net underfunded PBO. The net underfunded PBO may be disclosed as a current liability, long-term liability, or both. The current portion is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next 12 months exceeds the fair value of plan assets. If the fair value of plan assets exceeds the PBO of the plan, an asset is recognized equal to the net overfunded PBO. The post-retirement and post-employment benefit plans are unfunded because there are no related plan assets. Hydro One recognizes its contributions to the defined contribution pension plan (DC Plan) as pension expense, with a portion being capitalized as part of labour costs included in capital expenditures. The expensed amount is included in operation, maintenance and administration (OM&A) costs in the consolidated statements of operations and comprehensive income. Defined Benefit Pension Defined benefit pension costs are recorded on an accrual basis for financial reporting purposes. Pension costs are actuarially determined using the projected benefit method prorated on service and are based on assumptions that reflect management’s best estimate of the effect of future events, including future compensation increases. Past service costs from plan amendments and all actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service period of active employees in the plan, and over the estimated remaining life expectancy of inactive employees in the plan. Pension plan assets, consisting primarily of listed equity securities, corporate and government debt securities as well as private real estate and private infrastructure investments, are recorded at fair value at the end of each year. Hydro One records a regulatory asset equal to the net underfunded PBO for its pension plan. Defined benefit pension costs are attributed to labour costs on a cash basis and a portion directly related to acquisition and development of capital assets is capitalized as part of the cost of property, plant and equipment and intangible assets. The remaining defined benefit pension costs are charged to results of operations (OM&A costs). Post-retirement and Post-employment Benefits Post-retirement and post-employment benefits are recorded and included in rates on an accrual basis. Costs are determined by independent actuaries using the projected benefit method prorated on service and based on assumptions that reflect management’s best estimates. Past service costs from plan amendments are amortized to results of operations based on the expected average remaining service period. For post-retirement benefits, all actuarial gains or losses are deferred using the “corridor” approach. The amount calculated above the “corridor” is amortized to results of operations on a straight-line basis over the expected average remaining service life of active employees in the plan and over the remaining life expectancy of inactive employees in the plan. The post-retirement benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. For post-employment obligations, the associated regulatory liabilities representing actuarial gains on transition to US GAAP are amortized to results of operations based on the “corridor” approach. The actuarial gains and losses on post-employment obligations that are incurred during the year are recognized immediately to results of operations. The post-employment benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. All post-retirement and post-employment benefit costs are attributed to labour costs and are either charged to results of operations (OM&A costs) or capitalized as part of the cost of property, plant and equipment and intangible assets for service cost component and to regulatory assets for all other components of the benefit costs, consistent with their inclusion in OEB-approved rates. Stock-Based Compensation Share Grant Plans Hydro One measures share grant plans based on fair value of share grants as estimated based on Hydro One Limited grant date common share price. The costs are recognized in the financial statements using the graded-vesting attribution method for share grant plans that have both a performance condition and a service condition. The Company records a regulatory asset equal to the accrued costs of share grant plans recognized in each period. Costs are transferred from the regulatory asset to labour costs at the time the share grants vest and are issued, and are recovered in rates. Forfeitures are recognized as they occur. Deferred Share Unit (DSU) Plans The Company records the liabilities associated with its Directors’ and Management DSU Plans at fair value at each reporting date until settlement, recognizing compensation expense over the vesting period on a straight-line basis. The fair value of the DSU liability is based on the Hydro One Limited common share closing price at the end of each reporting period. Long-term Incentive Plan (LTIP) The Company measures the awards issued under Hydro One Limited's LTIP, at fair value based on Hydro One Limited grant date common share price. The related compensation expense is recognized over the vesting period on a straight-line basis. Forfeitures are recognized as they occur. Loss Contingencies Hydro One is involved in certain legal and environmental matters that arise in the normal course of business. In the preparation of its Consolidated Financial Statements, management makes judgments regarding the future outcome of contingent events and records a loss for a contingency based on its best estimate when it is determined that such loss is probable and the amount of the loss can be reasonably estimated. Where the loss amount is recoverable in future rates, a regulatory asset is also recorded. When a range estimate for the probable loss exists and no amount within the range is a better estimate than any other amount, the Company records a loss at the minimum amount within the range. Management regularly reviews current information available to determine whether recorded provisions should be adjusted and whether new provisions are required. Estimating probable losses may require analysis of multiple forecasts and scenarios that often depend on judgments about potential actions by third parties, such as federal, provincial and local courts or regulators. Contingent liabilities are often resolved over long periods of time. Amounts recorded in the Consolidated Financial Statements may differ from the actual outcome once the contingency is resolved. Such differences could have a material impact on future results of operations, financial position and cash flows of the Company. Provisions are b |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The following tables present ASCs and ASUs issued by the Financial Accounting Standards Board that are applicable to Hydro One: Recently Adopted Accounting Guidance Guidance Date issued Description Effective date Impact on Hydro One ASC 842 February 2016 - January 2019 Lessees are required to recognize the rights and obligations resulting from operating leases as assets (right to use the underlying asset for the term of the lease) and liabilities (obligation to make future lease payments) on the balance sheet. January 1, 2019 Hydro One adopted ASC 842 on January 1, 2019 using the modified retrospective transition approach using the effective date of January 1, 2019 as its date of initial application. See Note 2 to the Consolidated Financial Statements for impact of adoption. The Company has included the disclosure requirements of ASC 842 in Note 22 to the Consolidated Financial Statements. ASU 2017-12 August 2017 Amendments will better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. January 1, 2019 No impact upon adoption ASU June 2018 Expansion in the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. Previously, ASC 718 was only applicable to share-based payment transactions for acquiring goods and services from employees. January 1, 2019 No impact upon adoption ASU 2018-15 August 2018 The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement is not affected by the amendment. January 1, 2019 Hydro One early-adopted this ASU with a transition date of January 1, 2019. The ASU was applied prospectively and there was no material impact upon adoption. ASU 2016-13 June 2016 - November 2019 The amendments provide users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. January 1, 2019 Hydro One early-adopted these ASUs with a transition date of January 1, 2019 using the modified retrospective transition approach. See Note 2 to the Consolidated Financial Statements for impact of adoption. Recently Issued Accounting Guidance Not Yet Adopted Guidance Date issued Description Effective date Anticipated impact on Hydro One ASU 2017-04 January 2017 The amendment removes the second step of the current two-step goodwill impairment test to simplify the process of testing goodwill. January 1, 2020 No impact upon adoption ASU August 2018 Disclosure requirements on fair value measurements in ASC 820 are modified to improve the effectiveness of disclosures in financial statement notes. January 1, 2020 No impact upon adoption ASU 2018-14 August 2018 Disclosure requirements related to single-employer defined benefit pension or other post-retirement benefit plans are added, removed or clarified to improve the effectiveness of disclosures in financial statement notes. January 1, 2021 Under assessment ASU March 2019 This amendment carries forward the exemption previously provided under ASC 840 relating to the determination of the fair value of underlying assets by lessors that are not manufacturers or dealers. It also provides for clarification on cash-flow presentation of sales-type and financing leases and clarifies that transition disclosures under Topic 250 are not applicable in the adoption of ASC 842. January 1, 2020 No impact upon adoption ASU December 2019 The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles and improving consistent application of Topic 740 by clarifying and amending existing guidance. January 1, 2021 Under assessment ASU 2020-01 January 2020 The amendments clarify the interaction of the accounting for equity securities under Topic 321, investments under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. January 1, 2021 Under assessment |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS NRLP In 2018, Hydro One entered into an agreement with the First Nations Partners, wherein a noncontrolling equity interest in Hydro One’s limited partnership, NRLP, would be made available for purchase at fair value by the First Nations Partners. On September 19, 2018, NRLP was formed to own a new 230 kV transmission line (Niagara Line) in the Niagara region. The Niagara Line enables generators in the Niagara area to connect to the load centres of the Greater Toronto and Hamilton areas. Hydro One Networks maintains and operates the Niagara Line in accordance with an operation and management services agreement. On September 12, 2019, the OEB granted NRLP a transmission licence and granted Hydro One Networks leave to sell the applicable Niagara Line assets to NRLP. On September 18, 2019, the applicable Niagara Line assets were transferred from Hydro One Networks to NRLP for $119 million and operation of the line was contracted to Hydro One Networks. This transfer was financed with 60% debt ( $71 million ) and 40% equity ( $48 million ). The cash payment of $71 million was financed by debt sourced by NRLP from a Hydro One subsidiary, and the $48 million equity comprised partnership units issued by NRLP to Hydro One Networks. Subsequently, on the same date, Hydro One Networks sold to the Six Nations of the Grand River Development Corporation and to the Mississaugas of the Credit First Nation, through a trust, a 25.0% and 0.1% , respectively, equity interest in NRLP for total consideration of $12 million , representing the fair value of the equity interest acquired. NRLP is fully consolidated in these Consolidated Financial Statements as it is controlled by Hydro One. The First Nations Partners' 25.1% noncontrolling interest in NRLP is classified within equity. Net income attributable to the First Nations Partners' noncontrolling interest for the period from September 18, 2019 to December 31, 2019 was not significant. See Note 27 - Noncontrolling Interest for additional information. In addition, the Mississaugas of the Credit First Nation had an option to purchase an additional 19.9% equity interest in NRLP from Hydro One Networks at a price based on the value of the Niagara Line assets on the date of closing, subject to certain conditions. On December 31, 2019, the Mississaugas of the Credit First Nation exercised the option. The transaction closed on January 31, 2020. See Note 33 - Subsequent Events for additional information. Orillia Power Purchase Agreement In August 2016 , the Company reached an agreement to acquire Orillia Power Distribution Corporation (Orillia Power), an electricity distribution company located in Simcoe County, Ontario, from the City of Orillia for approximately $41 million , including the assumption of approximately $15 million in outstanding indebtedness and regulatory liabilities, subject to closing adjustments and regulatory approval by the OEB. In 2016, Hydro One filed an application with the OEB to acquire Orillia Power, which was denied by the OEB in April 2018. In September 2018, Hydro One filed a new application with the OEB for approval to acquire Orillia Power. An OEB oral hearing was held on December 2-3, 2019. A decision by the OEB is pending. Peterborough Distribution Purchase Agreement In July 2018, Hydro One reached an agreement to acquire the business and distribution assets of Peterborough Distribution Inc., an electricity distribution company located in east central Ontario, from the City of Peterborough for approximately $105 million . The acquisition is conditional upon the satisfaction of customary closing conditions and approval by the OEB and the Competition Bureau. In October 2018, the Company filed an application with the OEB for approval of the acquisition. In November 2018, the Competition Bureau issued no action letter, meaning that transaction can proceed from the Competition Bureau’s position. An OEB oral hearing was held on December 2-3, 2019. A decision by the OEB is pending. |
Depreciation, Amortization And
Depreciation, Amortization And Asset Removal Costs | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Depreciation, Amortization And Asset Removal Costs | DEPRECIATION, AMORTIZATION AND ASSET REMOVAL COSTS Year ended December 31 (millions of dollars) 2019 2018 Depreciation of property, plant and equipment 664 647 Amortization of intangible assets 81 71 Amortization of regulatory assets 25 22 Depreciation and amortization 770 740 Asset removal costs 101 90 871 830 |
Financing Charges
Financing Charges | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
Financing Charges | FINANCING CHARGES Year ended December 31 (millions of dollars) 2019 2018 Interest on long-term debt 479 447 Interest on short-term notes 18 14 Other 18 17 Less: Interest capitalized on construction and development in progress (48 ) (53 ) Interest earned on cash and cash equivalents (7 ) (7 ) 460 418 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES As a rate regulated utility company, the Company’s effective tax rate excludes temporary differences that are recoverable in future rates charged to customers. Income tax expense differs from the amount that would have been recorded using the combined Canadian federal and Ontario statutory income tax rate. The reconciliation between the statutory and the effective tax rates is provided as follows: Year ended December 31 (millions of dollars) 2019 2018 Income before income tax expense 1,009 908 Income tax expense at statutory rate of 26.5% (2018 - 26.5%) 267 241 Increase (decrease) resulting from: Net temporary differences recoverable in future rates charged to customers: Capital cost allowance in excess of depreciation and amortization 1 (105 ) (68 ) Impact of tax deductions from deferred tax asset sharing 2 (60 ) (68 ) Overheads capitalized for accounting but deducted for tax purposes (21 ) (20 ) Interest capitalized for accounting but deducted for tax purposes (13 ) (14 ) Pension and post-retirement benefit contributions in excess of pension expense (11 ) (11 ) Environmental expenditures (7 ) (6 ) Other 1 (9 ) Net temporary differences (216 ) (196 ) Net permanent differences — 3 Write-off of unregulated deferred income tax asset (Note 12) — 885 Total income tax expense 51 933 Effective income tax rate 5.1 % 102.8 % 1 Included in current period’s amount is the accelerated tax depreciation of up to three times the first-year rate for certain eligible capital investments acquired after November 20, 2018 and placed in-service before January 1, 2028, as introduced in the 2019 federal and Ontario budgets and enacted in the second quarter of 2019. 2 Impact of tax deductions from deferred tax sharing represents the OEB’s prescribed allocation to ratepayers of the net deferred tax asset that originated from the transition from the payments in lieu of tax regime under the Electricity Act, 1998 (Ontario) to tax payments under the federal and provincial tax regime. The major components of income tax expense are as follows: Year ended December 31 (millions of dollars) 2019 2018 Current income tax expense 28 24 Deferred income tax expense 23 909 Total income tax expense 51 933 Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities that are expected to be included in the rate-setting process are offset by regulatory assets and liabilities to reflect the anticipated recovery or disposition of these balances within future electricity rates. Deferred income tax assets and liabilities arise from differences between the tax basis and the carrying amounts of the assets and liabilities. At December 31, 2019 and 2018, deferred income tax assets and liabilities consisted of the following: December 31 (millions of dollars) 2019 2018 Deferred income tax assets Post-retirement and post-employment benefits expense in excess of cash payments 633 523 Non-depreciable capital property 271 271 Non-capital losses 288 263 Pension obligations 405 197 Investment in subsidiaries 95 86 Tax credit carryforwards 92 71 Environmental expenditures 51 59 Depreciation and amortization in excess of capital cost allowance 4 5 Other 18 24 1,857 1,499 Less: valuation allowance (375 ) (366 ) Total deferred income tax assets 1,482 1,133 Deferred income tax liabilities Capital cost allowance in excess of depreciation and amortization 377 9 Regulatory amounts that are not recognized for tax purposes 495 188 Goodwill 10 10 Other 18 17 Total deferred income tax liabilities 900 224 Net deferred income tax assets 582 909 The net deferred income tax assets are presented on the Consolidated Balance Sheets as follows: December 31 (millions of dollars) 2019 2018 Long-term: Deferred income tax assets 643 964 Deferred income tax liabilities (61 ) (55 ) Net deferred income tax assets 582 909 The valuation allowance for deferred tax assets as at December 31, 2019 was $375 million (2018 - $366 million ). The valuation allowance primarily relates to temporary differences for non-depreciable assets and investments in subsidiaries. As of December 31, 2019 and 2018, the Company had non-capital losses carried forward available to reduce future years’ taxable income, which expire as follows: Year of expiry (millions of dollars) 2019 2018 2034 2 2 2035 220 220 2036 549 549 2037 121 121 2038 5 99 2039 187 — Total losses 1,084 991 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | ACCOUNTS RECEIVABLE December 31 (millions of dollars) 2019 2018 Accounts receivable - billed 330 289 Accounts receivable - unbilled 391 357 Accounts receivable, gross 721 646 Allowance for doubtful accounts (22 ) (21 ) Accounts receivable, net 699 625 The following table shows the movements in the allowance for doubtful accounts for the years ended December 31, 2019 and 2018: Year ended December 31 (millions of dollars) 2019 2018 Allowance for doubtful accounts - beginning (21 ) (29 ) Write-offs 18 25 Additions to allowance for doubtful accounts (19 ) (17 ) Allowance for doubtful accounts - ending (22 ) (21 ) |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | OTHER CURRENT ASSETS December 31 (millions of dollars) 2019 2018 Regulatory assets (Note 12) 52 42 Prepaid expenses and other assets 41 37 Materials and supplies 21 20 114 99 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT December 31, 2019 (millions of dollars) Property, Plant and Equipment Accumulated Depreciation Construction in Progress Total Transmission 17,454 5,714 711 12,451 Distribution 10,991 3,747 85 7,329 Communication 1,151 876 38 313 Administration and service 1,617 931 53 739 Easements 663 77 — 586 31,876 11,345 887 21,418 December 31, 2018 (millions of dollars) Property, Plant and Equipment Accumulated Depreciation Construction in Progress Total Transmission 16,559 5,449 766 11,876 Distribution 10,580 3,561 75 7,094 Communication 1,121 804 33 350 Administration and service 1,548 893 58 713 Easements 647 75 — 572 30,455 10,782 932 20,605 Financing charges capitalized on property, plant and equipment under construction were $45 million in 2019 (2018 - $51 million ). |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS December 31, 2019 (millions of dollars) Intangible Assets Accumulated Amortization Development in Progress Total Computer applications software 912 512 55 455 Other 5 5 — — 917 517 55 455 December 31, 2018 (millions of dollars) Intangible Assets Accumulated Amortization Development in Progress Total Computer applications software 790 440 59 409 Other 5 5 — — 795 445 59 409 Financing charges capitalized to intangible assets under development were $3 million in 2019 (2018 - $2 million ). The estimated annual amortization expense for intangible assets is as follows: 2020 - $63 million ; 2021 - $61 million ; 2022 - $58 million ; 2023 - $48 million ; and 2024 - $37 million . |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Regulated Operations [Abstract] | |
Regulatory Assets and Liabilities | REGULATORY ASSETS AND LIABILITIES Regulatory assets and liabilities arise as a result of the rate-setting process. Hydro One has recorded the following regulatory assets and liabilities: December 31 (millions of dollars) 2019 2018 Regulatory assets: Deferred income tax regulatory asset 1,128 908 Pension benefit regulatory asset 1,125 547 Environmental 141 165 Post-retirement and post-employment benefits 105 — Post-retirement and post-employment benefits - non-service cost 77 39 Foregone revenue deferral 67 — Stock-based compensation 42 43 Debt premium 17 22 Distribution system code exemption — 10 Other 26 29 Total regulatory assets 2,728 1,763 Less: current portion (52 ) (42 ) 2,676 1,721 Regulatory liabilities: Tax rule changes variance 44 5 Distribution rate riders 42 6 Pension cost differential 31 55 Green energy expenditure variance 31 52 Retail settlement variance account 23 39 Earnings sharing mechanism deferral 21 — External revenue variance 6 26 Deferred income tax regulatory liability 5 86 Post-retirement and post-employment benefits — 130 Other 9 18 Total regulatory liabilities 212 417 Less: current portion (45 ) (91 ) 167 326 Deferred Income Tax Regulatory Asset and Liability Deferred income taxes are recognized on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income. The Company has recognized regulatory assets and liabilities that correspond to deferred income taxes that flow through the rate-setting process. In the absence of rate-regulated accounting, the Company’s income tax expense would have been recognized using the liability method and there would be no regulatory accounts established for taxes to be recovered through future rates. As a result, the 2019 income tax expense would have been higher by approximately $221 million (2018 - lower by $686 million ). On September 28, 2017, the OEB issued its decision and order on Hydro One Networks' 2017 and 2018 transmission rates revenue requirements (Original Decision). In its Original Decision, the OEB concluded that the net deferred tax asset resulting from transition from the payments in lieu of tax regime under the Electricity Act, 1998 (Ontario) to tax payments under the federal and provincial tax regime should not accrue entirely to Hydro One Limited shareholders and that a portion should be shared with ratepayers. On November 9, 2017, the OEB issued a decision and order that calculated the portion of the tax savings that should be shared with ratepayers. The OEB's calculation would result in an impairment of a portion of both Hydro One Networks' transmission and distribution deferred income tax regulatory asset. In October 2017, the Company filed a Motion to Review and Vary (Motion) the Original Decision and filed an appeal with the Ontario Divisional Court (Appeal). In both cases, the Company's position was that the OEB made errors of fact and law in its determination of allocation of the tax savings between the shareholders and ratepayers. On December 19, 2017, the OEB granted a hearing of the merits of the Motion which was held on February 12, 2018. On August 31, 2018, the OEB granted the Motion and returned the portion of the Original Decision relating to the deferred tax asset to an OEB panel for reconsideration. On March 7, 2019, the OEB issued its reconsideration decision and concluded that their Original Decision was reasonable and should be upheld. Also, on March 7, 2019 the OEB issued its decision for Hydro One Networks’ 2018-2022 distribution rates, in which it directed the Company to apply the Original Decision to Hydro One Networks’ distribution rates. As a result, as at December 31, 2018, the Company recognized an impairment charge of Hydro One Networks' distribution deferred income tax regulatory asset of $474 million and Hydro One Networks' transmission deferred income tax regulatory asset of $558 million , an increase in deferred income tax regulatory liability of $81 million , and a decrease in the foregone revenue deferral regulatory asset of $68 million . The regulatory balances relating to deferred tax asset sharing will continue to decrease as the tax savings are shared with ratepayers. Notwithstanding the recognition of the effects of the decision in the financial statements, on April 5, 2019, the Company filed an appeal with the Ontario Divisional Court with respect to the OEB's deferred tax benefit decision. The appeal was heard on November 21, 2019 and a decision is pending. Pension Benefit Regulatory Asset In accordance with OEB rate orders, pension costs are recovered on a cash basis as employer contributions are paid to the pension fund in accordance with the Pension Benefits Act (Ontario). The Company recognizes the net unfunded status of pension obligations on the Consolidated Balance Sheets with an offset to the associated regulatory asset. A regulatory asset is recognized because management considers it to be probable that pension benefit costs will be recovered in the future through the rate-setting process. The pension benefit obligation is remeasured to the present value of the actuarially determined benefit obligation at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. In the absence of rate-regulated accounting, OCI would have been lower by $597 million (2018 - higher by $435 million ) and OM&A expenses would have been lower by $20 million (2018 - higher by $1 million ). Environmental Hydro One records a liability for the estimated future expenditures required to remediate environmental contamination. A regulatory asset is recognized because management considers it to be probable environmental expenditures will be recovered in the future through the rate-setting process. The Company has recorded an equivalent amount as a regulatory asset. In 2019, the environmental regulatory asset decreased by $3 million (2018 - $15 million ) to reflect related changes in the Company’s PCB and LAR environmental liabilities. The environmental regulatory asset is amortized to results of operations based on the pattern of actual expenditures incurred and charged to environmental liabilities. The OEB has the discretion to examine and assess the prudency and the timing of recovery of all of Hydro One’s actual environmental expenditures. In the absence of rate-regulated accounting, 2019 OM&A expenses would have been lower by $3 million (2018 - $15 million ). In addition, 2019 amortization expense would have been lower by $25 million (2018 - $22 million ), and 2019 financing charges would have been higher by $4 million (2018 - $6 million ). Post-Retirement and Post-Employment Benefits In accordance with OEB rate orders, post-retirement and post-employment benefits costs are recovered on an accrual basis. The Company recognizes the net unfunded status of post-retirement and post-employment obligations on the Consolidated Balance Sheets with an incremental offset to the associated regulatory assets. A regulatory asset is recognized because management considers it to be probable that post-retirement and post-employment benefit costs will be recovered in the future through the rate-setting process. The post-retirement and post-employment benefit obligation is remeasured to the present value of the actuarially determined benefit obligation at each year end based on an annual actuarial report, with an offset to the associated regulatory asset or liability as the case may be, to the extent of the remeasurement adjustment. In the absence of rate-regulated accounting, 2019 OCI would have been lower by $235 million (2018 - higher by $166 million ). Post-Retirement and Post-Employment Benefits - Non-Service Cost Hydro One applied to the OEB for a regulatory asset account to record the components other than service costs relating to its post-retirement and post-employment benefits that would have previously been capitalized to property, plant and equipment and intangible assets prior to adoption of ASU 2017-07. In May 2018 and March 2019, the OEB approved the regulatory asset account for Hydro One Networks' transmission business and distribution business, respectively. Hydro One has recorded the components other than service costs relating to its post-retirement and post-employment benefits that would have been capitalized to property, plant and equipment and intangible assets, in the Post-Retirement and Post-Employment Benefits - Non-Service Cost regulatory asset. Hydro One proposed disposition methodologies for the accumulated balance in the 2020-2022 transmission rate application which is pending an OEB decision. Foregone Revenue Deferral The foregone revenue deferral account is primarily made up of the difference between revenue earned based on distribution rates approved by the OEB in Hydro One Networks' 2018-2022 distribution rates application, effective May 1, 2018, and revenue earned under the interim rates until the approved 2018 and 2019 rates were implemented on July 1, 2019. The balance of this account is being recovered from ratepayers over an 18-month period ending December 31, 2020. The foregone revenue deferral account also records the difference between revenue earned based on transmission rates approved by the OEB in Hydro One Networks' 2019 transmission rate application, effective May 1, 2019, and the revenue earned under the interim rates until the approved 2019 rates were implemented on July 1, 2019. The balance of this account was being recovered from ratepayers over a 6-month period ended December 31, 2019. The 2019 revenue requirement related to NRLP (see Note 1 - Description of the Business and Note 4 - Business Combinations) is also recorded in this account. Stock-based Compensation The Company recognizes costs associated with share grant plans in a regulatory asset as management considers it probable that share grant plans' costs will be recovered in the future through the rate-setting process. In the absence of rate-regulated accounting, there would be no material impact to OM&A expenses (2018 - OM&A expenses would be higher by $1 million ). Share grant costs are transferred to labour costs at the time the share grants vest and are issued, and are recovered in rates in accordance with recovery of said labour costs. Debt Premium The value of debt assumed in the acquisition of HOSSM has been recorded at fair value in accordance with US GAAP - Business Combinations. The OEB allows for recovery of interest at the coupon rate of the Senior Secured Bonds and a regulatory asset has been recorded for the difference between the fair value and face value of this debt. The debt premium is recovered over the remaining term of the debt. Distribution System Code (DSC) Exemption In June 2010, Hydro One Networks filed an application with the OEB regarding the OEB’s new cost responsibility rules contained in the OEB’s October 2009 Notice of Amendment to the DSC, with respect to the connection of certain renewable generators that were already connected or that had received a connection impact assessment prior to October 21, 2009. The application sought approval to record and defer the unanticipated costs incurred by Hydro One Networks that resulted from the connection of certain renewable generation facilities. The OEB ruled that identified specific expenditures can be recorded in a deferral account subject to the OEB’s review in subsequent Hydro One Networks distribution applications. In 2015, the OEB also approved Hydro One’s request to discontinue this deferral account. The remaining balance in this account at December 31, 2016, including accrued interest, was approved for disposition by the OEB in March 2019, and was transferred to the 2019-2020 Rate Rider. Tax Rule Changes Variance The 2019 federal and Ontario budgets (Budgets) provided certain time-limited investment incentives permitting Hydro One to deduct accelerated capital cost allowance of up to three times the first-year rate for capital investments acquired after November 20, 2018 and placed in-service before January 1, 2028. The Budgets measures enacted in the second quarter of 2019 required Hydro One to refund the tax benefits related to the accelerated depreciation rules to ratepayers. The tax benefit to be returned to ratepayers in the future gave rise to a regulatory liability and resulted in a decrease in revenues as current rates do not include the benefit of the accelerated tax; therefore, the revenue subject to refund cannot be recognized. Distribution Rate Riders In March 2019, as part of its decision on Hydro One Networks' distribution rates application for 2018-2022, the OEB approved the disposition of certain deferral and variance accounts which were accumulated in a 2019-2020 Rate Rider. The Distribution Rate Riders balance includes the 2019-2020 Rate Rider, where amounts are currently being disposed of over an 18-month period ending December 31, 2020, and the 2015-2017 Rate Rider balance, representing over-collected amounts to be returned to ratepayers in a future rate application. Pension Cost Differential Variances between the pension cost recognized and the cost embedded in rates as part of the rate-setting process for Hydro One Networks' transmission business are recognized as a regulatory asset or regulatory liability, as the case may be. Similar variances were recognized for the distribution business prior to January 1, 2018, but are no longer recognized based on the March 7, 2019 decision. In March 2019, the OEB approved the disposition of the distribution business portion of the balance as at December 31, 2016, including accrued interest, and the balance was transferred to the 2019-2020 Rate Rider. The transmission portion of the balance as at December 31, 2018, including accrued interest, was requested for disposition in the 2020-2022 transmission rate application. On March 26, 2019, the Company filed a motion to review and vary the OEB's decision as it relates to rates revenue requirement recovery of employer pension costs. Concurrently, the Company filed an appeal with the Ontario Divisional Court. The appeal was held in abeyance pending the outcome of the motion made before the OEB. During the year, the Company reflected a portion of pension costs incurred in the Hydro One Networks' distribution Pension Cost Differential regulatory account, pending the outcome of the motion before the OEB. On December 19, 2019, the OEB affirmed its earlier decision with respect to recovery of the revenue requirement associated with pension costs. As a result, Hydro One derecognized the portion relating to pension costs charged to operations as a reversal of revenues of $13 million as this amount is no longer probable for recovery. Hydro One also transferred to property, plant and equipment and intangible assets the portion attributable to capital expenditures in the amount of $37 million . Hydro One has decided to discontinue its appeal of the OEB decision with the Ontario Divisional Court. In the absence of rate-regulated accounting, 2019 revenue would have been higher by $5 million (2018 - $29 million ). Green Energy Expenditure Variance In April 2010, the OEB requested the establishment of deferral accounts which capture the difference between the revenue recorded on the basis of Green Energy Plan expenditures incurred and the actual recoveries received. The smart grid variance account balance as at December 31, 2016, including accrued interest, was approved for disposition by the OEB in March 2019, and was transferred to the 2019-2020 Rate Rider. Retail Settlement Variance Account (RSVA) Hydro One has deferred certain retail settlement variance amounts under the provisions of Article 490 of the OEB’s Accounting Procedures Handbook. The RSVA account tracks the difference between the cost of power purchased from the Independent Electricity System Operator (IESO) and the cost of power recovered from ratepayers. The balance as at December 31, 2014, including accrued interest, was approved for disposition by the OEB in March 2019, and was transferred to the 2019-2020 Rate Rider. Earnings Sharing Mechanism Deferral In March 2019, the OEB approved the establishment of an earnings sharing mechanism deferral account for Hydro One Networks distribution to record over-earnings, if any, realized for any year from 2018 to 2022. Under this mechanism, Hydro One shares 50% of regulated earnings that exceed the OEB-approved regulatory return-on-equity by more than 100 basis points with distribution ratepayers. This account is asymmetrical to the benefit of ratepayers. External Revenue Variance The external revenue variance account balance reflects the difference between actual export service revenue and external revenues from secondary land use, and the OEB-approved amounts. The account also records the difference between actual net external station maintenance, engineering and construction services revenue, and other external revenue, and the OEB-approved amounts. In September 2017, the OEB approved the disposition of the external revenue variance account as at December 31, 2015, including accrued interest, which was returned to customers over a two-year period ended December 31, 2018. The balance as at December 31, 2018, including accrued interest, was requested for disposition in the 2020-2022 transmission rate application. |
Other Long-Term Assets
Other Long-Term Assets | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | OTHER LONG-TERM ASSETS December 31 (millions of dollars) 2019 2018 Right-of-Use assets (Notes 3, 22) 71 — Other 9 5 80 5 |
Accounts Payable and Other Curr
Accounts Payable and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Current Liabilities | ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES December 31 (millions of dollars) 2019 2018 Accounts payable 184 171 Accrued liabilities 633 578 Accrued interest 104 96 Regulatory liabilities (Note 12) 45 91 Lease obligations (Note 22) 8 — 974 936 |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | OTHER LONG-TERM LIABILITIES December 31 (millions of dollars) 2019 2018 Post-retirement and post-employment benefit liability (Note 19) 1,705 1,406 Pension benefit liability (Note 19) 1,125 547 Environmental liabilities (Note 20) 111 139 Lease obligations (Note 22) 66 — Due to related parties (Note 28) 40 41 Long-term accounts payable 5 11 Asset retirement obligations (Note 21) 10 10 Other liabilities 11 10 3,073 2,164 |
Debt and Credit Agreements
Debt and Credit Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Credit Agreements | DEBT AND CREDIT AGREEMENTS Short-Term Notes and Credit Facilities Hydro One meets its short-term liquidity requirements in part through the issuance of commercial paper under its Commercial Paper Program which has a maximum authorized amount of $2,300 million . These short-term notes are denominated in Canadian dollars with varying maturities up to 365 days. The Commercial Paper Program is supported by the Company’s committed and unsecured revolving standby credit facilities totalling $2,300 million (Operating Credit Facilities). At December 31, 2019, Hydro One’s Operating Credit Facilities consisted of the following: (millions of dollars) Maturity Total Amount Amount Drawn Revolving standby credit facilities June 2024 1 2,300 — 1 On June 3, 2019, the maturity date for the Operating Credit Facilities was extended from June 2022 to June 2024. The Company may use the credit facilities for working capital and general corporate purposes. If used, interest on the credit facilities would apply based on Canadian benchmark rates. The obligation of each lender to make any credit extension under its credit facility is subject to various conditions including that no event of default has occurred or would result from such credit extension. Long-Term Debt The following table presents long-term debt outstanding at December 31, 2019 and 2018: December 31 (millions of dollars) 2019 2018 Floating-rate Series 31 notes due 2019 1 — 228 1.48% Series 37 notes due 2019 2 — 500 4.40% Series 20 notes due 2020 300 300 1.62% Series 33 notes due 2020 2 350 350 1.84% Series 34 notes due 2021 500 500 2.57% Series 39 notes due 2021 2 300 300 3.20% Series 25 notes due 2022 600 600 2.54% Series 42 notes due 2024 700 — 2.97% Series 40 notes due 2025 350 350 2.77% Series 35 notes due 2026 500 500 3.02% Series 43 notes due 2029 550 — 7.35% Debentures due 2030 400 400 6.93% Series 2 notes due 2032 500 500 6.35% Series 4 notes due 2034 385 385 5.36% Series 9 notes due 2036 600 600 4.89% Series 12 notes due 2037 400 400 6.03% Series 17 notes due 2039 300 300 5.49% Series 18 notes due 2040 500 500 4.39% Series 23 notes due 2041 300 300 6.59% Series 5 notes due 2043 315 315 4.59% Series 29 notes due 2043 435 435 4.17% Series 32 notes due 2044 350 350 5.00% Series 11 notes due 2046 325 325 3.91% Series 36 notes due 2046 350 350 3.72% Series 38 notes due 2047 450 450 3.63% Series 41 notes due 2049 750 750 3.64% Series 44 notes due 2050 250 — 4.00% Series 24 notes due 2051 225 225 3.79% Series 26 notes due 2062 310 310 4.29% Series 30 notes due 2064 50 50 Hydro One long-term debt (a) 11,345 10,573 6.6% Senior Secured Bonds due 2023 (Principal amount - $105 million) 121 129 4.6% Note Payable due 2023 (Principal amount - $36 million) 39 39 HOSSM long-term debt (b) 160 168 11,505 10,741 Add: Net unamortized debt premiums 12 13 Add: Unrealized mark-to-market loss (gain) 2 1 (5 ) Less: Unamortized deferred debt issuance costs (43 ) (40 ) Total long-term debt 11,475 10,709 1 The interest rates of the floating-rate notes are referenced to the three-month Canadian dollar bankers’ acceptance rate, plus a margin. 2 The unrealized mark-to-market net loss of $1 million relates to $50 million of the Series 33 notes due 2020 and $300 million Series 39 notes due 2021. (2018 - unrealized mark-to-market net gain also related to $500 million Series 37 notes due 2019). The unrealized mark-to-market net loss is offset by a $1 million unrealized mark-to-market net gain (2018 - $5 million net loss) on the related fixed-to-floating interest-rate swap agreements, which are accounted for as fair value hedges. (a) Hydro One long-term debt At December 31, 2019, long-term debt of $11,345 million (2018 - $10,573 million ) was outstanding, the majority of which was issued under Hydro One’s Medium Term Note (MTN) Program. The maximum authorized principal amount of notes issuable under the current MTN Program prospectus filed in March 2018 is $4,000 million . At December 31 2019, $1,100 million remained available for issuance until April 2020. In 2019, Hydro One issued long-term debt totalling $1,500 million (2018 - $1,400 million ) and repaid long-term debt of $728 million (2018 - $750 million ) under its MTN Program. (b) HOSSM long-term debt At December 31, 2019, HOSSM long-term debt of $160 million (2018 - $168 million ), with a principal amount of $141 million (2018 - $143 million ) was outstanding. In 2019, no long-term debt was issued (2018 - $ nil ), and $2 million (2018 - $3 million ) of long-term debt was repaid. The total long-term debt is presented on the consolidated balance sheets as follows: December 31 (millions of dollars) 2019 2018 Current liabilities: Long-term debt payable within one year 653 731 Long-term liabilities: Long-term debt 10,822 9,978 Total long-term debt 11,475 10,709 Principal and Interest Payments At December 31, 2019, principal repayments, interest payments, and related weighted-average interest rates were as follows: Long-Term Debt Principal Repayments Interest Payments Weighted Average Interest Rate (millions of dollars) (millions of dollars) (%) Year 1 653 473 2.9 Year 2 803 455 2.1 Year 3 604 436 3.2 Year 4 131 423 6.1 Year 5 700 410 2.5 2,891 2,197 2.8 Years 6-10 1,400 1,901 2.9 Thereafter 7,195 4,151 5.0 11,486 8,249 4.2 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Risk Management | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Risk Management | FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The fair value definition focuses on an exit price, which is the price that would be received in the sale of an asset or the amount that would be paid to transfer a liability. Hydro One classifies its fair value measurements based on the following hierarchy, as prescribed by the accounting guidance for fair value, which prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Hydro One has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputs are those other than quoted market prices that are observable, either directly or indirectly, for an asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest-rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. A Level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs. Level 3 inputs are any fair value measurements that include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. A Level 3 measurement may be based primarily on Level 2 inputs. Non-Derivative Financial Assets and Liabilities At December 31, 2019 and 2018, the Company’s carrying amounts of cash and cash equivalents, accounts receivable, due from related parties, short-term notes payable, accounts payable, and due to related parties are representative of fair value due to the short-term nature of these instruments. Fair Value Measurements of Long-Term Debt The fair values and carrying values of the Company’s long-term debt at December 31, 2019 and 2018 are as follows: 2019 2019 2018 2018 December 31 (millions of dollars) Carrying Value Fair Value Carrying Value Fair Value Long-term debt measured at fair value: $50 million of MTN Series 33 notes 50 50 49 49 $500 million MTN Series 37 notes — — 495 495 $300 million MTN Series 39 notes 301 301 301 301 Other notes and debentures 11,124 13,121 9,864 10,820 Long-term debt, including current portion 11,475 13,472 10,709 11,665 Fair Value Measurements of Derivative Instruments Fair Value Hedges At December 31, 2019, Hydro One had interest-rate swaps with a total notional amount of $350 million (2018 - $850 million ) that were used to convert fixed-rate debt to floating-rate debt. These swaps are classified as fair value hedges. Hydro One’s fair value hedge exposure was approximately 3% (2018 - 8% ) of its total long-term debt. At December 31, 2019, Hydro One had the following interest-rate swaps designated as fair value hedges: • a $50 million fixed-to-floating interest-rate swap agreement to convert $50 million of the $350 million MTN Series 33 notes maturing April 30, 2020 into three-month variable rate debt; and • a $300 million fixed-to-floating interest-rate swap agreement to convert the $300 million MTN Series 39 notes maturing June 25, 2021 into three-month variable rate debt. Cash Flow Hedges At December 31, 2019, Hydro One had a total of $800 million in 3 -year pay-fixed, receive-floating interest-rate swap agreements designated as cash flow hedges. These cash flow hedges are intended to offset the variability of interest rates on the issuances of short-term commercial paper between January 9, 2020 and March 9, 2023. At December 31, 2019 and 2018, the Company had no interest-rate swaps classified as undesignated contracts. Fair Value Hierarchy The fair value hierarchy of financial assets and liabilities at December 31, 2019 and 2018 is as follows: December 31, 2019 (millions of dollars) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Derivative instruments 1 Fair value hedges (interest-rate swaps) 1 1 — 1 — Cash flow hedges (interest-rate swaps) 2 2 — 2 — 3 3 — 3 — Liabilities: Long-term debt, including current portion 11,475 13,472 — 13,472 — 11,475 13,472 — 13,472 — 1 Derivative assets are included in other long-term assets on the consolidated balance sheets. December 31, 2018 (millions of dollars) Carrying Value Fair Value Level 1 Level 2 Level 3 Liabilities: Long-term debt, including current portion 10,709 11,665 — 11,665 — Derivative instruments - fair value hedges (interest-rate swaps) 1 5 5 — 5 — 10,714 11,670 — 11,670 — 1 Derivative liabilities are included in other long-term liabilities on the consolidated balance sheets. The fair value of the hedged portion of the long-term debt is primarily based on the present value of future cash flows using a swap yield curve to determine the assumption for interest rates. The fair value of the unhedged portion of the long-term debt is based on unadjusted period-end market prices for the same or similar debt of the same remaining maturities. There were no transfers between any of the fair value levels during the years ended December 31, 2019 or 2018. Risk Management Exposure to market risk, credit risk and liquidity risk arises in the normal course of the Company’s business. Market Risk Market risk refers primarily to the risk of loss which results from changes in costs, foreign exchange rates and interest rates. The Company is exposed to fluctuations in interest rates, as its regulated return on equity is derived using a formulaic approach that takes anticipated interest rates into account. The Company is not currently exposed to material commodity price risk or material foreign exchange risk. The Company uses a combination of fixed and variable-rate debt to manage the mix of its debt portfolio. The Company also uses derivative financial instruments to manage interest-rate risk. The Company may utilize interest-rate swaps designated as fair value hedges as a means to manage its interest rate exposure to achieve a lower cost of debt. The Company may also utilize interest-rate derivative instruments, such as cash flow hedges, to manage its exposure to short-term interest rates or to lock in interest-rate levels in anticipation of future financing. A hypothetical 100 basis points increase in interest rates associated with variable-rate debt would not have resulted in a significant decrease in Hydro One’s net income for the years ended December 31, 2019 and 2018. For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in the Consolidated Statements of Operations and Comprehensive Income. The net unrealized loss (gain) on the hedged debt and the related interest-rate swaps for the years ended December 31, 2019 and 2018 were not material. For derivative instruments that are designated and qualify as cash flow hedges, the unrealized gain or loss, net of tax, on the derivative instrument is recorded as OCI and is reclassified to results of operations in the same period during which the hedged transaction affects results of operations. The unrealized gain, net of tax, on the cash flow hedges for the year ended December 31, 2019 recorded in OCI was $2 million (2018 - $ nil ), resulting in an AOCI balance of $2 million related to cash flow hedges at December 31, 2019 (2018 - $ nil ). No amounts were reclassified to results of operations during 2019 or 2018. The Company estimates that the amount of AOCI, net of tax, related to cash flow hedges to be reclassified to results of operations in the next 12 months is not significant. Actual amounts reclassified to results of operations depend on the market risk in effect until the derivative contracts mature. For all forecasted transactions, the maximum term over which the Company is hedging exposures to the variability of cash flows is approximately three years . Credit Risk Financial assets create a risk that a counterparty will fail to discharge an obligation, causing a financial loss. At December 31, 2019 and 2018, there were no significant concentrations of credit risk with respect to any class of financial assets. The Company’s revenue is earned from a broad base of customers. As a result, Hydro One did not earn a material amount of revenue from any single customer. At December 31, 2019 and 2018, there was no material accounts receivable balance due from any single customer. At December 31, 2019, the Company’s allowance for doubtful accounts was $22 million (2018 - $21 million ). The allowance for doubtful accounts reflects the Company's current lifetime expected credit losses for all accounts receivable balances, which are based on historical overdue balances, customer payments and write-offs. At December 31, 2019, approximately 5% (2018 - 5% ) of the Company’s net accounts receivable were outstanding for more than 60 days. Hydro One manages its counterparty credit risk through various techniques including: entering into transactions with highly rated counterparties; limiting total exposure levels with individual counterparties; entering into master agreements which enable net settlement and the contractual right of offset; and monitoring the financial condition of counterparties. The Company monitors current credit exposure to counterparties on both an individual and an aggregate basis. The Company’s credit risk for accounts receivable is limited to the carrying amounts on the Consolidated Balance Sheets. Derivative financial instruments result in exposure to credit risk since there is a risk of counterparty default. The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date. At December 31, 2019 and 2018, the counterparty credit risk exposure on the fair value of these interest-rate swap contracts was not material. At December 31, 2019, Hydro One’s credit exposure for all derivative instruments, and applicable payables and receivables, had a credit rating of investment grade, with three financial institutions as the counterparties. Liquidity Risk Liquidity risk refers to the Company’s ability to meet its financial obligations as they come due. Hydro One meets its short-term operating liquidity requirements using cash and cash equivalents on hand, funds from operations, the issuance of commercial paper, and the Operating Credit Facilities. The short-term liquidity under the Commercial Paper Program, Operating Credit Facilities, and anticipated levels of funds from operations are expected to be sufficient to fund normal operating requirements. |
Capital Management
Capital Management | 12 Months Ended |
Dec. 31, 2019 | |
Regulated Operations [Abstract] | |
Capital Management | CAPITAL MANAGEMENT The Company’s objectives with respect to its capital structure are to maintain effective access to capital on a long-term basis at reasonable rates, and to deliver appropriate financial returns. In order to ensure ongoing access to capital, the Company targets to maintain strong credit quality. At December 31, 2019 and 2018, the Company’s capital structure was as follows: December 31 (millions of dollars) 2019 2018 Long-term debt payable within one year 653 731 Short-term notes payable 1,143 1,252 Less: cash and cash equivalents (7 ) (492 ) 1,789 1,491 Long-term debt 10,822 9,978 Preferred shares — 486 Common shares 3,564 4,312 Retained earnings 6,086 5,137 Total capital 22,261 21,404 Hydro One and HOSSM have customary covenants typically associated with long-term debt. Long-term debt and credit facility covenants limit permissible debt to 75% of its total capitalization, limit the ability to sell assets and impose a negative pledge provision, subject to customary exceptions. At December 31, 2019, the Company was in compliance with all financial covenants and limitations associated with the outstanding borrowings and credit facilities. |
Pension and Post-Retirement and
Pension and Post-Retirement and Post-Employment Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Post-Retirement and Post-Employment Benefits | PENSION AND POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS Hydro One has a defined benefit pension plan (Pension Plan), a DC Plan, a supplemental pension plan (Supplemental Plan), and post-retirement and post-employment benefit plans. DC Plan Hydro One established a DC Plan effective January 1, 2016. The DC Plan covers eligible management employees hired on or after January 1, 2016, as well as management employees hired before January 1, 2016 who were not eligible or had not irrevocably elected to join the Pension Plan as of September 30, 2015. Members of the DC Plan have an option to contribute 4% , 5% or 6% of their pensionable earnings, with matching contributions by Hydro One up to an annual contribution limit. There is also a Supplemental DC Plan that provides members of the DC Plan with employer contributions beyond the limitations imposed by the Income Tax Act (Canada) in the form of credits to a notional account. Hydro One contributions to the DC Plan for the year ended December 31, 2019 were $1 million (2018 - $1 million ). Pension Plan, Supplemental Plan, and Post-Retirement and Post-Employment Plans The Pension Plan is a defined benefit contributory plan which covers eligible regular employees of Hydro One and its subsidiaries. The Pension Plan provides benefits based on highest three -year average pensionable earnings. For management employees who commenced employment on or after January 1, 2004, and for the Society of United Professionals (Society)-represented staff hired after November 17, 2005, benefits are based on highest five -year average pensionable earnings. After retirement, pensions are indexed to inflation. Membership in the Pension Plan was closed to management employees who were not eligible or had not irrevocably elected to join the Pension Plan as of September 30, 2015. These employees are eligible to join the DC Plan. Company and employee contributions to the Pension Plan are based on actuarial reports, including valuations performed at least every three years, and actual or projected levels of pensionable earnings, as applicable. The most recent actuarial valuation was performed effective December 31, 2018 and filed on September 30, 2019. The next actuarial valuation will be performed no later than effective December 31, 2021. Total annual cash Pension Plan employer contributions for 2019 were $61 million (2018 - $75 million ). Estimated annual Pension Plan employer contributions for the years 2020, 2021, 2022, 2023 and 2024 are approximately $66 million , $65 million , $64 million , $64 million , and $64 million , respectively. The Supplemental Plan provides members of the Pension Plan with benefits that would have been earned and payable under the Pension Plan beyond the limitations imposed by the Income Tax Act (Canada). The Supplemental Plan obligation is included with other post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets. Hydro One recognizes the overfunded or underfunded status of the Pension Plan, and post-retirement and post-employment benefit plans (Plans) as an asset or liability on its Consolidated Balance Sheets, with offsetting regulatory assets and liabilities as appropriate. The underfunded benefit obligations for the Plans, in the absence of regulatory accounting, would be recognized in AOCI. The impact of changes in assumptions used to measure pension and post-retirement benefit obligations is generally recognized over the expected average remaining service period of the employees and using the corridor approach for the post-retirement benefit plan. For post-employment benefit plan, the impact of changes in assumptions are recognized immediately in the net periodic benefit cost. The measurement date for the Plans is December 31. The following tables provide the components of the unfunded status of the Company's Plans at December 31, 2019 and 2018: Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 (millions of dollars) 2019 2018 2019 2018 Change in projected benefit obligation Projected benefit obligation, beginning of year 7,752 8,258 1,453 1,552 Current service cost 145 176 55 49 Employee contributions 55 52 — — Interest cost 303 282 60 54 Benefits paid (371 ) (362 ) (47 ) (49 ) Net actuarial loss (gain) 1,089 (654 ) 241 (156 ) Recognition of prior service — — — 3 Net transfers 1 — — 6 — Projected benefit obligation, end of year 8,973 7,752 1,768 1,453 Change in plan assets Fair value of plan assets, beginning of year 7,205 7,277 — — Actual return on plan assets 922 190 — — Benefits paid (371 ) (362 ) (47 ) (49 ) Employer contributions 61 75 47 49 Employee contributions 55 52 — — Administrative expenses (24 ) (27 ) — — Fair value of plan assets, end of year 7,848 7,205 — — Unfunded status 1,125 547 1,768 1,453 1 Effective January 1, 2019, liabilities associated with the HOSSM post-employment benefit plans were transferred to the Hydro One post-employment benefit plans. Hydro One presents its benefit obligations and plan assets net on its Consolidated Balance Sheets as follows: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of dollars) 2019 2018 2019 2018 Other assets 1 3 3 — — Accrued liabilities — — 63 54 Pension benefit liability 1,125 547 — — Post-retirement and post-employment benefit liability 2 — — 1,705 1,406 Net unfunded status 1,122 544 1,768 1,460 1 Represents the funded status of HOSSM defined benefit pension plan. 2 Includes $ nil (2018 - $7 million ) relating to HOSSM post-employment benefit plans. Effective January 1, 2019, liabilities associated with the HOSSM post-employment benefit plans were transferred to the Hydro One post-employment benefit plans. The funded or unfunded status of the Plans refers to the difference between the fair value of plan assets and the PBO for the Plans. The funded/unfunded status changes over time due to several factors, including contribution levels, assumed discount rates and actual returns on plan assets. The following table provides the PBO, accumulated benefit obligation (ABO) and fair value of plan assets for the Pension Plan: December 31 (millions of dollars) 2019 2018 PBO 8,973 7,752 ABO 8,183 7,144 Fair value of plan assets 7,848 7,205 On an ABO basis, the Pension Plan was funded at 96% at December 31, 2019 (2018 - 101% ). On a PBO basis, the Pension Plan was funded at 87% at December 31, 2019 (2018 - 93% ). The ABO differs from the PBO in that the ABO includes no assumption about future compensation levels. Components of Net Periodic Benefit Costs The following table provides the components of the net periodic benefit costs for the years ended December 31, 2019 and 2018 for the Pension Plan: Year ended December 31 (millions of dollars) 2019 2018 Current service cost 145 176 Interest cost 303 282 Expected return on plan assets, net of expenses (462 ) (467 ) Amortization of actuarial losses 55 84 Net periodic benefit costs 41 75 Charged to results of operations 1 29 31 1 The Company accounts for pension costs consistent with their inclusion in OEB-approved rates. During the year ended December 31, 2019, pension costs of $72 million (2018 - $74 million ) were attributed to labour, of which $29 million (2018 - $31 million ) was charged to operations, and $43 million (2018 - $43 million ) was capitalized as part of the cost of property, plant and equipment and intangible assets. The following table provides the components of the net periodic benefit costs for the years ended December 31, 2019 and 2018 for the post-retirement and post-employment benefit plans: Year ended December 31 (millions of dollars) 2019 2018 Current service cost 55 49 Interest cost 60 53 Amortization of actuarial losses 7 15 Recognition of prior service — 3 Net periodic benefit costs 122 120 Charged to results of operations 1 48 50 1 The Company accounts for post-retirement and post-employment costs consistent with their inclusion in OEB-approved rates. During the year ended December 31, 2019, post-retirement and post-employment costs of $121 million (2018 - $119 million ) were attributed to labour, of which $48 million (2018 - $50 million ) was charged to operations, $39 million (2018 - $41 million ) was recorded as regulatory assets, and $34 million (2018 - $28 million ) was capitalized as part of the cost of property, plant and equipment and intangible assets. Assumptions The measurement of the obligations of the Plans and the costs of providing benefits under the Plans involves various factors, including the development of valuation assumptions and accounting policy elections. When developing the required assumptions, the Company considers historical information as well as future expectations. The measurement of benefit obligations and costs is impacted by several assumptions including the discount rate applied to benefit obligations, the long-term expected rate of return on plan assets, Hydro One’s expected level of contributions to the Plans, the incidence of mortality, the expected remaining service period of plan participants, the level of compensation and rate of compensation increases, employee age, length of service, and the anticipated rate of increase of health care costs, among other factors. The impact of changes in assumptions used to measure the obligations of the Plans is generally recognized over the expected average remaining service period of the plan participants. In selecting the expected rate of return on plan assets, Hydro One considers historical economic indicators that impact asset returns, as well as expectations regarding future long-term capital market performance, weighted by target asset class allocations. In general, equity securities, real estate and private equity investments are forecasted to have higher returns than fixed-income securities. The following weighted average assumptions were used to determine the benefit obligations at December 31, 2019 and 2018: Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 2019 2018 2019 2018 Significant assumptions: Weighted average discount rate 3.10 % 3.90 % 3.10 % 4.00 % Rate of compensation scale escalation (long-term) 2.50 % 2.50 % 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % 2.00 % 2.00 % Rate of increase in health care cost trends 1 — — 4.04 % 4.04 % 1 5.09% per annum in 2020, grading down to 4.04% per annum in and after 2031 (2018 - 5.19% per annum in 2019, grading down to 4.04% per annum in and after 2031) The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2019 and 2018. Assumptions used to determine current year-end benefit obligations are the assumptions used to estimate the subsequent year’s net periodic benefit costs. Year ended December 31 2019 2018 Pension Benefits: Weighted average expected rate of return on plan assets 6.50 % 6.50 % Weighted average discount rate 3.90 % 3.40 % Rate of compensation scale escalation (long-term) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 15 15 Post-Retirement and Post-Employment Benefits: Weighted average discount rate 4.00 % 3.40 % Rate of compensation scale escalation (long-term) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 15.5 15.5 Rate of increase in health care cost trends 1 4.04 % 4.04 % 1 5.19% per annum in 2019, grading down to 4.04% per annum in and after 2031 (2018 - 5.26% per annum in 2018, grading down to 4.04% per annum in and after 2031) The discount rate used to determine the current year pension obligation and the subsequent year’s net periodic benefit costs is based on a yield curve approach. Under the yield curve approach, expected future benefit payments for each plan are discounted by a rate on a third-party bond yield curve corresponding to each duration. The yield curve is based on “AA” long-term corporate bonds. A single discount rate is calculated that would yield the same present value as the sum of the discounted cash flows. The effect of a 1% change in health care cost trends on the PBO for the post-retirement and post-employment benefits at December 31, 2019 and 2018 is as follows: December 31 (millions of dollars) 2019 2018 Projected benefit obligation: Effect of a 1% increase in health care cost trends 279 228 Effect of a 1% decrease in health care cost trends (211 ) (173 ) The effect of a 1% change in health care cost trends on the service cost and interest cost for the post-retirement and post-employment benefits for the years ended December 31, 2019 and 2018 is as follows: Year ended December 31 (millions of dollars) 2019 2018 Service cost and interest cost: Effect of a 1% increase in health care cost trends 21 23 Effect of a 1% decrease in health care cost trends (15 ) (16 ) The following approximate life expectancies were used in the mortality assumptions to determine the PBO for the pension and post-retirement and post-employment plans at December 31, 2019 and 2018: December 31 2019 2018 Life expectancy at age 65 for a member currently at: (years) (years) Age 65 - male 22 22 Age 65 - female 25 25 Age 45 - male 23 23 Age 45 - female 26 25 Estimated Future Benefit Payments At December 31, 2019, estimated future benefit payments to the participants of the Plans were: (millions of dollars) Pension Benefits Post-Retirement and Post-Employment Benefits 2020 345 60 2021 354 61 2022 362 62 2023 369 64 2024 375 64 2025 through to 2029 1,945 340 Total estimated future benefit payments through to 2029 3,750 651 Components of Regulatory Assets A portion of actuarial gains and losses and prior service costs is recorded within regulatory assets on Hydro One’s Consolidated Balance Sheets to reflect the expected regulatory inclusion of these amounts in future rates, which would otherwise be recorded in OCI. These amounts are reflected in the following table: Year ended December 31 (millions of dollars) 2019 2018 Pension Benefits: Actuarial loss (gain) for the year 652 (350 ) Amortization of actuarial losses (55 ) (84 ) 597 (434 ) Post-Retirement and Post-Employment Benefits: Actuarial loss (gain) for the year 240 (155 ) Amortization of actuarial losses (7 ) (15 ) Amortization of prior service cost — (3 ) Amounts not subject to regulatory treatment 2 7 235 (166 ) The following table provides the components of regulatory assets that have not been recognized as components of net periodic benefit costs for the years ended December 31, 2019 and 2018: Year ended December 31 (millions of dollars) 2019 2018 Pension Benefits: Actuarial loss 1,125 547 Post-Retirement and Post-Employment Benefits: Actuarial loss (gain) 105 (130 ) The following table provides the components of regulatory assets at December 31 that are expected to be amortized as components of net periodic benefit costs in the following year: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of dollars) 2019 2018 2019 2018 Actuarial loss (gain) 95 55 2 (1 ) Pension Plan Assets Investment Strategy On a regular basis, Hydro One evaluates its investment strategy to ensure that Pension Plan assets will be sufficient to pay Pension Plan benefits when due. As part of this ongoing evaluation, Hydro One may make changes to its targeted asset allocation and investment strategy. The Pension Plan is managed at a net asset level. The main objective of the Pension Plan is to sustain a certain level of net assets in order to meet the pension obligations of the Company. The Pension Plan fulfils its primary objective by adhering to specific investment policies outlined in its Statement of Investment Policies and Procedures (SIPP), which is reviewed and approved by the Human Resource Committee of Hydro One’s Board of Directors. The Company manages net assets by engaging knowledgeable external investment managers who are charged with the responsibility of investing existing funds and new funds (current year’s employee and employer contributions) in accordance with the approved SIPP. The performance of the managers is monitored through a governance structure. Increases in net assets are a direct result of investment income generated by investments held by the Pension Plan and contributions to the Pension Plan by eligible employees and by the Company. The main use of net assets is for benefit payments to eligible Pension Plan members. Pension Plan Asset Mix At December 31, 2019, the Pension Plan target asset allocations and weighted average asset allocations were as follows: Target Allocation (%) Pension Plan Assets (%) Equity securities 45 52 Debt securities 35 35 Real Estate and Infrastructure 20 13 100 100 At December 31, 2019, the Pension Plan held $21 million (2018 - $18 million ) Hydro One corporate bonds and $504 million (2018 - $546 million ) of debt securities of the Province of Ontario (Province). Concentrations of Credit Risk Hydro One evaluated its Pension Plan’s asset portfolio for the existence of significant concentrations of credit risk as at December 31, 2019 and 2018. Concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, concentrations in a type of industry, and concentrations in individual funds. At December 31, 2019 and 2018, there were no significant concentrations (defined as greater than 10% of plan assets) of risk in the Pension Plan’s assets. The Pension Plan's Statement of Investment Beliefs and Guidelines provides guidelines and restrictions for eligible investments taking into account credit ratings, maximum investment exposure and other controls in order to limit the impact of this risk. The Pension Plan manages its counterparty credit risk with respect to bonds by investing in investment-grade and government bonds and with respect to derivative instruments by transacting only with highly rated financial institutions, and also by ensuring that exposure is diversified across counterparties. The risk of default on transactions in listed securities is considered minimal, as the trade will fail if either party to the transaction does not meet its obligation. Fair Value Measurements The following tables present the Pension Plan assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy at December 31, 2019 and 2018: December 31, 2019 (millions of dollars) Level 1 Level 2 Level 3 Total Pooled funds — 22 1,079 1,101 Cash and cash equivalents 159 — — 159 Short-term securities — 98 — 98 Derivative instruments — 5 — 5 Corporate shares - Canadian 107 — — 107 Corporate shares - Foreign 3,545 219 — 3,764 Bonds and debentures - Canadian — 2,427 — 2,427 Bonds and debentures - Foreign — 165 — 165 Total fair value of plan assets 1 3,811 2,936 1,079 7,826 December 31, 2019 (millions of dollars) Level 1 Level 2 Level 3 Total Derivative instruments — 2 — 2 Total fair value of plan liabilities 1 — 2 — 2 1 At December 31, 2019, the total fair value of Pension Plan assets and liabilities excludes $36 million of interest and dividends receivable, $10 million of pension administration expenses payable, $3 million of sold investments receivable, and $5 million of purchased investments payable. December 31, 2018 (millions of dollars) Level 1 Level 2 Level 3 Total Pooled funds — 21 651 672 Cash and cash equivalents 210 — — 210 Short-term securities — 78 — 78 Derivative instruments — (7 ) — (7 ) Corporate shares - Canadian 115 — — 115 Corporate shares - Foreign 3,222 183 — 3,405 Bonds and debentures - Canadian — 2,506 — 2,506 Bonds and debentures - Foreign — 197 — 197 Total fair value of plan assets 1 3,547 2,978 651 7,176 1 At December 31, 2018, the total fair value of Pension Plan assets and liabilities excludes $35 million of interest and dividends receivable, $10 million of pension administration expenses payable, $6 million of sold investments receivable, and $2 million of purchased investments payable. See Note 17 - Fair Value of Financial Instruments and Risk Management for a description of levels within the fair value hierarchy. Changes in the Fair Value of Financial Instruments Classified in Level 3 The following table summarizes the changes in fair value of financial instruments classified in Level 3 for the years ended December 31, 2019 and 2018. The Pension Plan classifies financial instruments as Level 3 when the fair value is measured based on at least one significant input that is not observable in the markets or due to lack of liquidity in certain markets. The gains and losses presented in the table below could, therefore, include changes in fair value based on both observable and unobservable inputs. The Level 3 financial instruments are comprised of pooled funds whose valuations are provided by the investment managers. Sensitivity analysis is not provided as the underlying assumptions used by the investment managers are not available. Year ended December 31 (millions of dollars) 2019 2018 Fair value, beginning of year 651 549 Realized and unrealized gains (losses) (4 ) 59 Purchases 463 90 Sales and disbursements (31 ) (47 ) Fair value, end of year 1,079 651 There were no significant transfers between any of the fair value levels during the years ended December 31, 2019 and 2018. Valuation Techniques Used to Determine Fair Value Pooled funds mainly consist of private equity, real estate and infrastructure investments. Private equity investments represent private equity funds that invest in operating companies that are not publicly traded on a stock exchange. Investment strategies in private equity include limited partnerships in businesses that are characterized by high internal growth and operational efficiencies, venture capital, leveraged buyouts and special situations such as distressed investments. Real estate and infrastructure investments represent funds that invest in real assets which are not publicly traded on a stock exchange. Investment strategies in real estate include limited partnerships that seek to generate a total return through income and capital growth by investing primarily in global and Canadian limited partnerships. Investment strategies in infrastructure include limited partnerships in core infrastructure assets focusing on assets that generate stable, long-term cash flows and deliver incremental returns relative to conventional fixed-income investments. Private equity, real estate and infrastructure valuations are reported by the fund manager and are based on the valuation of the underlying investments which includes inputs such as cost, operating results, discounted future cash flows and market-based comparable data. Since these valuation inputs are not highly observable, private equity and infrastructure investments have been categorized as Level 3 within pooled funds. Cash equivalents consist of demand cash deposits held with banks and cash held by the investment managers. Cash equivalents are categorized as Level 1. Short-term securities are valued at cost plus accrued interest, which approximates fair value due to their short-term nature. Short-term securities are categorized as Level 2. Derivative instruments are used to hedge the Pension Plan’s foreign currency exposure back to Canadian dollars. The notional principal amount of contracts outstanding as at December 31, 2019 was $742 million (2018 - $299 million ), the most significant currencies being hedged against the Canadian dollar are the United States dollar, euro, British pound sterling, and Japanese yen. The net realized gain on contracts for the year ended December 31, 2019 was $1 million (2018 - $7 million net realized loss). The terms to maturity of the forward exchange contracts at December 31, 2019 are within three months. The fair value is determined using standard interpolation methodology primarily based on the World Markets exchange rates. Derivative instruments are categorized as Level 2. Corporate shares are valued based on quoted prices in active markets and are categorized as Level 1. Corporate shares which are valued based on quoted prices in active markets, but held within a pension investment holding company, are categorized as Level 2. Investments denominated in foreign currencies are translated into Canadian currency at year-end rates of exchange. Bonds and debentures are presented at published closing trade quotations, and are categorized as Level 2. |
Environmental Liabilities
Environmental Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Environmental Remediation Obligations [Abstract] | |
Environmental Liabilities | ENVIRONMENTAL LIABILITIES The following tables show the movements in environmental liabilities for the years ended December 31, 2019 and 2018: Year ended December 31, 2019 (millions of dollars) PCB LAR Total Environmental liabilities - beginning 108 57 165 Interest accretion 4 — 4 Expenditures (17 ) (8 ) (25 ) Revaluation adjustment (5 ) 2 (3 ) Environmental liabilities - ending 90 51 141 Less: current portion (19 ) (11 ) (30 ) 71 40 111 Year ended December 31, 2018 (millions of dollars) PCB LAR Total Environmental liabilities - beginning 134 62 196 Interest accretion 5 1 6 Expenditures (16 ) (6 ) (22 ) Revaluation adjustment (15 ) — (15 ) Environmental liabilities - ending 108 57 165 Less: current portion (15 ) (11 ) (26 ) 93 46 139 The following tables show the reconciliation between the undiscounted basis of the environmental liabilities and the amount recognized on the Consolidated Balance Sheets after factoring in the discount rate: December 31, 2019 (millions of dollars) PCB LAR Total Undiscounted environmental liabilities 97 51 148 Less: discounting environmental liabilities to present value (7 ) — (7 ) Discounted environmental liabilities 90 51 141 December 31, 2018 (millions of dollars) PCB LAR Total Undiscounted environmental liabilities 118 58 176 Less: discounting environmental liabilities to present value (10 ) (1 ) (11 ) Discounted environmental liabilities 108 57 165 At December 31, 2019, the estimated future environmental expenditures were as follows: December 31 (millions of dollars) 2019 2020 30 2021 31 2022 29 2023 25 2024 8 Thereafter 25 148 Hydro One records a liability for the estimated future expenditures for LAR and for the phase-out and destruction of PCB-contaminated mineral oil removed from electrical equipment when it is determined that future environmental remediation expenditures are probable under existing statute or regulation and the amount of the future expenditures can be reasonably estimated. There are uncertainties in estimating future environmental costs due to potential external events such as changes in legislation or regulations, and advances in remediation technologies. In determining the amounts to be recorded as environmental liabilities, the Company estimates the current cost of completing required work and makes assumptions as to when the future expenditures will actually be incurred, in order to generate future cash flow information. A long-term inflation rate assumption of approximately 2% has been used to express these current cost estimates as estimated future expenditures. Future expenditures have been discounted using factors ranging from approximately 2.0% to 6.3% , depending on the appropriate rate for the period when expenditures are expected to be incurred. All factors used in estimating the Company’s environmental liabilities represent management’s best estimates of the present value of costs required to meet existing legislation or regulations. However, it is reasonably possible that numbers or volumes of contaminated assets, cost estimates to perform work, inflation assumptions and the assumed pattern of annual cash flows may differ significantly from the Company’s current assumptions. In addition, with respect to the PCB environmental liability, the availability of critical resources such as skilled labour and replacement assets and the ability to take maintenance outages in critical facilities may influence the timing of expenditures. PCBs The Environment Canada regulations, enacted under the Canadian Environmental Protection Act, 1999 , govern the management, storage and disposal of PCBs based on certain criteria, including type of equipment, in-use status, and PCB-contamination thresholds. Under current regulations, Hydro One’s PCBs have to be disposed of by the end of 2025, with the exception of specifically exempted equipment. Contaminated equipment will generally be replaced, or will be decontaminated by removing PCB-contaminated insulating oil and retro filling with replacement oil that contains PCBs in concentrations of less than 2 ppm. At December 31, 2019, the Company’s best estimate of the total estimated future expenditures to comply with current PCB regulations was $97 million (2018 - $118 million ). These expenditures are expected to be incurred over the period from 2020 to 2024. As a result of its annual review of environmental liabilities, the Company recorded a revaluation adjustment in 2019 to decrease the PCB environmental liability by $5 million (2018 - $15 million ). LAR At December 31, 2019, the Company’s best estimate of the total estimated future expenditures to complete its LAR program was $51 million (2018 - $58 million ). These expenditures are expected to be incurred over the period from 2020 to 2044. As a result of its annual review of environmental liabilities, the Company recorded a revaluation adjustment in 2019 to increase the LAR environmental liability by $2 million (2018 - $ nil ). |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | ASSET RETIREMENT OBLIGATIONS Hydro One records a liability for the estimated future expenditures for the removal and disposal of asbestos-containing materials installed in some of its facilities. Asset retirement obligations, which represent legal obligations associated with the retirement of certain tangible long-lived assets, are computed as the present value of the projected expenditures for the future retirement of specific assets and are recognized in the period in which the liability is incurred, if a reasonable estimate can be made. If the asset remains in service at the recognition date, the present value of the liability is added to the carrying amount of the associated asset in the period the liability is incurred and this additional carrying amount is depreciated over the remaining life of the asset. If an asset retirement obligation is recorded in respect of an out-of-service asset, the asset retirement cost is charged to results of operations. Subsequent to the initial recognition, the liability is adjusted for any revisions to the estimated future cash flows associated with the asset retirement obligation, which can occur due to a number of factors including, but not limited to, cost escalation, changes in technology applicable to the assets to be retired, changes in legislation or regulations, as well as for accretion of the liability due to the passage of time until the obligation is settled. Depreciation expense is adjusted prospectively for any increases or decreases to the carrying amount of the associated asset. In determining the amounts to be recorded as asset retirement obligations, the Company estimates the current fair value for completing required work and makes assumptions as to when the future expenditures will actually be incurred, in order to generate future cash flow information. A long-term inflation assumption of approximately 2% has been used to express these current cost estimates as estimated future expenditures. Future expenditures have been discounted using factors ranging from approximately 2.0% to 4.0% , depending on the appropriate rate for the period when expenditures are expected to be incurred. All factors used in estimating the Company’s asset retirement obligations represent management’s best estimates of the cost required to meet existing legislation or regulations. However, it is reasonably possible that numbers or volumes of contaminated assets, cost estimates to perform work, inflation assumptions and the assumed pattern of annual cash flows may differ significantly from the Company’s current assumptions. Asset retirement obligations are reviewed annually or more frequently if significant changes in regulations or other relevant factors occur. Estimate changes are accounted for prospectively. As a result of its annual review of asset retirement obligations, no revaluation adjustment to the asset retirement obligations was recorded in 2019 (2018 - revaluation adjustment was recorded to increase the asset retirement obligations by $1 million ). At December 31, 2019, Hydro One had recorded asset retirement obligations of $10 million (2018 - $10 million ), primarily consisting of the estimated future expenditures associated with the removal and disposal of asbestos-containing materials installed in some of its facilities. The amount of interest recorded is nominal. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES Hydro One has operating lease contracts for buildings used in administrative and service-related functions. These leases have typical terms of between three and five years with renewal options of additional three - to five -year terms at prevailing market rates at the time of extension. All leases include a clause to enable upward revision of the rental charge on an annual basis or on renewal according to prevailing market conditions or pre-established rents. There are no restrictions placed upon Hydro One by entering into these leases. Renewal options are included in the lease term when their exercise is reasonably certain. Other information related to the Company's operating leases was as follows: Year ended December 31 (millions of dollars) 2019 Lease expense 9 Lease payments made 6 December 31 2019 Weighted-average remaining lease term 1 (years) 8 Weighted-average discount rate 2.7 % 1 Includes renewal options that are reasonably certain to be exercised At December 31, 2019, future minimum operating lease payments were as follows: December 31 (millions of dollars) 2019 2020 10 2021 11 2022 10 2023 9 2024 9 Thereafter 33 Total undiscounted minimum lease payments 1 82 Less: discounting minimum lease payments to present value (9 ) Total discounted minimum lease payments 73 1 Excludes committed amounts of $6 million for leases that have not yet commenced At December 31, 2018, future minimum operating lease payments were as follows: December 31 (millions of dollars) 2018 2019 6 2020 10 2021 4 2022 1 2023 1 Thereafter 3 Total undiscounted minimum lease payments 25 Hydro One presents its ROU assets and lease obligations on the Consolidated Balance Sheet as follows: December 31 (millions of dollars) 2019 Other long-term assets (Note 13) 71 Accounts payable and other current liabilities (Note 14) 8 Other long-term liabilities (Note 15) 66 |
Share Capital
Share Capital | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Share Capital | SHARE CAPITAL Common Shares The Company is authorized to issue an unlimited number of common shares. At December 31, 2019, the Company had 142,239 (2018 - 142,239 ) common shares issued and outstanding. In 2019, a return of stated capital in the amount of $748 million (2018 - $544 million ) was paid. The amount and timing of any dividends payable by Hydro One is at the discretion of the Hydro One Board of Directors and is established on the basis of Hydro One’s results of operations, maintenance of its deemed regulatory capital structure, financial condition, cash requirements, the satisfaction of solvency tests imposed by corporate laws for the declaration and payment of dividends and other factors that the Board of Directors may consider relevant. Preferred Shares The Company is authorized to issue an unlimited number of preferred shares, issuable in series. At December 31, 2019 and 2018, two series of preferred shares were authorized for issuance: the Class A preferred shares and Class B preferred shares. On January 24, 2019, the Company redeemed 485,870 Class B preferred shares totalling $486 million . At December 31, 2019 the Company had no (2018 - 485,870 ) Class B preferred shares and no (2018 - nil ) Class A preferred shares issued and outstanding. Class A Preferred Shares On November 2, 2015, a special resolution of Hydro One Limited (as sole shareholder of Hydro One) was made to amend the articles of Hydro One to delete the share ownership restrictions and to amend the Hydro One preferred share terms to provide for basic redeemable preferred shares. When issued, the Class A preferred shares will be redeemable at the option of the Company. The holders of the Class A preferred shares will be entitled to receive, if and when declared by the Hydro One Board of Directors, non-cumulative preferred share dividends at a rate per year to be determined by the Hydro One Board of Directors. The holders of the Class A preferred shares will not be entitled to receive notice of, or to attend or to vote at, any meeting of the shareholders of Hydro One. The holders of the Class A preferred shares will be entitled to receive, before any distributions to the holders of common shares and any other shares ranking junior to the Class A preferred shares, an amount equal to the amount paid for the Class A preferred shares together with all dividends declared and unpaid up to the date of liquidation, dissolution or winding up of Hydro One, or the date of redemption. Class B Preferred Shares On November 10, 2017, a special resolution of Hydro One Limited was made to amend the articles of Hydro One to create an unlimited number of Class B preferred shares. The holders of the Class B preferred shares are entitled to receive quarterly floating-rate cumulative dividends, if and when declared by the Board of Directors, at a rate equal to the sum of the average 3-month Canadian dollar bankers’ acceptance rate and 0.25% as reset quarterly. The holders of the Class B preferred shares will not be entitled to receive notice of, or to attend or to vote at, any meeting of the shareholders of Hydro One. The holders of the Class B preferred shares will be entitled to receive, before any distributions to the holders of the Class A preferred shares, the common shares and any other shares ranking junior to the Class B preferred shares, an amount equal to the amount paid for the Class B preferred shares together with all dividends unpaid up to the date of liquidation, dissolution or winding up of Hydro One, or the date of redemption. The Class B preferred shares have a redemption feature that is outside the control of the Company because the holders can exercise their right to redeem the Class B preferred shares at any time without approval of the Company’s Board of Directors. The Class B preferred shares are classified on the Consolidated Balance Sheet as temporary equity because this redemption feature is outside the control of the Company. |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Dividends | DIVIDENDS In 2019, preferred share dividends in the amount of $2 million (2018 - $9 million ) and common share dividends in the amount of $1 million (2018 - $6 million ) were declared and paid. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | EARNINGS PER COMMON SHARE Basic and diluted earnings per common share is calculated by dividing net income (loss) attributable to common shareholder of Hydro One by the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding at December 31, 2019 was 142,239 (2018 - 142,239 ). There were no dilutive securities during 2019 or 2018. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The following compensation plans were established by Hydro One Limited, however they represent components of compensation costs of Hydro One in current and future periods. Share Grant Plans Hydro One Limited has two share grant plans (Share Grant Plans), one for the benefit of certain members of the Power Workers’ Union (PWU) (PWU Share Grant Plan) and one for the benefit of certain members of the Society (Society Share Grant Plan). Hydro One and Hydro One Limited entered into an intercompany agreement, such that Hydro One will pay Hydro One Limited for the compensation costs associated with these plans. The PWU Share Grant Plan provides for the issuance of common shares of Hydro One Limited from treasury to certain eligible members of the PWU annually, commencing on April 1, 2017 and continuing until the earlier of April 1, 2028 or the date an eligible employee no longer meets the eligibility criteria of the PWU Share Grant Plan. To be eligible, an employee must be a member of the Pension Plan on April 1, 2015, be employed on the date annual share issuance occurs and continue to have under 35 years of service. The requisite service period for the PWU Share Grant Plan began on July 3, 2015 , which is the date the share grant plan was ratified by the PWU. The number of common shares issued annually to each eligible employee will be equal to 2.7% of such eligible employee’s salary as at April 1, 2015, divided by $20.50 , being the price of the common shares of Hydro One Limited in the Initial Public Offering (IPO). The aggregate number of Hydro One Limited common shares issuable under the PWU Share Grant Plan shall not exceed 3,981,763 common shares. In 2015, 3,952,212 Hydro One Limited common shares were granted under the PWU Share Grant Plan relevant to the total share based compensation recognized by Hydro One. The Society Share Grant Plan provides for the issuance of common shares of Hydro One Limited from treasury to certain eligible members of The Society annually, commencing on April 1, 2018 and continuing until the earlier of April 1, 2029 or the date an eligible employee no longer meets the eligibility criteria of the Society Share Grant Plan. To be eligible, an employee must be a member of the Pension Plan on September 1, 2015 , be employed on the date annual share issuance occurs and continue to have under 35 years of service. Therefore, the requisite service period for the Society Share Grant Plan began on September 1, 2015. The number of common shares issued annually to each eligible employee will be equal to 2.0% of such eligible employee’s salary as at September 1, 2015, divided by $20.50 , being the price of the common shares of Hydro One Limited in the IPO. The aggregate number of Hydro One Limited common shares issuable under the Society Share Grant Plan shall not exceed 1,434,686 common shares. In 2015, 1,367,158 Hydro One Limited common shares were granted under the Society Share Grant Plan relevant to the total share-based compensation recognized by Hydro One. The fair value of the Hydro One Limited 2015 share grants of $111 million was estimated based on the grant date Hydro One Limited share price of $20.50 and is recognized using the graded-vesting attribution method as the share grant plans have both a performance condition and a service condition. In 2019, 455,694 common shares of Hydro One Limited (2018 - 473,222 ) were issued under the Share Grant Plans to eligible employees of Hydro One. Total share-based compensation recognized during 2019 was $9 million (2018 - $12 million ) and was recorded as a regulatory asset. A summary of share grant activity under the Share Grant Plans during the years ended December 31, 2019 and 2018 is presented below: Year ended December 31, 2019 Share Grants (number of common shares) Weighted-Average Price Share grants outstanding - beginning 4,159,439 $20.50 Vested and issued 1 (455,694 ) — Forfeited (92,567 ) $20.50 Share grants outstanding - ending 3,611,178 $20.50 1 In 2019, Hydro One Limited issued from treasury common shares to eligible Hydro One employees in accordance with provisions of the PWU and the Society Share Grant Plans. In accordance with the intercompany agreement between Hydro One and Hydro One Limited, Hydro One made payments to Hydro One Limited for the common shares issued. Year ended December 31, 2018 Share Grants (number of common shares) Weighted-Average Price Share grants outstanding - beginning 4,737,783 $20.50 Vested and issued 1 (473,222 ) — Forfeited (105,122 ) $20.50 Share grants outstanding - ending 4,159,439 $20.50 1 In 2018, Hydro One Limited issued from treasury common shares to eligible Hydro One employees in accordance with provisions of the PWU and the Society Share Grant Plans. In accordance with the intercompany agreement between Hydro One and Hydro One Limited, Hydro One made payments to Hydro One Limited for the common shares issued. Directors' DSU Plan Under the Directors’ DSU Plan, directors can elect to receive credit for their annual cash retainer in a notional account of DSUs in lieu of cash. Hydro One Limited’s Board of Directors may also determine from time to time that special circumstances exist that would reasonably justify the grant of DSUs to a director as compensation in addition to any regular retainer or fee to which the director is entitled. Each DSU represents a unit with an underlying value equivalent to the value of one common share of Hydro One Limited and is entitled to accrue Hydro One Limited common share dividend equivalents in the form of additional DSUs at the time dividends are paid, subsequent to declaration by Hydro One Limited’s Board of Directors. A summary of DSU awards activity under the Directors' DSU Plan during the years ended December 31, 2019 and 2018 is presented below: Year ended December 31 (number of DSUs) 2019 2018 DSUs outstanding - beginning 46,697 187,090 Granted 29,938 82,375 Settled 1 (24,015 ) (222,768 ) DSUs outstanding - ending 52,620 46,697 1 In 2018, DSUs related to the Company's former Board of Directors were settled at the June 29, 2018 closing price of Hydro One Limited's common shares of $20.04 , with an amount of approximately $5 million paid during the fourth quarter of 2018. For the year ended December 31, 2019, an expense of $1 million (2018 - $1 million ) was recognized in earnings with respect to the Directors' DSU Plan. At December 31, 2019, a liability of $1 million (2018 - $1 million ) related to Directors' DSUs has been recorded at the December 31, 2019 closing price of the Company's common shares of $25.08 . This liability is included in long-term accounts payable and other liabilities on the Consolidated Balance Sheets. Management DSU Plan Under the Management DSU Plan, eligible executive employees can elect to receive a specified proportion of their annual short-term incentive in a notional account of DSUs in lieu of cash. Each DSU represents a unit with an underlying value equivalent to the value of one common share of Hydro One Limited and is entitled to accrue common share dividend equivalents in the form of additional DSUs at the time dividends are paid, subsequent to declaration by Hydro One’s Board of Directors. A summary of DSU awards activity under the Management DSU Plan during the years ended December 31, 2019 and 2018 is presented below: Year ended December 31 (number of DSUs) 2019 2018 DSUs outstanding - beginning 104,041 63,760 Granted 24,947 40,281 Paid (76,802 ) — DSUs outstanding - ending 52,186 104,041 For the year ended December 31, 2019, an expense of $1 million (2018 - $1 million ) was recognized in earnings with respect to the Management DSU Plan. At December 31, 2019, a liability of $1 million (2018 - $2 million ) related to Management DSUs has been recorded at the December 31, 2019 closing price of Hydro One Limited's common shares of $25.08 . This liability is included in long-term accounts payable and other liabilities on the Consolidated Balance Sheets. Employee Share Ownership Plan In 2015, Hydro One Limited established Employee Share Ownership Plans (ESOP) for certain eligible management and non-represented employees (Management ESOP) and for certain eligible Society-represented staff (Society ESOP). Under the Management ESOP, the eligible management and non-represented employees may contribute between 1% and 6% of their base salary towards purchasing common shares of Hydro One Limited. The Company matches 50% of their contributions, up to a maximum Company contribution of $25,000 per calendar year. Under the Society ESOP, the eligible Society-represented staff may contribute between 1% and 4% of their base salary towards purchasing common shares of Hydro One Limited. The Company matches 25% of their contributions, with no maximum Company contribution per calendar year. In 2019, Company contributions made under the ESOP were $2 million (2018 - $2 million ). LTIP Effective August 31, 2015, the Board of Directors of Hydro One Limited adopted an LTIP. Under the LTIP, long-term incentives are granted to certain executive and management employees of Hydro One Limited and its subsidiaries, and all equity-based awards will be settled in newly issued shares of Hydro One Limited from treasury, consistent with the provisions of the plan which also permit the participants to surrender a portion of their awards to satisfy related withholding taxes requirements. The aggregate number of shares issuable under the LTIP shall not exceed 11,900,000 shares of Hydro One Limited. The LTIP provides flexibility to award a range of vehicles, including Performance Share Units (PSUs), Restricted Share Units (RSUs), stock options, share appreciation rights, restricted shares, DSUs, and other share-based awards. The mix of vehicles is intended to vary by role to recognize the level of executive accountability for overall business performance. PSUs and RSUs A summary of PSU and RSU awards activity under the LTIP during the years ended December 31, 2019 and 2018 is presented below: PSUs RSUs Year ended December 31 (number of units) 2019 2018 2019 2018 Units outstanding - beginning 594,470 425,120 432,780 388,140 Granted — 438,470 — 338,480 Vested and issued (76,411 ) (123 ) (88,532 ) (104,881 ) Forfeited (153,805 ) (30,967 ) (84,745 ) (30,649 ) Settled (201,910 ) (238,030 ) (58,620 ) (158,310 ) Units outstanding - ending 1 162,344 594,470 200,883 432,780 1 Units outstanding at December 31, 2019 include 7,740 PSUs and 96,330 RSUs that may be settled in cash if certain conditions are met. At December 31, 2019, a liability of $3 million has been recorded with respect to these awards and is included in accrued liabilities on the Consolidated Balance Sheet. No awards were granted in 2019. The grant date total fair value of the awards granted in 2018 was $16 million . The compensation expense related to the PSU and RSU awards recognized by the Company during 2019 was $8 million (2018 - $15 million ). Amounts recognized in 2019 were affected by the reversal in the third quarter of 2019 of approximately $3 million of previously recognized compensation expense to reflect forfeitures of PSUs and RSUs in the third quarter of 2019. The expense recognized in 2018 included $5 million related to previously awarded PSUs and RSUs to the Company's former President and Chief Executive Officer for which costs had not previously been recognized. These awards, consisting of 238,030 PSUs and 158,310 RSUs, were settled in 2018 through a one-time cash settlement arrangement. At December 31, 2019, $10 million (2018 - $20 million ) payable to Hydro One Limited relating to PSU and RSU awards was included in due to related parties on the Consolidated Balance Sheets. Stock Options The Company is authorized to grant stock options under its LTIP to certain eligible employees. No stock options were granted in 2019 (2018 - 1,450,880 stock options were granted). The stock options granted are exercisable for a period not to exceed seven years from the date of grant. The original three -year vesting period for 706,070 stock options was modified in 2019 due to agreements reached with five option-holders, resulting in applicable stock options being fully vested in 2019. The incremental compensation cost resulting from the modification was not significant. The fair value-based method is used to measure compensation expense related to stock options and the expense is recognized over the vesting period on a straight-line basis. The fair value of the stock option awards granted was estimated on the date of grant using a Black-Scholes valuation model. Updates related to stock options subject to modification were not significant. Stock options granted and the weighted-average assumptions used in the valuation model for options granted during 2018 are as follows: Exercise price 1 $ 20.70 Grant date fair value per option $ 1.66 Valuation assumptions: Expected dividend yield 2 3.78 % Expected volatility 3 15.01 % Risk-free interest rate 4 2.00 % Expected option term 5 4.5 years 1 Hydro One Limited common share price on the date of the grant. 2 Based on dividend and Hydro One Limited common share price on the date of the grant. 3 Based on average daily volatility of Hydro One Limited's peer entities for a 4.5 -year term. 4 Based on bond yield for an equivalent Canadian government bond. 5 Determined using the option term and the vesting period. A summary of stock options activity during the years ended December 31, 2019 and 2018 is presented below: Number of Stock Options Weighted-average exercise price Stock options outstanding - January 1, 2018 — Granted 1,450,880 $ 20.70 Forfeited 1 (500,970 ) $ 20.66 Stock options outstanding - December 31, 2018 2,3 949,910 $ 20.72 Exercised 4 (302,520 ) $ 20.76 Forfeited 1 (243,840 ) $ 20.75 Stock options outstanding - December 31, 2019 2 403,550 $ 20.66 1 Stock options forfeited in 2019 had a fair value of $1.65 per option (2018 - $1.67 ). 2 During 2019, 706,070 stock options vested with a modified fair value of $1.04 per option (2018 - no stock options vested), of which 302,520 stock options were exercised. At December 31, 2019, all stock options outstanding were vested and exercisable (2018 - all stock options were non-vested). 3 Stock options outstanding at December 31, 2019 have an aggregate intrinsic value of $2 million (2018 - $ nil ) and weighted-average remaining contractual term of 5.2 years (2018 - 6.2 years). 4 Stock options exercised in 2019 had an aggregate intrinsic value of $1 million . The compensation expense related to stock options recognized by the Company during 2019 was $1 million (2018 - $1 million . At December 31, 2019, the unrecognized compensation expense related to stock options not yet vested was $ nil (2018 - $1 million ). At December 31, 2019, no amounts were payable to Hydro One Limited relating to stock options awards (2018 - $1 million was included in due to related parties on the Consolidated Balance Sheets). On January 16, 2020, 117,980 stock options were exercised. See Note 33 - Subsequent Events. |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | NONCONTROLLING INTEREST Total noncontrolling interest consists of noncontrolling interest attributable to B2M LP and noncontrolling interest attributable to NRLP. The following tables show the movements in total noncontrolling interest during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 21 49 70 Contributions from sale of noncontrolling interest (Note 4) — 12 12 Distributions to noncontrolling interest (3 ) (6 ) (9 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 20 59 79 Year ended December 31, 2018 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 22 50 72 Distributions to noncontrolling interest (3 ) (5 ) (8 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 21 49 70 B2M LP On December 16, 2014, transmission assets totalling $526 million were transferred from Hydro One Networks to B2M LP. This was financed by 60% debt ( $316 million ) and 40% equity ( $210 million ). On December 17, 2014, the SON acquired a 34.2% equity interest in B2M LP for consideration of $72 million , representing the fair value of the equity interest acquired. The SON’s initial investment in B2M LP consists of $50 million of Class A units and $22 million of Class B units. The Class B units have a mandatory put option which requires that upon the occurrence of an enforcement event (i.e., an event of default such as a debt default by the SON or insolvency event), Hydro One purchase the Class B units of B2M LP for net book value on the redemption date. The noncontrolling interest relating to the Class B units is classified on the Consolidated Balance Sheet as temporary equity because the redemption feature is outside the control of the Company. The balance of the noncontrolling interest is classified within equity. The following tables show the movements in B2M LP noncontrolling interest during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 21 49 70 Distributions to noncontrolling interest (3 ) (6 ) (9 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 20 47 67 Year ended December 31, 2018 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 22 50 72 Distributions to noncontrolling interest (3 ) (5 ) (8 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 21 49 70 NRLP On September 18, 2019, Hydro One Networks sold to the Six Nations of the Grand River Development Corporation and, through a trust, to the Mississaugas of the Credit First Nation a 25.0% and 0.1% equity interest in NRLP partnership units, respectively, for total consideration of $12 million , representing the fair value of the equity interest acquired. NRLP is fully consolidated in these Consolidated Financial Statements as it is controlled by Hydro One. The First Nations Partners' 25.1% noncontrolling interest in NRLP is classified within equity. The following table shows the movements in NRLP noncontrolling interest during the year ended December 31, 2019: Year ended December 31, 2019 (millions of dollars) Equity Noncontrolling interest - beginning — Contributions from sale of noncontrolling interest (Note 4) 12 Distributions to noncontrolling interest — Net income attributable to noncontrolling interest — Noncontrolling interest - ending 12 On January 31, 2020, the Mississaugas of the Credit First Nation purchased an additional 19.9% equity interest in NRLP. See Note 4 - Business Combinations and Note 33 - Subsequent Events for additional information. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Hydro One is owned by Hydro One Limited. The Province is a shareholder of Hydro One Limited with approximately 47.3% ownership at December 31, 2019. The IESO, Ontario Power Generation Inc. (OPG), Ontario Electricity Financial Corporation (OEFC), the OEB, Hydro One Telecom Inc. (Hydro One Telecom) and 2587264 Ontario Inc. are related parties to Hydro One because they are controlled or significantly influenced by the Ministry of Energy or by Hydro One Limited. The following is a summary of the Company’s related party transactions during the years ended December 31, 2019 and 2018: Year ended December 31 (millions of dollars) Related Party Transaction 2019 2018 IESO Power purchased 1,808 1,636 Revenues for transmission services 1,636 1,672 Amounts related to electricity rebates 692 477 Distribution revenues related to rural rate protection 240 239 Distribution revenues related to the supply of electricity to remote northern communities 35 35 Funding received related to Conservation and Demand Management programs 42 62 OPG Power purchased 8 10 Revenues related to provision of services and supply of electricity 8 8 Costs related to the purchase of services 1 — OEFC Power purchased from power contracts administered by the OEFC 2 2 OEB OEB fees 9 8 Hydro One Limited Return of stated capital 748 544 Dividends paid 1 6 Stock-based compensation costs 10 28 Cost recovery for services provided 14 15 Hydro One Telecom Services received – costs expensed 21 23 Revenues for services provided 3 3 2587264 Ontario Inc. Preferred shares redeemed 486 — Dividends paid 2 9 Sales to and purchases from related parties are based on the requirements of the OEB’s Affiliate Relationships Code. Outstanding balances at period end are interest-free and settled in cash. Invoices are issued monthly, and amounts are due and paid on a monthly basis. |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Consolidated Statements of Cash Flows | CONSOLIDATED STATEMENTS OF CASH FLOWS The changes in non-cash balances related to operations consist of the following: Year ended December 31 (millions of dollars) 2019 2018 Accounts receivable (74 ) 13 Due from related parties (176 ) (22 ) Other assets (6 ) 3 Accounts payable 10 (2 ) Accrued liabilities 55 18 Due to related parties 184 (78 ) Accrued interest 8 (3 ) Long-term accounts payable and other liabilities — (5 ) Post-retirement and post-employment benefit liability 26 26 27 (50 ) Capital Expenditures The following tables reconcile investments in property, plant and equipment and intangible assets and the amounts presented in the Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018. The reconciling items include net change in accruals and capitalized depreciation. Year ended December 31, 2019 (millions of dollars) Property, Plant and Equipment Intangible Assets Total Capital investments (1,543 ) (116 ) (1,659 ) Reconciling items 33 1 34 Cash outflow for capital expenditures (1,510 ) (115 ) (1,625 ) Year ended December 31, 2018 (millions of dollars) Property, Plant and Equipment Intangible Assets Total Capital investments (1,441 ) (121 ) (1,562 ) Reconciling items 30 1 31 Cash outflow for capital expenditures (1,411 ) (120 ) (1,531 ) Capital Contributions Hydro One enters into contracts governed by the OEB Transmission System Code when a transmission customer requests a new or upgraded transmission connection. The customer is required to make a capital contribution to Hydro One based on the shortfall between the present value of the costs of the connection facility and the present value of revenues. The present value of revenues is based on an estimate of load forecast for the period of the contract with Hydro One. Once the connection facility is commissioned, in accordance with the OEB Transmission System Code, Hydro One will periodically reassess the estimated load forecast which will lead to a decrease, or an increase in the capital contributions from the customer. The increase or decrease in capital contributions is recorded directly to property, plant and equipment in service. In 2019, capital contributions from these reassessments totalled $3 million (2018 - $7 million ), which represents the difference between the revised load forecast of electricity transmitted compared to the load forecast in the original contract, subject to certain adjustments. Supplementary Information Year ended December 31 (millions of dollars) 2019 2018 Net interest paid 486 458 Income taxes paid 21 15 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES Legal Proceedings Hydro One is involved in various lawsuits and claims in the normal course of business. In the opinion of management, the outcome of such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Hydro One, Hydro One Networks, Hydro One Remote Communities, and Norfolk Power Distribution Inc. were defendants in a class action suit commenced in 2015 in which the representative plaintiff was seeking up to $125 million in damages related to allegations of improper billing practices. The plaintiff’s application for leave to appeal the lower court’s refusal to certify the lawsuit as a class action was denied by the Ontario Court of Appeal on March 26, 2019, which means that the lawsuit has effectively ended. Transfer of Assets The transfer orders by which the Company acquired certain of Ontario Hydro’s businesses as of April 1, 1999 did not transfer title to some assets located on Reserves (as defined in the Indian Act (Canada)). Currently, the OEFC holds these assets. Under the terms of the transfer orders, the Company is required to manage these assets until it has obtained all consents necessary to complete the transfer of title of these assets to itself. The Company cannot predict the aggregate amount that it may have to pay, either on an annual or one-time basis, to obtain the required consents. In 2019, the Company paid approximately $2 million (2018 - $2 million ) in respect of consents obtained. If the Company cannot obtain the required consents, the OEFC will continue to hold these assets for an indefinite period of time. If the Company cannot reach a satisfactory settlement, it may have to relocate these assets to other locations at a cost that could be substantial or, in a limited number of cases, to abandon a line and replace it with diesel-generation facilities. The costs relating to these assets could have a material adverse effect on the Company’s results of operations if the Company is not able to recover them in future rate orders. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | COMMITMENTS The following table presents a summary of Hydro One’s commitments under outsourcing and other agreements due in the next five years and thereafter: December 31, 2019 (millions of dollars) Year 1 Year 2 Year 3 Year 4 Year 5 Thereafter Outsourcing and other agreements 155 28 3 2 4 13 Long-term software/meter agreement 22 1 2 1 2 — Outsourcing Agreements Hydro One has an agreement with Inergi LP for the provision of back-office and IT outsourcing services, including supply chain, pay operations, IT, and finance and accounting services. The agreement expires on February 28, 2021 for IT services and on October 31, 2021 for supply chain services. The agreement for pay operations, and for finance and accounting services was extended in September 2019 and now expires on December 31, 2020. In addition, the agreement for settlement services expired on December 31, 2019, and these services are now insourced. Brookfield Global Integrated Solutions (Brookfield) provides services to Hydro One, including facilities management and execution of certain capital projects as deemed required by the Company. The agreement with Brookfield for these services expires in December 2024, with an option for the Company to renew the agreement for an additional term of three years. Long-term Software/Meter Agreement Trilliant Holdings Inc. and Trilliant Networks (Canada) Inc. (collectively Trilliant) provide services to Hydro One for the supply, maintenance and support services for smart meters and related hardware and software, including additional software licences, as well as certain professional services. The agreement with Trilliant for these services expires in December 2025, with an option for the Company to renew the agreement for an additional term of five years. Other Commitments The following table presents a summary of Hydro One’s other commercial commitments by year of expiry in the next five years and thereafter: December 31, 2019 (millions of dollars) Year 1 Year 2 Year 3 Year 4 Year 5 Thereafter Operating Credit Facilities 1 — — — — 2,300 — Letters of credit 2 185 2 — — — — Guarantees 3 325 — — — — — 1 On June 3, 2019, the maturity date for the Operating Credit Facilities was extended from June 2022 to June 2024. 2 Letters of credit consist of $171 million letters of credit related to retirement compensation arrangements, a $4 million in letters of credit to satisfy debt service reserve requirements, a $9 million letter of credit provided to the IESO for prudential support, and $3 million in letters of credit for various operating purposes. 3 Guarantees consist of prudential support provided to the IESO by Hydro One on behalf of its subsidiaries. Prudential Support Purchasers of electricity in Ontario, through the IESO, are required to provide security to mitigate the risk of their default based on their expected activity in the market. The IESO could draw on these guarantees and/or letters of credit if these purchasers fail to make a payment required by a default notice issued by the IESO. The maximum potential payment is the face value of any letters of credit plus the amount of the parental guarantees. Retirement Compensation Arrangements Bank letters of credit have been issued to provide security for Hydro One's liability under the terms of a trust fund established pursuant to the supplementary pension plan for eligible employees of Hydro One. The supplementary pension plan trustee is required to draw upon these letters of credit if Hydro One is in default of its obligations under the terms of this plan. Such obligations include the requirement to provide the trustee with an annual actuarial report as well as letters of credit sufficient to secure Hydro One’s liability under the plan, to pay benefits payable under the plan and to pay the letter of credit fee. The maximum potential payment is the face value of the letters of credit. |
Segmented Reporting
Segmented Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segmented Reporting | SEGMENTED REPORTING Hydro One has three reportable segments: • The Transmission Segment, which comprises the transmission of high voltage electricity across the province, interconnecting more than 70 local distribution companies and certain large directly connected industrial customers throughout the Ontario electricity grid; • The Distribution Segment, which comprises the delivery of electricity to end customers and certain other municipal electricity distributors; and • Other Segment, which includes certain corporate activities. The designation of segments has been based on a combination of regulatory status and the nature of the services provided. Operating segments of the Company are determined based on information used by the chief operating decision-maker in deciding how to allocate resources and evaluate the performance of each of the segments. The Company evaluates segment performance based on income before financing charges and income taxes from continuing operations (excluding certain allocated corporate governance costs). Year ended December 31, 2019 (millions of dollars) Transmission Distribution Other Consolidated Revenues 1,654 4,788 — 6,442 Purchased power — 3,111 — 3,111 Operation, maintenance and administration 369 615 7 991 Depreciation and amortization 462 409 — 871 Income (loss) before financing charges and income tax expense 823 653 (7 ) 1,469 Capital investments 1,035 624 — 1,659 Year ended December 31, 2018 (millions of dollars) Transmission Distribution Other Consolidated Revenues 1,688 4,422 — 6,110 Purchased power — 2,899 — 2,899 Operation, maintenance and administration 424 608 23 1,055 Depreciation and amortization 435 395 — 830 Income (loss) before financing charges and income tax expense 829 520 (23 ) 1,326 Capital investments 985 577 — 1,562 Total Assets by Segment: December 31 (millions of dollars) 2019 2018 Transmission 14,917 13,877 Distribution 9,943 9,277 Other 2,057 2,415 Total assets 26,917 25,569 Total Goodwill by Segment: December 31 (millions of dollars) 2019 2018 Transmission 157 157 Distribution 168 168 Total goodwill 325 325 All revenues, assets and costs, as the case may be, are earned, held or incurred in Canada. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Return of Stated Capital On February 11, 2020 , a return of stated capital of $146 million was approved. NRLP On January 31, 2020, the Mississaugas of the Credit First Nation purchased an additional 19.9% equity interest in NRLP. On this date, Hydro One Networks sold to the Mississaugas of the Credit First Nation,through a trust, a 19.9% equity interest in NRLP for total consideration of $9 million . Following this transaction, Hydro One's interest in the equity portion of NRLP was reduced to 55% , with the Six Nations of the Grand River Development Corporation and the Mississaugas of the Credit First Nation owning 25% and 20% , respectively, of the equity interest in NRLP. Stock Options On January 16, 2020, Hydro One Limited issued from treasury common shares in accordance with provisions of the LTIP. This issuance resulted from the exercise of 117,980 stock options for cash proceeds of $2 million . |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation These Consolidated Financial Statements (Consolidated Financial Statements) include the accounts of the Company and its subsidiaries. Inter-company transactions and balances have been eliminated. On March 25, 2019, the Company filed amended consolidated financial statements as at and for the year ended December 31, 2018 to reflect the impact of the March 7, 2019 decision issued by the OEB relating to the Deferred Tax Asset portion of the OEB's decision on Hydro One Networks' 2017 and 2018 transmission revenue requirement, for which the OEB previously granted a Motion to Review and Vary. The comparative information in these Consolidated Financial Statements reflects the amended consolidated financial statements as at and for the year ended December 31, 2018. |
Basis of Accounting | Basis of Accounting These Consolidated Financial Statements are prepared and presented in accordance with United States (US) Generally Accepted Accounting Principles (GAAP) and in Canadian dollars. |
Use of Management Estimates | Use of Management Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, gains and losses during the reporting periods. Management evaluates these estimates on an ongoing basis based upon historical experience, current conditions, and assumptions believed to be reasonable at the time the assumptions are made, with any adjustments being recognized in results of operations in the period they arise. Significant estimates relate to regulatory assets and regulatory liabilities, environmental liabilities, pension benefits, post-retirement and post-employment benefits, asset retirement obligations, goodwill and asset impairments, contingencies, unbilled revenues, and deferred income tax assets and liabilities. Actual results may differ significantly from these estimates. |
Regulatory Accounting | Regulatory Accounting The OEB has the general power to include or exclude revenues, costs, gains or losses in the rates of a specific period, resulting in a change in the timing of accounting recognition from that which would have been applied in an unregulated company. Such change in timing involves the application of rate-regulated accounting, giving rise to the recognition of regulatory assets and liabilities. The Company’s regulatory assets represent amounts receivable from future customers and costs that have been deferred for accounting purposes because it is probable that they will be recovered in future rates. In addition, the Company has recorded regulatory liabilities that generally represent amounts that are refundable to future customers. The Company continually assesses the likelihood of recovery of each of its regulatory assets and continues to believe that it is probable that the OEB will include its regulatory assets and liabilities in setting future rates. If, at some future date, the Company judges that it is no longer probable that the OEB will include a regulatory asset or liability in setting future rates, the appropriate carrying amount would be reflected in results of operations prospectively from the date the Company’s assessment is made, unless the change meets the requirements for a subsequent event adjustment. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments with an original maturity of three months or less. |
Revenue Recognition | Revenue Recognition Nature of Revenues Transmission revenues predominantly consist of transmission tariffs, which are collected through OEB-approved UTRs which are applied against the monthly peak demand for electricity across Hydro One's high-voltage network. OEB-approved UTRs are based on an approved revenue requirement that includes a rate of return. The transmission tariffs are designed to recover revenues necessary to support the Company's transmission system with sufficient capacity to accommodate the maximum expected demand which is influenced by weather and economic conditions. Transmission revenues are recognized as electricity is transmitted and delivered to customers. Distribution revenues attributable to the delivery of electricity are based on OEB-approved distribution rates and are recognized on an accrual basis and include billed and unbilled revenues. Billed revenues are based on electricity delivered as measured from customer meters. At the end of each month, electricity delivered to customers since the date of the last billed meter reading is estimated, and the corresponding unbilled revenue is recorded. The unbilled revenue estimate is affected by energy consumption, weather, and changes in the composition of customer classes. Revenues also include amounts related to sales of other services and equipment. Such revenue is recognized as services are rendered or as equipment is delivered. Revenues are recorded net of indirect taxes. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company early-adopted Accounting Standard Update (ASU) 2016-13 Financial Instruments - Credit Losses (along with related ASUs as disclosed in Note 3 - New Accounting Pronouncements) with a transition date of January 1, 2019 using the modified retrospective method. Upon adoption, there was no material impact to the Consolidated Financial Statements, and no adjustments were made to prior period financial statements. Billed accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Unbilled accounts receivable are recorded at their estimated value, net of allowance for doubtful accounts. Overdue amounts related to regulated billings bear interest at OEB-approved rates. The allowance for doubtful accounts reflects the Company’s current lifetime expected credit losses (CECL) for all accounts receivable balances. The Company estimates the CECL by applying internally developed loss rates to all outstanding receivable balances by aging category. Loss rates applied to the accounts receivable balances are based on historical overdue balances, customer payments and write-offs. Accounts receivable are written-off against the allowance when they are deemed uncollectible. The allowance for doubtful accounts is affected by changes in volume, prices and economic conditions. |
Noncontrolling interest | Noncontrolling interest Noncontrolling interest represents the portion of equity ownership in subsidiaries that is not attributable to the shareholder of Hydro One. Noncontrolling interest is initially recorded at fair value and subsequently the amount is adjusted for the proportionate share of net income and other comprehensive income (OCI) attributable to the noncontrolling interest and any dividends or distributions paid to the noncontrolling interest. If a transaction results in the acquisition of all, or part, of a noncontrolling interest in a subsidiary, the acquisition of the noncontrolling interest is accounted for as an equity transaction. No gain or loss is recognized in consolidated net income or comprehensive income as a result of changes in the noncontrolling interest, unless a change results in the loss of control by the Company. |
Income Taxes | Income Taxes Current and deferred income taxes are computed based on the tax rates and tax laws enacted as at the balance sheet date. Tax benefits associated with income tax positions are recorded only when the more-likely-than-not recognition threshold is satisfied and are measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. Management evaluates each position based solely on the technical merits and facts and circumstances of the position, assuming the position will be examined by a taxing authority having full knowledge of all relevant information. Significant management judgment is required to determine recognition thresholds and the related amount of tax benefits to be recognized in the Consolidated Financial Statements. Management re-evaluates tax positions each period using new information about recognition or measurement as it becomes available. Deferred Income Taxes Deferred income taxes are provided for using the liability method. Under this method, deferred income tax assets and liabilities are recognized on all temporary differences between the tax bases and carrying amounts of assets and liabilities, including the carry forward unused tax credits and tax losses to the extent that it is more-likely-than-not that these deductions, credits, and losses can be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on the tax rates and tax laws that have been enacted as at the balance sheet date. Deferred income taxes that are not included in the rate-setting process are charged or credited to the consolidated statements of operations and comprehensive income. Management reassesses the deferred income tax assets at each balance sheet date and reduces the amount to the extent that it is more likely than not that the deferred income tax asset will not be realized. Previously unrecognized deferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become more likely than not that the tax benefit will be realized. The Company recognizes deferred income taxes associated with its regulated operations and records offsetting regulatory assets and liabilities for the deferred income taxes that are expected to be recovered or refunded in future regulated rates charged to customers. Investment tax credits are recorded as a reduction of the related expenses or income tax expense in the current or future period to the extent it is more likely than not that the credits can be utilized. |
Materials and Supplies | Materials and Supplies Materials and supplies represent consumables, small spare parts and construction materials held for internal construction and maintenance of property, plant and equipment. These assets are carried at average cost less any impairments recorded. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is recorded at original cost, net of customer contributions, and any accumulated impairment losses. The cost of additions, including betterments and replacement asset components, is included on the Consolidated Balance Sheets as property, plant and equipment. The original cost of property, plant and equipment includes direct materials, direct labour (including employee benefits), contracted services, attributable capitalized financing costs, asset retirement costs, and direct and indirect overheads that are related to the capital project or program. Indirect overheads include a portion of corporate costs such as finance, treasury, human resources, and information technology (IT). Overhead costs, including corporate functions and field services costs, are capitalized on a fully allocated basis, consistent with an OEB-approved methodology. Property, plant and equipment in service consists of transmission, distribution, communication, administration and service assets and land easements. Property, plant and equipment also includes future use assets, such as land, major components and spare parts, and capitalized project development costs associated with deferred capital projects. Transmission Transmission assets include assets used for the transmission of high-voltage electricity, such as transmission lines, support structures, foundations, insulators, connecting hardware and grounding systems, and assets used to step up the voltage of electricity from generating stations for transmission and to step down voltages for distribution, including transformers, circuit breakers and switches. Distribution Distribution assets include assets related to the distribution of low-voltage electricity, including lines, poles, switches, transformers, protective devices and metering systems. Communication Communication assets include fibre optic and microwave radio systems, optical ground wire, towers, telephone equipment and associated buildings. Administration and Service Administration and service assets include administrative buildings, personal computers, transport and work equipment, tools and other minor assets. Easements Easements include statutory rights of use for transmission corridors and abutting lands granted under the Reliable Energy and Consumer Protection Act, 2002 , as well as other land access rights. |
Intangible Assets | Intangible Assets Intangible assets separately acquired or internally developed are measured on initial recognition at cost, which comprises purchased software, direct labour (including employee benefits), consulting, engineering, overheads and attributable capitalized financing charges. Following initial recognition, intangible assets are carried at cost, net of any accumulated amortization and accumulated impairment losses. The Company’s intangible assets primarily represent major computer applications. |
Capitalized Financing Costs | Capitalized Financing Costs Capitalized financing costs represent interest costs attributable to the construction of property, plant and equipment or development of intangible assets. The financing cost of attributable borrowed funds is capitalized as part of the acquisition cost of such assets. The capitalized financing costs are a reduction of financing charges recognized in the Consolidated Statements of Operations and Comprehensive Income. Capitalized financing costs are calculated using the Company’s weighted average effective cost of debt. |
Construction and Development in Progress | Construction and Development in Progress Construction and development in progress consists of the capitalized cost of constructed assets that are not yet complete and which have not yet been placed in service. |
Depreciation and Amortization | Depreciation and Amortization The cost of property, plant and equipment and intangible assets is depreciated or amortized on a straight-line basis based on the estimated remaining service life of each asset category, except for transport and work equipment, which is depreciated on a declining balance basis. The Company periodically initiates an external independent review of its property, plant and equipment and intangible asset depreciation and amortization rates, as required by the OEB. Any changes arising from OEB approval of such a review are implemented on a remaining service life basis, consistent with their inclusion in electricity rates. The most recent reviews resulted in changes to rates effective January 1, 2015 and January 1, 2017 for Hydro One Networks’ distribution and transmission businesses, respectively. A summary of average service lives and depreciation and amortization rates for the various classes of assets is included below: Average Rate Service Life Range Average Property, plant and equipment: Transmission 55 years 1% - 3% 2 % Distribution 46 years 1% - 7% 2 % Communication 16 years 1% - 15% 5 % Administration and service 21 years 1% - 20% 5 % Intangible assets 10 years 10 % 10 % In accordance with group depreciation practices, the original cost of property, plant and equipment, or major components thereof, and intangible assets that are normally retired, is charged to accumulated depreciation, with no gain or loss being reflected in results of operations. Where a disposition of property, plant and equipment occurs through sale, a gain or loss is calculated based on proceeds and such gain or loss is included in depreciation expense. |
Acquisitions and Goodwill | Acquisitions and Goodwill The Company accounts for business acquisitions using the acquisition method of accounting and, accordingly, the assets and liabilities of the acquired entities are primarily measured at their estimated fair value at the date of acquisition. Costs associated with pending acquisitions are expensed as incurred. Goodwill represents the cost of acquired companies that is in excess of the fair value of the net identifiable assets acquired at the acquisition date. Goodwill is not included in rate base. Goodwill is evaluated for impairment on an annual basis, or more frequently if circumstances require. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of the applicable reporting unit is less than its carrying amount. If the Company determines, as a result of its qualitative assessment, that it is not more likely than not that the fair value of the applicable reporting unit is less than its carrying amount, no further testing is required. If the Company determines, as a result of its qualitative assessment, that it is more likely than not that the fair value of the applicable reporting unit is less than its carrying amount, a goodwill impairment assessment is performed using a two-step, fair value-based test. The first step compares the fair value of the applicable reporting unit to its carrying amount, including goodwill. If the carrying amount of the applicable reporting unit exceeds its fair value, a second step is performed. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount, an impairment loss is recorded as a reduction to goodwill and as a charge to results of operations. Based on assessment performed as at September 30, 2019, the Company has concluded that goodwill was not impaired at December 31, 2019. |
Long-Lived Asset Impairment | Long-Lived Asset Impairment When circumstances indicate the carrying value of long-lived assets may not be recoverable, the Company evaluates whether the carrying value of such assets, excluding goodwill, has been impaired. For such long-lived assets, the Company evaluates whether impairment may exist by estimating future estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. When alternative courses of action to recover the carrying amount of a long-lived asset are under consideration, a probability-weighted approach is used to develop estimates of future undiscounted cash flows. If the carrying value of the long-lived asset is not recoverable based on the estimated future undiscounted cash flows, an impairment loss is recorded, measured as the excess of the carrying value of the asset over its fair value. As a result, the asset’s carrying value is adjusted to its estimated fair value. Within its regulated business, the carrying costs of most of Hydro One’s long-lived assets are included in rate base where they earn an OEB-approved rate of return. Asset carrying values and the related return are recovered through approved rates. As a result, such assets are only tested for impairment in the event that the OEB disallows recovery, in whole or in part, or if such a disallowance is judged to be probable. As at December 31, 2019 and 2018, no asset impairment had been recorded. |
Costs of Arranging Debt Financing | Costs of Arranging Debt Financing For financial liabilities classified as other than held-for-trading, the Company defers the external transaction costs related to obtaining financing and presents such amounts net of related debt on the Consolidated Balance Sheets. Deferred issuance costs are amortized over the contractual life of the related debt on an effective-interest basis and the amortization is included within financing charges in the Consolidated Statements of Operations and Comprehensive Income. Transaction costs for items classified as held-for-trading are expensed immediately. |
Comprehensive Income | Comprehensive Income Comprehensive income is comprised of net income and OCI. Hydro One presents net income and OCI in a single continuous Consolidated Statement of Operations and Comprehensive Income. |
Financial Assets and Liabilities | Financial Assets and Liabilities All financial assets and liabilities are classified into one of the following five categories: held-to-maturity; loans and receivables; held-for-trading; other liabilities; or available-for-sale. Financial assets and liabilities classified as held-for-trading are measured at fair value. All other financial assets and liabilities are measured at amortized cost, except accounts receivable and amounts due from related parties, which are measured at the lower of cost or fair value. Accounts receivable and amounts due from related parties are classified as loans and receivables. The Company considers the carrying amounts of accounts receivable and amounts due from related parties to be reasonable estimates of fair value because of the short time to maturity of these instruments. The Company estimates the CECL for all accounts receivable balances, which are recognized as adjustments to the allowance for doubtful accounts. Accounts receivable are written-off against the allowance when they are deemed uncollectible. All financial instrument transactions are recorded at trade date. The Company determines the classification of its financial assets and liabilities at the date of initial recognition. The Company designates certain of its financial assets and liabilities to be held at fair value, when it is consistent with the Company’s risk management policy disclosed in Note 17 - Fair Value of Financial Instruments and Risk Management. |
Derivative Instruments and Hedge Accounting | Derivative Instruments and Hedge Accounting The Company closely monitors the risks associated with changes in interest rates on its operations and, where appropriate, uses various instruments to hedge these risks. Certain of these derivative instruments qualify for hedge accounting and are designated as accounting hedges, while others either do not qualify as hedges or have not been designated as hedges (hereinafter referred to as undesignated contracts) as they are part of economic hedging relationships. The accounting guidance for derivative instruments requires the recognition of all derivative instruments not identified as meeting the normal purchase and sale exemption as either assets or liabilities recorded at fair value on the consolidated balance sheets. For derivative instruments that qualify for hedge accounting, the Company may elect to designate such derivative instruments as either cash flow hedges or fair value hedges. The Company offsets fair value amounts recognized on its consolidated balance sheets related to derivative instruments executed with the same counterparty under the same master netting agreement. For derivative instruments that qualify for hedge accounting and which are designated as cash flow hedges, any unrealized gain or loss, net of tax, is recorded as a component of accumulated OCI (AOCI). Amounts in AOCI are reclassified to results of operations in the same period or periods during which the hedged transaction affects results of operations and presented in the same line item as the earnings effect of the hedged item. Any gains or losses on the derivative instrument that represent hedge components excluded from the assessment of effectiveness are recognized in the same line item of the consolidated statements of operations as the hedged item. For fair value hedges, changes in fair value of both the derivative instrument and the underlying hedged exposure are recognized in the consolidated statements of operations and comprehensive income in the current period. The gain or loss on the derivative instrument is included in the same line item as the offsetting gain or loss on the hedged item in the consolidated statements of operations and comprehensive income. The changes in fair value of the undesignated derivative instruments are reflected in results of operations. Embedded derivative instruments are separated from their host contracts and are carried at fair value on the consolidated balance sheets when: (a) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument is not measured at fair value, with changes in fair value recognized in results of operations each period; and (c) the embedded derivative itself meets the definition of a derivative. The Company does not engage in derivative trading or speculative activities and had no embedded derivatives that required bifurcation at December 31, 2019 or 2018. Hydro One periodically develops hedging strategies taking into account risk management objectives. At the inception of a hedging relationship where the Company has elected to apply hedge accounting, Hydro One formally documents the relationship between the hedged item and the hedging instrument, the related risk management objective, the nature of the specific risk exposure being hedged, and the method for assessing the effectiveness of the hedging relationship. The Company also assesses, both at the inception of the hedge and on a quarterly basis, whether the hedging instruments are effective in offsetting changes in fair values or cash flows of the hedged items. |
Employee Future Benefits | Employee Future Benefits Employee future benefits provided by Hydro One include pension, post-retirement and post-employment benefits. The costs of the Company’s pension, post-retirement and post-employment benefit plans are recorded over the periods during which employees render service. The Company recognizes the funded status of its defined benefit pension, post-retirement and post-employment plans on its consolidated balance sheets and subsequently recognizes the changes in funded status at the end of each reporting year. Defined benefit pension, post-retirement and post-employment plans are considered to be underfunded when the projected benefit obligation (PBO) exceeds the fair value of the plan assets. Liabilities are recognized on the consolidated balance sheets for any net underfunded PBO. The net underfunded PBO may be disclosed as a current liability, long-term liability, or both. The current portion is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next 12 months exceeds the fair value of plan assets. If the fair value of plan assets exceeds the PBO of the plan, an asset is recognized equal to the net overfunded PBO. The post-retirement and post-employment benefit plans are unfunded because there are no related plan assets. Hydro One recognizes its contributions to the defined contribution pension plan (DC Plan) as pension expense, with a portion being capitalized as part of labour costs included in capital expenditures. The expensed amount is included in operation, maintenance and administration (OM&A) costs in the consolidated statements of operations and comprehensive income. Defined Benefit Pension Defined benefit pension costs are recorded on an accrual basis for financial reporting purposes. Pension costs are actuarially determined using the projected benefit method prorated on service and are based on assumptions that reflect management’s best estimate of the effect of future events, including future compensation increases. Past service costs from plan amendments and all actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service period of active employees in the plan, and over the estimated remaining life expectancy of inactive employees in the plan. Pension plan assets, consisting primarily of listed equity securities, corporate and government debt securities as well as private real estate and private infrastructure investments, are recorded at fair value at the end of each year. Hydro One records a regulatory asset equal to the net underfunded PBO for its pension plan. Defined benefit pension costs are attributed to labour costs on a cash basis and a portion directly related to acquisition and development of capital assets is capitalized as part of the cost of property, plant and equipment and intangible assets. The remaining defined benefit pension costs are charged to results of operations (OM&A costs). Post-retirement and Post-employment Benefits Post-retirement and post-employment benefits are recorded and included in rates on an accrual basis. Costs are determined by independent actuaries using the projected benefit method prorated on service and based on assumptions that reflect management’s best estimates. Past service costs from plan amendments are amortized to results of operations based on the expected average remaining service period. For post-retirement benefits, all actuarial gains or losses are deferred using the “corridor” approach. The amount calculated above the “corridor” is amortized to results of operations on a straight-line basis over the expected average remaining service life of active employees in the plan and over the remaining life expectancy of inactive employees in the plan. The post-retirement benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. For post-employment obligations, the associated regulatory liabilities representing actuarial gains on transition to US GAAP are amortized to results of operations based on the “corridor” approach. The actuarial gains and losses on post-employment obligations that are incurred during the year are recognized immediately to results of operations. The post-employment benefit obligation is remeasured to its fair value at each year end based on an annual actuarial report, with an offset to the associated regulatory asset, to the extent of the remeasurement adjustment. All post-retirement and post-employment benefit costs are attributed to labour costs and are either charged to results of operations (OM&A costs) or capitalized as part of the cost of property, plant and equipment and intangible assets for service cost component and to regulatory assets for all other components of the benefit costs, consistent with their inclusion in OEB-approved rates. |
Stock-Based Compensation | Stock-Based Compensation Share Grant Plans Hydro One measures share grant plans based on fair value of share grants as estimated based on Hydro One Limited grant date common share price. The costs are recognized in the financial statements using the graded-vesting attribution method for share grant plans that have both a performance condition and a service condition. The Company records a regulatory asset equal to the accrued costs of share grant plans recognized in each period. Costs are transferred from the regulatory asset to labour costs at the time the share grants vest and are issued, and are recovered in rates. Forfeitures are recognized as they occur. Deferred Share Unit (DSU) Plans The Company records the liabilities associated with its Directors’ and Management DSU Plans at fair value at each reporting date until settlement, recognizing compensation expense over the vesting period on a straight-line basis. The fair value of the DSU liability is based on the Hydro One Limited common share closing price at the end of each reporting period. Long-term Incentive Plan (LTIP) The Company measures the awards issued under Hydro One Limited's LTIP, at fair value based on Hydro One Limited grant date common share price. The related compensation expense is recognized over the vesting period on a straight-line basis. Forfeitures are recognized as they occur. |
Loss Contingencies | Loss Contingencies Hydro One is involved in certain legal and environmental matters that arise in the normal course of business. In the preparation of its Consolidated Financial Statements, management makes judgments regarding the future outcome of contingent events and records a loss for a contingency based on its best estimate when it is determined that such loss is probable and the amount of the loss can be reasonably estimated. Where the loss amount is recoverable in future rates, a regulatory asset is also recorded. When a range estimate for the probable loss exists and no amount within the range is a better estimate than any other amount, the Company records a loss at the minimum amount within the range. Management regularly reviews current information available to determine whether recorded provisions should be adjusted and whether new provisions are required. Estimating probable losses may require analysis of multiple forecasts and scenarios that often depend on judgments about potential actions by third parties, such as federal, provincial and local courts or regulators. Contingent liabilities are often resolved over long periods of time. Amounts recorded in the Consolidated Financial Statements may differ from the actual outcome once the contingency is resolved. Such differences could have a material impact on future results of operations, financial position and cash flows of the Company. Provisions are based upon current estimates and are subject to greater uncertainty where the projection period is lengthy. A significant upward or downward trend in the number of claims filed, the nature of the alleged injuries, and the average cost of resolving each claim could change the estimated provision, as could any substantial adverse or favourable verdict at trial. A federal or provincial legislative outcome or structured settlement could also change the estimated liability. Legal fees are expensed as incurred. |
Environmental Liabilities | Environmental Liabilities Environmental liabilities are recorded in respect of past contamination when it is determined that future environmental remediation expenditures are probable under existing statute or regulation and the amount of the future expenditures can be reasonably estimated. Hydro One records a liability for the estimated future expenditures associated with contaminated land assessment and remediation (LAR) and for the phase-out and destruction of polychlorinated biphenyl (PCB)-contaminated mineral oil removed from electrical equipment, based on the present value of these estimated future expenditures. The Company determines the present value with a discount rate that produces an amount at which the environmental liabilities could be settled in an arm’s length transaction with a third party. As the Company anticipates that the future expenditures will continue to be recoverable in future rates, an offsetting regulatory asset has been recorded to reflect the future recovery of these environmental expenditures from customers. Hydro One reviews its estimates of future environmental expenditures annually, or more frequently if there are indications that circumstances have changed. |
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations are recorded for legal obligations associated with the future removal and disposal of long-lived assets. Such obligations may result from the acquisition, construction, development and/or normal use of the asset. Conditional asset retirement obligations are recorded when there is a legal obligation to perform a future asset retirement activity but where the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the Company. In such a case, the obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. This uncertainty is incorporated in the fair value measurement of the obligation. When recording an asset retirement obligation, the present value of the estimated future expenditures required to complete the asset retirement activity is recorded in the period in which the obligation is incurred, if a reasonable estimate can be made. In general, the present value of the estimated future expenditures is added to the carrying amount of the associated asset and the resulting asset retirement cost is depreciated over the estimated useful life of the asset. The present value is determined with a discount rate that equates to the Company’s credit-adjusted risk-free rate. Where an asset is no longer in service when an asset retirement obligation is recorded, the asset retirement cost is recorded in results of operations. Some of the Company’s transmission and distribution assets, particularly those located on unowned easements and rights-of-way, may have asset retirement obligations, conditional or otherwise. The majority of the Company’s easements and rights-of-way are either of perpetual duration or are automatically renewed annually. Land rights with finite terms are generally subject to extension or renewal. As the Company expects to use the majority of its facilities in perpetuity, no asset retirement obligations have been recorded for these assets. If, at some future date, a particular facility is shown not to meet the perpetuity assumption, it will be reviewed to determine whether an estimable asset retirement obligation exists. In such a case, an asset retirement obligation would be recorded at that time. The Company’s asset retirement obligations recorded to date relate to estimated future expenditures associated with the removal and disposal of asbestos-containing materials installed in some of its facilities. |
Leases | Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (ASC) 842 - Leases using the modified retrospective transition approach using the effective date of January 1, 2019, as its date of initial application. In the Company's transition to ASC 842, the Company elected the package of practical expedients and the land easement practical expedient. As a result, a Right-of-Use (ROU) asset and a corresponding lease obligation of approximately $24 million was recognized on the Consolidated Balance Sheet at January 1, 2019, and no adjustments were made to prior period financial statement amounts. There was no material impact to the Consolidated Statement of Operations and Comprehensive Income. On adoption, the Company did not identify any finance leases. At the commencement date of a lease, the minimum lease payments are discounted and recognized as a lease obligation. Discount rates used correspond to the Company's incremental borrowing rates. Renewal options are assessed for their likelihood of being exercised and are included in the measurement of the lease obligation when it is reasonably certain they will be exercised. The Company does not recognize leases with a term of less than 12 months. A corresponding ROU asset is recognized at the commencement date of a lease. The ROU asset is measured as the lease obligation adjusted for any lease payments made and/or any lease incentives and initial direct costs incurred. ROU assets are included in other long-term assets, and corresponding lease obligations are included in other current liabilities and other long-term liabilities on the Consolidated Balance Sheets. Subsequent to the commencement date, the lease expense recognized at each reporting period is the total remaining lease payments over the remaining lease term. Lease obligations are measured as the present value of the remaining unpaid lease payments using the discount rate established at commencement date. The amortization of the ROU assets are calculated as the difference between the lease expense and the accretion of interest, which is calculated on the effective interest method. Lease modifications and impairments are assessed at each reporting period to assess the need for a re-measurement of the lease obligations or ROU assets. |
New Accounting Pronouncements | Recently Adopted Accounting Guidance Guidance Date issued Description Effective date Impact on Hydro One ASC 842 February 2016 - January 2019 Lessees are required to recognize the rights and obligations resulting from operating leases as assets (right to use the underlying asset for the term of the lease) and liabilities (obligation to make future lease payments) on the balance sheet. January 1, 2019 Hydro One adopted ASC 842 on January 1, 2019 using the modified retrospective transition approach using the effective date of January 1, 2019 as its date of initial application. See Note 2 to the Consolidated Financial Statements for impact of adoption. The Company has included the disclosure requirements of ASC 842 in Note 22 to the Consolidated Financial Statements. ASU 2017-12 August 2017 Amendments will better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. January 1, 2019 No impact upon adoption ASU June 2018 Expansion in the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. Previously, ASC 718 was only applicable to share-based payment transactions for acquiring goods and services from employees. January 1, 2019 No impact upon adoption ASU 2018-15 August 2018 The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement is not affected by the amendment. January 1, 2019 Hydro One early-adopted this ASU with a transition date of January 1, 2019. The ASU was applied prospectively and there was no material impact upon adoption. ASU 2016-13 June 2016 - November 2019 The amendments provide users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. January 1, 2019 Hydro One early-adopted these ASUs with a transition date of January 1, 2019 using the modified retrospective transition approach. See Note 2 to the Consolidated Financial Statements for impact of adoption. Recently Issued Accounting Guidance Not Yet Adopted Guidance Date issued Description Effective date Anticipated impact on Hydro One ASU 2017-04 January 2017 The amendment removes the second step of the current two-step goodwill impairment test to simplify the process of testing goodwill. January 1, 2020 No impact upon adoption ASU August 2018 Disclosure requirements on fair value measurements in ASC 820 are modified to improve the effectiveness of disclosures in financial statement notes. January 1, 2020 No impact upon adoption ASU 2018-14 August 2018 Disclosure requirements related to single-employer defined benefit pension or other post-retirement benefit plans are added, removed or clarified to improve the effectiveness of disclosures in financial statement notes. January 1, 2021 Under assessment ASU March 2019 This amendment carries forward the exemption previously provided under ASC 840 relating to the determination of the fair value of underlying assets by lessors that are not manufacturers or dealers. It also provides for clarification on cash-flow presentation of sales-type and financing leases and clarifies that transition disclosures under Topic 250 are not applicable in the adoption of ASC 842. January 1, 2020 No impact upon adoption ASU December 2019 The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles and improving consistent application of Topic 740 by clarifying and amending existing guidance. January 1, 2021 Under assessment ASU 2020-01 January 2020 The amendments clarify the interaction of the accounting for equity securities under Topic 321, investments under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. January 1, 2021 Under assessment |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Average Service Lives and Depreciation and Amortization Rates | A summary of average service lives and depreciation and amortization rates for the various classes of assets is included below: Average Rate Service Life Range Average Property, plant and equipment: Transmission 55 years 1% - 3% 2 % Distribution 46 years 1% - 7% 2 % Communication 16 years 1% - 15% 5 % Administration and service 21 years 1% - 20% 5 % Intangible assets 10 years 10 % 10 % |
Depreciation, Amortization An_2
Depreciation, Amortization And Asset Removal Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Depreciation and Amortization | Year ended December 31 (millions of dollars) 2019 2018 Depreciation of property, plant and equipment 664 647 Amortization of intangible assets 81 71 Amortization of regulatory assets 25 22 Depreciation and amortization 770 740 Asset removal costs 101 90 871 830 |
Financing Charges (Tables)
Financing Charges (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
Schedule of Financing Charges | Year ended December 31 (millions of dollars) 2019 2018 Interest on long-term debt 479 447 Interest on short-term notes 18 14 Other 18 17 Less: Interest capitalized on construction and development in progress (48 ) (53 ) Interest earned on cash and cash equivalents (7 ) (7 ) 460 418 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation between Statutory and Effective Tax Rates | The reconciliation between the statutory and the effective tax rates is provided as follows: Year ended December 31 (millions of dollars) 2019 2018 Income before income tax expense 1,009 908 Income tax expense at statutory rate of 26.5% (2018 - 26.5%) 267 241 Increase (decrease) resulting from: Net temporary differences recoverable in future rates charged to customers: Capital cost allowance in excess of depreciation and amortization 1 (105 ) (68 ) Impact of tax deductions from deferred tax asset sharing 2 (60 ) (68 ) Overheads capitalized for accounting but deducted for tax purposes (21 ) (20 ) Interest capitalized for accounting but deducted for tax purposes (13 ) (14 ) Pension and post-retirement benefit contributions in excess of pension expense (11 ) (11 ) Environmental expenditures (7 ) (6 ) Other 1 (9 ) Net temporary differences (216 ) (196 ) Net permanent differences — 3 Write-off of unregulated deferred income tax asset (Note 12) — 885 Total income tax expense 51 933 Effective income tax rate 5.1 % 102.8 % 1 Included in current period’s amount is the accelerated tax depreciation of up to three times the first-year rate for certain eligible capital investments acquired after November 20, 2018 and placed in-service before January 1, 2028, as introduced in the 2019 federal and Ontario budgets and enacted in the second quarter of 2019. 2 Impact of tax deductions from deferred tax sharing represents the OEB’s prescribed allocation to ratepayers of the net deferred tax asset that originated from the transition from the payments in lieu of tax regime under the Electricity Act, 1998 (Ontario) to tax payments under the federal and provincial tax regime. |
Major Components of Income Tax Expense | The major components of income tax expense are as follows: Year ended December 31 (millions of dollars) 2019 2018 Current income tax expense 28 24 Deferred income tax expense 23 909 Total income tax expense 51 933 |
Schedule of Deferred Income Tax Assets and Liabilities | At December 31, 2019 and 2018, deferred income tax assets and liabilities consisted of the following: December 31 (millions of dollars) 2019 2018 Deferred income tax assets Post-retirement and post-employment benefits expense in excess of cash payments 633 523 Non-depreciable capital property 271 271 Non-capital losses 288 263 Pension obligations 405 197 Investment in subsidiaries 95 86 Tax credit carryforwards 92 71 Environmental expenditures 51 59 Depreciation and amortization in excess of capital cost allowance 4 5 Other 18 24 1,857 1,499 Less: valuation allowance (375 ) (366 ) Total deferred income tax assets 1,482 1,133 Deferred income tax liabilities Capital cost allowance in excess of depreciation and amortization 377 9 Regulatory amounts that are not recognized for tax purposes 495 188 Goodwill 10 10 Other 18 17 Total deferred income tax liabilities 900 224 Net deferred income tax assets 582 909 |
Major Categories of Net Deferred Income Tax Assets | The net deferred income tax assets are presented on the Consolidated Balance Sheets as follows: December 31 (millions of dollars) 2019 2018 Long-term: Deferred income tax assets 643 964 Deferred income tax liabilities (61 ) (55 ) Net deferred income tax assets 582 909 |
Non Capital Losses Carried Forward to Reduce Future Period Taxable Income | As of December 31, 2019 and 2018, the Company had non-capital losses carried forward available to reduce future years’ taxable income, which expire as follows: Year of expiry (millions of dollars) 2019 2018 2034 2 2 2035 220 220 2036 549 549 2037 121 121 2038 5 99 2039 187 — Total losses 1,084 991 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | December 31 (millions of dollars) 2019 2018 Accounts receivable - billed 330 289 Accounts receivable - unbilled 391 357 Accounts receivable, gross 721 646 Allowance for doubtful accounts (22 ) (21 ) Accounts receivable, net 699 625 |
Schedule of Allowance for Doubtful Accounts | The following table shows the movements in the allowance for doubtful accounts for the years ended December 31, 2019 and 2018: Year ended December 31 (millions of dollars) 2019 2018 Allowance for doubtful accounts - beginning (21 ) (29 ) Write-offs 18 25 Additions to allowance for doubtful accounts (19 ) (17 ) Allowance for doubtful accounts - ending (22 ) (21 ) |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | December 31 (millions of dollars) 2019 2018 Regulatory assets (Note 12) 52 42 Prepaid expenses and other assets 41 37 Materials and supplies 21 20 114 99 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | December 31, 2019 (millions of dollars) Property, Plant and Equipment Accumulated Depreciation Construction in Progress Total Transmission 17,454 5,714 711 12,451 Distribution 10,991 3,747 85 7,329 Communication 1,151 876 38 313 Administration and service 1,617 931 53 739 Easements 663 77 — 586 31,876 11,345 887 21,418 December 31, 2018 (millions of dollars) Property, Plant and Equipment Accumulated Depreciation Construction in Progress Total Transmission 16,559 5,449 766 11,876 Distribution 10,580 3,561 75 7,094 Communication 1,121 804 33 350 Administration and service 1,548 893 58 713 Easements 647 75 — 572 30,455 10,782 932 20,605 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | December 31, 2019 (millions of dollars) Intangible Assets Accumulated Amortization Development in Progress Total Computer applications software 912 512 55 455 Other 5 5 — — 917 517 55 455 December 31, 2018 (millions of dollars) Intangible Assets Accumulated Amortization Development in Progress Total Computer applications software 790 440 59 409 Other 5 5 — — 795 445 59 409 |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulated Operations [Abstract] | |
Schedule of Regulatory Assets and Liabilities | Hydro One has recorded the following regulatory assets and liabilities: December 31 (millions of dollars) 2019 2018 Regulatory assets: Deferred income tax regulatory asset 1,128 908 Pension benefit regulatory asset 1,125 547 Environmental 141 165 Post-retirement and post-employment benefits 105 — Post-retirement and post-employment benefits - non-service cost 77 39 Foregone revenue deferral 67 — Stock-based compensation 42 43 Debt premium 17 22 Distribution system code exemption — 10 Other 26 29 Total regulatory assets 2,728 1,763 Less: current portion (52 ) (42 ) 2,676 1,721 Regulatory liabilities: Tax rule changes variance 44 5 Distribution rate riders 42 6 Pension cost differential 31 55 Green energy expenditure variance 31 52 Retail settlement variance account 23 39 Earnings sharing mechanism deferral 21 — External revenue variance 6 26 Deferred income tax regulatory liability 5 86 Post-retirement and post-employment benefits — 130 Other 9 18 Total regulatory liabilities 212 417 Less: current portion (45 ) (91 ) 167 326 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Non-Current Assets | December 31 (millions of dollars) 2019 2018 Right-of-Use assets (Notes 3, 22) 71 — Other 9 5 80 5 |
Accounts Payable and Other Cu_2
Accounts Payable and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other Current Liabilities | December 31 (millions of dollars) 2019 2018 Accounts payable 184 171 Accrued liabilities 633 578 Accrued interest 104 96 Regulatory liabilities (Note 12) 45 91 Lease obligations (Note 22) 8 — 974 936 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | December 31 (millions of dollars) 2019 2018 Post-retirement and post-employment benefit liability (Note 19) 1,705 1,406 Pension benefit liability (Note 19) 1,125 547 Environmental liabilities (Note 20) 111 139 Lease obligations (Note 22) 66 — Due to related parties (Note 28) 40 41 Long-term accounts payable 5 11 Asset retirement obligations (Note 21) 10 10 Other liabilities 11 10 3,073 2,164 |
Debt and Credit Agreements (Tab
Debt and Credit Agreements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-Term Debt | At December 31, 2019, Hydro One’s Operating Credit Facilities consisted of the following: (millions of dollars) Maturity Total Amount Amount Drawn Revolving standby credit facilities June 2024 1 2,300 — 1 On June 3, 2019, the maturity date for the Operating Credit Facilities was extended from June 2022 to June 2024. The following table presents long-term debt outstanding at December 31, 2019 and 2018: December 31 (millions of dollars) 2019 2018 Floating-rate Series 31 notes due 2019 1 — 228 1.48% Series 37 notes due 2019 2 — 500 4.40% Series 20 notes due 2020 300 300 1.62% Series 33 notes due 2020 2 350 350 1.84% Series 34 notes due 2021 500 500 2.57% Series 39 notes due 2021 2 300 300 3.20% Series 25 notes due 2022 600 600 2.54% Series 42 notes due 2024 700 — 2.97% Series 40 notes due 2025 350 350 2.77% Series 35 notes due 2026 500 500 3.02% Series 43 notes due 2029 550 — 7.35% Debentures due 2030 400 400 6.93% Series 2 notes due 2032 500 500 6.35% Series 4 notes due 2034 385 385 5.36% Series 9 notes due 2036 600 600 4.89% Series 12 notes due 2037 400 400 6.03% Series 17 notes due 2039 300 300 5.49% Series 18 notes due 2040 500 500 4.39% Series 23 notes due 2041 300 300 6.59% Series 5 notes due 2043 315 315 4.59% Series 29 notes due 2043 435 435 4.17% Series 32 notes due 2044 350 350 5.00% Series 11 notes due 2046 325 325 3.91% Series 36 notes due 2046 350 350 3.72% Series 38 notes due 2047 450 450 3.63% Series 41 notes due 2049 750 750 3.64% Series 44 notes due 2050 250 — 4.00% Series 24 notes due 2051 225 225 3.79% Series 26 notes due 2062 310 310 4.29% Series 30 notes due 2064 50 50 Hydro One long-term debt (a) 11,345 10,573 6.6% Senior Secured Bonds due 2023 (Principal amount - $105 million) 121 129 4.6% Note Payable due 2023 (Principal amount - $36 million) 39 39 HOSSM long-term debt (b) 160 168 11,505 10,741 Add: Net unamortized debt premiums 12 13 Add: Unrealized mark-to-market loss (gain) 2 1 (5 ) Less: Unamortized deferred debt issuance costs (43 ) (40 ) Total long-term debt 11,475 10,709 1 The interest rates of the floating-rate notes are referenced to the three-month Canadian dollar bankers’ acceptance rate, plus a margin. 2 The unrealized mark-to-market net loss of $1 million relates to $50 million of the Series 33 notes due 2020 and $300 million Series 39 notes due 2021. (2018 - unrealized mark-to-market net gain also related to $500 million Series 37 notes due 2019). The unrealized mark-to-market net loss is offset by a $1 million unrealized mark-to-market net gain (2018 - $5 million net loss) on the related fixed-to-floating interest-rate swap agreements, which are accounted for as fair value hedges. (a) Hydro One long-term debt At December 31, 2019, long-term debt of $11,345 million (2018 - $10,573 million ) was outstanding, the majority of which was issued under Hydro One’s Medium Term Note (MTN) Program. The maximum authorized principal amount of notes issuable under the current MTN Program prospectus filed in March 2018 is $4,000 million . At December 31 2019, $1,100 million remained available for issuance until April 2020. In 2019, Hydro One issued long-term debt totalling $1,500 million (2018 - $1,400 million ) and repaid long-term debt of $728 million (2018 - $750 million ) under its MTN Program. (b) HOSSM long-term debt At December 31, 2019, HOSSM long-term debt of $160 million (2018 - $168 million ), with a principal amount of $141 million (2018 - $143 million ) was outstanding. In 2019, no long-term debt was issued (2018 - $ nil ), and $2 million (2018 - $3 million ) of long-term debt was repaid. |
Schedule of Long-Term Debt | The total long-term debt is presented on the consolidated balance sheets as follows: December 31 (millions of dollars) 2019 2018 Current liabilities: Long-term debt payable within one year 653 731 Long-term liabilities: Long-term debt 10,822 9,978 Total long-term debt 11,475 10,709 |
Summary of Principal Repayments and Related Weighted Average Interest Rates | At December 31, 2019, principal repayments, interest payments, and related weighted-average interest rates were as follows: Long-Term Debt Principal Repayments Interest Payments Weighted Average Interest Rate (millions of dollars) (millions of dollars) (%) Year 1 653 473 2.9 Year 2 803 455 2.1 Year 3 604 436 3.2 Year 4 131 423 6.1 Year 5 700 410 2.5 2,891 2,197 2.8 Years 6-10 1,400 1,901 2.9 Thereafter 7,195 4,151 5.0 11,486 8,249 4.2 |
Summary of Long Term Debt Interest Payment Obligations | At December 31, 2019, principal repayments, interest payments, and related weighted-average interest rates were as follows: Long-Term Debt Principal Repayments Interest Payments Weighted Average Interest Rate (millions of dollars) (millions of dollars) (%) Year 1 653 473 2.9 Year 2 803 455 2.1 Year 3 604 436 3.2 Year 4 131 423 6.1 Year 5 700 410 2.5 2,891 2,197 2.8 Years 6-10 1,400 1,901 2.9 Thereafter 7,195 4,151 5.0 11,486 8,249 4.2 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Values and Carrying Values of Long-Term Debt | The fair values and carrying values of the Company’s long-term debt at December 31, 2019 and 2018 are as follows: 2019 2019 2018 2018 December 31 (millions of dollars) Carrying Value Fair Value Carrying Value Fair Value Long-term debt measured at fair value: $50 million of MTN Series 33 notes 50 50 49 49 $500 million MTN Series 37 notes — — 495 495 $300 million MTN Series 39 notes 301 301 301 301 Other notes and debentures 11,124 13,121 9,864 10,820 Long-term debt, including current portion 11,475 13,472 10,709 11,665 |
Summary of Fair Value Hierarchy of Financial Assets and Liabilities | The fair value hierarchy of financial assets and liabilities at December 31, 2019 and 2018 is as follows: December 31, 2019 (millions of dollars) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Derivative instruments 1 Fair value hedges (interest-rate swaps) 1 1 — 1 — Cash flow hedges (interest-rate swaps) 2 2 — 2 — 3 3 — 3 — Liabilities: Long-term debt, including current portion 11,475 13,472 — 13,472 — 11,475 13,472 — 13,472 — 1 Derivative assets are included in other long-term assets on the consolidated balance sheets. December 31, 2018 (millions of dollars) Carrying Value Fair Value Level 1 Level 2 Level 3 Liabilities: Long-term debt, including current portion 10,709 11,665 — 11,665 — Derivative instruments - fair value hedges (interest-rate swaps) 1 5 5 — 5 — 10,714 11,670 — 11,670 — 1 Derivative liabilities are included in other long-term liabilities on the consolidated balance sheets. |
Capital Management (Tables)
Capital Management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulated Operations [Abstract] | |
Summary of Company's Capital Structure | At December 31, 2019 and 2018, the Company’s capital structure was as follows: December 31 (millions of dollars) 2019 2018 Long-term debt payable within one year 653 731 Short-term notes payable 1,143 1,252 Less: cash and cash equivalents (7 ) (492 ) 1,789 1,491 Long-term debt 10,822 9,978 Preferred shares — 486 Common shares 3,564 4,312 Retained earnings 6,086 5,137 Total capital 22,261 21,404 |
Pension and Post-Retirement a_2
Pension and Post-Retirement and Post-Employment Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |
Change in Projected Benefit Obligation and Change in Plan Assets | The following tables provide the components of the unfunded status of the Company's Plans at December 31, 2019 and 2018: Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 (millions of dollars) 2019 2018 2019 2018 Change in projected benefit obligation Projected benefit obligation, beginning of year 7,752 8,258 1,453 1,552 Current service cost 145 176 55 49 Employee contributions 55 52 — — Interest cost 303 282 60 54 Benefits paid (371 ) (362 ) (47 ) (49 ) Net actuarial loss (gain) 1,089 (654 ) 241 (156 ) Recognition of prior service — — — 3 Net transfers 1 — — 6 — Projected benefit obligation, end of year 8,973 7,752 1,768 1,453 Change in plan assets Fair value of plan assets, beginning of year 7,205 7,277 — — Actual return on plan assets 922 190 — — Benefits paid (371 ) (362 ) (47 ) (49 ) Employer contributions 61 75 47 49 Employee contributions 55 52 — — Administrative expenses (24 ) (27 ) — — Fair value of plan assets, end of year 7,848 7,205 — — Unfunded status 1,125 547 1,768 1,453 1 Effective January 1, 2019, liabilities associated with the HOSSM post-employment benefit plans were transferred to the Hydro One post-employment benefit plans. |
Schedule of Benefit Obligations and Plan Assets | Hydro One presents its benefit obligations and plan assets net on its Consolidated Balance Sheets as follows: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of dollars) 2019 2018 2019 2018 Other assets 1 3 3 — — Accrued liabilities — — 63 54 Pension benefit liability 1,125 547 — — Post-retirement and post-employment benefit liability 2 — — 1,705 1,406 Net unfunded status 1,122 544 1,768 1,460 1 Represents the funded status of HOSSM defined benefit pension plan. 2 Includes $ nil (2018 - $7 million ) relating to HOSSM post-employment benefit plans. Effective January 1, 2019, liabilities associated with the HOSSM post-employment benefit plans were transferred to the Hydro One post-employment benefit plans. |
Schedule of Projected Benefit Obligation (PBO), Accumulated Benefit Obligation (ABO) and Fair Value of Plan Assets | The following table provides the PBO, accumulated benefit obligation (ABO) and fair value of plan assets for the Pension Plan: December 31 (millions of dollars) 2019 2018 PBO 8,973 7,752 ABO 8,183 7,144 Fair value of plan assets 7,848 7,205 |
Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations | The following weighted average assumptions were used to determine the benefit obligations at December 31, 2019 and 2018: Pension Benefits Post-Retirement and Post-Employment Benefits Year ended December 31 2019 2018 2019 2018 Significant assumptions: Weighted average discount rate 3.10 % 3.90 % 3.10 % 4.00 % Rate of compensation scale escalation (long-term) 2.50 % 2.50 % 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % 2.00 % 2.00 % Rate of increase in health care cost trends 1 — — 4.04 % 4.04 % 1 5.09% per annum in 2020, grading down to 4.04% per annum in and after 2031 (2018 - 5.19% per annum in 2019, grading down to 4.04% per annum in and after 2031) |
Schedule of Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs | The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2019 and 2018. Assumptions used to determine current year-end benefit obligations are the assumptions used to estimate the subsequent year’s net periodic benefit costs. Year ended December 31 2019 2018 Pension Benefits: Weighted average expected rate of return on plan assets 6.50 % 6.50 % Weighted average discount rate 3.90 % 3.40 % Rate of compensation scale escalation (long-term) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 15 15 Post-Retirement and Post-Employment Benefits: Weighted average discount rate 4.00 % 3.40 % Rate of compensation scale escalation (long-term) 2.50 % 2.50 % Rate of cost of living increase 2.00 % 2.00 % Average remaining service life of employees (years) 15.5 15.5 Rate of increase in health care cost trends 1 4.04 % 4.04 % 1 5.19% per annum in 2019, grading down to 4.04% per annum in and after 2031 (2018 - 5.26% per annum in 2018, grading down to 4.04% per annum in and after 2031) |
Schedule of Effect of One Percent Change in Health Care Cost Trends on Projected Benefit Obligation | The effect of a 1% change in health care cost trends on the PBO for the post-retirement and post-employment benefits at December 31, 2019 and 2018 is as follows: December 31 (millions of dollars) 2019 2018 Projected benefit obligation: Effect of a 1% increase in health care cost trends 279 228 Effect of a 1% decrease in health care cost trends (211 ) (173 ) |
Schedule of Effect of One Percent Change in Health Care Cost Trends on Service Cost and Interest Cost | The effect of a 1% change in health care cost trends on the service cost and interest cost for the post-retirement and post-employment benefits for the years ended December 31, 2019 and 2018 is as follows: Year ended December 31 (millions of dollars) 2019 2018 Service cost and interest cost: Effect of a 1% increase in health care cost trends 21 23 Effect of a 1% decrease in health care cost trends (15 ) (16 ) |
Approximate Life Expectancies Used to Determine Projected Benefit Obligations for Pension, Post-Retirement and Post-Employment Plans | The following approximate life expectancies were used in the mortality assumptions to determine the PBO for the pension and post-retirement and post-employment plans at December 31, 2019 and 2018: December 31 2019 2018 Life expectancy at age 65 for a member currently at: (years) (years) Age 65 - male 22 22 Age 65 - female 25 25 Age 45 - male 23 23 Age 45 - female 26 25 Estimated Future Benefit Payments |
Schedule of Estimated Future Benefit Payments | At December 31, 2019, estimated future benefit payments to the participants of the Plans were: (millions of dollars) Pension Benefits Post-Retirement and Post-Employment Benefits 2020 345 60 2021 354 61 2022 362 62 2023 369 64 2024 375 64 2025 through to 2029 1,945 340 Total estimated future benefit payments through to 2029 3,750 651 |
Schedule of Actuarial Gains and Losses and Prior Service Costs Recorded Within Regulatory Assets | These amounts are reflected in the following table: Year ended December 31 (millions of dollars) 2019 2018 Pension Benefits: Actuarial loss (gain) for the year 652 (350 ) Amortization of actuarial losses (55 ) (84 ) 597 (434 ) Post-Retirement and Post-Employment Benefits: Actuarial loss (gain) for the year 240 (155 ) Amortization of actuarial losses (7 ) (15 ) Amortization of prior service cost — (3 ) Amounts not subject to regulatory treatment 2 7 235 (166 ) |
Components of Regulatory Assets That Have Not Been Recognized as Components of Net Periodic Benefit Costs | The following table provides the components of regulatory assets that have not been recognized as components of net periodic benefit costs for the years ended December 31, 2019 and 2018: Year ended December 31 (millions of dollars) 2019 2018 Pension Benefits: Actuarial loss 1,125 547 Post-Retirement and Post-Employment Benefits: Actuarial loss (gain) 105 (130 ) |
Components of Regulatory Assets Expected to be Amortized as Components of Net Periodic Benefit Costs | The following table provides the components of regulatory assets at December 31 that are expected to be amortized as components of net periodic benefit costs in the following year: Pension Benefits Post-Retirement and Post-Employment Benefits December 31 (millions of dollars) 2019 2018 2019 2018 Actuarial loss (gain) 95 55 2 (1 ) |
Schedule of Pension Plan Target Asset and Weighted Average Asset Allocations | At December 31, 2019, the Pension Plan target asset allocations and weighted average asset allocations were as follows: Target Allocation (%) Pension Plan Assets (%) Equity securities 45 52 Debt securities 35 35 Real Estate and Infrastructure 20 13 100 100 |
Pension Plan Assets Measured and Recorded at Fair Value on Recurring Basis | The following tables present the Pension Plan assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy at December 31, 2019 and 2018: December 31, 2019 (millions of dollars) Level 1 Level 2 Level 3 Total Pooled funds — 22 1,079 1,101 Cash and cash equivalents 159 — — 159 Short-term securities — 98 — 98 Derivative instruments — 5 — 5 Corporate shares - Canadian 107 — — 107 Corporate shares - Foreign 3,545 219 — 3,764 Bonds and debentures - Canadian — 2,427 — 2,427 Bonds and debentures - Foreign — 165 — 165 Total fair value of plan assets 1 3,811 2,936 1,079 7,826 December 31, 2019 (millions of dollars) Level 1 Level 2 Level 3 Total Derivative instruments — 2 — 2 Total fair value of plan liabilities 1 — 2 — 2 1 At December 31, 2019, the total fair value of Pension Plan assets and liabilities excludes $36 million of interest and dividends receivable, $10 million of pension administration expenses payable, $3 million of sold investments receivable, and $5 million of purchased investments payable. December 31, 2018 (millions of dollars) Level 1 Level 2 Level 3 Total Pooled funds — 21 651 672 Cash and cash equivalents 210 — — 210 Short-term securities — 78 — 78 Derivative instruments — (7 ) — (7 ) Corporate shares - Canadian 115 — — 115 Corporate shares - Foreign 3,222 183 — 3,405 Bonds and debentures - Canadian — 2,506 — 2,506 Bonds and debentures - Foreign — 197 — 197 Total fair value of plan assets 1 3,547 2,978 651 7,176 1 At December 31, 2018, the total fair value of Pension Plan assets and liabilities excludes $35 million of interest and dividends receivable, $10 million of pension administration expenses payable, $6 million of sold investments receivable, and $2 million of purchased investments payable. |
Changes in Fair Value of Financial Instruments Classified in Level 3 | Year ended December 31 (millions of dollars) 2019 2018 Fair value, beginning of year 651 549 Realized and unrealized gains (losses) (4 ) 59 Purchases 463 90 Sales and disbursements (31 ) (47 ) Fair value, end of year 1,079 651 |
Pension Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Periodic Benefit Costs | The following table provides the components of the net periodic benefit costs for the years ended December 31, 2019 and 2018 for the Pension Plan: Year ended December 31 (millions of dollars) 2019 2018 Current service cost 145 176 Interest cost 303 282 Expected return on plan assets, net of expenses (462 ) (467 ) Amortization of actuarial losses 55 84 Net periodic benefit costs 41 75 Charged to results of operations 1 29 31 1 The Company accounts for pension costs consistent with their inclusion in OEB-approved rates. During the year ended December 31, 2019, pension costs of $72 million (2018 - $74 million ) were attributed to labour, of which $29 million (2018 - $31 million ) was charged to operations, and $43 million (2018 - $43 million ) was capitalized as part of the cost of property, plant and equipment and intangible assets. |
Post-Retirement and Post-Employment Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Periodic Benefit Costs | The following table provides the components of the net periodic benefit costs for the years ended December 31, 2019 and 2018 for the post-retirement and post-employment benefit plans: Year ended December 31 (millions of dollars) 2019 2018 Current service cost 55 49 Interest cost 60 53 Amortization of actuarial losses 7 15 Recognition of prior service — 3 Net periodic benefit costs 122 120 Charged to results of operations 1 48 50 |
Environmental Liabilities (Tabl
Environmental Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Environmental Remediation Obligations [Abstract] | |
Schedule of Movements in Environmental Liabilities | The following tables show the movements in environmental liabilities for the years ended December 31, 2019 and 2018: Year ended December 31, 2019 (millions of dollars) PCB LAR Total Environmental liabilities - beginning 108 57 165 Interest accretion 4 — 4 Expenditures (17 ) (8 ) (25 ) Revaluation adjustment (5 ) 2 (3 ) Environmental liabilities - ending 90 51 141 Less: current portion (19 ) (11 ) (30 ) 71 40 111 Year ended December 31, 2018 (millions of dollars) PCB LAR Total Environmental liabilities - beginning 134 62 196 Interest accretion 5 1 6 Expenditures (16 ) (6 ) (22 ) Revaluation adjustment (15 ) — (15 ) Environmental liabilities - ending 108 57 165 Less: current portion (15 ) (11 ) (26 ) 93 46 139 |
Reconciliation between Undiscounted Basis of Environmental Liabilities and Amount Recognized on Consolidated Balance Sheets | The following tables show the reconciliation between the undiscounted basis of the environmental liabilities and the amount recognized on the Consolidated Balance Sheets after factoring in the discount rate: December 31, 2019 (millions of dollars) PCB LAR Total Undiscounted environmental liabilities 97 51 148 Less: discounting environmental liabilities to present value (7 ) — (7 ) Discounted environmental liabilities 90 51 141 December 31, 2018 (millions of dollars) PCB LAR Total Undiscounted environmental liabilities 118 58 176 Less: discounting environmental liabilities to present value (10 ) (1 ) (11 ) Discounted environmental liabilities 108 57 165 |
Schedule of Estimated Future Environmental Expenditures | At December 31, 2019, the estimated future environmental expenditures were as follows: December 31 (millions of dollars) 2019 2020 30 2021 31 2022 29 2023 25 2024 8 Thereafter 25 148 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Other Information Related to Operating Leases | All leases include a clause to enable upward revision of the rental charge on an annual basis or on renewal according to prevailing market conditions or pre-established rents. There are no restrictions placed upon Hydro One by entering into these leases. Renewal options are included in the lease term when their exercise is reasonably certain. Other information related to the Company's operating leases was as follows: Year ended December 31 (millions of dollars) 2019 Lease expense 9 Lease payments made 6 December 31 2019 Weighted-average remaining lease term 1 (years) 8 Weighted-average discount rate 2.7 % 1 Includes renewal options that are reasonably certain to be exercised |
Schedule of Future Minimum Operating Lease Payments After Adoption | At December 31, 2019, future minimum operating lease payments were as follows: December 31 (millions of dollars) 2019 2020 10 2021 11 2022 10 2023 9 2024 9 Thereafter 33 Total undiscounted minimum lease payments 1 82 Less: discounting minimum lease payments to present value (9 ) Total discounted minimum lease payments 73 1 Excludes committed amounts of $6 million for leases that have not yet commenced |
Schedule of Future Minimum Operating Lease Payments Before Adoption | At December 31, 2018, future minimum operating lease payments were as follows: December 31 (millions of dollars) 2018 2019 6 2020 10 2021 4 2022 1 2023 1 Thereafter 3 Total undiscounted minimum lease payments 25 |
Schedule of Supplementary Balance Sheet Information | Hydro One presents its ROU assets and lease obligations on the Consolidated Balance Sheet as follows: December 31 (millions of dollars) 2019 Other long-term assets (Note 13) 71 Accounts payable and other current liabilities (Note 14) 8 Other long-term liabilities (Note 15) 66 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Share Grant Activity | A summary of share grant activity under the Share Grant Plans during the years ended December 31, 2019 and 2018 is presented below: Year ended December 31, 2019 Share Grants (number of common shares) Weighted-Average Price Share grants outstanding - beginning 4,159,439 $20.50 Vested and issued 1 (455,694 ) — Forfeited (92,567 ) $20.50 Share grants outstanding - ending 3,611,178 $20.50 1 In 2019, Hydro One Limited issued from treasury common shares to eligible Hydro One employees in accordance with provisions of the PWU and the Society Share Grant Plans. In accordance with the intercompany agreement between Hydro One and Hydro One Limited, Hydro One made payments to Hydro One Limited for the common shares issued. Year ended December 31, 2018 Share Grants (number of common shares) Weighted-Average Price Share grants outstanding - beginning 4,737,783 $20.50 Vested and issued 1 (473,222 ) — Forfeited (105,122 ) $20.50 Share grants outstanding - ending 4,159,439 $20.50 1 In 2018, Hydro One Limited issued from treasury common shares to eligible Hydro One employees in accordance with provisions of the PWU and the Society Share Grant Plans. In accordance with the intercompany agreement between Hydro One and Hydro One Limited, Hydro One made payments to Hydro One Limited for the common shares issued. A summary of stock options activity during the years ended December 31, 2019 and 2018 is presented below: Number of Stock Options Weighted-average exercise price Stock options outstanding - January 1, 2018 — Granted 1,450,880 $ 20.70 Forfeited 1 (500,970 ) $ 20.66 Stock options outstanding - December 31, 2018 2,3 949,910 $ 20.72 Exercised 4 (302,520 ) $ 20.76 Forfeited 1 (243,840 ) $ 20.75 Stock options outstanding - December 31, 2019 2 403,550 $ 20.66 1 Stock options forfeited in 2019 had a fair value of $1.65 per option (2018 - $1.67 ). 2 During 2019, 706,070 stock options vested with a modified fair value of $1.04 per option (2018 - no stock options vested), of which 302,520 stock options were exercised. At December 31, 2019, all stock options outstanding were vested and exercisable (2018 - all stock options were non-vested). 3 Stock options outstanding at December 31, 2019 have an aggregate intrinsic value of $2 million (2018 - $ nil ) and weighted-average remaining contractual term of 5.2 years (2018 - 6.2 years). 4 Stock options exercised in 2019 had an aggregate intrinsic value of $1 million . Stock options granted and the weighted-average assumptions used in the valuation model for options granted during 2018 are as follows: Exercise price 1 $ 20.70 Grant date fair value per option $ 1.66 Valuation assumptions: Expected dividend yield 2 3.78 % Expected volatility 3 15.01 % Risk-free interest rate 4 2.00 % Expected option term 5 4.5 years 1 Hydro One Limited common share price on the date of the grant. 2 Based on dividend and Hydro One Limited common share price on the date of the grant. 3 Based on average daily volatility of Hydro One Limited's peer entities for a 4.5 -year term. 4 Based on bond yield for an equivalent Canadian government bond. 5 Determined using the option term and the vesting period. |
Summary of Number of DSUs | A summary of DSU awards activity under the Directors' DSU Plan during the years ended December 31, 2019 and 2018 is presented below: Year ended December 31 (number of DSUs) 2019 2018 DSUs outstanding - beginning 46,697 187,090 Granted 29,938 82,375 Settled 1 (24,015 ) (222,768 ) DSUs outstanding - ending 52,620 46,697 A summary of DSU awards activity under the Management DSU Plan during the years ended December 31, 2019 and 2018 is presented below: Year ended December 31 (number of DSUs) 2019 2018 DSUs outstanding - beginning 104,041 63,760 Granted 24,947 40,281 Paid (76,802 ) — DSUs outstanding - ending 52,186 104,041 |
Summary of Number of PSUs and RSUs | A summary of PSU and RSU awards activity under the LTIP during the years ended December 31, 2019 and 2018 is presented below: PSUs RSUs Year ended December 31 (number of units) 2019 2018 2019 2018 Units outstanding - beginning 594,470 425,120 432,780 388,140 Granted — 438,470 — 338,480 Vested and issued (76,411 ) (123 ) (88,532 ) (104,881 ) Forfeited (153,805 ) (30,967 ) (84,745 ) (30,649 ) Settled (201,910 ) (238,030 ) (58,620 ) (158,310 ) Units outstanding - ending 1 162,344 594,470 200,883 432,780 1 |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of Movements in Noncontrolling Interest | The following tables show the movements in total noncontrolling interest during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 21 49 70 Contributions from sale of noncontrolling interest (Note 4) — 12 12 Distributions to noncontrolling interest (3 ) (6 ) (9 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 20 59 79 Year ended December 31, 2018 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 22 50 72 Distributions to noncontrolling interest (3 ) (5 ) (8 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 21 49 70 The following table shows the movements in NRLP noncontrolling interest during the year ended December 31, 2019: Year ended December 31, 2019 (millions of dollars) Equity Noncontrolling interest - beginning — Contributions from sale of noncontrolling interest (Note 4) 12 Distributions to noncontrolling interest — Net income attributable to noncontrolling interest — Noncontrolling interest - ending 12 The following tables show the movements in B2M LP noncontrolling interest during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 21 49 70 Distributions to noncontrolling interest (3 ) (6 ) (9 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 20 47 67 Year ended December 31, 2018 (millions of dollars) Temporary Equity Equity Total Noncontrolling interest - beginning 22 50 72 Distributions to noncontrolling interest (3 ) (5 ) (8 ) Net income attributable to noncontrolling interest 2 4 6 Noncontrolling interest - ending 21 49 70 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | The following is a summary of the Company’s related party transactions during the years ended December 31, 2019 and 2018: Year ended December 31 (millions of dollars) Related Party Transaction 2019 2018 IESO Power purchased 1,808 1,636 Revenues for transmission services 1,636 1,672 Amounts related to electricity rebates 692 477 Distribution revenues related to rural rate protection 240 239 Distribution revenues related to the supply of electricity to remote northern communities 35 35 Funding received related to Conservation and Demand Management programs 42 62 OPG Power purchased 8 10 Revenues related to provision of services and supply of electricity 8 8 Costs related to the purchase of services 1 — OEFC Power purchased from power contracts administered by the OEFC 2 2 OEB OEB fees 9 8 Hydro One Limited Return of stated capital 748 544 Dividends paid 1 6 Stock-based compensation costs 10 28 Cost recovery for services provided 14 15 Hydro One Telecom Services received – costs expensed 21 23 Revenues for services provided 3 3 2587264 Ontario Inc. Preferred shares redeemed 486 — Dividends paid 2 9 |
Consolidated Statement of Cas_2
Consolidated Statement of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Consolidated Statement of Cash Flows | The following tables reconcile investments in property, plant and equipment and intangible assets and the amounts presented in the Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018. The reconciling items include net change in accruals and capitalized depreciation. Year ended December 31, 2019 (millions of dollars) Property, Plant and Equipment Intangible Assets Total Capital investments (1,543 ) (116 ) (1,659 ) Reconciling items 33 1 34 Cash outflow for capital expenditures (1,510 ) (115 ) (1,625 ) Year ended December 31, 2018 (millions of dollars) Property, Plant and Equipment Intangible Assets Total Capital investments (1,441 ) (121 ) (1,562 ) Reconciling items 30 1 31 Cash outflow for capital expenditures (1,411 ) (120 ) (1,531 ) The changes in non-cash balances related to operations consist of the following: Year ended December 31 (millions of dollars) 2019 2018 Accounts receivable (74 ) 13 Due from related parties (176 ) (22 ) Other assets (6 ) 3 Accounts payable 10 (2 ) Accrued liabilities 55 18 Due to related parties 184 (78 ) Accrued interest 8 (3 ) Long-term accounts payable and other liabilities — (5 ) Post-retirement and post-employment benefit liability 26 26 27 (50 ) Supplementary Information Year ended December 31 (millions of dollars) 2019 2018 Net interest paid 486 458 Income taxes paid 21 15 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Commitments Under Leases, Outsourcing and Other Agreements Due | The following table presents a summary of Hydro One’s commitments under outsourcing and other agreements due in the next five years and thereafter: December 31, 2019 (millions of dollars) Year 1 Year 2 Year 3 Year 4 Year 5 Thereafter Outsourcing and other agreements 155 28 3 2 4 13 Long-term software/meter agreement 22 1 2 1 2 — |
Summary of Other Commitments | The following table presents a summary of Hydro One’s other commercial commitments by year of expiry in the next five years and thereafter: December 31, 2019 (millions of dollars) Year 1 Year 2 Year 3 Year 4 Year 5 Thereafter Operating Credit Facilities 1 — — — — 2,300 — Letters of credit 2 185 2 — — — — Guarantees 3 325 — — — — — 1 On June 3, 2019, the maturity date for the Operating Credit Facilities was extended from June 2022 to June 2024. 2 Letters of credit consist of $171 million letters of credit related to retirement compensation arrangements, a $4 million in letters of credit to satisfy debt service reserve requirements, a $9 million letter of credit provided to the IESO for prudential support, and $3 million in letters of credit for various operating purposes. 3 Guarantees consist of prudential support provided to the IESO by Hydro One on behalf of its subsidiaries. |
Segmented Reporting (Tables)
Segmented Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Year ended December 31, 2019 (millions of dollars) Transmission Distribution Other Consolidated Revenues 1,654 4,788 — 6,442 Purchased power — 3,111 — 3,111 Operation, maintenance and administration 369 615 7 991 Depreciation and amortization 462 409 — 871 Income (loss) before financing charges and income tax expense 823 653 (7 ) 1,469 Capital investments 1,035 624 — 1,659 Year ended December 31, 2018 (millions of dollars) Transmission Distribution Other Consolidated Revenues 1,688 4,422 — 6,110 Purchased power — 2,899 — 2,899 Operation, maintenance and administration 424 608 23 1,055 Depreciation and amortization 435 395 — 830 Income (loss) before financing charges and income tax expense 829 520 (23 ) 1,326 Capital investments 985 577 — 1,562 Total Assets by Segment: December 31 (millions of dollars) 2019 2018 Transmission 14,917 13,877 Distribution 9,943 9,277 Other 2,057 2,415 Total assets 26,917 25,569 Total Goodwill by Segment: December 31 (millions of dollars) 2019 2018 Transmission 157 157 Distribution 168 168 Total goodwill 325 325 |
Description of the Business (De
Description of the Business (Detail) - CAD ($) $ in Millions | Jun. 20, 2019 | May 01, 2019 | Dec. 20, 2018 | Oct. 13, 2016 | Jun. 30, 2018 | Dec. 31, 2015 | Dec. 31, 2019 |
Hydro One Sault Ste. Marie LP [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Deferred rebasing period | 10 years | ||||||
Revenue cap escalator | 1.10% | ||||||
Hydro One Remote Communities [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Electrical distribution, increased base rate | 1.80% | ||||||
2015 Approved Revenue Requirement [Member] | B2M Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Transmission revenue requirement | $ 39 | ||||||
2016 Approved Revenue Requirement [Member] | B2M Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Transmission revenue requirement | 36 | ||||||
2017 Approved Revenue Requirement [Member] | B2M Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Transmission revenue requirement | 37 | ||||||
2018 Approved Revenue Requirement [Member] | B2M Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Transmission revenue requirement | 38 | ||||||
2018 Approved Revenue Requirement [Member] | Hydro One Networks [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Electrical transmission revenue index rate | 1.40% | ||||||
Distribution revenue requirement | $ 1,459 | ||||||
2019 Approved Revenue Requirement [Member] | B2M Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Transmission revenue requirement | $ 33 | $ 37 | |||||
2019 Approved Revenue Requirement [Member] | Hydro One Networks [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Distribution revenue requirement | 1,498 | ||||||
2020 Approved Revenue Requirement [Member] | Hydro One Networks [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Distribution revenue requirement | 1,532 | ||||||
2021 Approved Revenue Requirement [Member] | Hydro One Networks [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Distribution revenue requirement | 1,578 | ||||||
2022 Approved Revenue Requirement [Member] | Hydro One Networks [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Distribution revenue requirement | $ 1,624 | ||||||
B2M Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Ownership interest in related party | 66.00% | ||||||
Niagara Reinforcement Limited Partnership [Member] | |||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||||||
Ownership interest in related party | 75.00% |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Accounting Policies [Line Items] | |||
Short-term investments original maturity | 3 months | ||
Asset impairment charges | $ 0 | $ 0 | |
Embedded derivatives | 0 | $ 0 | |
Operating lease, right-of-use asset | 71,000,000 | ||
Operating lease, liability | $ 73,000,000 | ||
Accounting Standards Update 2016-02 [Member] | |||
Accounting Policies [Line Items] | |||
Operating lease, right-of-use asset | $ 24,000,000 | ||
Operating lease, liability | $ 24,000,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Average Service Lives and Depreciation and Amortization Rates (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average service life, intangible assets | 10 years |
Annual rate of amortization, intangible assets | 10.00% |
Annual average rate of amortization, intangible assets | 10.00% |
Transmission [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average service life, property, plant and equipment | 55 years |
Annual average rate of depreciation and amortization, property, plant and equipment | 2.00% |
Distribution [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average service life, property, plant and equipment | 46 years |
Annual average rate of depreciation and amortization, property, plant and equipment | 2.00% |
Communication [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average service life, property, plant and equipment | 16 years |
Annual average rate of depreciation and amortization, property, plant and equipment | 5.00% |
Administration and Service [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Average service life, property, plant and equipment | 21 years |
Annual average rate of depreciation and amortization, property, plant and equipment | 5.00% |
Minimum [Member] | Transmission [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 1.00% |
Minimum [Member] | Distribution [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 1.00% |
Minimum [Member] | Communication [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 1.00% |
Minimum [Member] | Administration and Service [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 1.00% |
Maximum [Member] | Transmission [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 3.00% |
Maximum [Member] | Distribution [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 7.00% |
Maximum [Member] | Communication [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 15.00% |
Maximum [Member] | Administration and Service [Member] | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Annual rate of depreciation and amortization, property, plant and equipment | 20.00% |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - CAD ($) $ in Millions | Sep. 18, 2019 | Jul. 31, 2018 | Aug. 31, 2016 |
Niagara Reinforcement Limited Partnership [Member] | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 119 | ||
Six Nations of the Grand River Development Corporation and Mississaugas of the Credit First Nation [Member] | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 12 | ||
Orillia Power Distribution Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price of acquisition | $ 41 | ||
Business acquisition, consideration outstanding indebtedness | $ 15 | ||
Peterborough Distribution Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price of acquisition | $ 105 | ||
Six Nations of the Grand River Development Corporation [Member] | Niagara Reinforcement Limited Partnership [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of common shares acquired | 25.00% | ||
Mississaugas of the Credit First Nation [Member] | Niagara Reinforcement Limited Partnership [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of common shares acquired | 0.10% | ||
Option to purchase additional equity interest | 19.90% | ||
First Nations [Member] | Niagara Reinforcement Limited Partnership [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of common shares acquired | 25.10% | ||
Debt [Member] | Niagara Reinforcement Limited Partnership [Member] | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 71 | ||
Business combination percentage transferred | 60.00% | ||
Equity [Member] | Niagara Reinforcement Limited Partnership [Member] | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 48 | ||
Business combination percentage transferred | 40.00% |
Depreciation, Amortization An_3
Depreciation, Amortization And Asset Removal Costs - Schedule of Depreciation and Amortization (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation of property, plant and equipment | $ 664 | $ 647 |
Amortization of intangible assets | 81 | 71 |
Amortization of regulatory assets | 25 | 22 |
Depreciation and amortization | 770 | 740 |
Asset removal costs | 101 | 90 |
Total depreciation and amortization | $ 871 | $ 830 |
Financing Charges - Schedule of
Financing Charges - Schedule of Financing Charges (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Banking and Thrift, Interest [Abstract] | ||
Interest on long-term debt | $ 479 | $ 447 |
Interest on short-term notes | 18 | 14 |
Other | 18 | 17 |
Less: Interest capitalized on construction and development in progress | (48) | (53) |
Interest earned on cash and cash equivalents | (7) | (7) |
Net financing charges | $ 460 | $ 418 |
Income Taxes - Reconciliation b
Income Taxes - Reconciliation between Statutory and Effective Tax Rates (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory income tax rate | 26.50% | 26.50% |
Income before income tax expense | $ 1,009 | $ 908 |
Income tax expense at statutory rate of 26.5% (2018 - 26.5%) | 267 | 241 |
Net temporary differences recoverable in future rates charged to customers: | ||
Capital cost allowance in excess of depreciation and amortization | (105) | (68) |
Incremental tax deductions from deferred tax asset sharing | (60) | (68) |
Overheads capitalized for accounting but deducted for tax purposes | (21) | (20) |
Interest capitalized for accounting but deducted for tax purposes | (13) | (14) |
Pension and post-retirement benefit contributions in excess of pension expense | (11) | (11) |
Environmental expenditures | (7) | (6) |
Other | 1 | (9) |
Net temporary differences | (216) | (196) |
Net permanent differences | 0 | 3 |
Write-off of unregulated deferred income tax asset (Note 12) | 0 | 885 |
Total income tax expense | $ 51 | $ 933 |
Effective income tax rate | 5.10% | 102.80% |
Income Taxes - Major Components
Income Taxes - Major Components of Income Tax Expense (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense | $ 28 | $ 24 |
Deferred income tax expense | 23 | 909 |
Total income tax expense | $ 51 | $ 933 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred income tax assets | ||
Post-retirement and post-employment benefits expense in excess of cash payments | $ 633 | $ 523 |
Non-depreciable capital property | 271 | 271 |
Non-capital losses | 288 | 263 |
Pension obligations | 405 | 197 |
Investment in subsidiaries | 95 | 86 |
Tax credit carryforwards | 92 | 71 |
Environmental expenditures | 51 | 59 |
Depreciation and amortization in excess of capital cost allowance | 4 | 5 |
Other | 18 | 24 |
Deferred income tax assets gross | 1,857 | 1,499 |
Less: valuation allowance | (375) | (366) |
Total deferred income tax assets | 1,482 | 1,133 |
Deferred income tax liabilities | ||
Capital cost allowance in excess of depreciation and amortization | 377 | 9 |
Regulatory amounts that are not recognized for tax purposes | 495 | 188 |
Goodwill | 10 | 10 |
Other | 18 | 17 |
Total deferred income tax liabilities | 900 | 224 |
Net deferred income tax assets | $ 582 | $ 909 |
Income Taxes - Major Categories
Income Taxes - Major Categories of Net Deferred Income Tax Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term: | ||
Deferred income tax assets | $ 643 | $ 964 |
Deferred income tax liabilities | (61) | (55) |
Net deferred income tax assets | $ 582 | $ 909 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Valuation allowance in respect of capital property | $ 375 | $ 366 |
Income Taxes - Non Capital Loss
Income Taxes - Non Capital Losses Carried Forward to Reduce Future Period Taxable Income (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | $ 1,084 | $ 991 |
2034 [Member] | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | 2 | 2 |
2035 [Member] | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | 220 | 220 |
2036 [Member] | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | 549 | 549 |
2037 [Member] | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | 121 | 121 |
2038 [Member] | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | 5 | 99 |
2039 [Member] | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Total losses | $ 187 | $ 0 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | $ 721 | $ 646 | |
Allowance for doubtful accounts | (22) | (21) | $ (29) |
Accounts receivable, net | 699 | 625 | |
Accounts Receivable - Billed [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | 330 | 289 | |
Accounts Receivable - Unbilled [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | $ 391 | $ 357 |
Accounts Receivable - Schedul_2
Accounts Receivable - Schedule of Allowance for Doubtful Accounts (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts - beginning | $ (21) | $ (29) |
Write-offs | 18 | 25 |
Additions to allowance for doubtful accounts | (19) | (17) |
Allowance for doubtful accounts - ending | $ (22) | $ (21) |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Regulatory assets (Note 12) | $ 52 | $ 42 |
Prepaid expenses and other assets | 41 | 37 |
Materials and supplies | 21 | 20 |
Other current assets | $ 114 | $ 99 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment | $ 31,876 | $ 30,455 |
Accumulated Depreciation | 11,345 | 10,782 |
Construction in Progress | 887 | 932 |
Property, plant, and equipment, total | 21,418 | 20,605 |
Transmission [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment | 17,454 | 16,559 |
Accumulated Depreciation | 5,714 | 5,449 |
Construction in Progress | 711 | 766 |
Property, plant, and equipment, total | 12,451 | 11,876 |
Distribution [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment | 10,991 | 10,580 |
Accumulated Depreciation | 3,747 | 3,561 |
Construction in Progress | 85 | 75 |
Property, plant, and equipment, total | 7,329 | 7,094 |
Communication [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment | 1,151 | 1,121 |
Accumulated Depreciation | 876 | 804 |
Construction in Progress | 38 | 33 |
Property, plant, and equipment, total | 313 | 350 |
Administration and Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment | 1,617 | 1,548 |
Accumulated Depreciation | 931 | 893 |
Construction in Progress | 53 | 58 |
Property, plant, and equipment, total | 739 | 713 |
Easements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment | 663 | 647 |
Accumulated Depreciation | 77 | 75 |
Construction in Progress | 0 | 0 |
Property, plant, and equipment, total | $ 586 | $ 572 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Financing charges capitalized on property, plant and equipment | $ 45 | $ 51 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | $ 917 | $ 795 |
Accumulated Amortization | 517 | 445 |
Development in Progress | 55 | 59 |
Total | 455 | 409 |
Computer Applications Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 912 | 790 |
Accumulated Amortization | 512 | 440 |
Development in Progress | 55 | 59 |
Total | 455 | 409 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 5 | 5 |
Accumulated Amortization | 5 | 5 |
Development in Progress | 0 | 0 |
Total | $ 0 | $ 0 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Financing charges related to intangible assets under development | $ 3 | $ 2 |
Amortization expense for intangible assets, 2020 | 63 | |
Amortization expense for intangible assets, 2021 | 61 | |
Amortization expense for intangible assets, 2022 | 58 | |
Amortization expense for intangible assets, 2023 | 48 | |
Amortization expense for intangible assets, 2024 | $ 37 |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities - Schedule of Regulatory Assets and Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Regulatory assets: | ||
Total regulatory assets | $ 2,728 | $ 1,763 |
Less: current portion | (52) | (42) |
Regulatory assets | 2,676 | 1,721 |
Regulatory liabilities: | ||
Total regulatory liabilities | 212 | 417 |
Less: current portion | (45) | (91) |
Regulatory liabilities | 167 | 326 |
Tax Rule Changes Variance [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 44 | 5 |
Distribution Rate Riders [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 42 | 6 |
Pension Cost Differential [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 31 | 55 |
Green Energy Expenditure Variance [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 31 | 52 |
Retail Settlement Variance Account [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 23 | 39 |
Earnings Sharing Mechanism Deferral [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 21 | 0 |
External Revenue Variance [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 6 | 26 |
Deferred Income Tax Regulatory Liability [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 5 | 86 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 0 | 130 |
Other Regulatory Liabilities [Member] | ||
Regulatory liabilities: | ||
Total regulatory liabilities | 9 | 18 |
Deferred Income Tax Charge [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 1,128 | 908 |
Pension Benefit Regulatory Asset [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 1,125 | 547 |
Environmental [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 141 | 165 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 0 | |
Post-Retirement and Post-Employment Benefits - Non-Service [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 77 | 39 |
Foregone Revenue Deferral [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 67 | 0 |
Share-Based Compensation [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 42 | 43 |
Debt Premium [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 17 | 22 |
Distribution System Code Exemption [Member] | ||
Regulatory assets: | ||
Total regulatory assets | 0 | 10 |
Other Regulatory Assets [Member] | ||
Regulatory assets: | ||
Total regulatory assets | $ 26 | $ 29 |
Regulatory Assets and Liabili_4
Regulatory Assets and Liabilities - Additional Information (Detail) - CAD ($) $ in Millions | Dec. 19, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Regulatory Matters [Line Items] | ||||
Increase (decrease) in income tax expense including the impact of a change in enacted tax rates | $ (221) | $ (686) | ||
Environmental expenditures | (25) | (22) | ||
Pension Benefit Regulatory Asset [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) in other comprehensive income | (597) | 435 | ||
Increase (decrease) in operation, maintenance and administration expenses | (20) | 1 | ||
Post-Retirement and Post-Employment Benefits [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) in other comprehensive income | (235) | 166 | ||
Polychlorinated Biphenyl Liability [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) to regulatory assets | (3) | 15 | ||
Environmental [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) in amortization expense | (25) | (22) | ||
Increase (decrease) in financing chargers | 4 | 6 | ||
Share-Based Compensation [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) to operation, maintenance, administration and depreciation expenses | 1 | |||
Pension Cost Differential [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) in revenue | $ (13) | 5 | $ 29 | |
Increase (decrease) in capital expenditures | $ 37 | |||
Change in distribution rates adjustment [Member] | Foregone Revenue Deferral [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) to regulatory assets | $ (68) | |||
Change in distribution rates adjustment [Member] | Distribution [Member] | Hydro One Networks [Member] | Deferred Income Tax Charge [Member] | ||||
Regulatory Matters [Line Items] | ||||
Impairment of regulatory assets | 474 | |||
Change in distribution rates adjustment [Member] | Transmission [Member] | Hydro One Networks [Member] | Deferred Income Tax Charge [Member] | ||||
Regulatory Matters [Line Items] | ||||
Impairment of regulatory assets | $ 558 | |||
Change in distribution rates adjustment [Member] | Deferred Income Tax Charge [Member] | ||||
Regulatory Matters [Line Items] | ||||
Increase (decrease) in regulatory liabilities | $ 81 |
Other Long-Term Assets (Detail)
Other Long-Term Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Right-of-Use assets (Notes 3, 22) | $ 71 | |
Other | 9 | $ 5 |
Total other assets | $ 80 | $ 5 |
Accounts Payable and Other Cu_3
Accounts Payable and Other Current Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 184 | $ 171 |
Accrued liabilities | 633 | 578 |
Accrued interest | 104 | 96 |
Regulatory liabilities (Note 12) | 45 | 91 |
Lease obligations (Note 22) | 8 | |
Total | $ 974 | $ 936 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Post-retirement and post-employment benefit liability (Note 19) | $ 1,705 | $ 1,406 |
Pension benefit liability (Note 19) | 1,125 | 547 |
Environmental liabilities (Note 20) | 111 | 139 |
Lease obligations (Note 22) | 66 | |
Due to related parties (Note 28) | 40 | 41 |
Long-term accounts payable | 5 | 11 |
Asset retirement obligations (Note 21) | 10 | 10 |
Other liabilities | 11 | 10 |
Other long-term liabilities | $ 3,073 | $ 2,164 |
Debt and Credit Agreements - Ad
Debt and Credit Agreements - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 2,300,000,000 |
Commercial Paper Program [Member] | |
Debt Instrument [Line Items] | |
Maturities days of commercial paper | 365 days |
Hydro One Inc. [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 2,300,000,000 |
Debt and Credit Agreements - Sc
Debt and Credit Agreements - Schedule of Standby Credit Facilities (Detail) | Dec. 31, 2019CAD ($) |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Revolving standby credit facilities, amount drawn | $ 0 |
Debt and Credit Agreements - _2
Debt and Credit Agreements - Schedule of Outstanding Long-Term Debt (Detail) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | |||
Long-term debt, face amount | $ 11,486,000,000 | ||
Long-term debt, Total | 11,505,000,000 | $ 10,741,000,000 | |
Add: Net unamortized debt premiums | 12,000,000 | 13,000,000 | |
Add: Unrealized mark-to-market loss (gain) | 1,000,000 | (5,000,000) | |
Less: Deferred debt issuance costs | (43,000,000) | (40,000,000) | |
Total long-term debt | 11,475,000,000 | 10,709,000,000 | |
Long-term debt issued | 1,500,000,000 | 1,400,000,000 | |
Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 11,345,000,000 | 10,573,000,000 | |
Debt instrument maximum borrowing capacity | $ 4,000,000,000 | ||
Debt instrument unused borrowing capacity | 1,100,000,000 | ||
Long-term debt issued | 1,500,000,000 | 1,400,000,000 | |
Loan repaid and redeemed | 728,000,000 | 750,000,000 | |
Hydro One Sault Ste. Marie LP [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 141,000,000 | 143,000,000 | |
Long-term debt, market value | 160,000,000 | 168,000,000 | |
Long-term debt issued | 0 | 0 | |
Loan repaid and redeemed | 2,000,000 | 3,000,000 | |
Floating-rate Series 31 notes due 2019 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | $ 0 | $ 228,000,000 | |
1.48% Series 37 Notes Due 2019 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 1.48% | 1.48% | |
Long-term debt, face amount | $ 0 | $ 500,000,000 | |
1.48% Series 37 Notes Due 2019 [Member] | Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Hedged portion of debt | $ 500,000,000 | ||
4.40% Series 20 Notes Due 2020 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.40% | 4.40% | |
Long-term debt, face amount | $ 300,000,000 | $ 300,000,000 | |
1.62% Series 33 Notes Due 2020 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 1.62% | 1.62% | |
Long-term debt, face amount | $ 350,000,000 | $ 350,000,000 | |
1.62% Series 33 Notes Due 2020 [Member] | Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Hedged portion of debt | $ 50,000,000 | ||
1.84% Series 34 Notes Due 2021 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 1.84% | 1.84% | |
Long-term debt, face amount | $ 500,000,000 | $ 500,000,000 | |
2.57% Series 39 Notes Due 2021 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 2.57% | 2.57% | |
Long-term debt, face amount | $ 300,000,000 | $ 300,000,000 | |
3.20% Series 25 Notes Due 2022 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 3.20% | 3.20% | |
Long-term debt, face amount | $ 600,000,000 | $ 600,000,000 | |
2.54% Series 42 notes due 2024 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 2.54% | ||
Long-term debt, face amount | $ 700,000,000 | $ 0 | |
2.97% Series 40 Notes Due 2025 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 2.97% | 2.97% | |
Long-term debt, face amount | $ 350,000,000 | $ 350,000,000 | |
2.77% Series 35 Notes Due 2026 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 2.77% | 2.77% | |
Long-term debt, face amount | $ 500,000,000 | $ 500,000,000 | |
3.02% Series 43 notes due 2029 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 3.02% | ||
Long-term debt, face amount | $ 550,000,000 | $ 0 | |
7.35% Debentures Due 2030 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 7.35% | 7.35% | |
Long-term debt, face amount | $ 400,000,000 | $ 400,000,000 | |
6.93% Series 2 Notes Due 2032 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 6.93% | 6.93% | |
Long-term debt, face amount | $ 500,000,000 | $ 500,000,000 | |
6.35% Series 4 Notes Due 2034 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 6.35% | 6.35% | |
Long-term debt, face amount | $ 385,000,000 | $ 385,000,000 | |
5.36% Series 9 Notes Due 2036 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 5.36% | 5.36% | |
Long-term debt, face amount | $ 600,000,000 | $ 600,000,000 | |
4.89% Series 12 Notes Due 2037 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.89% | 4.89% | |
Long-term debt, face amount | $ 400,000,000 | $ 400,000,000 | |
6.03% Series 17 Notes Due 2039 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 6.03% | 6.03% | |
Long-term debt, face amount | $ 300,000,000 | $ 300,000,000 | |
5.49% Series 18 Notes Due 2040 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 5.49% | 5.49% | |
Long-term debt, face amount | $ 500,000,000 | $ 500,000,000 | |
4.39% Series 23 Notes Due 2041 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.39% | 4.39% | |
Long-term debt, face amount | $ 300,000,000 | $ 300,000,000 | |
6.59% Series 5 Notes Due 2043 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 6.59% | 6.59% | |
Long-term debt, face amount | $ 315,000,000 | $ 315,000,000 | |
4.59% Series 29 Notes Due 2043 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.59% | 4.59% | |
Long-term debt, face amount | $ 435,000,000 | $ 435,000,000 | |
4.17% Series 32 Notes Due 2044 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.17% | 4.17% | |
Long-term debt, face amount | $ 350,000,000 | $ 350,000,000 | |
5.00% Series 11 Notes Due 2046 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 5.00% | 5.00% | |
Long-term debt, face amount | $ 325,000,000 | $ 325,000,000 | |
3.91% Series 36 Notes Due 2046 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 3.91% | 3.91% | |
Long-term debt, face amount | $ 350,000,000 | $ 350,000,000 | |
3.72% Series 38 Notes Due 2047 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 3.72% | 3.72% | |
Long-term debt, face amount | $ 450,000,000 | $ 450,000,000 | |
3.63% Series 41 Notes Due 2049 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 3.63% | 3.63% | |
Long-term debt, face amount | $ 750,000,000 | $ 750,000,000 | |
3.64% Series 44 notes due 2050 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.00% | ||
Long-term debt, face amount | $ 250,000,000 | $ 0 | |
4.00% Series 24 Notes Due 2051 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.00% | 4.00% | |
Long-term debt, face amount | $ 225,000,000 | $ 225,000,000 | |
3.79% Series 26 Notes Due 2062 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 3.79% | 3.79% | |
Long-term debt, face amount | $ 310,000,000 | $ 310,000,000 | |
4.29% Series 30 Notes Due 2064 [Member] | Medium Term Note Program [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.29% | 4.29% | |
Long-term debt, face amount | $ 50,000,000 | $ 50,000,000 | |
6.6% Senior Secured Bonds due 2023 [Member] | Hydro One Sault Ste. Marie LP [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 6.60% | 6.60% | |
Long-term debt, face amount | $ 105,000,000 | ||
Long-term debt, market value | $ 121,000,000 | $ 129,000,000 | |
4.6% Note Payable due 2023 [Member] | Hydro One Sault Ste. Marie LP [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, interest rate | 4.60% | 4.60% | |
Long-term debt, face amount | $ 36,000,000 | ||
Long-term debt, market value | 39,000,000 | $ 39,000,000 | |
$300 million of MTN Series 39 notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 300,000,000 | ||
Total long-term debt | 301,000,000 | 301,000,000 | |
$300 million of MTN Series 39 notes [Member] | Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Hedged portion of debt | 300,000,000 | ||
Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Add: Unrealized mark-to-market loss (gain) | $ (1,000,000) | $ 5,000,000 |
Debt and Credit Agreements - _3
Debt and Credit Agreements - Schedule of Long-Term Debt (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current liabilities: | ||
Long-term debt payable within one year | $ 653 | $ 731 |
Long-term liabilities: | ||
Long-term debt, noncurrent | 10,822 | 9,978 |
Total long-term debt | $ 11,475 | $ 10,709 |
Debt and Credit Agreements - Su
Debt and Credit Agreements - Summary of Principal Repayments, Interest Payments and Related Weighted Average Interest Rates (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Debt Instrument [Line Items] | |
Long-term debt principal payments, 1 year | $ 653 |
Long-term debt principal payments, 2 years | 803 |
Long-term debt principal payments, 3 years | 604 |
Long-term debt principal payments, 4 years | 131 |
Long-term debt principal payments, 5 years | 700 |
Long-term debt principal payments, 5 year total | 2,891 |
6 – 10 years | 1,400 |
Over 10 years | 7,195 |
Long-term debt, principal payments, Total | 11,486 |
Interest payments | $ 8,249 |
Weighted average interest rate | 4.20% |
Year 1 [Member] | |
Debt Instrument [Line Items] | |
Interest payments | $ 473 |
Weighted average interest rate | 2.90% |
Year 2 [Member] | |
Debt Instrument [Line Items] | |
Interest payments | $ 455 |
Weighted average interest rate | 2.10% |
Year 3 [Member] | |
Debt Instrument [Line Items] | |
Interest payments | $ 436 |
Weighted average interest rate | 3.20% |
Year 4 [Member] | |
Debt Instrument [Line Items] | |
Interest payments | $ 423 |
Weighted average interest rate | 6.10% |
Year 5 [Member] | |
Debt Instrument [Line Items] | |
Interest payments | $ 410 |
Weighted average interest rate | 2.50% |
5 Years, Total [Member] | |
Debt Instrument [Line Items] | |
Interest payments | $ 2,197 |
Weighted average interest rate | 2.80% |
Years 6-10 [Member ] | |
Debt Instrument [Line Items] | |
Interest payments | $ 1,901 |
Weighted average interest rate | 2.90% |
Thereafter | |
Debt Instrument [Line Items] | |
Interest payments | $ 4,151 |
Weighted average interest rate | 5.00% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments and Risk Management - Summary of Fair Values and Carrying Values of Long-Term Debt (Detail) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long-term debt, face amount | $ 11,486,000,000 | |
Carrying value | 11,475,000,000 | $ 10,709,000,000 |
Fair value | 13,472,000,000 | 11,665,000,000 |
$50 Million of MTN Series 33 Notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long-term debt, face amount | 50,000,000 | |
Carrying value | 50,000,000 | 49,000,000 |
Fair value | 50,000,000 | 49,000,000 |
$500 million of MTN Series 37 notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long-term debt, face amount | 500,000,000 | |
Carrying value | 0 | 495,000,000 |
Fair value | 0 | 495,000,000 |
$300 million of MTN Series 39 notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Long-term debt, face amount | 300,000,000 | |
Carrying value | 301,000,000 | 301,000,000 |
Fair value | 301,000,000 | 301,000,000 |
Other Notes and Debentures [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Carrying value | 11,124,000,000 | 9,864,000,000 |
Fair value | $ 13,121,000,000 | $ 10,820,000,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments and Risk Management - Fair Value of Financial Instruments - Additional Information (Detail) - CAD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fair value hedge exposure | 3.00% | 8.00% |
Long-term debt | $ 11,486,000,000 | |
1.62% Series 33 Notes Due 2020 [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fixed-to-floating interest-rate swap | 50,000,000 | |
Conversion of debt | 50,000,000 | |
Long-term debt | 350,000,000 | |
Interest Rate Swap [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fixed-to-floating interest-rate swap | 350,000,000 | $ 850,000,000 |
Notional value | 0 | $ 0 |
$300 million of MTN Series 39 notes [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fixed-to-floating interest-rate swap | 300,000,000 | |
Long-term debt | 300,000,000 | |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items] | ||
Fixed-to-floating interest-rate swap | $ 800,000,000 | |
Fixed To Floating Interest Rate Swaps, Term | 3 years |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments and Risk Management - Fair Value Hierarchy of Financial Assets and Liabilities (Detail) $ in Millions, $ in Millions | Dec. 31, 2019CAD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018CAD ($) |
Liabilities: | |||
Long-term debt, including current portion, fair value | $ 13,472 | $ 11,665 | |
Level 1 [Member] | |||
Assets: | |||
Total assets | 0 | ||
Liabilities: | |||
Long-term debt, including current portion, fair value | 0 | 0 | |
Fair value hedge - interest-rate swap | 0 | ||
Total liabilities, fair value | 0 | 0 | |
Level 2 [Member] | |||
Assets: | |||
Total assets | 3 | ||
Liabilities: | |||
Long-term debt, including current portion, fair value | 13,472 | 11,665 | |
Fair value hedge - interest-rate swap | 5 | ||
Total liabilities, fair value | 13,472 | 11,670 | |
Level 3 [Member] | |||
Assets: | |||
Total assets | 0 | ||
Liabilities: | |||
Long-term debt, including current portion, fair value | 0 | 0 | |
Fair value hedge - interest-rate swap | 0 | ||
Total liabilities, fair value | 0 | 0 | |
Carrying Value [Member] | |||
Assets: | |||
Total assets | 3 | ||
Liabilities: | |||
Long-term debt, including current portion, fair value | 11,475 | 10,709 | |
Fair value hedge - interest-rate swap | 5 | ||
Total liabilities, fair value | 11,475 | 10,714 | |
Fair Value [Member] | |||
Assets: | |||
Total assets | 3 | ||
Liabilities: | |||
Long-term debt, including current portion, fair value | 13,472 | 11,665 | |
Fair value hedge - interest-rate swap | 5 | ||
Total liabilities, fair value | 13,472 | $ 11,670 | |
Fair Value Hedging [Member] | Level 1 [Member] | |||
Assets: | |||
Derivative instruments | 0 | ||
Fair Value Hedging [Member] | Level 2 [Member] | |||
Assets: | |||
Derivative instruments | 1 | ||
Fair Value Hedging [Member] | Level 3 [Member] | |||
Assets: | |||
Derivative instruments | 0 | ||
Fair Value Hedging [Member] | Carrying Value [Member] | |||
Assets: | |||
Derivative instruments | $ 1 | ||
Fair Value Hedging [Member] | Fair Value [Member] | |||
Assets: | |||
Derivative instruments | 1 | ||
Cash Flow Hedging [Member] | Level 1 [Member] | |||
Assets: | |||
Derivative instruments | 0 | ||
Cash Flow Hedging [Member] | Level 2 [Member] | |||
Assets: | |||
Derivative instruments | 2 | ||
Cash Flow Hedging [Member] | Level 3 [Member] | |||
Assets: | |||
Derivative instruments | 0 | ||
Cash Flow Hedging [Member] | Carrying Value [Member] | |||
Assets: | |||
Derivative instruments | $ 2 | ||
Cash Flow Hedging [Member] | Fair Value [Member] | |||
Assets: | |||
Derivative instruments | $ 2 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments and Risk Management - Risk Management - Additional Information (Detail) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Unrealized gain on cash flow hedges, net of tax | $ 2,000,000 | $ 0 | |
Accumulated other comprehensive income related to cash flow hedges | $ 9,703,000,000 | 9,491,000,000 | $ 10,080,000,000 |
Maximum term for hedges | 3 years | ||
Provision for bad debts | $ 22,000,000 | $ 21,000,000 | $ 29,000,000 |
Minimum [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Account receivable, period | 60 days | 60 days | |
Customer Concentration Risk [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Accounts receivable | $ 0 | $ 0 | |
Aged More Than 60 Days [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Account receivable, percentage | 5.00% | 5.00% | |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | |||
Market Risk, Credit Risk And Liquidity Risk [Line Items] | |||
Accumulated other comprehensive income related to cash flow hedges | $ 2,000,000 | $ 0 |
Capital Management - Summary of
Capital Management - Summary of Company's Capital Structure (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Regulated Operations [Abstract] | ||
Long-term debt payable within one year | $ 653 | $ 731 |
Short-term notes payable | 1,143 | 1,252 |
Less: cash and cash equivalents | (7) | (492) |
Net Long-term debt payable within one year | 1,789 | 1,491 |
Long-term debt | 10,822 | 9,978 |
Preferred shares | 0 | 486 |
Common shares | 3,564 | 4,312 |
Retained earnings | 6,086 | 5,137 |
Total capital | $ 22,261 | $ 21,404 |
Capital Management - Additional
Capital Management - Additional Information (Detail) | Dec. 31, 2019 |
Regulated Operations [Abstract] | |
Permissible limit on debt to total capital percentage | 75.00% |
Pension and Post-Retirement a_3
Pension and Post-Retirement and Post-Employment Benefits - Additional Information (Detail) - CAD ($) $ in Millions | Jan. 01, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Contributions by company to the plan | $ 1 | $ 1 | |
Pension plan average pensionable earnings | 3 years | ||
New pension plan average pensionable earnings | 5 years | ||
Annual pension plan contributions | $ 61 | 75 | |
Estimated annual pension plan contributions for 2019 | 66 | ||
Estimated annual pension plan contributions for 2020 | 65 | ||
Estimated annual pension plan contributions for 2021 | 64 | ||
Estimated annual pension plan contributions for 2022 | 64 | ||
Estimated annual pension plan contributions for 2023 | $ 64 | ||
Percentage of assets to ascertain concentration of credit risk | 10.00% | ||
Purchase of investments payable excluded from fair value of pension plan assets | $ 5 | 2 | |
Option One [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Percentage of employer matching contribution | 4.00% | ||
Option Two [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Percentage of employer matching contribution | 5.00% | ||
Option Three [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Percentage of employer matching contribution | 6.00% | ||
Corporate Bond Securities [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Pension plan | 21 | 18 | |
Province Of Ontario [Member] | Debt Securities [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Pension plan | 504 | 546 | |
Foreign Exchange Contract [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Notional value | 742 | 299 | |
Gain (loss) on derivative. net | (1) | (7) | |
Postretirement Benefit Costs [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Charged to results of operations | 48 | 50 | |
Pension Costs Charged To Operations | $ 39 | $ 41 | |
ABO [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Funded percentage | 96.00% | 101.00% | |
PBO [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Funded percentage | 87.00% | 93.00% |
Pension and Post-Retirement a_4
Pension and Post-Retirement and Post-Employment Benefits - Change in Projected Benefit Obligation and Change in Plan Assets (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Change in plan assets | ||
Employer contributions | $ 61 | $ 75 |
Pension Benefits [Member] | ||
Change in projected benefit obligation | ||
Projected benefit obligation, beginning of year | 7,752 | 8,258 |
Current service cost | 145 | 176 |
Employee contributions | 55 | 52 |
Interest cost | 303 | 282 |
Benefit paid | (371) | (362) |
Net actuarial loss (gain) | 1,089 | (654) |
Recognition of prior service | 0 | 0 |
Net transfers | 0 | 0 |
Projected benefit obligation, end of year | 8,973 | 7,752 |
Change in plan assets | ||
Fair value of plan assets, beginning of year | 7,205 | 7,277 |
Actual return on plan assets | 922 | 190 |
Benefits paid | (371) | (362) |
Employer contributions | 61 | 75 |
Employee contributions | 55 | 52 |
Administrative expenses | (24) | (27) |
Fair value of plan assets, end of year | 7,848 | 7,205 |
Unfunded status | 1,125 | 547 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Change in projected benefit obligation | ||
Projected benefit obligation, beginning of year | 1,453 | 1,552 |
Current service cost | 55 | 49 |
Employee contributions | 0 | 0 |
Interest cost | 60 | 54 |
Benefit paid | (47) | (49) |
Net actuarial loss (gain) | 241 | (156) |
Recognition of prior service | 0 | 3 |
Net transfers | 6 | 0 |
Projected benefit obligation, end of year | 1,768 | 1,453 |
Change in plan assets | ||
Fair value of plan assets, beginning of year | 0 | 0 |
Actual return on plan assets | 0 | 0 |
Benefits paid | (47) | (49) |
Employer contributions | 47 | 49 |
Employee contributions | 0 | 0 |
Administrative expenses | 0 | 0 |
Fair value of plan assets, end of year | 0 | 0 |
Unfunded status | $ 1,768 | $ 1,453 |
Pension and Post-Retirement a_5
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Benefit Obligations and Plan Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Accrued liabilities | $ 633 | $ 578 |
Pension benefit liability (Note 19) | 1,125 | 547 |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Other assets | 3 | 3 |
Accrued liabilities | 0 | 0 |
Pension benefit liability (Note 19) | 1,125 | 547 |
Post-retirement and post-employment benefit liability | 0 | 0 |
Net unfunded status | 1,122 | 544 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Other assets | 0 | 0 |
Accrued liabilities | 63 | 54 |
Pension benefit liability (Note 19) | 0 | 0 |
Post-retirement and post-employment benefit liability | 1,705 | 1,406 |
Net unfunded status | 1,768 | 1,460 |
Hydro One Sault Ste. Marie LP [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Post-employment benefit plans | $ 0 | $ 7 |
Pension and Post-Retirement a_6
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Projected Benefit Obligation (PBO), Accumulated Benefit Obligation (ABO) and Fair Value of Plan Assets (Detail) - Pension Benefits [Member] - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
PBO | $ 8,973 | $ 7,752 | $ 8,258 |
ABO | 8,183 | 7,144 | |
Fair value of plan assets | $ 7,848 | $ 7,205 | $ 7,277 |
Pension and Post-Retirement a_7
Pension and Post-Retirement and Post-Employment Benefits - Components of Net Periodic Benefit Costs (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Current service cost | $ 145 | $ 176 |
Interest cost | 303 | 282 |
Expected return on plan assets, net of expenses | (462) | (467) |
Amortization of actuarial losses | 55 | 84 |
Recognition of prior service | 0 | 0 |
Net periodic benefit costs | 41 | 75 |
Charged to results of operations | 29 | 31 |
Pension costs | 72 | 74 |
Pension costs capitalized | 43 | 43 |
Postretirement Benefit Costs [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Current service cost | 55 | 49 |
Interest cost | 60 | 53 |
Amortization of actuarial losses | 7 | 15 |
Recognition of prior service | 0 | 3 |
Net periodic benefit costs | 122 | 120 |
Charged to results of operations | 48 | 50 |
Pension Costs Charged To Operations | 39 | 41 |
Pension costs | 121 | 119 |
Pension costs capitalized | $ 34 | $ 28 |
Pension and Post-Retirement a_8
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2019 | Dec. 31, 2018 |
Pension Benefits [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Weighted average discount rate | 3.10% | 3.90% |
Rate of compensation scale escalation (long-term) | 2.50% | 2.50% |
Rate of cost of living increase | 2.00% | 2.00% |
Rate of increase in health care cost trends | 0.00% | 0.00% |
Assumed health care cost trend, percentage | 5.09% | |
Health care cost trend rate | 4.04% | |
Post-Retirement and Post-Employment Benefits [Member] | ||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | ||
Weighted average discount rate | 3.10% | 4.00% |
Rate of compensation scale escalation (long-term) | 2.50% | 2.50% |
Rate of cost of living increase | 2.00% | 2.00% |
Rate of increase in health care cost trends | 4.04% | 4.04% |
Assumed health care cost trend, percentage | 5.19% | 5.26% |
Health care cost trend rate | 4.04% | 4.04% |
Pension and Post-Retirement a_9
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | |
Pension Benefits [Member] | |||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | |||
Weighted average expected rate of return on plan assets | 6.50% | 6.50% | |
Weighted average discount rate | 3.90% | 3.40% | |
Rate of compensation scale escalation (long-term) | 2.50% | 2.50% | |
Rate of cost of living increase | 2.00% | 2.00% | |
Average remaining service life of employees (years) | 15 years | 15 years | |
Assumed health care cost trend, percentage | 5.09% | ||
Health care cost trend rate | 4.04% | ||
Post-Retirement and Post-Employment Benefits [Member] | |||
Schedule Of Weighted Average Assumption Determining Pension Plan And Other Post retirement Benefit Plan [Line Items] | |||
Weighted average discount rate | 4.00% | 3.40% | |
Rate of compensation scale escalation (long-term) | 2.50% | 2.50% | |
Rate of cost of living increase | 2.00% | 2.00% | |
Average remaining service life of employees (years) | 15 years 6 months | 15 years 6 months | |
Rate of increase in health care cost trends | 4.04% | 4.04% | |
Assumed health care cost trend, percentage | 5.19% | 5.26% | |
Health care cost trend rate | 4.04% | 4.04% |
Pension and Post-Retirement _10
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Effect of One Percent Change in Health Care Cost Trends on Projected Benefit Obligation (Detail) - Post-Retirement and Post-Employment Benefits [Member] - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Line Items] | ||
Effect of a 1% increase in health care cost trends | $ 279 | $ 228 |
Effect of a 1% decrease in health care cost trends | $ (211) | $ (173) |
Pension and Post-Retirement _11
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Effect of One Percent Change in Health Care Cost Trends on Service Cost and Interest Cost (Detail) - Post-Retirement and Post-Employment Benefits [Member] - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Line Items] | ||
Effect of a 1% increase in health care cost trends | $ 21 | $ 23 |
Effect of a 1% decrease in health care cost trends | $ (15) | $ (16) |
Pension and Post-Retirement _12
Pension and Post-Retirement and Post-Employment Benefits - Approximate Life Expectancies Used to Determine Projected Benefit Obligations for Pension, Post-Retirement and Post-Employment Plans (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Life Expectancy At Age Sixty Five [Member] | Male [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 22 years | 22 years |
Life Expectancy At Age Sixty Five [Member] | Female [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 25 years | 25 years |
Life Expectancy At Age Forty Five [Member] | Male [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 23 years | 23 years |
Life Expectancy At Age Forty Five [Member] | Female [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Approximate life expectancy (in years) at particular age | 26 years | 25 years |
Pension and Post-Retirement _13
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Estimated Future Benefit Payments (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2021 | $ 65 |
2022 | 64 |
2023 | 64 |
2024 | 64 |
Pension Benefits [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2020 | 345 |
2021 | 354 |
2022 | 362 |
2023 | 369 |
2024 | 375 |
2025 through to 2029 | 1,945 |
Total estimated future benefit payments through to 2029 | 3,750 |
Post-Retirement and Post-Employment Benefits [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2020 | 60 |
2021 | 61 |
2022 | 62 |
2023 | 64 |
2024 | 64 |
2025 through to 2029 | 340 |
Total estimated future benefit payments through to 2029 | $ 651 |
Pension and Post-Retirement _14
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Actuarial Gains and Losses and Prior Service Costs Recorded Within Regulatory Assets (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Actuarial loss (gain) for the year | $ 1,089 | $ (654) | |
Recognition of prior service | 0 | 0 | |
Post-Retirement and Post-Employment Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Actuarial loss (gain) for the year | 241 | (156) | |
Recognition of prior service | 0 | $ 3 | |
Pension Benefit Regulatory Asset [Member] | Post-Retirement and Post-Employment Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Actuarial loss (gain) for the year | 652 | $ (350) | |
Amortization of actuarial losses | (55) | (84) | |
Total actuarial gains and losses and prior service costs | 597 | (434) | |
Post Retirement and Employment Benefits Regulatory Assets [Member] | Pension Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Actuarial loss (gain) for the year | 240 | (155) | |
Amortization of actuarial losses | (7) | (15) | |
Recognition of prior service | 0 | (3) | |
Amounts not subject to regulatory treatment | 2 | 7 | |
Total actuarial gains and losses and prior service costs | $ 235 | $ (166) |
Pension and Post-Retirement _15
Pension and Post-Retirement and Post-Employment Benefits - Components of Regulatory Assets That Have Not Been Recognized as Components of Net Periodic Benefit Costs (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2017 |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Actuarial loss | $ 1,125 | $ 547 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Actuarial loss | $ 105 | $ (130) |
Pension and Post-Retirement _16
Pension and Post-Retirement and Post-Employment Benefits - Components of Regulatory Assets Expected to be Amortized as Components of Net Periodic Benefit Costs (Detail) - Regulatory Assets [Member] - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2017 | |
Pension Benefits [Member] | ||
Schedule Of Components Of Regulatory Assets Expected To Be Amortized As Components Of Net Periodic Benefit Cost [Line Items] | ||
Actuarial loss (gain) | $ 95 | $ 55 |
Post-Retirement and Post-Employment Benefits [Member] | ||
Schedule Of Components Of Regulatory Assets Expected To Be Amortized As Components Of Net Periodic Benefit Cost [Line Items] | ||
Actuarial loss (gain) | $ 2 | $ (1) |
Pension and Post-Retirement _17
Pension and Post-Retirement and Post-Employment Benefits - Schedule of Pension Plan Target Asset and Weighted Average Asset Allocations (Detail) | Dec. 31, 2019 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 100.00% |
Pension Plan Assets | 100.00% |
Equity Securities [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 45.00% |
Pension Plan Assets | 52.00% |
Debt Securities [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 35.00% |
Pension Plan Assets | 35.00% |
Other Plan Assets [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Target Allocation | 20.00% |
Pension Plan Assets | 13.00% |
Pension and Post-Retirement _18
Pension and Post-Retirement and Post-Employment Benefits - Pension Plan Assets Measured and Recorded at Fair Value on Recurring Basis (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | $ 7,826 | $ 7,176 |
Total fair value of plan liabilities | 2 | |
Interest and dividend receivable excluded from fair value of pension plan assets | 36 | 35 |
Accruals for pension administration expense excluded from fair value of pension plan assets | 10 | 10 |
Sale of investments receivable excluded from fair value of pension plan assets | 3 | 6 |
Purchase of investments payable excluded from fair value of pension plan assets | 5 | 2 |
Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 1,101 | 672 |
Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 159 | 210 |
Short-term Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 98 | 78 |
Derivative instruments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 5 | (7) |
Corporate Shares - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 107 | 115 |
Corporate Shares - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 3,764 | 3,405 |
Bonds and Debentures - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,427 | 2,506 |
Bonds and debentures - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 165 | 197 |
Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 3,811 | 3,547 |
Total fair value of plan liabilities | 0 | |
Level 1 [Member] | Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 1 [Member] | Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 159 | 210 |
Level 1 [Member] | Short-term Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 1 [Member] | Derivative instruments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 1 [Member] | Corporate Shares - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 107 | 115 |
Level 1 [Member] | Corporate Shares - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 3,545 | 3,222 |
Level 1 [Member] | Bonds and Debentures - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 1 [Member] | Bonds and debentures - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,936 | 2,978 |
Total fair value of plan liabilities | 2 | |
Level 2 [Member] | Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 22 | 21 |
Level 2 [Member] | Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 2 [Member] | Short-term Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 98 | 78 |
Level 2 [Member] | Derivative instruments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 5 | (7) |
Level 2 [Member] | Corporate Shares - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 2 [Member] | Corporate Shares - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 219 | 183 |
Level 2 [Member] | Bonds and Debentures - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 2,427 | 2,506 |
Level 2 [Member] | Bonds and debentures - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 165 | 197 |
Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 1,079 | 651 |
Total fair value of plan liabilities | 0 | |
Level 3 [Member] | Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 1,079 | 651 |
Level 3 [Member] | Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 3 [Member] | Short-term Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 3 [Member] | Derivative instruments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 3 [Member] | Corporate Shares - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 3 [Member] | Corporate Shares - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 3 [Member] | Bonds and Debentures - Canadian [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | 0 |
Level 3 [Member] | Bonds and debentures - Foreign [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan assets | 0 | $ 0 |
Derivative instruments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan liabilities | 2 | |
Derivative instruments [Member] | Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan liabilities | 0 | |
Derivative instruments [Member] | Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan liabilities | 2 | |
Derivative instruments [Member] | Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total fair value of plan liabilities | $ 0 |
Pension and Post-Retirement _19
Pension and Post-Retirement and Post-Employment Benefits - Changes in Fair Value of Financial Instruments Classified in Level 3 (Detail) - Level 3 [Member] - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Change in plan assets | ||
Fair value of plan assets, beginning of year | $ 651 | $ 549 |
Realized and unrealized gains (losses) | (4) | 59 |
Purchases | 463 | 90 |
Sales and disbursements | (31) | (47) |
Fair value of plan assets, end of year | $ 1,079 | $ 651 |
Environmental Liabilities - Sch
Environmental Liabilities - Schedule of Movements in Environmental Liabilities (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Environmental liabilities - beginning | $ 165 | $ 196 |
Interest accretion | 4 | 6 |
Expenditures | (25) | (22) |
Revaluation adjustment | (3) | (15) |
Environmental liabilities - ending | 141 | 165 |
Less: current portion | (30) | (26) |
Environmental liabilities non current portion | 111 | 139 |
PCB [Member] | ||
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Environmental liabilities - beginning | 108 | 134 |
Interest accretion | 4 | 5 |
Expenditures | (17) | (16) |
Revaluation adjustment | (5) | (15) |
Environmental liabilities - ending | 90 | 108 |
Less: current portion | (19) | (15) |
Environmental liabilities non current portion | 71 | 93 |
Land Assessment and Remediation [Member] | ||
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Environmental liabilities - beginning | 57 | 62 |
Interest accretion | 0 | 1 |
Expenditures | (8) | (6) |
Revaluation adjustment | 2 | 0 |
Environmental liabilities - ending | 51 | 57 |
Less: current portion | (11) | (11) |
Environmental liabilities non current portion | $ 40 | $ 46 |
Environmental Liabilities - Rec
Environmental Liabilities - Reconciliation between Undiscounted Basis of Environmental Liabilities and Amount Recognized on Consolidated Balance Sheets (Detail) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | $ 148 | $ 176 |
Less: discounting environmental liabilities to present value | (7) | (11) |
Discounted environmental liabilities | 141 | 165 |
PCB [Member] | ||
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | 97 | 118 |
Less: discounting environmental liabilities to present value | (7) | (10) |
Discounted environmental liabilities | 90 | 108 |
Land Assessment and Remediation [Member] | ||
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | 51 | 58 |
Less: discounting environmental liabilities to present value | 0 | (1) |
Discounted environmental liabilities | $ 51 | $ 57 |
Environmental Liabilities - S_2
Environmental Liabilities - Schedule of Estimated Future Environmental Expenditures (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Environmental Remediation Obligations [Abstract] | |
2020 | $ 30 |
2021 | 31 |
2022 | 29 |
2023 | 25 |
2024 | 8 |
Thereafter | 25 |
Total | $ 148 |
Environmental Liabilities - Add
Environmental Liabilities - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Environmental Liabilities [Line Items] | ||
Long-term inflation rate assumption of current costs | 2.00% | |
Undiscounted environmental liabilities | $ 148 | $ 176 |
Increase (decrease) of environmental liability due to revaluation adjustment | $ (3) | (15) |
Minimum [Member] | ||
Environmental Liabilities [Line Items] | ||
Future environmental expenditure discount rate | 2.00% | |
Maximum [Member] | ||
Environmental Liabilities [Line Items] | ||
Future environmental expenditure discount rate | 6.30% | |
PCB [Member] | ||
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | $ 97 | 118 |
Increase (decrease) of environmental liability due to revaluation adjustment | (5) | (15) |
Land Assessment and Remediation [Member] | ||
Environmental Liabilities [Line Items] | ||
Undiscounted environmental liabilities | 51 | 58 |
Increase (decrease) of environmental liability due to revaluation adjustment | $ 2 | $ 0 |
Asset Retirement Obligations -
Asset Retirement Obligations - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligations [Line Items] | ||
Long-term inflation assumption of current costs | 2.00% | |
Revaluation adjustment | $ 1 | |
Asset retirement obligations recorded | $ 10 | $ 10 |
Minimum [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Discounted future expenditures | 2.00% | |
Maximum [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Discounted future expenditures | 4.00% |
Share Capital - Additional Info
Share Capital - Additional Information (Detail) $ in Millions | Jan. 24, 2019CAD ($)shares | Nov. 10, 2017 | Dec. 31, 2019CAD ($)seriesshares | Dec. 31, 2018CAD ($)shares |
Class of Stock [Line Items] | ||||
Common stock outstanding (in shares) | 142,239 | 142,239 | ||
Common stock issued (in shares) | 142,239 | 142,239 | ||
Return of stated capital | $ | $ 748 | $ 544 | ||
Number of series of preferred stock (in series) | series | 2 | |||
Preferred dividend rate, basis spread on variable rate | 0.25% | |||
Preferred Class B [Member] | ||||
Class of Stock [Line Items] | ||||
Number of shares redeemed (in shares) | 485,870 | |||
Value of preferred shares redeemed | $ | $ 486 | |||
Preferred shares issued (in shares) | 0 | 485,870 | ||
Preferred shares outstanding (in shares) | 0 | 485,870 | ||
Preferred Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred shares issued (in shares) | 0 | 0 | ||
Preferred shares outstanding (in shares) | 0 | 0 |
Leases - Additional Information
Leases - Additional Information (Detail) | Dec. 31, 2019 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 3 years |
Operating lease renewal term | 3 years |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 5 years |
Operating lease renewal term | 5 years |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Operating Leases (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Leases [Abstract] | |
Lease expense | $ 9 |
Lease payments made | $ 6 |
Weighted-average remaining lease term1 (years) | 8 years |
Weighted-average discount rate | 2.70% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Operating Lease Payments After Adoption (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 | $ 10 |
2021 | 11 |
2022 | 10 |
2023 | 9 |
2024 | 9 |
Thereafter | 33 |
Total undiscounted minimum lease payments | 82 |
Less: discounting minimum lease payments to present value | (9) |
Total discounted minimum lease payments | 73 |
Committed amounts for leases that have not yet commenced | $ 6 |
Leases - Schedule of Future M_2
Leases - Schedule of Future Minimum Operating Lease Payments Before Adoption (Detail) $ in Millions | Dec. 31, 2018CAD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 6 |
2020 | 10 |
2021 | 4 |
2022 | 1 |
2023 | 1 |
Thereafter | 3 |
Total undiscounted minimum lease payments | $ 25 |
Leases - Schedule of Supplement
Leases - Schedule of Supplementary Balance Sheet Information (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Leases [Abstract] | |
Other long-term assets (Note 13) | $ 71 |
Accounts payable and other current liabilities (Note 14) | 8 |
Other long-term liabilities (Note 15) | $ 66 |
Dividends - Additional Informat
Dividends - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Preferred share dividends | $ 2 | $ 9 |
Common share dividends | $ 1 | $ 6 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Detail) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Weighted average number of shares outstanding (in shares) | 142,239 | 142,239 |
Dilutive securities (in shares) | 0 | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | Jan. 16, 2020shares | Sep. 30, 2019CAD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2019CAD ($)plan$ / sharesshares | Dec. 31, 2018CAD ($)$ / sharesshares | Dec. 31, 2016CAD ($)$ / sharesshares | Jun. 29, 2018$ / shares | Sep. 01, 2015 | Apr. 01, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of plans | plan | 2 | ||||||||
Weighted-average price, granted (in dollars per share) | $ / shares | $ 20.76 | $ 20.70 | $ 20.50 | ||||||
Shares granted (in shares) | shares | 0 | 1,450,880 | |||||||
Compensation expenses | $ 1,000,000 | $ 1,000,000 | |||||||
Expiration period | 7 years | ||||||||
Vesting period | 3 years | ||||||||
Number of shares modified (in shares) | shares | 706,070 | ||||||||
Unrecognized compensation expense | $ 1,000,000 | $ 0 | $ 1,000,000 | ||||||
Payables for options included in related party activity | $ 3,000,000 | ||||||||
Shares exercised (in shares) | shares | 302,520 | ||||||||
Management Employee Share Ownership Plans [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Highest percentage of participant's salary towards purchasing common shares | 6.00% | ||||||||
Lowest percentage of participant's salary towards purchasing common shares | 1.00% | ||||||||
Employer matching contribution, percent of match | 50.00% | ||||||||
Maximum amount contributed by employer | $ 25,000 | ||||||||
Society Employee Share Ownership Plans [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Highest percentage of participant's salary towards purchasing common shares | 4.00% | ||||||||
Lowest percentage of participant's salary towards purchasing common shares | 1.00% | ||||||||
Employer matching contribution, percent of match | 25.00% | ||||||||
Employee Share Ownership Plan (ESOP) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Contribution under the plan | $ 2,000,000 | $ 2,000,000 | |||||||
PWU Share Grant Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Highest percentage of participant's salary towards purchasing common shares | 2.70% | ||||||||
Weighted-average price, granted (in dollars per share) | $ / shares | $ 20.50 | ||||||||
Shares granted (in shares) | shares | 3,952,212 | ||||||||
PWU Share Grant Plan [Member] | Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period | 35 years | ||||||||
Aggregate number of common shares issuable under the plan (in shares) | shares | 3,981,763 | ||||||||
Society Share Grant Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Highest percentage of participant's salary towards purchasing common shares | 2.00% | ||||||||
Weighted-average price, granted (in dollars per share) | $ / shares | $ 20.50 | ||||||||
Shares granted (in shares) | shares | 1,367,158 | ||||||||
Society Share Grant Plan [Member] | Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period | 35 years | ||||||||
Aggregate number of common shares issuable under the plan (in shares) | shares | 1,434,686 | ||||||||
Share Grant Plans [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted-average price, granted (in dollars per share) | $ / shares | $ 0 | $ 0 | |||||||
Shares granted (in shares) | shares | 455,694 | 473,222 | |||||||
Fair value of shares granted | $ 111,000,000 | ||||||||
Compensation expenses | $ 9,000,000 | $ 12,000,000 | |||||||
Directors' Deferred Share Units Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
DSU value equivalent to common shares (in shares) | shares | 1 | ||||||||
Directors' Deferred Share Units Plan [Member] | Deferred Share Units [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expenses | 5,000,000 | $ 1,000,000 | 1,000,000 | ||||||
Liability related to share based compensation | 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||||||
Number of shares settled (in shares) | shares | 24,015 | 222,768 | |||||||
Directors' Deferred Share Units Plan [Member] | Hydro One Limited [Member] | Deferred Share Units [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Closing share price of common shares (in dollars per share) | $ / shares | $ 25.08 | $ 20.04 | |||||||
Management Deferred Share Units Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
DSU value equivalent to common shares (in shares) | shares | 1 | ||||||||
Liability related to share based compensation | 2,000,000 | $ 1,000,000 | $ 2,000,000 | ||||||
Management Deferred Share Units Plan [Member] | Deferred Share Units [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expenses | $ 1,000,000 | 1,000,000 | |||||||
Long Term Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Aggregate number of common shares issuable under the plan (in shares) | shares | 11,900,000 | ||||||||
Compensation expenses | $ 8,000,000 | 15,000,000 | |||||||
Grant date total fair value of awards | $ 0 | $ 16,000,000 | |||||||
Performance Share Units [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares settled (in shares) | shares | 201,910 | 238,030 | |||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares settled (in shares) | shares | 58,620 | 158,310 | |||||||
Performance Stock Units And Restricted Stock Units [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Liability related to share based compensation | 20,000,000 | $ 10,000,000 | $ 20,000,000 | ||||||
Performance Stock Units And Restricted Stock Units [Member] | Long Term Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expenses | $ 3,000,000 | 5,000,000 | |||||||
Share-based Payment Arrangement, Option [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Payables for options included in related party activity | $ 1,000,000 | $ 0 | $ 1,000,000 | ||||||
Subsequent Event [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares exercised (in shares) | shares | 117,980 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Share Grant Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Share grants outstanding, beginning (in shares) | 949,910 | 0 | |
Shares vested and issued (in shares) | 0 | (1,450,880) | |
Shares exercised (in shares) | (302,520) | ||
Shares forfeited (in shares) | (243,840) | (500,970) | |
Share grants outstanding, ending (in shares) | 403,550 | 949,910 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-average price, outstanding, beginning (in dollars per share) | $ 20.72 | ||
Weighted-average price, vested and issued (in dollars per share) | 20.76 | $ 20.70 | $ 20.50 |
Weighted-average price, forfeited (in dollars per share) | 20.75 | 20.66 | |
Weighted-average price, outstanding, ending (in dollars per share) | $ 20.66 | $ 20.72 | |
Share Grant Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Share grants outstanding, beginning (in shares) | 4,159,439 | 4,737,783 | |
Shares vested and issued (in shares) | (455,694) | (473,222) | |
Shares forfeited (in shares) | (92,567) | (105,122) | |
Share grants outstanding, ending (in shares) | 3,611,178 | 4,159,439 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-average price, outstanding, beginning (in dollars per share) | $ 20.50 | $ 20.50 | |
Weighted-average price, vested and issued (in dollars per share) | 0 | 0 | |
Weighted-average price, forfeited (in dollars per share) | 20.50 | 20.50 | |
Weighted-average price, outstanding, ending (in dollars per share) | $ 20.50 | $ 20.50 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Number of DSUs (Detail) - Deferred Share Units [Member] - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Directors' Deferred Share Units Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
DSUs outstanding - January 1 (in shares) | 46,697 | 187,090 |
DSUs granted (in shares) | 29,938 | 82,375 |
DSUs settled (in shares) | (24,015) | (222,768) |
DSUs outstanding - December 31 (in shares) | 52,620 | 46,697 |
Management Deferred Share Units Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
DSUs outstanding - January 1 (in shares) | 104,041 | 63,760 |
DSUs granted (in shares) | 24,947 | 40,281 |
DSUs paid (in shares) | (76,802) | 0 |
DSUs outstanding - December 31 (in shares) | 52,186 | 104,041 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Number of PSUs and RSUs (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Liability recorded for potentially settled shares | $ 3 | |
Performance Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Units outstanding - beginning (in shares) | 594,470 | 425,120 |
Units granted (in shares) | 0 | 438,470 |
Units vested (in shares) | (76,411) | (123) |
Units forfeited (in shares) | (153,805) | (30,967) |
Units settled (in shares) | (201,910) | (238,030) |
Units outstanding - ending (in shares) | 162,344 | 594,470 |
Number of shares potentially settled (in shares) | 7,740 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Units outstanding - beginning (in shares) | 432,780 | 388,140 |
Units granted (in shares) | 0 | 338,480 |
Units vested (in shares) | (88,532) | (104,881) |
Units forfeited (in shares) | (84,745) | (30,649) |
Units settled (in shares) | (58,620) | (158,310) |
Units outstanding - ending (in shares) | 200,883 | 432,780 |
Number of shares potentially settled (in shares) | 96,330 |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation - Summary of Stock Option Activity (Detail) - CAD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Exercise price (in dollars per share) | $ 20.70 | |
Grant date fair value per option (in dollars per share) | $ 1.66 | |
Expected dividend yield | 3.78% | |
Expected volatility | 15.01% | |
Risk-free interest rate | 2.00% | |
Expected option term | 4 years 6 months | |
Fair value of shares forfeited (in dollars per share) | $ 1.65 | $ 1.67 |
Number of options vested (in shares) | 706,070 | 0 |
Modified fair value of options vested (in dollars per share) | $ 1.04 | |
Shares exercised (in shares) | (302,520) | |
Aggregate intrinsic value for options outstanding | $ 2,000,000 | $ 0 |
Weighted-average remaining contractual term for options | 5 years 2 months 12 days | 6 years 2 months 12 days |
Aggregate intrinsic value for options exercised | $ 1,000,000 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Detail) - CAD ($) $ in Millions | Jan. 31, 2020 | Sep. 18, 2019 | Dec. 17, 2014 | Dec. 16, 2014 |
B2M Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 526 | |||
B2M Limited Partnership [Member] | Debt [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 316 | |||
Business combination percentage transferred | 60.00% | |||
B2M Limited Partnership [Member] | Equity [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 210 | |||
Business combination percentage transferred | 40.00% | |||
B2M Limited Partnership [Member] | Saugeen Ojibway Nation (SON) [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of common shares acquired | 34.20% | |||
Business acquisition, consideration paid | $ 72 | |||
B2M Limited Partnership [Member] | Class A Units [Member] | Saugeen Ojibway Nation (SON) [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Capital units in initial investment | 50 | |||
B2M Limited Partnership [Member] | Class B Units [Member] | Saugeen Ojibway Nation (SON) [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Capital units in initial investment | $ 22 | |||
Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 119 | |||
Niagara Reinforcement Limited Partnership [Member] | Debt [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 71 | |||
Business combination percentage transferred | 60.00% | |||
Niagara Reinforcement Limited Partnership [Member] | Equity [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 48 | |||
Business combination percentage transferred | 40.00% | |||
Six Nations of the Grand River Development Corporation [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of common shares acquired | 25.00% | |||
Mississaugas of the Credit First Nation [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of common shares acquired | 0.10% | |||
First Nations [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of common shares acquired | 25.10% | |||
Hydro One Networks [Member] | Six Nations of the Grand River Development Corporation [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of common shares acquired | 25.00% | |||
Hydro One Networks [Member] | Mississaugas of the Credit First Nation [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of common shares acquired | 0.10% | |||
Hydro One Networks [Member] | First Nations [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 12 | |||
Percentage of common shares acquired | 25.10% | |||
Subsequent Event [Member] | Mississaugas of the Credit First Nation [Member] | Niagara Reinforcement Limited Partnership [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Consideration transferred | $ 9 | |||
Percentage of common shares acquired | 19.90% |
Noncontrolling Interest - Sched
Noncontrolling Interest - Schedule of Movements in Noncontrolling Interest (Detail) $ in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019CAD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018CAD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Noncontrolling interest - beginning balance, temporary equity | $ 21 | $ 22 | |
Contributions from sale of noncontrolling interest, temporary equity | 0 | ||
Distributions to noncontrolling interest, temporary equity | (3) | (3) | |
Net income attributable to noncontrolling interest, temporary equity | 2 | 2 | |
Noncontrolling interest - ending balance, temporary equity | 20 | 21 | |
Noncontrolling interest - beginning balance, equity | 49 | 50 | |
Contributions from sale of noncontrolling interest, equity | 12 | ||
Distributions to noncontrolling interest, equity | (6) | (5) | |
Net income attributable to noncontrolling interest, equity | 4 | 4 | |
Noncontrolling interest - ending balance, equity | 59 | 49 | |
Noncontrolling interest - beginning balance | 70 | 72 | |
Contributions from sale of noncontrolling interest | 12 | ||
Distributions to noncontrolling interest | (9) | (8) | |
Net income attributable to noncontrolling interest | 6 | 6 | |
Noncontrolling interest - ending balance | 79 | 70 | |
B2M Limited Partnership [Member] | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Noncontrolling interest - beginning balance, temporary equity | 21 | 22 | |
Distributions to noncontrolling interest, temporary equity | (3) | (3) | |
Net income attributable to noncontrolling interest, temporary equity | 2 | 2 | |
Noncontrolling interest - ending balance, temporary equity | 20 | 21 | |
Noncontrolling interest - beginning balance, equity | 49 | 50 | |
Distributions to noncontrolling interest, equity | (6) | (5) | |
Net income attributable to noncontrolling interest, equity | 4 | ||
Noncontrolling interest - ending balance, equity | 47 | 49 | |
Noncontrolling interest - beginning balance | 70 | 72 | |
Distributions to noncontrolling interest | (9) | (8) | |
Net income attributable to noncontrolling interest | 6 | ||
Noncontrolling interest - ending balance | 67 | 70 | |
Niagara Reinforcement Limited Partnership [Member] | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Noncontrolling interest - beginning balance, equity | 0 | ||
Contributions from sale of noncontrolling interest, equity | $ 12 | ||
Distributions to noncontrolling interest, equity | 0 | ||
Net income attributable to noncontrolling interest, equity | 0 | ||
Noncontrolling interest - ending balance, equity | $ 12 | $ 0 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Transactions (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Purchased power | $ 3,111 | $ 2,899 |
Revenues for transmission services | 6,442 | 6,110 |
IESO [Member] | ||
Related Party Transaction [Line Items] | ||
Purchased power | 1,808 | 1,636 |
Funding received related to Conservation and Demand Management programs | 42 | 62 |
OPG [Member] | ||
Related Party Transaction [Line Items] | ||
Purchased power | 8 | 10 |
Costs related to the purchase of services | 1 | 0 |
OPG [Member] | Transmission [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues related to provision of services and supply of electricity | 8 | 8 |
OEFC [Member] | ||
Related Party Transaction [Line Items] | ||
Purchased power | 2 | 2 |
OEB [Member] | ||
Related Party Transaction [Line Items] | ||
OEB fees | 9 | 8 |
Hydro One Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Return of stated capital | 748 | 544 |
Dividends paid | 1 | 6 |
Stock-based compensation costs | 10 | 28 |
2587264 Ontario Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Dividends paid | 2 | 9 |
Preferred shares redeemed | 486 | 0 |
Amounts Related To Electricity Rebates [Member] | IESO [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transaction amount | 692 | 477 |
Cost Recovery For Services Provided [Member] | Hydro One Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transaction amount | 14 | 15 |
Transmission [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues for transmission services | 1,654 | 1,688 |
Transmission [Member] | IESO [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues for transmission services | 1,636 | 1,672 |
Electricity, US Regulated [Member] | IESO [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues for transmission services | 240 | 239 |
Distribution [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues for transmission services | 4,788 | 4,422 |
Distribution [Member] | IESO [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues for transmission services | 35 | 35 |
Energy Service [Member] | Hydro One Telecom [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues for transmission services | 3 | 3 |
Energy Service [Member] | Hydro One Telecom [Member] | Operating Expense [Member] | ||
Related Party Transaction [Line Items] | ||
Purchased power | $ 21 | $ 23 |
Province Of Ontario [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 47.30% |
Consolidated Statement of Cas_3
Consolidated Statement of Cash Flows (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Accounts receivable | $ (74) | $ 13 |
Due from related parties | (176) | (22) |
Other assets | (6) | 3 |
Accounts payable | 10 | (2) |
Accrued liabilities | 55 | 18 |
Due to related parties | 184 | (78) |
Accrued interest | 8 | (3) |
Long-term accounts payable and other liabilities | 0 | (5) |
Post-retirement and post-employment benefit liability | 26 | 26 |
Changes in non-cash balances related to operations, Total | 27 | (50) |
Capital Expenditure [Abstract] | ||
Capital investments in property, plant and equipment | (1,543) | (1,441) |
Capitalized depreciation and net change in accruals included in capital investments in property, plant and equipment | 33 | 30 |
Cash outflow for capital expenditures – property, plant and equipment | (1,510) | (1,411) |
Capital investments in intangible assets | (116) | (121) |
Capital Investments | (1,659) | (1,562) |
Net change in accruals included in capital investments in intangible assets | 1 | 1 |
Net change in accruals included in capital investments | 34 | 31 |
Cash outflow for capital expenditures – intangible assets | (115) | (120) |
Cash outflow for capital expenditures | (1,625) | (1,531) |
Net interest paid | 486 | 458 |
Income taxes paid | $ 21 | $ 15 |
Consolidated Statement of Cas_4
Consolidated Statement of Cash Flows - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Capital contribution received | $ 3 | $ 7 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - CAD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Plaintiff sought value, up to | $ 125,000,000 | |
Payments made | $ 2,000,000 | $ 2,000,000 |
Commitments - Summary of Commit
Commitments - Summary of Commitments Under Leases, Outsourcing and Other Agreements Due (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Outsourcing agreements, year 1 | $ 155 |
Outsourcing agreements, year 2 | 28 |
Outsourcing agreements, year 3 | 3 |
Outsourcing agreements, year 4 | 2 |
Outsourcing agreements, year 5 | 4 |
Outsourcing agreements, thereafter | 13 |
Long-term software/meter agreement, year 1 | 22 |
Long-term software/meter agreement, year 2 | 1 |
Long-term software/meter agreement, year 3 | 2 |
Long-term software/meter agreement, year 4 | 1 |
Long-term software/meter agreement, year 5 | 2 |
Long-term software/meter agreement, thereafter | $ 0 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Long-Term Software/Meter Agreement [Member] | Trilliant Agreement [Member] | |
Commitments [Line Items] | |
Agreement renewal term | 5 years |
Commitments - Summary of Other
Commitments - Summary of Other Commitments (Detail) $ in Millions | Dec. 31, 2019CAD ($) |
Credit Facilities [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | $ 0 |
Other commitment, year 2 | 0 |
Other commitment, year 3 | 0 |
Other commitment, year 4 | 0 |
Other commitment, year 5 | 2,300 |
Other commitment, thereafter | 0 |
Letters Of Credit [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | 185 |
Other commitment, year 2 | 2 |
Other commitment, year 3 | 0 |
Other commitment, year 4 | 0 |
Other commitment, year 5 | 0 |
Other commitment, thereafter | 0 |
Guarantees [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | 325 |
Other commitment, year 2 | 0 |
Other commitment, year 3 | 0 |
Other commitment, year 4 | 0 |
Other commitment, year 5 | 0 |
Other commitment, thereafter | 0 |
Retirement Compensation Arrangements [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | 171 |
Prudential Support From IESO [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | 9 |
Debt Service Reserve Requirements [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | 4 |
Various Operating Purposes [Member] | |
Other Commitments [Line Items] | |
Other commitment, year 1 | $ 3 |
Segmented Reporting - Additiona
Segmented Reporting - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019segmentcompany | |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 3 |
Number of local distribution companies (more than) | company | 70 |
Segmented Reporting - Summary o
Segmented Reporting - Summary of Segment Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 6,442 | $ 6,110 |
Purchased power | 3,111 | 2,899 |
Operation, maintenance and administration | 991 | 1,055 |
Depreciation, amortization and asset removal costs (Note 5) | 871 | 830 |
Income before financing charges and income tax expense | 1,469 | 1,326 |
Capital investments | 1,659 | 1,562 |
Total assets | 26,917 | 25,569 |
Goodwill | 325 | 325 |
Transmission [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,654 | 1,688 |
Purchased power | 0 | 0 |
Operation, maintenance and administration | 369 | 424 |
Depreciation, amortization and asset removal costs (Note 5) | 462 | 435 |
Income before financing charges and income tax expense | 823 | 829 |
Capital investments | 1,035 | 985 |
Total assets | 14,917 | 13,877 |
Goodwill | 157 | 157 |
Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,788 | 4,422 |
Purchased power | 3,111 | 2,899 |
Operation, maintenance and administration | 615 | 608 |
Depreciation, amortization and asset removal costs (Note 5) | 409 | 395 |
Income before financing charges and income tax expense | 653 | 520 |
Capital investments | 624 | 577 |
Total assets | 9,943 | 9,277 |
Goodwill | 168 | 168 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Purchased power | 0 | 0 |
Operation, maintenance and administration | 7 | 23 |
Depreciation, amortization and asset removal costs (Note 5) | 0 | 0 |
Income before financing charges and income tax expense | (7) | (23) |
Capital investments | 0 | 0 |
Total assets | $ 2,057 | $ 2,415 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - CAD ($) $ in Millions | Feb. 11, 2020 | Jan. 31, 2020 | Jan. 16, 2020 | Sep. 18, 2019 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||
Shares exercised (in shares) | 302,520 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Return of stated capital, total amount approved | $ 146 | ||||
Shares exercised (in shares) | 117,980 | ||||
Proceeds from stock options exercised | $ 2 | ||||
Niagara Reinforcement Limited Partnership [Member] | |||||
Subsequent Event [Line Items] | |||||
Consideration transferred | $ 119 | ||||
Niagara Reinforcement Limited Partnership [Member] | Mississaugas of the Credit First Nation [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of common shares acquired | 0.10% | ||||
Niagara Reinforcement Limited Partnership [Member] | Mississaugas of the Credit First Nation [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of common shares acquired | 19.90% | ||||
Consideration transferred | $ 9 | ||||
Niagara Reinforcement Limited Partnership [Member] | Six Nations of the Grand River Development Corporation [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of common shares acquired | 25.00% | ||||
Niagara Reinforcement Limited Partnership [Member] | Mississaugas of the Credit First Nation [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Non-controlling ownership percentage | 20.00% | ||||
Niagara Reinforcement Limited Partnership [Member] | Hydro One Inc. [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Non-controlling ownership percentage | 55.00% | ||||
Niagara Reinforcement Limited Partnership [Member] | Six Nations of the Grand River Development Corporation [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Non-controlling ownership percentage | 25.00% |