Corporate and Sustainability Report 2018 Contents Our business ................................2 Partners & communities ....... 15 Appendix .....................................39 Performance summary—employees ........... 43 Area of operations.....................3 Environment ............................... 21 Performance summary—customers ............40 Concordance .............................44 A message from Employees .................................. 26 the President and CEO .............4 Performance summary— Looking forward ......................30 partners & communities ....... 41 Sustainability in all we do .......6 Leadership team ...................... 35 Performance Customers ...................................10 Board of directors ................... 37 summary—environment .......42 FortisBC Corporate Sustainability Report 2018 1 Our business FortisBC Inc. and FortisBC Energy Financial highlights (in millions of dollars) Looking back at 2018 Inc. do business as FortisBC. We are FortisBC delivers the energy customers indirectly wholly owned by our parent FortisBC FortisBC Inc. 1 need safely, reliably and at the lowest company, Fortis Inc., a leader in the 2017 2018 Energy Inc. 20171 2018 Electricity reasonable cost. Whether delivering North American electric and gas utility Natural gas & electricity, natural gas or propane, business. Through its subsidiaries, piped propane Net earnings $50 $50 our more than 2,400 employees serve Fortis Inc. serves more than 3.3 million Revenues $381 $391 approximately 1.2 million customers in natural gas and electricity customers. Net earnings $186 $190 135 communities. Operating Revenues $1,199 $1,187 $81 $96 Performance expenses FortisBC owns and operates Operating approximately 49,000 kilometres expenses $297 $308 Capital $105 $106 of natural gas transmission FortisBC expenditures2 and distribution pipelines, and Energy Inc. 2017 2018 Capital Natural gas & expenditures2 $444 $486 7,260 kilometres of electric piped propane transmission and distribution 1 2 power lines. Certain comparative figures have been classified to conform to the current year’s presentation. Capital expenditures before Peak day demand contributions in aid of construction and including cost of removal. (TJ) 1,336 1,353 Our energy infrastructure assets also include B.C.’s largest underground Gas volumes (PJ) 221 212 FortisBC gas customers3 FortisBC electricity customers4 natural gas storage facility, two (Approximately 1,029,476 in 2018) (Approximately 175,868 in 2018) Customer liquefied natural gas (LNG) storage satisfaction index 8.4 8.7 facilities, and four hydroelectric 1025000 1,025,000175000 175,000 generating plants. 995000 995,000169000 169,000 FortisBC Inc. 2017 2018 965000 965,000163000 163,000 Electricity 935000 935,000157000 157,000 Generating 225 225 capacity (MW) 905000 905,000151000 151,000 Peak demand 731 731 875000 875,000145000 145,000 each year (MW) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Energy 3 Includes piped propane customers. 4 Includes direct and indirect customers (customers who are served by utilities to which FortisBC provides wholesale energy or distribution service). Regulated (GWh) 3,305 3,250 Customer satisfaction index 8.2 8.3 FortisBC Corporate Sustainability Report 2018 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 gas line Enbridge gas line 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 Kelowna C Princeton Port Alberni Nanaimo Hope Cranbrook E Vancouver A Trail N Osoyoos Victoria United States FortisBC Corporate Sustainability Report 2018 3 In order to maintain our high level of Our investment and activity in service to our growing customer base, the province goes well beyond the A message from we continue to invest in our energy provision of energy to homes and infrastructure. Over the summer, we businesses across B.C. 2018 was a tackled the first leg of arguably one banner year for the advancement of the President and CEO of the most challenging projects we our natural gas for transportation have undertaken — the FortisBC Gas business. More than 150 new Line Upgrades project — a 20 kilometre compressed natural gas (CNG) vehicles Our strategic decisions must also stretch of new pipeline running hit the road in 2018 from organizations be guided by social sustainability, underneath East First Avenue in such as BC Transit, TransLink and considering the needs, priorities Vancouver. As one of the primary UPS — bringing the grand total of and safety of our partners and commuter routes in Metro Vancouver, heavy-duty, on-road natural gas communities, including Indigenous this phase of the project had some vehicles to more than 850. By replacing communities. We must consider challenging impacts on traffic, diesel or gasoline-powered vehicles the sustainability of our workforce local residents and businesses. with CNG, operators are reducing and continually seek out ways to However, through detailed project greenhouse gas (GHG) emissions enrich the careers of our people and planning, extensive consultation from their fleets by 20 to 30 per cent provide meaningful opportunities and engagement, and hard work, the while saving roughly 50 per cent for professional development and section was completed on budget and on fuel costs. advancement. And, of course, we have a day ahead of schedule. Completion BC Ferries completed the conversion to watch the books to ensure our of this segment of the Lower Mainland to LNG of another vessel in its fleet, business is economically sustainable system ensures that we’ll be able to Spirit of British Columbia. This is the over the long-term by serving the continue delivering natural gas to fifth BC Ferries’ vessel that has been needs of customers, delivering reliable, over 210,000 customers — safely and converted to LNG and another ferry affordable energy while maintaining reliably. Work continues in 2019 as we is expected to be converted in 2019. and expanding our customer base. undertake the next phase of the gas line replacement in Coquitlam under A total of seven local vessels are Indeed, taking the long view of now fuelled by FortisBC, five from Roger Dall’Antonia Como Lake Road. I'm confident we’ll our business is key to ensuring see similar success. BC Ferries and another two from Over the last year, the Fortis group sustainability. While we will Seaspan ULC, using our proprietary of companies have continued to always strive to meet the needs and The integrity of our electric onboard trailer-to-ship bunkering increase their focus on sustainability. expectations of our customers today, infrastructure in the interior of technology. In fact, in 2018, our LNG While it has always been a part of we must also look to the priorities of the province is also something we team passed an important milestone our business, we have found that the our future customers. Their interests continually invest capital dollars in. as we surpassed over 1,000 successful concept of sustainability mirrors our will evolve over time and FortisBC must In 2018, we began the $63 million bunkerings since we began in 2016. have the foresight to adapt our services replacement of the spill gates at organizational values and encompasses In 2018, we also expanded to continue to match their expectations the Corra Linn Dam. We expect to the expectations of our customers and our infrastructure in electric of reliability, safety, affordability and a complete the work at Corra Linn by employees on how good companies act. transportation with the construction lower environmental impact. 2021. We also entered the second Simply put, we pursue sustainability of new Direct Current Fast Charging because it is the right thing to do. year of refurbishment of our Upper In 2018, FortisBC continued to Bonnington Dam generating station. electric vehicle (EV) charging stations Many people see sustainability as deliver on customer and shareholder This $32 million investment combines as part of the accelerate Kootenays synonymous with environmental expectations. We saw a net growth new technology with original systems initiative. We believe that FortisBC responsibility. While safeguarding of 21,054 natural gas customers and within the 110-year-old facility to has an integral role to play in the the environment is a key piece of our another 3,525 electricity customers, provide decades more clean, reliable expansion of the province’s EV sustainability framework, it is far from including dynamic new markets such power to our customers. charging network and look forward to the only piece. as natural gas transportation, cannabis helping build out the network of fast growers and blockchain server farms. charging stations in 2019. This growth has helped us deliver $240 million in net earnings in 2018. FortisBC Corporate Sustainability Report 2018 4 But while the successes of the past year are worth celebrating, a commitment to sustainability requires us to look towards the future and set the foundation for continued success. Late in the year, we released our Clean Growth Pathways to 2050 strategy; our vision of how FortisBC can contribute to a lower carbon future and help drive environmental change in the province. The strategy calls for four primary actions to drive change within