CSR at
Hydro One

A Message from our Acting President and CEO and CFO and
Chief Corporate Affairs and Customer Care Officer
Paul Dobson
Acting President and CEO and CFO
Jason Fitzsimmons
Chief Corporate Affairs,
Customer Care Officer
 
 
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2017 was an important year of transition for Hydro One. We unveiled our new business strategy, which outlines our goal to become one of North America’s leading utilities.

We are confident this strategy will create considerable value for our shareholders and other stakeholders. We also took important steps to improve our CSR performance as we work to deliver electricity that is among the cleanest, safest and most reliable on the continent.

Sadly, in December, we experienced the tragic loss of four Hydro One employees while they were completing work on a transmission tower near Tweed. This is a difficult reminder that much work still remains to achieve our goal of eliminating all serious workplace injury incidents.

Achieving Hydro One’s business goals will require the disciplined execution of our strategy – a strategy that is focused on customers and centred around three pillars: optimization and innovation, diversification and growth.

One of the most important tools we have for transforming Hydro One into a best-in-class electricity utility is our CSR program. CSR provides a solid platform to drive performance improvements across our transmission and distribution networks, and to build a sustainable future.

Our vision for a sustainable future translates into Hydro One’s five pillars of CSR: customers come first, using resources responsibly, people and potential, powering economies and building a grid for the future. These pillars support the execution of our business strategy in many meaningful ways.

Optimization & Innovation

Hydro One is transforming through a culture of operational excellence and continuous improvement. We seek to be excellent in every facet of our operations, to the benefit of our customers, employees, communities and shareholders. Hydro One plans to invest in innovation to modernize the transmission and distribution grids, improving reliability and efficiencies, as well as building a platform for connecting distributed energy resources. These are business imperatives, but also environmental imperatives to respond to the challenge of climate change and the emerging low-carbon economy.

Whether we employ technology to improve the quality of our service, reduce the number of our trucks on the road, or to optimize our procurement spending, our goal is to continuously improve our performance. Since 2016, we have improved our customer satisfaction rates, with a 5% increase in distribution customer satisfaction and a 10% increase in transmission customer satisfaction.

We strive to be a more innovative and efficient organization in everything we do. To find out more about our plans to put customers first, use resources responsibly, and build a grid for the future,
click here.

Diversification

The electricity industry is transforming from a large centralized system to smaller localized distributed generation systems. These changes and the pace of change pose a challenge, but Hydro One is adapting our grid investments to reflect this new reality and to provide new energy services that customers are demanding. This business model also requires a more nimble and entrepreneurial approach and a culture that is willing to challenge conventional thinking.

As we prepare our next generation of leaders, our succession and development plans will build upon those with diverse backgrounds and experience, as well as individuals who can visualize what it will take to succeed in the future. To learn more about our plans to develop the potential of our people, put customers first and build a grid for the future, click here.

Growth

We announced a merger agreement with Avista Corporation, which has been providing reliable and safe energy to its customers in the Pacific Northwest USA since 1889. Avista has an excellent reputation for environmental stewardship and for creating shared value for its business and community stakeholders. We will share best practices in CSR as we move forward and grow together.

Another opportunity we are pursuing is to become the primary business partner to Indigenous communities by 2021. Our team has been working diligently over the past 10 years to foster new business opportunities with First Nations across Ontario.

To find out more about how these sustaining partnerships and investments are advancing our plans to build a grid for the future, power local economies and expand Hydro One’s business, click here.

2017 Performance

Hydro One made significant progress in improving our CSR performance this past year. We achieved Bronze certification for Progressive Aboriginal Relations (PAR) from the Canadian Council for Aboriginal Business (CCAB), which provides a strong platform for increasing Indigenous participation in our supply chain going forward. We were very encouraged by the positive consumer response to our energy conservation programs, helping us to deliver sustained energy savings throughout 2017 and land 51% ahead of our overall provincial mid-term energy conservation target. Finally, we outlined our CSR plans for 2018 and beyond, where we will be further advancing our CSR approach and framework.

Over the next five years, our workforce demographics will evolve as the baby boom generation prepares to retire, putting pressure on our workforce. Our Human Resources team is stepping up recruitment activities to ensure our workforce plans support Hydro One’s new business strategy and build a more diverse and highly motivated leadership team.

2018 Plans

Over the coming year, we expect to finalize our CSR strategy and programs, working to ensure they are fully integrated into our business strategy and provide guidance as we transform Hydro One into a best-in-class electricity utility. We will also ensure our team has the training, tools and resources they need to execute and deliver on our CSR commitments.

Paul Dobson
Acting President and CEO and CFO

Jason Fitzsimmons
Chief Corporate Affairs and Customer Care Officer

“WE ARE COMMITTED TO RUNNING A SUSTAINABLE AND SOCIALLY RESPONSIBLE UTILITY, NOW 
AND INTO THE FUTURE.”
– Jason Fitzsimmons

Hydro One
At-a-Glance

Hydro One is Ontario’s largest electricity transmission and distribution provider with more than 1.3 million valued customers, over $25 billion in assets and annual revenues of nearly $6 billion.

Our team of approximately 7,400 skilled and dedicated regular and non-regular employees proudly and safely serves suburban, rural and remote communities across Ontario, through our approximately 30,000 circuit kilometres of high-voltage transmission and approximately 123,000 circuit kilometres of primary low-voltage distribution networks. Hydro One is committed to the communities we serve and has been rated by Corporate Knights as a top utility in Canada for our corporate citizenship, sustainability and diversity initiatives. In 2017, Hydro One was ranked 11th overall in the Best 50 Corporate Citizens in Canada report. We are also one of only six utility companies in Canada to achieve the Sustainable Electricity Company™ designation from the CEA.

Our Businesses

Hydro One is one of North America’s largest electrical utilities. Our transmission and distribution system safely and reliably serves communities throughout Ontario. Our customers are suburban, rural and remote homes and businesses across our province.

1. Based on assets.

Transmission

Our transmission system transmits high-voltage electricity from nuclear, hydroelectric, natural gas, wind and solar sources to our distribution customers and industrial customers across Ontario.

$1.6b
Revenues (Net of Purchased Power) for Transmission

Our Customers

  • Large directly-connected industrial customers
  • Large and small businesses
  • Local distribution companies

Growth Opportunities

Integration of Hydro One’s Sault Ste. Marie LP customers.

Distribution

The Hydro One distribution system is the largest in Ontario. It consists of approximately 123,000 circuit kilometres of primary low-voltage power lines serving over 1.3 million customers.

$1.5b
Revenue (Net of Purchased Power) for Distribution

Our Customers

  • Residential and business customers
  • 55 municipal utility customers
  • Farmers
 
THE ELECTRICITY INDUSTRY IS TRANSFORMING FROM A LARGE CENTRALIZED SYSTEM TO SMALLER LOCALIZED DISTRIBUTED GENERATION SYSTEMS. THESE CHANGES AND THE PACE OF CHANGE POSE A CHALLENGE, BUT HYDRO ONE IS ADAPTING OUR GRID INVESTMENTS TO REFLECT THIS NEW REALITY AND TO PROVIDE NEW ENERGY SERVICES THAT CUSTOMERS ARE DEMANDING.

Hydro One’s Role in the Electrical Power System

Hydro One is committed to building a sustainable future for all Ontarians. 
The sheer scale of our operations – the geographic area we cover, the millions 
of people we serve and the economies we impact – makes it essential we do 
our part to follow environmentally friendly practices. We contribute by delivering electricity that is among the cleanest, safest and most reliable in North America.
Electricity is produced at a generating site, such as a wind farm or power plant, and moves through a power grid network that includes electricity substations, transformers and high voltage lines that connect to the transmission network. From there it moves across medium-voltage transmission lines that connect to distribution substations and on to low-voltage power lines that connect to customers. At Hydro One we are responsible for the transmission of power from generating sites and the distribution of power to end customers. We do not own any power generating facilities.

2017 Facts & Figures

7,400

Skilled and dedicated regular and non-regular employees

88

First Nations communities served

over 1.3m

Valued customers

$1.6b

Capital investments to renew and modernize infrastructure.

1 of 6

Utility companies in Canada to achieve the Sustainable Electricity Company™ designation from the CEA

2017 CSR
Performance Overview

CEA Principle by Pillar Indicator 2015 2016 2017
Customers Come First
Stakeholder Engagement and Transparency Transmission customer satisfaction (%) 85% 78% 88%
Distribution customer satisfaction (%) 70% 66% 71%
Electricity Demand, Efficiency and Conservation Savings from energy conservation and demand management programs (GWh) 310 208 404
Using Resources Responsibly
Evironmental Stewardship Spill recovery rate (%) 93% 95% 88%
Climate Change Mitigation and Adaption Scope 1 GHG emissions (tCO2e) 121,478 147,405 144,115
Scope 2 GHG emissions (tCO2e) 202,282 201,488 197,738
People and Potential
Employee, Contractor and Public Health and Safety Total annual recordable injury rate (# of recordable injuries per 200,000 hours worked) 1.7 1.1 1.2
Human Resources and Workplace Executive breakdown (% of executive employees) 22.2% women
77.7% men
5.5% minority groups
33.3% women
66.7% men
3% minority groups
37.1% women
62.9% men
11.4% minority groups
Number of employees eligible to retire within 5 years (% of workforce) 32% 33% 27%
Powering Economies
Indigenous Engagement Indigenous procurement spend ($ millions)(New indicator for 2017) Not recorded Not recorded $24.1
Economic Value and Community Investment Community investment donations and sponsorships ($ millions) $1.8 $1.8 $2.16
Full-time regular employees 5,500 5,500 5,400
Full-time non-regular employees (i.e. skilled trades, engineering, professional and managerial personnel) 2,000 2,000 2,000
Building a Grid For the Future
Infrastructure Renewal and Modernization and Business Model Pressures Capital investment ($ billions) (New indicator for 2017) $1.66 $1.69 $1.60
System Reliability Transmission System Average Interruption Duration Index (SAIDI) (hours per delivery point per year) 0.73 1.35 0.71
Distribution System Average Interruption Duration Index (SAIDI) (hours per customer per year) 7.6 7.8 7.9
Customers Come First
CEA Principle by Pillar Stakeholder Engagement and Transparency
Indicator Transmission customer satisfaction (%)
2015 85%
2016 78%
2017 88%
 
CEA Principle by Pillar Stakeholder Engagement and Transparency
Indicator Distribution customer satisfaction (%)
2015 70%
2016 66%
2017 71%
 
CEA Principle by Pillar Electricity Demand, Efficiency and Conservation
Indicator Savings from energy conservation and demand management programs (GWh)
2015 310
2016 208
2017 404
Using Resources Responsibly
CEA Principle by Pillar Evironmental Stewardship
Indicator Spill recovery rate (%)
2015 93%
2016 95%
2017 88%
 
CEA Principle by Pillar Climate Change Mitigation and Adaption
Indicator Scope 1 GHG emissions (tCO2e)
2015 121,478
2016 147,405
2017 144,115
 
CEA Principle by Pillar Climate Change Mitigation and Adaption
Indicator Scope 2 GHG emissions (tCO2e)
2015 202,282
2016 201,488
2017 197,738
People and Potential
CEA Principle by Pillar Employee, Contractor and Public Health and Safety
Indicator Total annual recordable injury rate (# of recordable injuries per 200,000 hours worked)
2015 1.7
2016 1.1
2017 1.2
 
CEA Principle by Pillar Human Resources and Workplace
Indicator Executive breakdown (% of executive employees)
2015 22.2% women
77.7% men
5.5% minority groups
2016 33.3% women
66.7% men
3% minority groups
2017 37.1% women
62.9% men
11.4%minority groups
 
CEA Principle by Pillar Human Resources and Workplace
Indicator Number of employees eligible to retire within 5 years (% of workforce)
2015 32%
2016 33%
2017 27%
Powering Economies
CEA Principle by Pillar Indigenous Engagement
Indicator Indigenous procurement spend ($ millions)(New indicator for 2017)
2015 Not recorded
2016 Not recorded
2017 $24.1
 
CEA Principle by Pillar Economic Value and Community Investment
Indicator Community investment donations and sponsorships ($ millions)
2015 $1.8
2016 $1.8
2017 $2.16
 
CEA Principle by Pillar Economic Value and Community Investment
Indicator Full-time regular employees
2015 5,500
2016 5,500
2017 5,400
 
CEA Principle by Pillar Economic Value and Community Investment
Indicator Full-time non-regular employees (i.e. skilled trades, engineering, professional and managerial personnel)
2015 2,000
2016 2,000
2017 2,000
Building a Grid For the Future
CEA Principle by Pillar Infrastructure Renewal and Modernization and Business Model Pressures
Indicator Capital Investment ($ billions) (New indicator for 2017)
2015 $1.66
2016 $1.69
2017 $1.60
 
CEA Principle by Pillar System Reliability
Indicator Transmission System Average Interruption Duration Index (SAIDI) (hours per delivery point per year)
2015 0.73
2016 1.35
2017 0.71
 
CEA Principle by Pillar System Reliability
Indicator Distribution System Average Interruption Duration Index (SAIDI) (hours per customer per year)
2015 7.6
2016 7.8
2017 7.9

Our Approach
to CSR

IN RECOGNIZING OUR POWER TO IMPROVE PEOPLE’S LIVES, WE STRIVE TO DEVELOP RESPECTFUL LONG-TERM RELATIONSHIPS 
WITH OUR EMPLOYEES, INDIGENOUS PEOPLES AND THE COMMUNITIES IN 
WHICH WE OPERATE.

Core Values & Code of Conduct

At Hydro One, we are led by our purpose to make the impossible, possible for our customers, as well as the communities we serve. Our core values guide how all employees behave, how we do our work and how we interact with one another. These values – safety comes first, stand for people, empowered to act, optimism charges us and win as one – are the foundation of our business. They are reflected in our Code of Business Conduct ("the Code"), which defines how the employees, officers and directors of Hydro One should act. For Hydro One to be successful, we must continually earn the trust and confidence of our customers, investors, stakeholders and each other. Our core values guide our actions and decisions by reminding us of who we are and who we strive to be in all of our business activities.

To download a copy of our Code of Business Conduct, go to: www.HydroOne.com/careers/code-of-conduct

Policies

Hydro One is committed to achieving world-class environmental, health and safety performance. In recognizing our power to improve people’s lives, we strive to develop respectful long-term relationships with our employees, Indigenous Peoples and the communities in which we operate.

We have a number of policies in place that support this:

Our Core values

Safety Comes First

Nothing is more important than the health and safety of our employees, our customers and the public. We make the world a safer place by setting a high bar that others aspire to.

Stand for People

We foster an open, collaborative work environment. We work to build relationships internally and externally based on trust and mutual respect. We believe in equality for all people and view diversity as a source of our strength.

Empowered to Act

We recognize our power to improve people’s lives. We are ready to act in any situation. We capitalize on opportunities. We make the impossible, possible.

Optimism Charges Us

Optimism creates potential in everything we do. We think creatively and innovatively to turn challenges into opportunities.

Win as One

Winning is about doing well while also doing good. It means working together as one Company to deliver strong results for our customers, communities, employees and shareholders.

CSR Oversight & Management

Responsibility for CSR resides with the Vice Presidents of Corporate Affairs; Health, Safety and Environment; and People and Culture and with the Chief Operating Officer; Chief Corporate Affairs and Customer Care Officer; and Executive Vice President and Chief Human Resources Officer and ultimately with the President and CEO. A Joint CSR Committee convenes Hydro One Directors and Managers who provide perspectives on current, emerging and material issues, as well as related strategic stakeholder engagement. The Joint CSR Committee reports to the Governance Committee of the Board of Directors. Additionally, Hydro One’s Disclosure Committee reviews and approves the accurate disclosure and reporting of our CSR practices and performance, as well as the timely, accurate and complete disclosure of developments that have a significant and material impact on the Company.

Management Systems

Hydro One operates in a highly regulated space, in which federal, provincial and municipal bodies require us to assess and mitigate environmental risks. These include everything from the water and emissions we discharge, to how we use land, dispose of waste, impact biodiversity and store, transport and dispose of hazardous substances. Permits and approvals are required every step of the way.

To assess, manage and mitigate these risks, Hydro One has an integrated Health, Safety and Environmental Management System (HSEMS), aligned with the ISO 14001 Environmental Management Systems and OHSAS 18001 internationally recognized standards.

The HSEMS drives the identification of HSE risks to the Company and the setting of targets and initiatives to manage these risks and demonstrate continuous improvement. In 2017, Environmental Services applied the risk identification process, our understanding of compliance obligations and industry benchmarking to establish four key areas of focus.

These include:

1. Climate Change (including greenhouse gas [GHG] management and reporting, sulphur hexafluoride [SF6] management, document control, corporate awareness)

2. Resource Management (including water sampling programs, waste management, heritage management)

3. Contaminated Lands (including land assessment and remediation [LAR] program, polychlorinated biphenyls [PCBs] management, spill response)

4. Biodiversity (including pollinator species protection, partnerships with other organizations, avian protection programs, training)

We will continue to refine our HSEMS and pursue these improvement opportunities as we finalize our CSR framework and strategy and integrate them into Hydro One’s business strategy.

Hydro One also adheres to other industry-leading management programs and is designated as a CEA Sustainable Electricity Company™, which is based primarily on meeting ISO 26000 Guidance on Social Responsibility.

  1. ISO stands for the International Organization for Standardization and  OHSAS is the Occupational Health and Safety Assessment Series.

175 HYDRO ONE EMPLOYEES WERE HARD AT WORK FOR 10 DAYS IN SEPTEMBER HELPING TO RESTORE POWER TO THE PEOPLE OF FLORIDA AFTER HURRICANE IRMA PUMMELLED THE REGION. OVER THE COURSE OF TWO WEEKS, UTILITIES FROM ACROSS THE NORTH ATLANTIC MUTUAL ASSISTANCE GROUP HELPED RESTORE POWER TO MORE THAN 4.4 MILLION FLORIDA POWER & LIGHT CUSTOMERS.

Materiality

We have used the CEA’s 10 principles of sustainable development to identify key issues of importance to the industry and to guide our disclosure throughout this report. Additionally, we conducted a peer benchmarking review to inform the selection of targeted performance indicators and  to enhance Hydro One’s overall reporting and disclosure framework in this area.

This report also reflects the interests and expectations of Hydro One’s stakeholders and partners, including customers, employees, local communities, Indigenous communities and partners, regulators, shareholders, suppliers, contractors, governments, non-governmental organizations and the general public.

The following table shows how the CEA principles align with our five CSR pillars. 

  Highest Priority High Priority
Customers Come First    
1. Stakeholder Engagement and Transparency
2. Electricity Demand, Efficiency and Conservation
User Resource Responsibility    
3.Environmental Stewardship
 Resource Management
 Contaminated Sites
 Biodiversity
4.Climate Change Mitigation and Adaption
People and Potential    
5.Employee, Contractor and Public Health and Safety
6.Human Resources and Workplace
Powering Economies    
7.Indigenous Engagement
8.Economic Value and Community Investments
Building a Grid for the Future    
9.Infrastructure Renewal and Modernization
10.Business Model Pressures

Assurance

We have taken steps to assure the content and data included in this report is accurate to the best of our knowledge. Internally, subject matter experts have provided and verified all data included in this report and the report in its entirety has been reviewed and approved by key members of Hydro One’s senior management team. Externally, several data points are third-party verified. As part of our CEA Sustainable Electricity Company TM designation, our System Average Interruption Duration Index (SAIDI) and health and safety statistics (injury frequency and lost-time injuries) are third-party reviewed and verified. The Independent Electricity System Operator (IESO) audits and verifies our energy savings data on an annual basis. However, the values included in this report are our submitted values and will be verified after the publication of this report.

 
About this Report

Hydro One’s 2017 Corporate Social Responsibility (CSR) Report updates the progress we made during the past year to advance our health, safety, environmental and social performance. Our report is organized around Hydro One’s five strategic CSR pillars: customers come first, using resources responsibly, people and potential, powering economies, and building a grid 
for the future. It also describes our performance under the Canadian Electricity Association’s (CEA’s) Sustainable Electricity™ Program, which promotes the integration of CSR in business decision-making and pursues leading practices in continuous improvement.

As our CSR strategy and reporting program continue to evolve in support of Hydro One’s business strategy, we will review further opportunities to align our reporting with the internationally recognized Sustainability Reporting Standards, developed by the Global Reporting Initiative (GRI).

The information in this report reflects our performance from January 1, 2017 to December 31, 2017 and covers our Canadian operations. This CSR report is limited to Hydro One Limited (referred to as “Hydro One” throughout this report). All dollar amounts are in Canadian dollars. The scope of the report excludes Hydro One Remote Communities Inc. and Hydro One Telecom Inc.