Corporate Report 2016 We’re working to meet the evolving energy needs of our customers and B.C.— safely, reliably and at the lowest reasonable cost. Contents

Performance...... 2 Safety...... 8 Aboriginal relations...... 18 Leadership team...... 26 Area of operations...... 3 Employees...... 10 Climate action...... 20 Board of directors...... 28 A message from Reliability and innovation.....12 Optimizing energy use...... 22 the President and CEO...... 4 Major projects...... 14 Looking ahead...... 24 Customer service...... 6 Community investment...... 16

FortisBC Corporate Report 2016 1 Performance

FortisBC Inc. and FortisBC Financial highlights (in millions of dollars) Looking back at 2016 Energy Inc. do business as FortisBC. We deliver approximately 21 per cent We are indirectly wholly owned FortisBC FortisBC Inc. of the total energy consumed in by our parent company, Fortis Inc., 2015 2016 Energy Inc. 2015 2016 Electricity , which is the most a leader in the North American electric Natural gas & energy delivered by any utility in and gas utility business. Through piped propane Net earnings $46 $49 the province. Whether delivering its subsidiaries, Fortis Inc. serves Revenues $346 $360 electricity, natural gas or propane, more than 3 million natural gas and Net earnings $151 $171 our more than 2,200 employees serve electricity customers. Revenues $1,353 $1,151 Operating approximately 1.1 million customers expenses $80 $79 in 135 communities. Performance Operating expenses $292 $295 Capital $104 $74 FortisBC owns and operates FortisBC expenditures1 Capital approximately 48,700 kilometres Energy Inc. 2015 2016 expenditures1 $460 $333 of natural gas transmission Natural gas & piped propane and distribution pipelines and 1Capital expenditures before contributions in aid of construction and including cost of removal. approximately 7,200 kilometres of electric transmission and distribution Peak day demand FortisBC gas customers2,3 FortisBC electricity customers4 (TJ) 1,074 1,334 power lines. Our energy infrastructure (Approximately 994,000 in 2016) (Approximately 169,600 in 2016) assets also include B.C.’s largest Gas volumes (PJ) 186 197 underground natural gas storage facility, two liquefied natural gas Customer satisfaction index 8.6 8.8 (LNG) storage facilities, and four 975,000 165,000 hydroelectric generating plants.

950,000 FortisBC Inc. 2015 2016 160,000 Electricity

Generating 925,000 155,000 capacity (MW) 225 225 Peak demand 624 712 each year (MW) 900,000 150,000 Energy Walden (GWh) 37 2 875,000 145,000 Regulated (GWh) 3,116 3,119 Customer 850,000 140,000 satisfaction index 8.1 8.2 015 016 014 2013 2012 2012 2013 2014 2015 2016 2 2 2

2Includes piped propane customers. 3With the implementation of the Customer Care Enhancement Project on January 1, 2012, the definition of customer changed, thereby reducing gas customers by approximately 18,000 customers effective January 1, 2012. All comparative periods have been restated to reflect this change.4 Includes direct and indirect customers.

FortisBC Corporate Report 2016 2 Northwest Area of operations Yukon Territories

Natural gas service area Electric service area Fort Nelson Combined natural gas & electric service area Propane service area FortisBC pipeline Spectra Energy pipeline FortisBC electric transmission lines

Aitken Creek Hudson’s Hope

British Mackenzie Columbia Alberta

Prince George

Williams Lake

Revelstoke PA C Kamloops Enderby Campbell River IF Whistler Lumby I Powell River Elkford C Kaslo O C Princeton Port Alberni Nanaimo Hope Cranbrook E A Trail N Osoyoos

Victoria nited States

FortisBC Corporate Report 2016 3 For years, FortisBC has been active in allowed ROE and common equity ratio assisting customers with optimizing approved in this decision will serve A message from their energy use and reducing their as the benchmark cost of capital for environmental footprint. Both natural similar utilities in British Columbia to gas and electricity customers benefit set rates. This positive decision ensured the President and CEO from energy-saving rebates that result there was no impact to FortisBC's rates in smaller bills while ensuring the and earnings and provides long-term continual improvement of efficient stability to the company. employee safety awareness and moved energy technology in their homes We made significant headway us further toward an interdependent and businesses. with many of our major projects in working environment and zero We also provide locally produced, 2016. The company broke ground preventable incidents. Renewable Natural Gas to more than on a 30,000-square-foot Kootenay We constantly strive to maintain a 7,000 customers, and natural gas Operations Centre outside of Castlegar. high level of service for our customers. for transportation incentives have Developed to replace aging facilities, Last year, FortisBC was proud to resulted in almost 1,300 natural gas the new building and warehouse accept a Surrey Innovation Award vehicles operating in B.C. However, space will bring our employees closer from the Surrey Board of Trade for the Zero Emissions Building Plan to our customers. It is set to open our Renewable Natural Gas program. introduced by the City of Vancouver its doors in 2017. The award recognizes companies in 2016 would effectively remove The $170 million Coastal Transmission for new and improved technologies energy choice for 107,000 Vancouver System project, which involves and services for Surrey residents. natural gas customers, including 100 the installation of approximately FortisBC was also recognized with schools and three major hospitals. 11 kilometres of new 36- and 42-inch a second-place E Source Utility Ad We believe customers should be able natural gas pipeline from Surrey to Award in the Best Social Media Ad to choose the energy solutions that Coquitlam, is progressing on schedule. category for our 2015 social media work for them. The right way forward Construction began this past February. contest What keeps you warm? that is through continual innovation to Our project team continues to consult encouraged customers to save energy. reduce emissions, cost-effective energy Michael Mulcahy with impacted property owners, We also accepted the 2016 Rix Award delivery, and incentives that result in Aboriginal communities, businesses for Engaged Corporate Citizenship improved efficiency standards. With the hard work, dedication and and stakeholders. The pre-construction from the Board commitment of our employees, 2016 In 2016, FortisBC received approval of fieldwork and awareness program of Trade, reflecting the dedication of was another successful and safe year our 2015 application to the BC Utilities has kicked off with project signage our employees to the communities in for FortisBC. Our business continued to Commission (BCUC) for changes to and awareness messages promoted which they live and work. show strong financial results over those the system extension policies for our through the media. of 2015. FortisBC’s electric division In 2016, the provincial government natural gas division. This means that reported a net income of $49 million The $255 million Lower Mainland approved amendments to the it will now be more affordable for new and the natural gas division reported System Upgrades, which includes Greenhouse Gas Reduction Regulation customers to connect to the system. a net income of $171 million. Capital the installation of approximately (GGRR) that increases our allowed This allows for more efficient use of spending totalled $333 million for 20 kilometres of new 30-inch natural investment by $67 million in incentives the system for all gas customers. gas operations and $74 million for gas pipeline from Coquitlam to to support the use of natural gas in electric operations. This past August the BCUC reaffirmed Vancouver, is currently on track with markets such as mine haul trucks, that our natural gas division, Fortis detailed engineering plans. There asphalt paving, marine and rail. This In 2016, we maintained a strong Energy Inc.’s, return on equity (ROE) are multiple and ongoing external increase is in addition to the previous emphasis on public safety while and common equity component stakeholder consultations with regard to total of $104.5 million allocated for continuing efforts to improve our in capital structure will remain construction impacts as a result of the incentives and stations in the GGRR. internal safety culture. We conducted unchanged. The BCUC also determined project. A limited scope of construction The amendments confirmed the B.C. our second annual employee safety that the natural gas utility will remain began in February, with the remaining government’s support for expanding the survey, where results showed that the benchmark utility for cost of construction to begin in early 2018. use of natural gas in the transportation the launch of our employee safety capital determination. Accordingly, the initiative increased the overall level of and regional LNG sectors.

FortisBC Corporate Report 2016 4 Other community events included The first of BC Ferries’ new dual-fuel LNG Salish-class vessels, the Salish Orca, will enter service on the Comox-Powell River route in 2017. planting trees with Evergreen in FortisBC will provide this vessel and two others with up to 300,000 gigajoules of liquefied natural gas per year for the next 10 years. Vancouver and preparing the Hudson’s Bay Wetlands nature park in Prince George for hiking season. On behalf of FortisBC, I would like to congratulate David Podmore, the Chair of the FortisBC Board of Directors, for receiving the 2016 Rix Award for Engaged Community Citizenship from the Greater Vancouver Board of Trade. I would also like to welcome Diane Roy, vice president of regulatory affairs, to FortisBC’s executive leadership team. The teams across every part of our company have been focused on our business priorities and contributing to organizational values, and I thank them for their dedication. Their contributions have been well received and are greatly appreciated.

Image courtesy of BC Ferries

In addition to FortisBC securing Reflecting our confidence in B.C.’s In October, our parent company Michael Mulcahy environmental approval from the natural gas industry, Fortis Inc., took a major step in the marketplace President and CEO provincial government for the Eagle through its subsidiary FortisBC when common shares of Fortis Inc. FortisBC Mountain-Woodfibre Gas Pipeline Midstream Inc., completed the began trading on the New York Stock Project, Woodfibre LNG Limited also acquisition of the Aitken Creek gas Exchange under the symbol FTS. announced that they have secured storage facility, located 120 kilometres Fortis Inc. retains its listing on the approval to move forward with their northeast of Fort St. John, from Toronto Stock Exchange. LNG export facility. We will continue Chevron Canada Properties Limited. to work on the design and permitting The acquisition of this critical piece of Our employees are dedicated to of the pipeline to serve Woodfibre infrastructure also allowed FortisBC to providing value to our customers and LNG’s facility. successfully integrate Aitken Creek’s the communities in which they live broader commercial business into and work through community giving To ensure growing demand for the company as a whole. initiatives. In 2016, a year after the LNG as a transportation fuel is Rock Creek fires, a team of employees met, construction continued on the participated in rebuilding a home expansion of our Tilbury LNG facility with Habitat for Humanity. in Delta. Customers like BC Ferries and Seaspan became the province’s first adopters of LNG as a marine fuel, with both companies taking delivery of their first LNG ferries.

FortisBC Corporate Report 2016 5 Customer service

Dennis Swanson, FortisBC Vice President, Energy Supply, attends a groundbreaking ceremony of our new Kootenay Operations Centre with many community leaders. Among them: Chief Keith Crow, Lower Similkameen Indian Band; Jared Basil, Councillor, Lower Kootenay Band; Daniel Joe, Councillor, Splatsin First Nation; Mayor Lawrence Chernoff, City of Castlegar; Rick Smith, Area J Director, Regional District of Central Kootenay; and MLA Katrine Conroy, Kootenay-West.

FortisBC Corporate Report 2016 6 Moving is easier online Notable numbers Customers are happier when they have choices for interacting with us, which is why we expanded our self-service Natural gas and electricity customers options. We introduced an online form who signed up for Account Online: on .com for moving service. By year’s end, 28,197 account moves were completed using this form, which in turn, helped reduce costs and provided our customers with a new way to move or create an account. 354,689 We also made it simpler for customers to request a natural gas service line Customers who have chosen using a new online tool. Customers paperless billing: can check if natural gas is available at their address and get an installation cost estimate. Then they can request and schedule the installation online. Customers can also create an online profile to track the status of their service request. 338,287 Today, more British Columbians can take advantage of the low cost of natural gas following a decision by the BC Utilities Commission (BCUC) that made it easier and more affordable for customers to connect to our natural FortisBC Crew Leader John Guzzo and Distribution Mechanic Daniel Golding connect gas system. a customer's home to our natural gas delivery system in Metro Vancouver. Electricity outage map When power goes out, our electricity Paperless billing Connecting by blog customers want to know when power on the rise Understanding our customers want will be restored. Now that more than choices in the way they connect 129,000 advanced meters have been We have offered a paperless billing with us, we launched our first blog, installed in our electricity service area, option to our customers since 2012. We’ve Got Energy! It allows us to we have implemented a new outage This year, we saw a 21 per cent communicate with the public by communication system that answers jump in customers subscribing providing timely, relevant content that question. Customers can access to this service, bringing the total in an engaging storytelling fashion. up-to-date, accurate outage information number to 338,287 or approximately And in 2016, we saw a steady in a map format and find timely 30 per cent of customers. This increase in our followers on Twitter information about restoration times. reduces costs for all customers and is (26 per cent), Instagram (300 per cent) In fact, we are in the final stages of environmentally friendly. and LinkedIn (31 per cent) as social testing the new system and expect it media continues to grow. to launch in 2017 — giving customers greater peace of mind.

FortisBC Corporate Report 2016 7 Safety

Chris Wilcock, a FortisBC Laboratory Technologist, tests the addition of mercaptan to natural gas in our lab. The pungent additive helps in the detection of potential leaks.

FortisBC Corporate Report 2016 8 Planning, prep Notable numbers and practice Conducting emergency preparedness BC One Call requests in 2016: exercises is integral to our ongoing commitment to customer, employee and public safety. From planning and preparation to repeated practice, we regularly train our employees across all our operations and locations. 129,645 In 2016, we conducted nine tabletop and five full-scale emergency exercises. Students who participated in the Another six exercises were practised Energy is Awesome educational with various first responders such as presentation: fire, police and local governments. For personal safety and wellness, FortisBC employees stretch before a full day of work One of these included our participation begins, including Operations Manager Ryan Teesdale (left foreground) and Customer in an exercise organized and facilitated Service Technician Clinton Carey (centre). by the B.C. government and the District of Elkford. Safety in Focus on public safety Employees also joined 800,000 others 2,995 across B.C. in the annual Great British As a leading energy provider, it’s everything we do Columbia ShakeOut earthquake drill, important for us to raise awareness Decrease in third-party damage to our practising how to drop, cover and hold on. Safety—for employees and the among customers and the general pipelines between 2007 and 2016: public—is at the forefront of public about staying safe around everything we do at FortisBC. In 2016, natural gas and electricity. Working safely near us we aligned internal safety metrics to In conjunction with BC One Call, ensure employees are safe whether This year, our safety awareness our 2016 Call Before You Dig campaign working in an office or outside on field campaign educated the public and reminded people about the infrastructure. In addition, 22 joint customers about what to do if they importance of following safe digging 730 health and safety committees, made smell natural gas and that we add trace practices. We outlined the steps to up of 260 employees from across our amounts of a pungent chemical called take to prevent unsafe contact with company, worked together to ensure mercaptan to a naturally odourless underground utilities. Although the workplace safety. product. We do this because we want customers to smell if there’s a leak number of contacts to our natural Compared to 2015, we have seen so they can go outside and call us or gas infrastructure increased slightly, significant improvement in our overall 911 immediately. overall, the awareness campaign safety performance and culture across helped increase BC One Call requests our operations. To further support and To further promote safety education by more than 6 per cent over 2015. increase the level of safety awareness, for all, we developed three videos with we launched a new program that will important safety messages, including “As a new member, I’m very impressed with the joint health and help create an environment where all flood safety, blocked sewer line safety employees work to prevent incidents. and earthquake safety. The videos are safety committee members’ commitment to safety. I am proud Together, we continue to strive for a available on our website and YouTube. to be a part of such a dynamic group of people working toward target of zero injuries and accidents. the common goal of keeping our colleagues safe.” Andrea MacKenzie, Contract Specialist and Joint Health and Safety committee member, FortisBC

FortisBC Corporate Report 2016 9 Employees

Congratulations! More than 250 employees celebrated FortisBC service milestones, including Della Bond, a Key Account Manager, with 20 years of service.

FortisBC Corporate Report 2016 10 Living our values Notable numbers Our employees are the backbone of FortisBC, adapting to our customers’ energy needs and the changing Employees who collaborated on our landscape of B.C.’s energy sector. corporate values action plan:

Respecting our employees’ insight, we updated our corporate values to meet such changes head on. Our values now take a renewed approach to reflect who we are as an organization, our 200 business goals and the ever-evolving environment in which we work. Our employees live these values in their Forty-six students visited our Kelowna and Surrey locations on Take Your Kids to Money raised by employees and Work Day. This program supports Grade 9 students in learning about careers and day-to-day work, supporting their ability allows FortisBC to help shape the emerging leaders of tomorrow. reinvested into the community to deliver on our business priorities. on their behalf: initiatives across our province. For Empowering our people is how we instance, employees in Kelowna remain strong as a company and FortisBC participated in the Bats for a Cause continue to provide the service our baseball tournament in support of customers deserve. $ corporate values: BC Children’s Hospital Foundation and • Safe raised $10,800. Through our FortisBC Energizing our 108,000 We put safety first. community giving program, we happily contributed $51,900 to 140 charities on safety culture • Customer centric behalf of our generous employees. Employee participation rate in We value the customers’ When it comes to our safety culture, safety perception survey: business. Additionally, our employee-run we rely on employees for an important Warm Hearts Charitable Foundation pulse check. Engagement in our annual • Collaborative raised and reinvested almost employee safety perception survey was We work as one company, $57,000 — collected through grassroots at an all-time high, with an 81 per cent one team with shared fundraising efforts — into numerous participation rate. These results showed success. local organizations. The foundation has noticeable improvements on key issues % and provided us further opportunity to 81 • Respectful given back since 1994, making many communities stronger along the way. learn and improve upon our culture. We are respectful, honest and ethical. Empowering Our first employee-based • Progressive First Move Forward committee kicked off its awareness campaign to educate We seek better ways. our people employees on the four-part action We invest in our employees through plan to reduce and eliminate backup skills training, career development incidents. More than 43 educational Caring for our and new job opportunities. Fifty-seven road shows took place across our gas per cent of nearly 600 posted job and electric operations. The overall Communities positions were filled internally. employee feedback and engagement Our employees give back to the Another 211 employees were promoted has been encouraging. communities in which they live and or moved laterally within the company work, and we are proud to support and 38 jobs were filled through their efforts. Employees championed co-op hiring. numerous fundraising and volunteer FortisBC Corporate Report 2016 11 Reliability and innovation

Mark Warren, FortisBC Director, Customer Service Technology and Systems, and Alf Soros, Fleet Services Manager, City of Kelowna, celebrate the opening of two electric vehicle charging stations. This collaboration had the City provide the location and FortisBC purchase, install and maintain the units.

FortisBC Corporate Report 2016 12 Committed to Notable numbers reliable service We constantly look for opportunities Residential and commercial customers to collaborate with other service subscribing to Renewable Natural Gas agencies to manage costs while making to date: system improvements. In Kelowna, we worked with the Ministry of Transportation and Infrastructure’s highway widening project to move a large stretch of overhead electrical assets underground. 7,400 This upgrade will support growth and urbanization and improve safety and system reliability. Jon Janower, Chief Operating Officer, stands in an aisle of . LNG and CNG vehicles and vessels The Vancouver-based chain joined our growing list of RNG commercial funded by our incentives to date: In 2016, we installed 29,637 pairs of customers as a way to help meet its customers’ expectations for a lower Jomar valves across our natural gas environmental impact. service area, allowing us to perform meter work without disconnecting and interrupting service to customers. Natural gas for Renewable energy transportation As the first utility in North America This installation has improved both to offer Renewable Natural Gas to our 1,293 safety and the customer experience We continued to work with customers, customers, we work with B.C. suppliers by eliminating the need to make policy-makers and industry to offer to turn organic waste from sources appointments or have appliances relit natural gas to B.C.’s transportation such as landfill sites into biogas that following meter maintenance. The fleets. In 2016, we provided incentive is then upgraded and injected into our valves are now standard on all new funding for BC Transit to switch its existing system. services and installed as part of our bus fleets in Nanaimo, Kamloops and regular meter exchange program. Whistler to compressed natural gas In 2016, nearly 500 new customers (CNG). In Nanaimo, we also opened signed up for our Renewable Natural Driving electrical a CNG fuelling facility at Mid-Island Gas program and together consumed “We strive to become more Co-op to support the growing number approximately 163,000 gigajoules of the sustainable in every facet innovation of CNG vehicles on Vancouver Island. locally made fuel, which is equivalent to avoiding 8,117 tonnes of CO or of our business. It was a In partnership with the City of 2 FortisBC continued to support the removing 1,715 cars from the road. natural fit for us to align Kelowna, we installed two electric growth of B.C.’s liquefied natural gas ourselves with FortisBC vehicle charging stations in downtown (LNG) market. We provided incentives Customers who choose this sustainable, Kelowna. This pilot project enhanced to BC Ferries and Seaspan to switch locally produced energy also saw the and use Renewable Natural charging options for electric vehicles a total of five marine vessels to LNG. premium they pay over conventional Gas, especially since it’s and will help us learn more about As part of this, we are also leading the natural gas decrease thanks to produced locally in B.C.” how customers are using electric way in LNG bunkering. We developed a BCUC-approved rate change. This is vehicles in B.C. a unique system that fuels marine a positive step forward for both our Jon Janower, Chief Operating vessels with LNG through an on-ship, customers and the environment. Officer, Choices Markets tanker truck-to-vessel process—the first of its kind in the world.

FortisBC Corporate Report 2016 13 Major projects

The Eagle Mountain-Woodfibre Gas Pipeline project received approval by the Environmental Assessment Agency of British Columbia. The project runs 11 kilometres west of Squamish, seen here from the Stawamus Chief.

FortisBC Corporate Report 2016 14 Better facilities, Creating jobs for Notable numbers better service local communities Major project investments to date: To meet our commitment to customer Operating safely since 1971, the Tilbury service and support long-term space storage facility in Delta supplies LNG to requirements, we broke ground on a number of transportation customers a new Kootenay Operations Centre and ensures a reliable supply of natural in Castlegar. It will replace aging gas to heat homes and businesses on $ facilities and bring our generation the coldest days of the year. and operations employees together 400 million under one roof. This centralization In 2016, we continued the $400-million Tilbury LNG Storage Expansion will not only help achieve a variety of expansion of this facility to meet operational benefits, but also lead to ever-growing demand. The project improved customer service. As part is providing significant employment of the planning process, we consulted and economic benefits to workers and community members and incorporated businesses in Delta, neighbouring their feedback into the site design. communities and Aboriginal groups. Approximately $60 million has been million A unique building feature, a green or committed to local contractor spending $42 living wall, will take inspiration from and more than 140 local companies, Samantha Ethier is learning her Lower Mainland System Upgrades trade as an apprentice scaffolder on the Kootenays’ natural beauty. The self- spanning 10 communities have been sufficient vertical garden will promote FortisBC’s Tilbury LNG Expansion contracted. On site, 60 apprentices are Project. She looks forward to earning employee wellness and help improve being mentored and learning valuable her scaffolding journeyman ticket Local vendors engaged in indoor air quality. trade skills, while approximately 870 in the future. Lower Mainland System Upgrades: local tradespeople have registered for Meeting B.C.’s work on the project. processing and export facility, which energy needs Eagle Mountain- will be located at the former Woodfibre pulp mill site near Squamish. Over the next few years, we’ll be Woodfibre Gas Pipeline upgrading sections of our natural gas As with all major projects, we diligently 105 lines in Surrey, Coquitlam, Burnaby Squamish Nation Chiefs and Council communicate with the public, and Vancouver. This work will help reached an Environmental Assessment Aboriginal peoples and community maintain safe and reliable gas service Agreement on the Eagle Mountain- stakeholders. A new website and for the more than 700,000 customers Woodfibre Gas Pipeline project. The interactive forum, TalkingEnergy.ca, who depend on it to heat their homes provincial government of B.C. also provides yet another way of reaching and businesses. issued an Environmental Assessment out, encouraging people to learn Certificate to FortisBC. Meanwhile, To raise awareness about this about our projects and post questions. Woodfibre LNG Limited secured upcoming work, we are engaging We have received more than 200 approval to move forward with its LNG with Aboriginal groups, government, questions to date. property owners, businesses and community stakeholders. In addition, we committed more than $31 million “This has been one of the most supportive learning environments in local contracts to 99 businesses I’ve ever experienced. The mentorship I’ve had has been in 14 communities throughout the key to my learning.” Lower Mainland for the project. Samantha Ethier, Apprentice Scaffolder, Tilbury LNG Expansion project

FortisBC Corporate Report 2016 15 Community investment

FortisBC employees and their families teamed up with Habitat for Humanity Canada to help rebuild a family’s home that was lost to the Rock Creek fires in 2015.

FortisBC Corporate Report 2016 16 construction and energy-efficiency Where we live retrofitting. Students built an and work accessibility ramp and deck and replaced windows, doors, faucets At FortisBC, we believe in and showerheads for the Bridge strengthening the communities Youth and Family Services Society in where we live and work. Every year, Kelowna. Students of REnEW gain we organize a number of community self-confidence as well as job-ready giving days so employees can donate skills, while employers gain access personal time to give back to to a pool of skilled, entry-level workers. local causes. Teaming up with charitable Investing in organizations and local communities, communities several employee groups volunteered FortisBC Director of Operations Barry Smithson (left) and students on a tour of the to care for parks that everyone As part of the 2016 Union of B.C. new natural gas lab at Okanagan College, featuring state-of-the-art lab equipment and enjoys. They planted trees and shrubs Municipalities (UBCM) convention, gas meters donated by FortisBC. in Vancouver’s Renfrew Park and elected officials from across our Fruitvale’s Railway Park. Another group service area nominated local non-profit helped clean up at the Hudson’s Bay organizations to receive a $15,000 For Sooke’s community association Notable numbers Wetlands nature park in Prince George. FortisBC community investment. and community hall we contributed Three projects were selected from 35 to a much needed replacement of the Sometimes, it is not the hands-on nominations. One investment helped hall’s existing natural gas furnace. work but investment that’s needed. Communities that install water-saving drip irrigation The North Island Wildlife Recovery We also awarded $1,500 to additional in the educational gardens of received investments: Association, located in Errington, looks communities through our local the North Shore Neighbourhood after ill, injured and orphaned wildlife, government association conferences. House child care centres and working to rehabilitate and release. We They included: the Lumby Whitevalley Sharing Gardens. invested in its in-class programs for the Community Resource Centre, 2016–2017 school year. In Trail, our investment was shared New Westminster’s Monarch Place between the Trail Historical Society Transition House, Lantzville Historical Society and Seaside Community 91 Creating opportunities and the District to purchase furniture, fixtures, equipment and exhibits for a Association, Nelson Food Cupboard together new integrated library/museum space. Society and its District Seniors Community events in which Coordinating Society. We supported Okanagan College by we participated: investing in the building of its new natural gas lab. As part of our donation, “FortisBC’s donation is already having a direct impact on our we contributed lab equipment including state-of-the-art gas meters. students. The new lab provides us with a state-of-the-art space We also stepped in to assist local to deliver the latest training. It’s also very positive for our company Kal-West Mechanical with the students to see a major employer like FortisBC investing in their 602 installation, which provided Okanagan education. It validates their choice to learn here and to pursue College students with opportunities for a career in the trades.” hands-on learning. Steve Moores, Dean of Trades and Apprenticeship, Created by FortisBC in partnership with BC Hydro in 2010, the Residential Okanagan College Energy Efficiency Works (REnEW) program is delivered by community groups to train participants in

FortisBC Corporate Report 2016 17 Aboriginal relations

(Left to Right) Bruce Falstead, FortisBC’s Manager, Aboriginal Initiatives; Chief Clem Seymour; and Jay Hope, Corporate Affairs Director of the Seabird Island Band celebrate the completion of a project on reserve lands by Stqó:ya Construction.

FortisBC Corporate Report 2016 18 Working together for “For many years, the Crown and third-party interests were busy Notable numbers stronger communities finding ways to deny and confuse our title and rights, but those Guided by a formal Statement of days are behind us, and I am pleased that FortisBC has taken Aboriginal communities to which Aboriginal Principles, we conduct important bold steps to recognize our communities and the we provide service: business in a manner that respects the importance of our voices on land and in future decision-making.” social, economic and cultural interests of Aboriginal Peoples. Committed Grand Chief Stewart Phillip, Chairman, to building mutually beneficial Okanagan Nation Alliance, July 13, 2016 relationships, we continue to build stronger communities. At our Surrey office, more than 100 56 Together with the Lower Similkameen Investing in the future employees participated in a cultural Indian Band, Osoyoos Indian Band and We want Aboriginal businesses performance by the Nahanee family Aboriginal businesses contracted Ktunaxa Nation, we identified and and communities to benefit from known as the Chinook SongCatchers. in the Lower Mainland System provided energy conservation help to the economic and employment At the 2016 UBCM, attendees were in-need homes. Through the Energy opportunities our projects provide. In welcomed to our reception and Upgrades project: Conservation Assistance Program, 2016, we introduced a new internal the traditional territories of more an energy coach provided energy- resource dedicated to the recruitment, than 20 representatives from the saving advice and installed household support and retention of Aboriginal Lekwungen Traditional Dancers of the measures like energy-efficient lighting, employees. We also attended a number Songhees Nation and the Esquimalt water-efficient showerheads, heat of Aboriginal career fairs and presented Dancers of Esquimalt Nation. pumps, energy-efficient refrigerators two student bursaries at the Okanagan Recognizing Indigenous professionals 9 and upgraded insulation. Nation’s annual general meeting. and youth who demonstrate It's important that we live by our In June, Squamish Nation Chiefs and outstanding achievement, and who principles, and in this case, how Council approved an environmental serve as invaluable role models we support fair and equal access assessment for the proposed Eagle for all Aboriginal Peoples, is to employment and business Mountain–Woodfibre Gas Pipeline important to FortisBC. This is why opportunities for Aboriginal peoples. Project and issued an Environmental we were honoured to be a sponsor of We worked with Stqо́:ya Construction Certificate to FortisBC. the 2016 Indspire Awards. from the Seabird Island Band to install a natural gas main extension from their reserve lands to a Celebrating tradition neighbouring farm. and achievement We also engaged Inlailawatash On National Aboriginal Day we Limited Partnership, a local business celebrated the preservation, sharing owned by the Tsleil-Waututh Nation, and promotion of Aboriginal culture. for the gas line right-of-way clearing We participated in a number of events in preparation for our Surrey to such as handing out more than 100 Coquitlam natural gas line upgrade trees at the Ki-Low-Na Friendship project. The work entailed clearing Society's celebration in downtown archaeologically sensitive areas in Kelowna, and sponsored events held preparation for study. near Cranbrook in the aq’am and Tobacco Plains communities. Inlailawatash Limited Partnership, a local business owned by the Tsleil-Waututh Nation, was selected for the gas line right-of-way clearing in preparation for our Surrey to Coquitlam natural gas line upgrade project.

FortisBC Corporate Report 2016 19 Climate action

Jerry Keulen of Seabreeze Farm in Delta is one of FortisBC’s Renewable Natural Gas suppliers. His farm has an anaerobic digestion and biogas upgrading plant that produces local, sustainable, Renewable Natural Gas from manure and other organic waste. It is then injected into our natural gas system.

FortisBC Corporate Report 2016 20 Natural gas key to climate leadership In August 2016, the provincial government released its Climate Leadership Plan, a blueprint for reducing greenhouse gas emissions by up to 25 million tonnes by 2050. We were an early participant in the conversation, bringing innovative ideas to the table with an eye on advancing our key business priorities. We want to continue to grow our business by looking for cleaner, affordable energy solutions while maintaining stable rates for our customers. In its plan, the B.C. government described the importance of natural gas in combatting climate change. The plan presents several opportunities for FortisBC to help meet B.C.’s climate change targets, including new incentives that encourage Renewable More and more, heavy-duty fleets like Vedder Transport are LNG-fuelled, which means fuel cost savings for the operators and Natural Gas for use in commercial reduced greenhouse gas emissions for the province. fleets, increased support for electric vehicle charging stations, incentives to asphalt paving, marine, remote power For example, BC Ferries estimates expand our energy-efficiency solutions generation and rail. This increase is in that the reduced carbon emissions by at least 100 per cent, and a strategy “Natural gas is a growing addition to the previous $104.5 million from its three new dual-fuel ferries to turn waste produced from sources industry in B.C. that can allocated for incentives and stations in will be the approximate equivalent of such as landfills into Renewable secure our economy for the GGRR. The amendments confirmed taking 1,900 passenger vehicles off our Natural Gas. the B.C. government’s support for roads annually. generations to come while expanding the use of natural gas creating good jobs for our Exploring new markets in the transportation and regional Looking ahead, with new, citizens. Natural gas is LNG sectors. internationally regulated emissions Natural gas provides a low-carbon targets for the marine sector, we have also the cleanest-burning solution in the transportation sector, an opportunity to play a significant fossil fuel, representing an which represents more than one-third Reducing emissions role in supplying LNG to ship operators opportunity to shift global of B.C.’s total greenhouse gas (GHG) LNG is having a positive impact who choose to convert from higher emissions. The Province approved economies off GHG-intensive on the environment—allowing emitting fuels. For those in the amendments to the Greenhouse fuels like coal and oil to consumers to shift away from diesel marine industry, and many other fleet Gas Reductions Regulation (GGRR) and fuel oil, which in turn reduces operators on the ground, LNG provides reduce worldwide emissions.” that increased FortisBC’s allowed greenhouse gas emissions and other a cost-effective, environmentally investment by $67 million in incentives British Columbia Climate environmental impacts. minded choice. to support the use of natural gas in Leadership Plan, markets such as mine haul trucks, August 2016

FortisBC Corporate Report 2016 21 Optimizing energy use

Andrew Luke, FortisBC’s Industrial Key Account Manager, and Graham Ballachey, Energy Manager, Tree Island Steel, talk boilers. The nail manufacturing facility in Richmond upgraded its boilers and reduced its natural gas use by 11,500 gigajoules.

FortisBC Corporate Report 2016 22 Companies like Tree Island Steel also To show the collective impact people Savings at home saved energy. Boiler upgrades at its can make when they reduce energy Notable numbers Together with BC Hydro and the Richmond nail manufacturing facility use, we invited customers to sign up Province of B.C., we made it easier reduced its natural gas use by more for the Conserver Club, an interactive Estimated megawatt hours of for homeowners to make energy than 11,500 gigajoules per year. enewsletter. In total, close to 6,000 improvements where it matters people—a 55 per cent increase over last electricity saved by customers most—a home’s building envelope. For smaller businesses, we launched year—pledged to turn down the heat. through efficiency programs: The Home Renovation Rebate Program the Business Direct Install Program. increased incentives for building More than 50 Okanagan and Kootenay envelope upgrades and made funds businesses implemented upgrades with available for energy coaching by a help from local contractors. Natural Resources Canada qualified energy advisor. Promoting energy 22,800 Working with local home builders, conservation the University of British Columbia Estimated gigajoules of natural and Okanagan College, we helped Visiting more than 30 food banks new engineers and tradespeople learn across the province, one of our efforts gas saved by customers through about sustainable building design saw close to 600 households receive efficiency programs in 2016: through the Wilden Living Lab, our energy-saving kits. In total, we Home of Tomorrow. With its advanced provided approximately 12,000 kits energy-saving features, the total energy to customers in 2016, a 10 per cent use is expected to be approximately increase from 2015. 53 per cent less than an average A unique fundraiser also promoted new home. energy literacy—we donated 20,000 438,800 high-efficiency LED light bulbs to Rental units also received energy- At the annual Efficiency in scouting groups and parent advisory efficiency support this year with the Action Awards, we recognized 10 launch of our new Rental Apartment councils at local schools. They organizations that collectively saved Efficiency Program. We spread the then sold the bulbs to raise funds an estimated 11,000 gigajoules of word about the program through for their programs. People who natural gas and 3,700 megawatt LandlordBC and municipalities purchased light bulbs received useful hours of electricity. across the province, resulting in 286 information about more ways to participating buildings after just one save energy at home. year in market. Helping business and “We estimate the typical life of a boiler is 20 to 30 years, so although we are conscious of the initial capital spend, this is industry save a long-term play.” In 2016, we supported businesses Doug Gallagher, Director of Operations, Western Canada, of all sizes in their efforts to save energy. One of our co-funded energy Andrew Peller Limited (2016 Efficiency in Action Award winner) specialists helped Fraser Health make natural gas efficiency upgrades at two hospitals, saving an estimated 6,900 gigajoules annually.

FortisBC Corporate Report 2016 23 Looking ahead

Viviana Zanocco, a FortisBC Community Relations Manager, stands in front of our Tilbury LNG Storage Facility in Delta. Operating safely since 1971, the facility is undergoing an expansion with a second storage tank being constructed to meet the growing LNG needs for transportation, remote communities and B.C.’s marketplace.

FortisBC Corporate Report 2016 24 FortisBC has operated and maintained hydroelectric power facilities in B.C. for the past 100 years. One of four hydroelectric generating plants, the Lower Bonnington Dam is located on the approximately 18 kilometres southwest of Nelson.

We are also awaiting a decision on our The first of BC Ferries’ new dual- Construction work for the Surrey to Upgrading dams application to the BCUC to refurbish fuel LNG Salish-class vessels, Coquitlam upgrades will begin in We received approval from the BCUC to the four original generating units the Salish Orca, will enter service February 2017 and will continue to the replace 14 spillway gates and reinforce at the Upper Bonnington Dam. This on the Comox-Powell River route end of the year. Upgrade construction the structures and equipment at the refurbishment will bring the units in 2017. The Salish Eagle and the on the Vancouver, Burnaby and in the Kootenays. In to modern safety and environmental Salish Raven are also scheduled to Coquitlam gas lines will begin in 2018, addition to power generation, the standards, keeping them operable for arrive in 2017 and expected to serve with completion expected by 2019. Corra Linn Dam plays a critical role 20 more years. the Southern Gulf Islands routes. in controlling the reservoir levels in FortisBC will provide these vessels Building upon the progress we made Kootenay Lake, which helps protect Meeting growing with up to 300,000 gigajoules of in 2016 in the areas of infrastructure, people, habitats and communities LNG per year—the energy equivalent safety, climate action and more, we downstream from potential floods. LNG demands of 7.8 million litres of diesel fuel—for have a strong foundation to meet the the next 10 years. evolving demands of our customers. These upgrades will ensure the The Tilbury LNG facility expansion spillway gates meet new seismic in Delta will go into production in criteria and are able to remain mid-2017. The equipment added as Increasing reliability operational, even following the part of the expansion—a storage We’re upgrading sections of our occurrence of a maximum credible tank and additional liquefaction natural gas system to increase earthquake—the largest hypothetical equipment—will help meet the reliability for customers during times earthquake for the area. growing LNG demands of the of peak demand—like cold winter transportation sector, remote days—or when maintenance work communities and industry in B.C. is required. That means if a line is impacted in one place, their gas will keep flowing to keep the heat on.

FortisBC Corporate Report 2016 25 Leadership team

Standing (left to right): Michael Mulcahy, Doyle Sam, Ian Lorimer, Roger Dall’Antonia. Seated: Diane Roy, Douglas Stout, Cynthia Des Brisay, Dennis Swanson and Jody Drope.

FortisBC Corporate Report 2016 26 Roger Dall’Antonia Jody Drope Michael Mulcahy Douglas Stout Executive Vice President, Customer Vice President, Human Resources and President and CEO Vice President, Market Development Service & Technology Environment, Health and Safety Mr. Mulcahy is President and CEO of and External Relations Mr. Dall’Antonia holds over 20 years Ms. Drope has spent her career working in FortisBC Inc. and FortisBC Energy Inc. Mr. Stout joined the company in 2001 as of experience in the energy industry, Human Resources and occupational health He began his career with the Fortis group Vice President, Gas Supply and Transmission. specializing in corporate finance and and safety. Her career has included work of companies with Maritime Electric in He has also held senior executive roles development, treasury and regulatory affairs. in provincial and municipal government, 1993. Mr. Mulcahy sits on the board of with Belkorp Industries Inc. and Husky Past senior financial roles include positions health care and post-secondary education. the Canadian Electricity Association, the Energy Inc. He has served on the board with Westcoast Energy and Versacold Ms. Drope joined FortisBC in 2008. In her Executive Council of the Western Energy of directors for Sultran Ltd., Pacific Coast Income Fund. current role, Ms. Drope is responsible Institute and is Chair of the Canadian Gas Terminals, Hillsborough Resources, the for fleet services, human resources, Association. He also sits on the Board of Canadian Natural Gas Vehicle Alliance Cynthia Des Brisay labour relations and talent development. Directors for UNS Energy. and the Northwest Gas Association. He is Vice President, Midstream Services & In addition, Ms. Drope champions currently a Director of the BC LNG Alliance. Resource Development environment and safety for FortisBC. Diane Roy Vice President, Regulatory Affairs Ms. Des Brisay has spent her entire career Dennis Swanson in the energy industry. Prior to joining Ian Lorimer Ms. Roy has 13 years of experience with Vice President, Energy Supply FortisBC in 1999, she held engineering and Vice President, Finance and Chief FortisBC and its predecessor companies, Mr. Swanson has more than 19 years of commercial roles in the oil and gas industry Financial Officer holding leadership roles including Director, experience with FortisBC and its predecessor and in independent power generation Mr. Lorimer brings 17 years of experience Regulatory Services, Manager, Regulatory companies, holding multiple leadership development in Canada and New Zealand. in regulated utility finance roles, including Strategy and Business Analysis, Manager roles including Director, Regulatory Affairs, She currently serves on the Executive Vice President, Finance and Chief Financial Financial and Regulatory Reporting. Manager, Corporate Reporting and Manager Committee and Board of Directors of the Officer for FortisAlberta and a Director Previously, she held finance roles with Budgeting and Planning. Prior to his Northwest Gas Association. role with FortisBC. Previously, he held the , and current role, Mr. Swanson was responsible finance roles including Senior Manager at Deloitte & Touche. Ms. Roy holds a Bachelor for Legal, Information Services, Internal Smythe Ratcliffe Chartered Accountants in of Commerce degree from the University Audit and Corporate Services as the Vice Vancouver. Mr. Lorimer holds a Bachelor of of British Columbia and is a Chartered President, Corporate Services. Mr. Swanson Commerce degree from the University of Professional Accountant. also managed the acquisition of the British Columbia, is a Chartered Accountant City of Kelowna’s electrical distribution and member of the Institutes of Chartered Doyle Sam assets in 2013. Accountants of Alberta and British Columbia. Executive Vice President, Operations and Engineering Mr. Sam has worked in the energy industry since 1989 and for FortisBC and its predecessors since 2003. He has operated in a variety of engineering, planning, operations and senior management roles in both electric and gas utilities.

FortisBC Corporate Report 2016 27 Board of directors

Phonse Delaney David G. Hutchens Mr. Delaney is the President and CEO of FortisAlberta. Prior Mr. Hutchens is President and CEO of Tucson Electric Power to this, he held the position of Executive Vice President, (TEP) and its parent company, UNS Energy Corporation. Operations, Engineering and Information Technology of He has held continuously progressive positions within TEP, FortisAlberta since 2004. He has held continuously progressive advancing to President in 2011, COO in 2013 and to his positions within the Fortis Inc. group of companies since current role as TEP’s top executive in 2014. Mr. Hutchens 1987. He serves on the Boards of the Canadian Electricity is a member of the Boards of FortisAlberta, Edison Electric Association and the Western Energy Institute, and is a Institute, Western Energy Institute, Southern Arizona member of the Association of Professional Engineers and Leadership Council, United Way of Tucson and Southern Geoscientists of Alberta. He previously served on the Board Arizona, the Tucson Conquistadores Foundation, Salpointe of Newfoundland Power, the Memorial University Advisory Catholic High School, Sun Corridor, Inc. and the University Council to the Faculty of Engineering and on the Board of of Arizona Foundation. Directors of the Newfoundland and Labrador Safety Council.

Brenda Eaton Tracy Medve Ms. Eaton is a corporate director, serving on the Boards of Ms. Medve is President of KF Aerospace Group of Companies Transelec, Westland Insurance, BC Safety Authority and the in Kelowna, BC, and has had an extensive executive career Core Area Wastewater Treatment Project Board. Previously in the Canadian aviation industry. She serves on the she served as Deputy Minister to the Premier of BC. She has boards of the Air Transport Association of Canada and the been Deputy Minister of Finance and Treasury Board; Energy; Canadian Association of Defense and Securities Industries, and Social Services and was CFO of a health authority. and is a member of the UBCO External Community Advisory Council, the Global Affairs Canada Aerospace Advisory Group, and the Willis Towers Watson Global Client Advisory Council. She is a current Member of the Transportation Appeal Tribunal of Canada. She has a law degree from the University of Saskatchewan and an Aviation MBA from Concordia University.

Ida J. Goodreau Ms. Goodreau is a Corporate Director serving on the Boards of Fortis Inc., Pharmasave Drugs International, Genome BC, the Streetohome Foundation and the Canada West Foundation. Previously, she held positions including Adjunct Professor, Sauder School of Business, University of British Columbia, President and CEO of LifeLabs Medical Laboratory Services, and President and CEO of the Vancouver Coastal Health Authority.

FortisBC Corporate Report 2016 28 Michael A. Mulcahy Christopher F. Scott Mr. Mulcahy is President and CEO of FortisBC Inc. and Mr. Scott is a Corporate Director, Consultant and the past FortisBC Energy Inc. He began his career with the Fortis Chief Operating Officer of Osoyoos Indian Band Development group of companies with Maritime Electric in 1993. Corporation. He currently is the business advisor for the Mr. Mulcahy sits on the board of the Canadian Electricity Indian Band Development Corporation. He has Association, the Executive Council of the Western Energy extensive business and community interests in the Okanagan Institute and is Chair of the Canadian Gas Association. Valley and is a past recipient of both the Exporter of the He also sits on the Board of Directors for UNS Energy. Year award in BC and the Entrepreneur of the Year award for Penticton. He currently serves as an advisor to several First Nations in BC and serves as a Director of the Lower Nicola Indian Band Development Corporation, Shxw Kwimel Cha Management Ltd. and Lower Nicola Site Services Ltd.

Barry V. Perry Karl W. Smith Mr. Perry is the President and CEO of Fortis Inc. Prior to this, Mr. Smith is Executive Vice President, Chief Financial he held the position of Vice President, Finance and Chief Officer of Fortis Inc. He has held continuously progressive Financial Officer of Fortis Inc. since 2004. Mr. Perry joined positions within the Fortis Inc. group of companies since the Fortis organization in 2000 as Vice President, Finance and 1999, including President and CEO of FortisAlberta and Chief Financial Officer of Newfoundland Power Inc. He serves President and CEO of Newfoundland Power. Mr. Smith serves on the Boards of Fortis utilities in British Columbia, Alberta, on the Board of UNS Energy. He is the Chair of the Atlantic Arizona and New York. Mr. Perry is a member of the Institute Provinces Economic Council, past Chair of the Canadian of Chartered Accountants of Newfoundland and Labrador. Electricity Association and past Treasurer of the Western Energy Institute. He is a member of the Institute of Chartered Accountants of Newfoundland and Labrador.

David R. Podmore, O.B.C. Janet P. Woodruff Mr. Podmore is the Chairman and CEO of Concert Properties Ms. Woodruff (FCPA, FCA) is a Corporate Director and Ltd., a national real estate enterprise he co-founded in former executive with over 30 years of experience in the 1989. He is Chair of the FortisBC Energy Inc. and FortisBC North American energy, transportation and health sectors. Inc. Boards and Past Chair of the BC Children’s Hospital Ms. Woodruff serves as a Director of Keyera Corporation, Foundation, the B.C. Pavilion Corporation and the British Altus Group and Capstone Infrastructure Corporation. Columbia Institute of Technology Foundation. He also serves She was previously the acting CEO of the Transportation on the Board of Directors of LifeLabs Inc. and as a Fund Investment Corporation. Advisory Committee member for Balfour Pacific Capital Inc. He is a recipient of the Order of British Columbia.

FortisBC Corporate Report 2016 29 Corporate office Suite 1000, 1111 West Georgia Street, Vancouver, British Columbia, V6E 4M3 Business operations 16705 Fraser Highway, Surrey, British Columbia, V4N 0E8 Suite 100, 1975 Springfield Road, Kelowna, British Columbia, V1Y 7V7 fortisbc.com

Printed in Canada by Hemlock Printers Ltd., Burnaby, B.C., a carbon-neutral operation using low-VOC vegetable-based ink to reduce the impact on local air quality. This corporate report is produced on 100 per cent post-consumer recycled paper. FortisBC Inc. and FortisBC Energy Inc. do business as FortisBC. The companies are indirectly wholly owned subsidiaries of Fortis Inc. FortisBC uses the FortisBC name and logo under licence from Fortis Inc. 2016 Corporate Report (16-255 04/2017)