Annual Report 2017 Cover photo: Aishihik Lake. Goran Sreckovic table of contents 2 President’s Welcome 4 Vision, Mission, Values 5 2017 Board of Directors 6 Yukon Energy By the Numbers 10 Our Customers 13 Our Staff 18 Strategic Priorities 21 Key 2017 Capital Projects 23 Health and Safety 25 Sustainability 28 Supporting Our Communities 30 Management Discussion and Analysis 33 Financial Statements Table of Contents Yukon Energy Annual Report 2017 1 president’s welcome I am pleased to present the 2017 Yukon Energy Annual Report. This was a year of highs and lows for the Corporation. On the positive side, we celebrated our 30th anniversary, marking this milestone with a series of public events. We were also honoured to become the first northern utility, and only the fifth in Canada, to receive a Sustainable Electricity Company™ designation from the Canadian Electricity Association. However it was also a difficult year for us, after the sudden deaths of two of our employees and a third former staff member who had only recently retired. While none of the deaths occurred on the job, it does not make the loss any less tragic. Through it all, our team of professional and dedicated employees and Board of Directors continued to work extremely hard to serve Yukoners every day. We strive for excellence in everything we do…from delivering affordable, reliable and sustainable power to attracting and retaining a skilled and engaged workforce and to our respect for the environment and for the communities and people we serve. We hope you see these values reflected in this 2017 annual report. Andrew Hall President and CEO Matt Jacques Photography 2 Yukon Energy Annual Report 2017 President’s Welcome President’s Welcome Yukon Energy Annual Report 2017 3 In 2017, Yukon Energy staff, management, and board members were involved in an exercise to update the company’s mission, values, and vision. We believe these statements better reflect our philosophy, goals and aspirations. vision values To establish a sustainable legacy for Safety Yukon’s future Accountability Continuous Improvement mission Teamwork To enable Yukon’s prosperity with sustainable, Professionalism cost-effective and reliable electricity Good Corporate Citizenship 4 Yukon Energy Annual Report 2017 Vision, Mission, Values 2017 board of directors Kells Boland, Chair Susan Craig Joanne Fairlie John Jensen Cam Malloch Clint McCuaig Wendy Shanks Curtis Shaw Erin Stehelin 2017 Board of Directors members. Christian Kuntz Photography Audit Committee Human Resources and Planning and Compensation Committee Governance Committee Erin Stehelin, Chair Wendy Shanks, Chair Kells Boland, Chair Kells Boland Kells Boland Erin Stehelin Cam Malloch Susan Craig Wendy Shanks Wendy Shanks John Jensen Clint McCuaig Curtis Shaw Clint McCuaig Susan Craig Cam Malloch 2017 Board of Directors Yukon Energy Annual Report 2017 5 archbould.com yukon energy by the numbers 6 Yukon Energy Annual Report 2017 Yukon Energy By the Numbers 1 of a few isolated grids in North America Jim Petelski generating stations hydro stations YEC Hydro 3 YEC LNG YEC Diesel Transmission and Distribution Lines backup LNG plant Dawson City Elsa 1 Keno Mayo Stewart Crossing Pelly Crossing Minto Mine Faro Carmacks Ross River backup diesel Aishihik generating stations Whitehorse 4 Haines Junction Johnson’s Crossing Tagish Teslin Carcross Yukon Energy By the Numbers Yukon Energy Annual Report 2017 7 1,10 0 kilometres of power lines archbould.com 12,000 power poles archbould.com Longest wooden fish ladder in the world archbould.com 8 Yukon Energy Annual Report 2017 Yukon Energy By the Numbers 2017 TOTAL GENERATION TYPE 96.8% HYDRO 1,10 0 kilometres of power lines 0.1% WIND 96.8% renewable in 2017 2.1% NATURAL GAS 1% DIESEL 2017 SALES 2% 78% SECONDARY SALES WHOLESALES TO ATCO ELECTRIC YUKON 10% INDUSTRIAL GWh supplied in 2017 456 10% COMMUNITIES $45.0 million in 2017 sales 133 megawatt generating capacity Yukon Energy By the Numbers Yukon Energy Annual Report 2017 9 archbould.com our customers 10 Yukon Energy Annual Report 2017 Our Customers ELECTRICITY GENERATION 460 456 450 440 423 418 422 406 400 360 320 HYDRO 280 DIESEL 240 200 NATURAL GAS 160 WIND 120 80 40 GENERATION (IN GWH) 0 2013 2014 2015 2016 2017 2017 GENERATION BY MONTH 2000 1800 1600 1400 1200 1000 HYDRO 800 DIESEL 600 NATURAL GAS 400 200 WIND 0 01 01 01 01 01 01 01 01 01 01 01 01 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 92.69 megawatts, new all-time peak set on December 30, 2017 Our Customers Yukon Energy Annual Report 2017 11 TOTAL POWER OUTAGES 70 62 60 59 59 56 50 48 46 43 42 43 40 39 OUTAGES TOTAL 30 UNCONTROLLABLE OUTAGES 20 16 14 16 16 CONTROLLABLE OUTAGES 10 9 0 2013 2014 2015 2016 2017 OUTAGES PER CUSTOMER 15 15 13 10.5 10 10 NUMBER OF OUTAGES 7 PER CUSTOMER TOTAL TIME OF ALL OUTAGES 6 6 5 DURING THE YEAR (IN HOURS) 5 3.9 AVERAGE LENGTH OF 2 EACH OUTAGE (IN HOURS) .8 .5 .4 .8 .45 0 2013 2014 2015 2016 2017 12 Yukon Energy Annual Report 2017 Our Customers archbould.com our staff Our Staff Yukon Energy Annual Report 2017 13 our staff 83 WHITEHORSE 6 DAWSON 5 MAYO 94 permanent, temporary, and term employeess employees received close to 66 2,000 hours of training in 2017 archbould.com 14 Yukon Energy Annual Report 2017 Our Staff Jim Petelski person completed his 2 people completed apprenticeships 1 apprenticeship equivalent Lowell Tait Dieter Brenner Heavy Duty Equipment Technician Systems Control Centre Operator Heavy Equipment and Truck and Transport Technician Jordan Corbeil Powerline Technician years is the average retirements in 2017 6 9.5 length of service Steve Milner John Aldrich Bill Haydock Ron Kirkwood Sulem Darani Danny Sutherland Our Staff Yukon Energy Annual Report 2017 15 Yukon Energy long service recipients 5 YEARS 10 YEARS Michael Brandt Jeremy Germaine Dieter Brenner Wesley Marsh Graham Cochrane Melanie Pettefer Jason Epp Travis Ritchie Ken Hasler Ramona Toth Kathy Krehbiel Luke Mahilum Matt O’Brien 15 YEARS 30 YEARS Barbara Bowen Steve Blysak Darryel Collins Guy Morgan Darcie Schroeder 16 Yukon Energy Annual Report 2017 Our Staff Sadly, there were three sudden (non-work-related) deaths in our Yukon Energy family. Our hearts go out to the family and friends of Justin Kolla, Rick Falbo, and Sulem Darami. archbould.com Our Staff Yukon Energy Annual Report 2017 17 archbould.com strategic priorities 18 Yukon Energy Annual Report 2017 Strategic Priorities 2017 Achieve All Injury Frequency Achieve Motor Vehicle Accident Achieve 10 or less Rate of 1.0 or less Frequency Rate of 4 or less controllable outages For 2017 Yukon Energy For 2017 Yukon Energy had an had a motor vehicle accident All Injury Frequency Rate of 5.1, frequency rate of 13.4, up from We had 16 controllable compared to 6.1 in 2016 and 5.0 in both 2015 and 2016. outages in 2017, compared to 6.2 in 2015. We are trending in We are concerned about this 9 in 2016 and 16 in 2015. the right direction and striving statistic and are working with to do better in 2018. our staff to make significant improvements in 2018. Confirm funding and Complete major overhaul of our Achieve a Return on Equity construction plan of Stewart Keno Whitehorse Hydro #4 Unit on time, of 8.82 percent Transmission Line Project on budget ($4.3M) Target federal funds were Goal achieved. We expect a Goal achieved. This project identified and funding Return on Equity for 2017 was completed on time and applications are planned of 9.15 percent. below budget. for 2018. Launch Independent Power Place order for 3rd engine Develop and launch updated Producers Standing Offer to expand capacity of LNG Asset Management Program Program in collaboration backup power plant with ATCO Electric Yukon There was a delay as we worked with the Yukon Goal achieved. The engine was Goal achieved. government on this program. ordered in September 2017. The target is to launch the initiative in early 2019. Strategic Priorities Yukon Energy Annual Report 2017 19 2018 Achieve All Injury Frequency Achieve a Motor Vehicle Achieve 10 or fewer Rate of 1 or less Accident Rate of 0 controllable outages Complete LNG 3rd Engine Complete 2018 scope of Achieve a Return on Equity Project on time and on budget Transmission Refurbishment of 7.35 percent Project on time and on budget Develop and implement Complete key deliverables Confirm path forward Generation Resource for Year 1 of the Asset for addressing long-term Management process Management Program energy capacity requirement Submit Aishihik Relicensing Develop expanded Demand YESAB application with support Side Management Program from the Champagne and Aishihik First Nations 20 Yukon Energy Annual Report 2017 Strategic Priorities archbould.com key 2017 capital projects Key 2017 Capital Projects Yukon Energy Annual Report 2017 21 key 2017 capital projects Completed a major overhaul of our largest Whitehorse hydro unit (known as the Fourth Wheel). Developed an updated Asset Management Program, which is allowing us to manage our assets and systems in an integrated and optimized way, and is providing a key link between operational requirements and strategic decision making. Completed Year 1 of electrical and controls upgrades at our Aishihik hydro facility. Placed order for 3rd engine to expand capacity of LNG backup power plant. Finalized 2016 Resource Plan and submitted to the Yukon Utilities Board for review. resourceplan.yukonenergy.ca Received continued positive response to our inCharge rebate programs. In 2017 Yukoners received more than 3,600 rebates on LED lights and block heater timers. We also provided 30 smart learning thermostats to customers with central electric heating systems, and distributed 500 energy saving kits to customers.