Hydro One Ltd
TSX:H
Hydro One Ltd
Hydro One Ltd. is a cornerstone of Ontario's electric utility landscape, rooted deeply in the province's economic engine as the largest electricity transmission and distribution service provider. The company's origins date back to the Hydro-Electric Power Commission of Ontario, which was established to harness and deliver power across vast, sparsely populated regions. Over the decades, Hydro One has evolved, transforming from a government-controlled entity to a publicly traded company, although the Province of Ontario maintains a significant ownership stake. This transition has enabled the company to modernize its operations while continuing its mission of ensuring a reliable energy supply throughout Ontario.
In terms of operations, Hydro One's business model revolves around its extensive network of transmission and distribution assets. The transmission system delivers high-voltage electricity from power generators to local distribution networks, while the distribution network brings electricity directly to homes and businesses. The company generates revenue primarily through regulated rates set by the Ontario Energy Board, which provides a stable cash flow, anchoring its business against market volatility. This model not only supports Hydro One's financial health but also allows for consistent reinvestment in infrastructure and technology, ensuring the ongoing resilience and adaptability of Ontario's power grid amidst shifting energy landscapes and growing consumer demand.
Hydro One Ltd. is a cornerstone of Ontario's electric utility landscape, rooted deeply in the province's economic engine as the largest electricity transmission and distribution service provider. The company's origins date back to the Hydro-Electric Power Commission of Ontario, which was established to harness and deliver power across vast, sparsely populated regions. Over the decades, Hydro One has evolved, transforming from a government-controlled entity to a publicly traded company, although the Province of Ontario maintains a significant ownership stake. This transition has enabled the company to modernize its operations while continuing its mission of ensuring a reliable energy supply throughout Ontario.
In terms of operations, Hydro One's business model revolves around its extensive network of transmission and distribution assets. The transmission system delivers high-voltage electricity from power generators to local distribution networks, while the distribution network brings electricity directly to homes and businesses. The company generates revenue primarily through regulated rates set by the Ontario Energy Board, which provides a stable cash flow, anchoring its business against market volatility. This model not only supports Hydro One's financial health but also allows for consistent reinvestment in infrastructure and technology, ensuring the ongoing resilience and adaptability of Ontario's power grid amidst shifting energy landscapes and growing consumer demand.
Earnings Growth: Hydro One reported a strong Q4, with basic EPS of $0.39 (up from $0.33 last year) and full-year EPS of $2.23 (up from $1.93 in 2024).
Revenue Drivers: Revenue growth was fueled by higher transmission and distribution volumes and approved 2025 rates, partially offset by regulatory adjustments and higher earnings sharing.
Cost Discipline: OM&A expenses fell sharply, down about 30.8% year-over-year in Q4, driven by lower corporate support costs and productivity initiatives.
Capital Investment: Hydro One invested $3.4 billion in capital in 2025 and placed $2.9 billion of assets into service, supporting Ontario’s growing energy needs.
Major Projects: The company secured multiple new large-scale transmission projects and highlighted the success of its First Nations equity partnerships.
Guidance Reaffirmed: Management reiterated 6–8% annual EPS growth guidance (using normalized 2022 EPS of $1.61 as a base) and expects the effective tax rate to remain between 13–16%.
Dividend: A dividend of $0.3331 per share was declared, payable March 11, 2026.
