Hydro One (H) Investor presentation summary

Credit and business highlights

• Operates one of North America's largest electric utilities, serving 91% of Ontario's transmission capacity and 75% of its distribution network.

• Maintains a pure-play electric transmission and distribution model, with 99% of business fully rate-regulated and no exposure to commodity prices.

• Holds one of the strongest investment grade balance sheets in the North American utility sector.

• Predictable, self-funded organic growth with a 6% expected rate base CAGR from 2023 to 2027.

• Regulatory environment is transparent, predictable, and credit supportive, with S&P rating Ontario as 'most credit supportive.'

Regulatory and operational structure

• Operates under a 5-year Custom Incentive Rate Making Framework, with a deemed debt/equity ratio of 60%/40% through 2027.

• 2025 revenues (net of purchased power) are $4.56B, with 53% from transmission and 46% from distribution.

• 2025 rate base is $28.0B, with 62% transmission and 38% distribution.

• Allowed ROE for both transmission and distribution is 9.36% for 2023–2027.

• Regulatory lag is reduced through forward-looking test years and a joint rate application for 2023–2027.

Capital plan and growth initiatives

• $11.8B capital plan for 2023–2027, focused on grid renewal and modernization, with no equity issuance anticipated.

• Rate base forecasted to grow from $23.6B in 2022 to $32.1B in 2027.

• Major transmission projects include St. Clair, Waasigan, Welland Thorold, and Wawa Timmins lines, with several projects extending into the 2030s.

• First Nations have the opportunity to invest in a 50% equity stake in new large-scale transmission projects over $100M.