Sustainability Report 2017 Contents

Forward-looking History of sustainability...... 6 How our metrics Vision for the future...... 20 information...... 2 were chosen...... 11 Area of operations...... 7 Q&A with Jody Drope...... 22 Accountability Description of Guiding principles and Appendix...... 23 to sustainability...... 3 individual metrics ...... 11 business priorities...... 8 Performance summary...... 24 A message from Four pillars...... 12 Framework overview...... 10 the President and CEO...... 5 Concordance table...... 26

Front cover: Colton Aston, Energy Solutions Manager, FortisBC visiting a biogas facility

FortisBC Sustainability Report 2017 1 Certain statements contained in and safety issues; absence of adverse this Sustainability Report contain weather conditions and natural forward-looking information within disasters; ability to maintain and the meaning of applicable securities obtain applicable permits; the ability laws in Canada (“forward-looking of FortisBC to attract and retain skilled information”). The words “anticipates”, workforces; continued energy demand; Forward-looking information “believes”, “budgets”, “could”, the ability to arrange sufficient and “envision”, “expects”, “forecasts”, cost-effective financing; no material “intends”, “may”, “might”, “plans”, adverse ratings actions by credit “projects”, “should”, “will”, “would” ratings agencies; and the availability of and similar expressions are often alternative fuel supply. intended to identify forward-looking information, although not all forward- The forward-looking information looking information contains these is subject to risks, uncertainties identifying words. and other factors that could cause actual results to differ materially The forward-looking information from historical results or results reflects management’s current beliefs anticipated by the forward-looking and is based on information currently information. The factors which could available to FortisBC’s management. cause results or events to differ from The forward-looking information in current expectations include, but are this report includes, but is not limited not limited to: regulatory approval to, statements regarding FortisBC’s and rate orders risk; asset breakdown, commitment to continue to deliver operation, maintenance and expansion safe, reliable energy in a responsible risk; environment, health and safety manner to all communities that we matters risk; weather and natural serve; FortisBC’s vision that efficiency disasters risk; permits risk; labour and conservation will lead to lowered relations risk; human resources risk; energy requirements and emissions, information technology infrastructure FortisBC’s plans to reduce GHG risk; interest rates risk; impact of emissions, FortisBC’s plans to offer changes in economic conditions risk; more conservation and efficiency capital resources and liquidity risk; incentives in the future; innovations competiveness and commodity price and investments in biogas supply, risk; and energy supply risk. carbon capture technology, low carbon vehicles and hydrogen blending All forward-looking information into the natural gas system; the in this report and the information development of new markets, FortisBC’s incorporated in this report by reference relationship with Indigenous peoples; is qualified in its entirety by this the diversity of FortisBC’s workforce cautionary statement and, except as and FortisBC’s safety practices. required by law, FortisBC undertakes no obligation to revise or update any The forecasts and projections that forward-looking information as a result make up the forward-looking of new information, future events or information are based on assumptions, otherwise after the date of this report. which include but are not limited to: receipt of applicable regulatory approvals and requested rate orders; absence of asset breakdown; absence of environmental damage and health

FortisBC Sustainability Report 2017 2 Accountability to sustainability

Castlegar is home to FortisBC's Kootenay Operations Centre.

FortisBC Sustainability Report 2017 3 Who we are Our Sustainability Report reflects How do we know that Collaborative: we work as that complete picture and our one company, one team with FortisBC is dedicated to providing tracking and monitoring of the sustainability has always the energy our customers need— metrics contained within will help been important to shared success safely, reliably and at the lowest guide many of the decisions we make FortisBC? Because we can FortisBC strives to build internal reasonable cost. More than 2,300 of in years to come. To see how these relationships and support diversity in our employees provide natural gas, metrics were put into action in 2017, see it reflected in our the workplace, which strengthens our electricity and innovative energy our 2017 Corporate Report acts as an company’s values: ability to recruit and retain the best solutions to 1.2 million customers in important companion piece to this talent. Our teams work in collaboration 135 communities throughout British document. Our core operations and Safety: we put safety first to support successful projects and Columbia. FortisBC invests in and our environmental and social impact Safety is always top of mind. Internally, initiatives that benefit our customers, maintains local energy infrastructure, stories are interconnected. FortisBC’s Target Zero program is the communities in which we operate offers innovative energy solutions our commitment to employee safety. and our employees. We are a company that is forward Externally, public safety is one of our and provides customers with energy Respectful: we are respectful, conservation incentives and programs. thinking: we are preparing today for primary concerns, and we work to We also own and operate liquified the energy landscape of tomorrow. educate the public about safety near gas honest and ethical natural gas (LNG) facilities that FortisBC understands the unique lines and power lines, encourage safe We focus on a safe working supply cleaner-burning natural gas energy needs of British Columbians digging practices and support other environment in which everyone is for transportation in the on-road and and knows that decisions we make organizations that promote public valued, respected and treated with marine sectors, as well as supply LNG today will have an impact for decades safety related to gas and electricity. fairness. We value diversity and for natural gas exports to Asia. to come. inclusion and support that work Customer centric: we value the by providing education for our That’s energy at work. FortisBC: the story customers’ business employees on respect, anti-bullying Every day we work to provide and cultural competency. We work As the province’s largest energy our customers with great service with municipalities and Indigenous provider, ensuring that our business of sustainability and innovative solutions to their communities to build strong and is sustainable over the long-term is While this is the inaugural FortisBC challenges. Because we believe that mutually beneficial relationships. vitally important to us. For many, Sustainability Report, sustainability trust, respect and open communication sustainability is synonymous with has been a part of FortisBC, even are the key to strong relationships, we Progressive: we seek better ways environmental protection and before we referred to it as such. employ a strong team of Community We research innovative energy preservation. While this is an FortisBC has always taken a long-term and Indigenous Relations Managers, solutions so that our customers important piece of sustainability, approach to planning and operating. who work closely with municipalities will continue to have the energy it does not stand alone. To do this successfully, we need and Indigenous communities to they need safely, reliably and at the to be concerned with a balance of For an organization to be sustainable, understand and address their needs. lowest reasonable cost. Along with financial, environmental and social anticipating and innovating for British we must consider everything that factors and outcomes. Focusing on enables our operations to succeed over Columbia’s future energy needs, we sustainability ensures that we are also work to deliver and improve upon the long-term and ensure we strike the pursuing the health and well-being right balance between business, social cutting-edge technology that reduces of our customers, our partners and environmental impacts, including and environmental factors. We must communities, the environment and our consider all of the implications of our Renewable Natural Gas, carbon capture employees — today, tomorrow and into and hydrogen injection. actions rather than a single outcome. the future. We believe that, through smart Our commitment to future planning and analysis, we can track sustainability is firm, as is our goal performance beyond dollars and cents of supporting British Columbians in to develop a complete picture of how transitioning to a low-carbon economy. we are performing across all sectors: Customers, Partners and Communities, Environment and Employees.

FortisBC Sustainability Report 2017 4 A message from the President and CEO

FortisBC began laying the groundwork for a sustainability-reporting structure in 2017. While we may still be in the early days of sustainability tracking and reporting, our commitment to embedding sustainability throughout our operations is evident. The development and advancement of affordable, reliable and efficient energy for homes and businesses, our commitment to Indigenous partnerships and the growth of our natural gas business in the transportation sector are all evidence of our pursuit of sustainability — and excellence. The Sustainability Report measures our Using LNG as a marine fuel enables greater sustainability from an economical and commitment to our long-term vision environmental perspective by cutting both cost and emissions. Pictured here is an LNG-powered Seaspan ferry — one of two in its fleet. for FortisBC. Going forward, we will measure our success with both metrics Roger Dall’Antonia and important achievements. We look forward to continued At FortisBC, we have established our Sustainability at FortisBC is the lens FortisBC’s commitment to being transparency and progressive planning reputation as a company that provides through which our organization a sustainable organization is into our future. energy solutions to its customers considers long-term financial accountability to its shareholders, embedded into our business. reliably, safely and at the lowest Our customers, community reasonable cost. We’ve long been customers and employees; ongoing innovators in the energy space, and it’s responsibility in the communities in partners, employees and our intention to continue from that which we operate; and environmental our shareholders expect spirit of innovation into the future as best practices so that future us to operate responsibly, generations will continue to enjoy the energy sector evolves to address transparently and with integrity Roger Dall’Antonia affordability and environmental B.C.’s natural beauty and diversity. In President & CEO challenges. As B.C.’s leading energy addition, we can play a role beyond extending beyond British FortisBC provider, our endeavours are supported the borders of British Columbia and Columbia, now and into the by our values as a safety-focused, Canada in reducing global greenhouse future. And we do so because gas (GHG) emissions. customer-centric, collaborative, it’s both a smart approach and respectful and progressive operation. it’s the right approach. At the end of the day, by staying true to our values, we position ourselves for continued long-term success.

FortisBC Sustainability Report 2017 5 History of sustainability

Sustainability has Partners & Communities Environment Employees Relationships are a primary Innovation, one of the hallmarks In 1994, we established the Warm always been a part of consideration in our Partners & of FortisBC, includes improving Hearts charity that benefits both Communities pillar, and those valued operations in order to protect the the communities we serve and our the FortisBC story relationships have led to making our natural environment. One of the most employees who tell us they feel The continuous operations of FortisBC, organization stronger, more resilient popular stories in recent years has personally enriched by giving back. including companies amalgamated and more adaptive to the needs of the been via our Osprey Cam in Kelowna, Our Target Zero safety program, over the years, account for more communities we serve. The adoption of established in 2009, which highlights started in 2016, ensures safety is part than a century of sustainability. This the Statement of Indigenous Principles the ways in which we care for these of our organizational culture and that history of sustainability becomes clear in 2004 marked a turning point in birds of prey — and other wildlife — near all of our people go home safely at the as we look at some of our milestone our relationships with Indigenous our power lines. In 2010, we became end of the day. moments through the lens of our four communities. In B.C.'s Interior, we the first utility in North America to 1 As we look to the future, and a sustainability pillars: Customers, provided tools and funding to the offer Renewable Natural Gas to our Okanagan College in Kelowna in customers. In 2013, we began to work low-carbon economy for British Partners & Communities, Columbians, we know that our Environment and Employees. 2016 to provide the region with more with BC Ferries to transition new trades training opportunities. In ferries to using liquid natural gas (LNG) focus on sustainability will continue Customers 2017, we entered into a memorandum to reduce emissions. to benefit our customers, our partners, the communities we Our customers have always been of understanding with the City of serve, the environment and our our focus. Since the beginning of Vancouver to find ways to reduce GHG FortisBC employees. our operations, and the operations emissions in the Lower Mainland of our predecessor companies, we’ve while ensuring natural gas's role in a worked to provide the energy that low-carbon future. our customers need to work, play and live. Consider, for example, the construction of our first hydroelectric plant at Bonnington Falls in 1898, the city gas systems in Vancouver and Victoria in the early 20th century, and the incorporation of Inland Natural Gas to distribute natural gas through the province’s interior in the 1950s. Our dedication to meeting our customers’ needs started over a century ago. We’ve continued to grow to meet the energy needs of our customers and have found ways to better serve them including new online options that enable customers to do everything from provide their opinions to monitor their electricity use on an hour-by-hour basis. Our Upper Bonnington hydroelectric facility has provided sustainable, emissions-free power for over a century.

1Renewable Natural Gas is produced in a different manner than conventional natural gas. It is derived from biogas, which is produced from decomposing organic waste from landfills, agricultural waste and wastewater from treatment facilities. The biogas is captured and cleaned to create carbon neutral Renewable Natural Gas (also called biomethane). FortisBC Sustainability Report 2017 6 Northwest Area of operations Yukon Territories

Total length of natural gas

and electric transmission and Natural gas service area distribution lines across B.C. Electric service area Fort Nelson Combined natural gas & electric service area Propane service area FortisBC gas line Enbridge gas line FortisBC electric transmission lines 56,000km Aitken Creek Total volume of natural gas Hudson’s Hope sales in 2017

British Mackenzie Columbia Alberta 221 petajoules Prince George Total peak electricity demand in 2017

Williams Lake 731 megawatts Revelstoke Total number of gas and electric PA C Kamloops Enderby customers across B.C. Campbell River IF Whistler Lumby I Powell River Elkford C Kaslo O Kelowna C Princeton Port Alberni Nanaimo Hope Cranbrook E Vancouver A Trail million N Osoyoos 1.2 Victoria United States

FortisBC Sustainability Report 2017 7 Guiding principles & business priorities

To protect our employees, communities and our operations, safety is always top of mind. Our operations must be safe in order to be viable over the long term. John Kopchia, FortisBC Field Operations Supervisor, at an emergency training session in Kelowna.

FortisBC Sustainability Report 2017 8 Guiding principles Our customer contact centres handled Leveraging innovation These values and priorities align close to 3,900 calls per day in 2017 and and technology within the four pillars of our FortisBC’s vision is to create value our willingness to actively work with sustainability framework: for our customers, employees and customers and address their concerns FortisBC continues to focus on shareholders through leadership in helps cement our standing as B.C.’s developing new energy offerings to the generation, transmission and foremost energy provider. respond to customer preferences delivery of energy, safely and reliably and market dynamics. Over the last Customers at the lowest reasonable cost. This Safety and maintaining year, FortisBC adopted technology to leadership is based not only in our system integrity maintain and expand our markets, Meeting evolving customer expectations: day-to-day performance but also in our We ensure the safety of our employees respond to changing customer expectations and improve service commitment to seek better ways and and the public. Every day, we're • Customer experience provide innovative energy solutions for building on our safety culture so that delivery. For example, we supported British Columbians. we all return home safely at the end BC Transit and the Resort Municipality • Operational safety and of the work day. In 2017, FortisBC of Whistler in converting its public system reliability FortisBC is committed to playing an continued its public awareness and bus fleet to compressed natural gas important role in B.C.’s transition to • Public safety, emergency education efforts supporting natural (CNG), providing decreased fuel a low-carbon future. We see ourselves preparedeness and response gas and meter safety as well as power costs and lower air contaminant and as a trusted energy solutions provider GHG emissions. line safety in the Interior. We’re also that has economic, environmental and maintaining focus on safeguarding community-based solutions for the Stakeholder engagement the integrity of our gas transmission Partners & Communities transportation and building sectors. system through new in-line inspection and communications We’re focused on providing support tools for smaller-dimension lines. FortisBC has established a reputation for British Columbians meeting for our proactive collaboration with Building strong relationships: their climate goals while leveraging Growth and stakeholders, communities and • Community and FortisBC’s existing assets and Major Projects execution different levels of governments — a partner relations infrastructure. And we're addressing reputation we will continue to build FortisBC is executing key business global emissions through bunkering on. In 2017, we provided energy • Indigenous communitites initiatives that enable the continued and the export of LNG to Asia as well as assessments to 233 small businesses engagement and partnerships growth of the business and economic local transport markets. throughout the interior of the province opportunity for British Columbia. In and worked closely with several Sustainability is more than just 2017, the Surrey to Coquitlam natural municipalities to take advantage Environment environmental considerations; gas line upgrade was completed, of energy solutions that can help sustainability includes socioeconomic installing eleven kilometers of new communities reach their regional concerns. We prioritize the strength gas line to enhance our coastal climate action goals. Enabling a sustainable and resiliency of the communities transmission system that serves over energy future: where we operate, the needs of our 700,000 homes and businesses in the Employee leadership and customers we serve and the health, lower mainland. talent development • Energy solutions and energy safety and career goals of our use practices Regulatory Our future success depends on employees. To help achieve this vision supporting employee development. • Environmental stewardship FortisBC works hard to keep rates for the future and stay true to our As an organization, we invest in our and management corporate values, our business priorities fair, equitable and affordable for employees’ development through are focused on: our customers throughout the on-the-job learning, tailored work regulatory process with the British assignments and focused skills Customers and Columbia Utilities Commission training, and support sustained Employees maintaining competitiveness (BCUC). Throughout 2017, we met with learning for new and existing leaders. We respond to the changing needs of customers to better understand their By creating an environment where Empowering our people: preferences and concerns on how our people can succeed, we maintain our customers. In 2017, we enhanced • Employee engagement our customer communication by they were billed for electricity. These a stable and experienced employee providing more ways to connect with and other discussions help shape the base. In fact, in 2017, we honoured • Employee safety and well-being us in person, by phone and online. applications we file with the BCUC in 217 employees for their service — with designing our rates. tenures ranging from five to 45 years! FortisBC Sustainability Report 2017 9 Framework overview

FortisBC street team members speak to home show attendees about energy saving measures, available rebates and the benefits of natural gas.

FortisBC Sustainability Report 2017 10 As such, FortisBC set its sights on being Environment refers to innovative The sustainability among the leaders in sustainability Description of energy practices that fit in a low- framework and finding opportunities to metric categories carbon future, including the reduction share its accomplishments with of GHG emissions, conservation and Our Sustainability Framework is built British Columbians. When we measure metrics related energy management programs for to ensure the long-term sustainability to Customers, we are considering our customers and energy efficiency of FortisBC across four primary Our sustainability framework aligns the quality of service provided to our within our own operations. It also pillars: Customers, Partners & well with Global Reporting Initiative customers, our public safety awareness refers to our record on environmental Communities, Environment and (GRI) sustainability metrics. GRI is an programs, emergency preparedness stewardship and management such Employees. Meeting expectations in independent international organization and response and the delivery of as fish and wildlife management near each of these areas is crucial in order that has pioneered sustainability energy safely, reliably and at the our facilities. Along with anticipating for FortisBC to meet its business goals reporting since 1997. The GRI lowest reasonable cost. We provide our and innovating for British Columbia’s in accordance with its values. Sustainability Reporting Standards customers with service and innovative future energy needs, we work to are the first and most widely adopted solutions to meet their energy needs. Arriving at our framework was no deliver and improve upon cutting-edge global standards for sustainability technology that reduces environmental simple task. It was instrumental reporting. The Partners & Communities to gather external perspectives pillar is a measurement of the impacts, including Renewable on FortisBC’s future sustainability relationships we've built with Natural Gas, electric vehicle (EV) priorities in order to inform and update How metrics communities throughout B.C. through charging stations and natural gas for our Sustainability Plan and ensure that were chosen local investment and honest conduct, transportation (NGT). goals and activities were aligned with including Indigenous communities. The Employee pillar measures the the needs and priorities of stakeholders While there are numerous metrics We provide gas and electricity service ways in which FortisBC provides a safe, and partners. This included a review available, we reviewed our most to customers in 135 communities. respectful and engaging workplace of the current sustainability practices significant sustainability practices Our gas and electricity infrastructure that recognizes the value that our and identified areas of strength and based on their impacts to our business, crosses more than 150 Indigenous employees bring to the organization. opportunity. We also conducted to stakeholders and to the communities traditional territories and our company We focus on a working environment internal discussions with employees affected by our business. The metrics also provides service to 56 Indigenous in which everyone is valued, respected throughout the organization as well chosen give a holistic view of where communities. Understanding, respect, and treated with fairness. And we work as over 20 interviews with senior we’ve been, and provide insight into open communication and trust to strengthen internal relationships leadership of the business community, what is required in order to ensure are key values in our relationships and support diversity in the workplace, provincial government, unions, we continue to make progress on with Indigenous communities and which enhances our ability to regulators, municipalities, associations sustainability practices. are embedded in FortisBC’s formal recruit and retain the best talent. and Indigenous groups to understand Statement of Indigenous Principles. All metrics included in this report are By developing a stable and motivated their perspectives on sustainability. aligned with the GRI’s standards for workforce in this fashion, we are able Understanding where the shared sustainability reporting. Benchmarking to deliver on customer energy needs priorities and concerns lay from allows us to find areas to improve and shareholder expectations. our stakeholders helped guide our upon, as well as where we may be decisions on the sustainability pillars leading the industry when it comes to and the framework they support. sustainability. For example, there was a common As our shareholders and stakeholders view that sustainability should be seek information on a wider range of more than just compliance with topics, we plan to expand upon the standards but rather leadership and current reported metrics in order demonstrable action. to ensure we continue to evolve and raise our standards around our business practices.

FortisBC Sustainability Report 2017 11 Customers

Customers are at the core of our business. To continue to be a part of British Columbia’s future, FortisBC must ensure that it provides affordable and reliable energy services to its over 1.2 million customers. Here, Monika Kambo from our Willingdon customer contact centre, helps a customer meet their energy needs.

FortisBC Sustainability Report 2017 12 Emergency calls responded to within one hour Fewer than one (.85 to be exact) gas line damage incidents for every 100 BC One Call requests

97.8% 93%

BC One Calls increased in 2017; however, there are still situations where work was Gas Electric undertaken without knowledge of where underground utilities are located.

Responding to emergencies resulting from damage to our electrical and natural gas Resources like BC One Call help underline the importance of "click or call before infrastructure in a timely and thorough manner is critical to ensure the safety of you dig" to reduce public damage of gas lines. Reducing damage also prevents added our customers and reliability of service delivery. GHG emissions.

2017 System Average Interruption Duration Index (SAIDI)¹ 4.05 2017 System Average Interruption Frequency Index (SAIFI)² 1.78 Customers who achieve resolution in one contact with our call centre Customer service awards and acknowledgements • Contact Centre and Web Self-Service World Class Customer Experience Certified by SQM Inc. This recognition based on 80 per cent (or higher) of customers getting their call resolved on the first call or first contact with our website for Resolution of a customer’s reason for three consecutive months or more. contacting FortisBC is very closely aligned with satisfaction and a strong • Awarded Highest Customer Service in Energy for 2017 measure of overall customer satisfaction (among SQM Inc.-rated companies). This recognition indicates FortisBC has as a result. demonstrated high first-contact response and customer experience performance.

SQM Inc. provides unbiased evaluations of a company's operations relating to issues of quality, service, cleanliness and value. Awards received reflect relative performance of FortisBC as compared to customer service standards applicable to various industries and 80% 1 SAIDI depicts the average outage duration for each service providers. customer served, indicated in minutes per customer. 2 SAIFI depicts the average number of interruptions that a customer would experience, indicated in units of Gas and electric interruptions per customer.

FortisBC Sustainability Report 2017 13 Partners & Communities

As an organization, we draw strength from the communities we work in and work to build relationships based on trust, understanding and mutual benefit. In 2017, our employees worked to help clean up flood damage on Bluebird Beach in Kelowna, supporting communities that are home to many employees.

FortisBC Sustainability Report 2017 14 Community giving

Total dollars directed back into communities through corporate investment and employee donation: $ million 2.1 Providing support for organizations and charities is one way FortisBC and its employees care for their communities.

Participated in FortisBC made relationships with Indigenous peoples a priority in 2004 when we signed our Statement of Indigenous Principles. In 2017, we celebrated Indigenous Peoples Day in both our Surrey and Kelowna offices, including a traditional carving demonstration from Xwalacktun of the Kwakwak’wakw nation. 251 Working with Indigenous communities community events More than Indigenous communities received Communities that received training from the First Nations community investment: Emergency Services Society: $5million earned by Indigenous businesses for the Surrey to Coquitlam natural gas 85 126 Supporting the communities we work line upgrades in 2017 which we provide with financial and live in is part of why we are B.C.’s support and educational sessions on energy leader. Indigenous-affiliated businesses provided valuable support in 2017 on natural gas and LNG safety Giving back to our communities is the Surrey to Coquitlam natural gas important to allow for communities to line upgrade. grow and prosper.

FortisBC Sustainability Report 2017 15 Environment

Through our Conservation & Energy Management programs, we provide energy-efficiency tips and rebate programs to help our customers reduce their overall GHG emissions and help communities meet their Climate Action goals.

FortisBC Sustainability Report 2017 16 Using innovative energy solutions such Offering Conservation Growth in customers as Renewable Natural Gas and LNG for & Energy Management with paperless billing transportation reduces GHG emissions. programs helps reduce 3 energy demand and GHG emissions avoided from Renewable Emissions avoided in 2017 are equivalent to improve environmental 30 Natural Gas, LNG, CNG, cumulative heating the communities of Prince George outcomes. Conservation & Energy Management and Vernon combined, or 2 and electric vehicle usage1:

Energy savings from 2017 natural gas 20 conservation efforts2: 250,000 56,500 1 tonnes CO e households. 10 2 GJ 533,000 Equivalent to taking approximately 53,500 vehicles off the road Equivalent to the energy used for home heating in 6,000 homes in a year. 0 Total expenditure through all 201 201 201 2017 Conservation & Energy Management programs in 2017: $34,000,000 The growing percentage of customers that are on paperless billing represent overall savings for customers as a result of reduced printing and postage-related Energy savings from 2017 electric costs as well as positive impacts on conservation efforts: environmental considerations by reducing paper use and waste.

Number of Class 3 spills in 2017 MWh by FortisBC3: 27,800 Equivalent to the power used by approximately 2,600 homes in a year. Total expenditure through all 2017 Conservation & Energy Management Each icon represents 250 vehicles programs: $7,300,000 0 1 Values were derived using a variety of industry standard GHG emission factors and inputs. For CNG, LNG and Conservation & Energy Management, the GHG emission factors and inputs are publicly available for review through either the B.C. Low Carbon Fuels Compliance Pathway Assessment or through demand side management reports from FortisBC’s website. 2 Energy savings are from customers’ efforts to encourage efficiencies due to FortisBC programming. 3 A Class 3 spill is defined as an event that results in significant damage that includes large spills in waterways, spills that significantly exceed externally reportable thresholds, a regulatory non-compliance investigation by regulator and/or a fire that may cause damage more than $100,000. FortisBC Sustainability Report 2017 17 Employees

We work to build a respectful and engaging workplace for our employees in order to build a skilled, stable and productive workforce. We celebrate our people and their accomplishments, including Roderick Torres’s five year work anniversary.

FortisBC Sustainability Report 2017 18 2017 All Injury Frequency Rate (AIFR) of 1.3 per 100 workers

We maintain strict safety standards to keep our employees safe. FortisBC’s Target Zero program has a mission to raise the overall level of safety awareness and to create an environment where everyone works together and watches out for each other to prevent injury and incidents — which will lead us to our target of zero incidents.

Voluntary turnover of 56% of job postings Training only 3.3% are filled internally Overall in-class and online training attendance, including trades, compliance, business and leadership development:

5,300courses 14,800participants Our employees are valued and developed to enhance their careers as well as job-related skills and satisfaction.

Excluding retirements

Our low voluntary turnover rate is We support employees' career indicative of employee satisfaction development by promoting and engagement. from within.

Each year, our executive team (including our vice president of external relations and business development Doug Stout pictured here at the podium) speaks directly to our workforce to share the latest in our business direction and share new visions for the future of FortisBC.

FortisBC Sustainability Report 2017 19 Vision for the future

FortisBC Sustainability Report 2017 20 The future is now As a sustainable organization, we're always looking ahead — innovating for the future, and setting a vision that we move toward with confidence. Our pillars of sustainability — Customers, Partners & Communities, Environment and Employees — provide the framework we need to ensure our vision is as robust as possible. • We intend to continue to deliver safe, reliable energy in an environmentally-responsible manner to all of the communities that we serve. And we'll continue to earn the trust of those communities through transparency and ethical conduct. • In doing so, we envision a future where efficiency and conservation lead to lowered energy requirements and lowered emissions, and renewable energy sources become a greater focus in our operations. We are building for the future in our operations and practices to help British Columbia • We'll continue to work closely transition to a low-carbon economy and sustainable future. with local governments and organizations to help them lower their emissions, meet Climate • We'll support the move to • We're committed to building • Our workforce will represent Action goals and provide solutions low-carbon, low-emission vehicles by effective Indigenous relationships the diversity of the communities for residents and businesses to save advancing electric vehicle charging and to ensure we have the structure, we serve, including energy and money. infrastructure and conversion of resources and skills necessary to Indigenous communities. medium and heavy duty vehicles and maintain these relationships. • We've applied to double our marine vessels to natural gas in the • We'll continue to improve our conservation and efficiency province of British Columbia. • We'll continue to work closely safety practices to ensure that our incentives available to our customers with our customers, allowing us to employees go home safely every for 2019 and are committed to • We'll continue to expand on our better understand their needs and day. Our Target Zero program, tripling this investment by 2022, network of fast-charging EV stations expectations so that we can deliver which aims to eliminate injury and subject to regulatory approval. so that people can drive their the energy they require. lost-time incidents, will continue electric vehicle with confidence to play a large part in protecting • We're working on innovations across our electric service territory. both employee and public health in biogas, subject to regulatory and safety. approval and supply availability, that • We'll work to develop new markets could boost our supply of Renewable that increase the use of our Natural Gas to 10 per cent of existing infrastructure, helping to FortisBC’s annual natural gas keep delivery rates stable for our demand by 2030. customers in the long term.

FortisBC Sustainability Report 2017 21 Natural gas, in liquified or compressed Q How has FortisBC helped form, can be used for transportation British Columbians manage Q&A with Jody Drope to replace more carbon intense diesel their energy consumption? and marine fuel. LNG can replace diesel fuel and propane for heating and power A We provide guidance and business. From these conversations, generation in off-grid communities. leadership on the efficient use of four key pillars emerged to comprise And we continue to advance our affordable, abundant and safe our sustainability framework: innovative ways to reduce the use of energy supply while focusing on Customers, Partners & Communities, natural gas, such as our Renewable innovative ways to conserve Environment and Employees. Natural Gas program and exploring consumption, which strengthens methanized hydrogen. these relationships. We place great importance on developing positive relationships Investments in electric vehicles Energy provision, customer satisfaction with all of our customers and work and charging stations as well as and ensuring that energy products are hard to ensure they have positive renewables like wind and solar safe, reliable and affordable are core interactions with us. Our employees infrastructure are opportunities business functions. FortisBC takes a benefit from our Safety First focus, we’re exploring. Our hydroelectric proactive role to help customers realize with strengthened health and safety energy from the Columbia River energy efficiencies. Along with our programs, awareness and initiatives is 99 per cent renewable, which Renewable Natural Gas, CNG and LNG designed to prevent safety incidents fundamentally contributes to global technologies for alternate uses, our and injury. We take a forward-looking emissions reductions. Conservation & Energy Management approach through continuous programs provide rebates and other engagement, based on honest and Q Being a regulated energy incentives for homeowners and transparent conduct, with our provider, how does the businesses that encourage efficient regulatory and political Jody Drope, Vice President, Human community partners, stakeholders and energy use. In 2017 alone, these environment impact FortisBC? Resources and Environment, Health rights holders, including municipal programs helped to avoid the release and Safety and Indigenous parties. And our A FortisBC is a leading energy of approximately 250,000 tCO2e or the commitment to minimizing the provider in British Columbia. This equivalent of heating a community The dialogue around energy provision environmental impact of our operation title does not come without the ability approximately the size of Prince and environmental policy frames our and reducing global GHG emissions is to form strong and positive George and Vernon combined, or current operating environment at central to our sustainability strategy. relationships with our key 56,500 households. FortisBC. Jody Drope provides context stakeholders. Regulation confirms to on how FortisBC has positioned itself How have international Q our customers that our strategies for to address these topics, and how commitments like the Paris growth have had financial and opportunities for resilience have Agreement and pressures to technical oversight; projects only move developed as a result. reduce GHGs affected FortisBC? forward after careful review and only Q How does FortisBC’s A We were pursuing with the support of our regulators and sustainability vision align environmentally responsible shareholders. Increasingly, federal and with the long-term interests of energy supply prior to the Paris provincial regulations have placed the business? Agreement and continue to do so. We more importance on the environment are very proud to have decreased and on building strong, strategic A We believe by being financially, reported GHG emissions by 26 per cent relationships with Indigenous peoples. socially and environmentally in 2017 relative to 2005 from gas We embrace this opportunity by focused, our business is sustainable for operations. We see ourselves as part of increasing our engagement with the long term. We engaged several key the solution by providing sustainable communities as well as federal, internal and external stakeholders in energy in B.C. and beyond. We take our provincial, municipal and Indigenous the development of our sustainability leadership responsibility seriously and policy makers. framework, which involved meaningful will continue to pursue innovation and conversation — something that’s technology to improve the efficiency of consistent with our overall approach to FortisBC operations. FortisBC Sustainability Report 2017 22 Appendix

FortisBC Sustainability Report 2017 23 Performance summary

For 2017, we identified our As we advance our sustainability performance across 40 indicators in program, we'll track our ongoing our four sustainability pillars. These performance against these indicators indicators show an overall performance and strive for continuous improvement. we can be proud of as well as a road In future years, this report will map for continued focus. contain historical data to enable us to show trends.

Customers Pillar1 Partners and Communities Pillar1 Indicator 2017 Performance Indicator 2017 Performance

Operational safety and system reliability Economic

Integrity Management - gas –2 Economic value generated6 $1,580 million Integrity Management - electric –2 Economic value distributed Energy use • Operating costs $177 million

Amount of energy delivered, gas and electric3 64,700 GWh • Employee wages and benefits $265 million or 233 PJ • Payments to providers of capital $471 million Customers • Payment to government $410 million Number of customers, gas 1,008,000 • Community investment7 $2.1 million Number of customers, electric 172,000 Social Customer satisfaction index - gas4 8.4 Discrimination incidents8 3 Customer satisfaction index - electric4 8.2 Indigenous Number of cybersecurity incidents5 0 Indigenous rights incidents9 0 Economic Taxes paid when on reserve land (gas and electric)10 $2.1 million Fuel cost savings for customers using natural gas 2 for transportation – Safety FortisBC investment in Conservation & Energy Number of emergency exercises11 18 Management programs4 $41.3 million

1 This summary table reports on data for FortisBC Energy Inc. and FortisBC Inc. 7 Includes investments into the communities including donations, in-kind contributions and sponsorships. 2 Value is not available at time of print. 8 Incidents include both discrimination and harassment complaints resulting in policy breaches. Policy includes compliance 3 Total amount of natural gas and electricity delivered to FortisBC customers, excluding energy exports with all applicable legislation. and upstream usage, amounts to 51 per cent of energy provided by public utilities. 9 Defined as incidents that have been substantiated by an external authority. 4 As reported to the BCUC. 10 For taxes paid on FortisBC land, infrastructure and other taxable real property situated on reserve or treaty lands of any First Nation that has opted to exercise optional legislative power to property taxation. 5 A cybersecurity incident is defined as an incident that is reportable to the BCUC. 11 6 FortisBC defines an emergency exercise as a simulated emergency in which participants carry out roles, actions, functions Revenues as reported per external fiancial statements for FortisBC Energy Inc and FortisBC Inc. and responsibilities that would be expected of them in a real emergency. FortisBC Sustainability Report 2017 24 Performance summary

Environment Pillar1 Employees Pillar1 Indicator 2017 Performance Indicator 2017 Performance

Emissions Health and safety Reduction in criteria air contaminants released to the 1.3 injuries/ 2 All injury frequency rate17 environment through the use of LNG and CNG by customers – 100 workers

Direct GHG emissions12 153,000 tCO e Injury severity rate18 17.6 lost work 2 days/100 workers Indirect GHG emissions13 5,300 tCO e 2 Number of fatalities 0 GHG emissions saved from natural gas used for transportation14 48,000 tCO e 2 Number of employees 2,310 GHG emissions saved from LNG used for marine bunkering 9,000 tCO e 2 Voluntary turnover rate19 3.3 per cent GHG emissions saved from Renewable Natural Gas 7,700 tCO e 2 Employees in unions or associations20 1,538 GHG emissions saved from Conservation & Energy 186,000 tCO e Diversity Management programs 2 21 Class 3 spills15 Women in workforce 35 per cent 22 Number of spills by FortisBC 0 Women in senior management 27 per cent 23 Number of spills by contractors 3 Women on the board of directors 36 per cent

Waste Amount of hazarous waste disposed of in accordance with regulatory requirements16 170 tonnes

Penalties

Number of environmental fines and penalties 0

12 Scope 1 emissions, as defined under the Greenhouse Gas Protocol, are direct emissions from owned or controlled sources. 16 Hazardous waste as reported on the Movement Document / Manifest form which is required for the movement of all Direct GHG emissions for 2016: 137,000 tCO2e; 2015: 131,000 tCO2e; 2014: 151,000 tCO2e. hardous waste by the B.C. Ministry of Environment Hazardous Waste Regulation. This includes 50 tonnes attributed to a 13 Scope 2 emissions, as defined under the Greenhouse Gas Protocol, are indirect emissions from the generation of purchased major roof replacement project. 17 electricity. Indirect GHG emissions for 2016: 3,800 tCO2e; 2015: 3,000 tCO2e; 2014: 4,300 tCO2e. AIFR 3-year rolling average as reported to the BCUC is 1.83. 14 Value differs from the compliance credits as determined by the Renewable and Low Carbon Fuel Requirements 18 Depicts the number of lost work days experienced per 100 workers. Regulation due to designated allowable limits as determined by the B.C. Government for the purposes of reporting under 19 Excludes retirements. The voluntary turnover rate includes high turnover departments such as Customer Service, not that regulation. present in other industry comparators. Values are aligned with the 90th percentile of industry comparators. 15 A Class 3 spill as defined by the FortisBC standard is a spill that results in significant damage that includes large 20 Includes members from International Brotherhood of Electrical Workers (IBEW) and MoveUp. spills in waterways, spills that significantly exceed externally reportable thresholds or spills that result in a regulatory non-compliance investigation by a regulator. 21 Number of women in workforce, 813. 22 Women in senior management, 68. 23 Women on board of directors, 4.

FortisBC Sustainability Report 2017 25 Concordance

This concordance table defines and A concordance table is valuable for cross-references what frameworks highlighting the broader vision of the and other standards FortisBC is in company and how the large number accordance with as well as how those of day-to-day operations across the metrics can be benchmarked with organization are integrated to give other organizations. It also provides a a more complete picture of our format to share this information easily sustainable practices. Most importantly, with readers. it allows for greater transparency and consistency in our reporting. Customers Pillar Indicator Indicator Definition/Intent Global Reporting Initiative (GRI)1 UNSDG2 TCFD3

Create value for our customers, employees and shareholders

First Contact Resolution - customers G4, PR4, GRI 417-2: Incidents of non-compliance concerning Indicator represents overall customer satisfaction n/a4 n/a4 who achieve resolution in one contact product and service information and labeling G4-PR1, GRI 416-1: Assessment of the health and safety Gas and Electricity 5 Integrity Management Indicator demonstrating resilient infrastructure impacts of product and service categories and GRI 102-30: 9 Yes Effectives of risk management and processes Fuel cost savings for customers by Indicator highlighting financial savings from the G4-EN4, GRI 302-2: Energy consumption outside of 12 Yes5 using natural gas for transportation use of natural gas for transportation the organization Emergency response time - calls Highlights the importance placed on ensuring G4-PR1, GRI 416-1: Assessment of the health and safety 7, 9 Yes5 responded to within one hour safety of our customers and infrastructure impacts of product and service categories

Delivering energy safely, reliably and at the lowest reasonable cost System Average Interruption Depicts the average outage duration as well Duration Index (SAIDI) and System G4PR2, GRI 417-2: Incidents of non-compliance concerning as the average number of interruptions for 7 n/a4 Average Interruption Frequency products and service information labeling Index (SAIFI) our customers Amount of energy delivered - gas Depicts the amount of energy delivered safely and G4-EN4, GRI 302-2: Energy consumption outside of 12 n/a4 and electric reliably to customers the organization

1GRI is an independent international organization that has pioneered sustainability reporting since 1997. GRI helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues such as climate change, human rights, governance and social well-being. 2References United Nations Sustainable Development. Goals by number. sustainabledevelopment.un.org/sdgs 3Alignment with Task Force on Climate Related Financial Disclosures. 4 N/A signifies that the sustainability indicator does not fall within the scope of the UNSDG and TCFD requirements. 5Disclose the indicators used by the organization to assess climate risks and opportunities in line with its strategy and risk management process. FortisBC Sustainability Report 2017 26 Customers Pillar Indicator Indicator Definition/Intent Global Reporting Initiative (GRI)1 UNSDG2 TCFD3

Delivering energy safely, reliably and at the lowest reasonable cost Useful to track trend in number of gas and Number of customers G4-8, GRI 102-6: Markets served n/a4 n/a4 electric customers

Customer satisfaction index Highlights customer satisfaction G4-PR5, GRI 102-44: Key topics and concerns raised 12 n/a4

G4-PR8, GRI 418: Customer privacy (substantiated Highlights the emphasis on the security of Number of cybersecurity incidents complaints concerning breaches of customer privacy and 9 Yes5 operations for all parties involved losses of customer data)

Reducing overall environmental impact

Indicator demonstrating public-facing resource Number of gas line damage incidents G4-PR1, GRI 416-1: Assessment of the health and safety to encourage reduced damage of gas lines and 9 n/a4 per 100 BC One Call requests impacts of product and service categories associated GHGs

FortisBC Sustainability Report 2017 27 Partners & Communities Pillar Indicator Indicator Definition/Intent Global Reporting Initiative (GRI)1 UNSDG2 TCFD3

Create value for our customers, employees and shareholders

Community relations including event G4-SO1, GRI 413-1: Operations with local Indicator tracks engagement to foster healthy and participation, charitable giving and community engagement, impact assessments and 11 n/a4 involved communities community investment development programs Dollars earned by Indigenous G4-EC9, GRI 204-1: Proportion of spending on local suppliers businesses for the Surrey to Indicator depicts the importance of investing in (definition by FortisBC must specify that local includes Indigenous 8 n/a4 Coquitlam natural gas line and supporting local commnity businesses communities) G4-HR10, GRI 414-1: New suppliers that were upgrades in 2017 screened using social criteria Depicts number of discrimination incidents G4-HR3, GRI 406-1: Incidents of discrimination and Number of discrimination incidents 3 n/a4 that occurred corrective actions taken Depicts the number of incidents involving G4-HR3, GRI 406-1: Incidents of discrimination and Number of Indigenous rights incidents 3 n/a4 non-compliance with Indigenous rights corrective actions taken Value illustrates economic contributions for taxes paid on FortisBC land, infrastructure and other Taxes paid for reservations served 4 with existing infrastructure taxable real property situated on reserve or treaty G4-EC8, GRI 203-2: Significant indirect economic impacts 11 n/a lands of any First Nation that has opted to exercise optional legislative power to property taxation Delivering energy safely, reliably and at the lowest reasonable cost

Indicator depicts economic value generated G4-EC1, GRI 201-1: Direct economic value generated Economic value generated 8 Yes5 and distributed and distributed

Economic value distributed: 4 Operating costs Value illustrates economic contributions G4-EC8, GRI 203-2: Significant indirect economic impacts 8 n/a

Economic value distributed: 4 Employee wages and benefits Value illustrates economic contributions G4-EC8, GRI 203-2: Significant indirect economic impacts 8 n/a Economic value distributed: G4-EC1, GRI 201-1: Direct economic value generated Value illustrates economic contributions 8 n/a4 Payments to providers of capital and distributed

Economic value distributed: 4 Payments to government Value illustrates economic contributions G4-EC8, GRI 203-2: Significant indirect economic impacts 11 n/a

Economic value distributed: 4 Community investment Value illustrates economic contributions G4-EC8, GRI 203-2: Significant indirect economic impacts 11 n/a

Number of emergency Illustrates the commitment to safety through G4-PR1, GRI 416: Customer Health and Safety (Assessment of 3 Yes5 exercises completed completing emergency exercises the health and safety impacts of product and service categories)

FortisBC Sustainability Report 2017 28 Environment Pillar Indicator Indicator Definition/Intent Global Reporting Initiative (GRI)1 UNSDG2 TCFD3

Delivering energy safely, reliably and at the lowest reasonable cost

Number of environmental fines and Indicator outlines the number of environmental G4-EN29, GRI 307-1: Non-compliance with environmental 4 penalties received non-compliance incidents laws and regulations 12 n/a

Reducing overall environmental impact

Direct GHG emissions Indicator highlighting emissions from owned and/ 5 or controlled sources G4-EN15, GRI 305: Direct (scope one) GHG emissions 7 Yes

Indirect GHG emissions Indicator highlights emissions from the generation G4-EN16, GRI 305-2: Energy indirect (Scope two) 5 of purchased electricity GHG emissions 7 Yes

GHG emissions saved from natural gas Indicator depicts emissions saved through the use 5 of various FortisBC programs G4-EN19, GRI 305-5: Reduction of GHG emissions 7 Yes Reduction in Criteria Air Contaminants G4-EN19, GRI 305-5: Reduction of GHG emissions, and released to the environment through Indicator highlights the reduction in air pollutants GRI 305-7: Nitrogen oxides, sulfur oxides and other 11 Yes5 the use of LNG and CNG by customers due to the use of LNG and CNG by customers significant air emissions Indicator outlines the number of spills that occurred Number of spills by contractors and FortisBC employees and were G4-EN24, GRI 306-3: Significant spills 15 Yes5 cleaned up

Amount of hazardous waste properly Indicator conveys the responsible collection and 5 disposed of disposal of hazardous waste G4-EN23, GRI 306-2: Waste by type and disposal method 5 Yes

FortisBC Sustainability Report 2017 29 Employees Pillar Indicator Indicator Definition/Intent Global Reporting Initiative (GRI)1 UNSDG2 TCFD3

Create value for our customers, employees and shareholders Overall in-class and online GRI 404, GRI 404-1: Average hours of training per year per training attendance, including Indicator highlights learning and development employee G4-LA10, GRI 404-2: Programs for upgrading 4 n/a4 trades, compliance, business and opportunities offered to employees leadership development employee skills and transition assistance programs Indicator highlights human capital comprising G4-10, GRI 102-8: Information on employees and Number of employees 8 n/a4 the company other workers Voluntary turnover as a percentage of Indicator depicts employee satisfaction G4-LA1, GRI 401-1: New employee hires and 8 n/a4 total employees and engagement employee turnover G4-HR4, GRI 407: Freedom of Association and Number of employees in employee Indicator conveys the employee engagement with Collective Bargaining / G4-11, GRI 102-41: Collective 8 n/a4 unions or associations various associations and unions bargaining agreements Percentage of postings filled by Highlights internal development opportunities G4-DMA, and G4-10, GRI 102-8: General disclosures, 8 n/a4 internal candidates for employees information on employees and other workers G4-LA12, GRI 504-1: Diversity of governance bodies Number of women in the workforce Indicator depicts diversity in the workplace 5 n/a4 and employees Number of women in G4-LA12, GRI 504-1: Diversity of governance bodies Indicator depicting women in leadership positions 5 n/a4 senior management and employees Number of women on the board G4-LA12, GRI 504-1: Diversity of governance bodies Indicator depicts women in leadership positions 5 n/a4 of directors and employees

Delivering energy safely, reliably and at the lowest reasonable cost G4-LA6, GRI 403-2: Types of injury and rates of injury, All Injury Frequency Rate (AIFR) Indicator depicts recordable injuries per 100 workers occupational diseases, lost days, absenteeism and number of 11 n/a4 work related fatalities Indicator illustrates the severity of injuries G4-LA6, GRI 403-2: Types of injury and rates of injury, Injury severity rate (ISR) occurred defined as the number of lost work days occupational diseases, lost days, absenteeism and number of 3 n/a4 experienced per 100 workers work related fatalities G4-LA6, GRI 403-2: Types of injury and rates of injury, Indicator illustrates the number of fatal incidents Number of fatalities occupational diseases, lost days, absenteeism and number of 3 n/a4 which occurred work related fatalities

FortisBC Sustainability Report 2017 30 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

FortisBC Inc. and FortisBC Energy Inc. do business as FortisBC. The companies are indirect, wholly owned subsidiaries of Fortis Inc. FortisBC uses the FortisBC name and logo under license from Fortis Inc. The Energy at work FortisBC logo and design is a trademark of FortisBC Energy Inc. 2017 Sustainability Report (18-107.3 10/2018)