6-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of: November 2023

Commission File Number: 001-36115

HYDRO ONE INC.

(Translation of Registrant’s name into English)

483 Bay Street, South Tower, 8th Floor, Toronto Ontario M5G 2P5 Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☐            Form 40-F  ☒

EXHIBIT INDEX

99.1	Unaudited interim consolidated financial statements of the Registrant as at and for the three and nine months ended September 30, 2023 and 2022
99.2	Management’s Discussion and Analysis of the Registrant as at and for the three and nine months ended September 30, 2023 and 2022
99.3	Certification of President and Chief Executive Officer
99.4	Certification of Executive Vice President, Chief Financial and Regulatory Officer

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HYDRO ONE INC.
/s/ Christopher Lopez
Name: Christopher Lopez
Title:   Executive Vice President, Chief Financial and Regulatory Officer
Date:	November 8, 2023

EX-99.1

HYDRO ONE INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)

For the three and nine months ended September 30, 2023 and 2022

	Three months ended September 30		Nine months ended September 30
(millions of Canadian dollars, except per share amounts)	2023	2022	2023	2022
Revenues
Distribution (includes related party revenues of $90 and $267 (2022 - $72 and $214) for the three and nine months ended September 30, respectively) (Note 23)	1,329	1,459	4,123	4,290
Transmission (includes related party revenues of $590 and $1,697 (2022 - $558 and $1,588) for the three and nine months ended September 30, respectively) (Note 23)	594	563	1,710	1,599
	1,923	2,022	5,833	5,889
Costs
Purchased power (includes related party costs of $456 and $1,609 (2022 - $555 and $1,753) for the three and nine months ended September 30, respectively) (Note 23)	854	963	2,662	2,829
Operation, maintenance and administration(Note 23)	283	288	928	847
Depreciation, amortization and asset removal costs (Note 4)	245	238	739	728
	1,382	1,489	4,329	4,404
Income before financing charges and income tax expense	541	533	1,504	1,485
Financing charges (Note 5)	142	121	417	353
Income before income tax expense	399	412	1,087	1,132
Income tax expense (Note 6)	37	101	169	249
Net income	362	311	918	883
Other comprehensive income (loss) (Note 7)	—	2	(12)	14
Comprehensive income	362	313	906	897
Net income attributable to:
Noncontrolling interest	3	3	7	7
Common shareholder	359	308	911	876
	362	311	918	883
Comprehensive income attributable to:
Noncontrolling interest	3	3	7	7
Common shareholder	359	310	899	890
	362	313	906	897
Earnings per common share (Note 21)
Basic	$2,524	$2,165	$6,405	$6,159
Diluted	$2,524	$2,165	$6,405	$6,159

See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited).

1

HYDRO ONE INC.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (unaudited)

At September 30, 2023 and December 31, 2022

As at (millions of Canadian dollars)	September 30, 2023	December 31, 2022
Assets
Current assets:
Cash and cash equivalents	—	458
Accounts receivable(Note 8)	747	765
Due from related parties (Note 23)	516	453
Other current assets (Note 9)	171	276
	1,434	1,952
Property, plant and equipment (Note 10)	26,182	24,970
Other long-term assets:
Regulatory assets (Note 12)	3,186	2,964
Deferred income tax assets	5	4
Intangible assets (Note 11)	643	605
Goodwill	373	373
Other assets (Note 13)	534	422
	4,741	4,368
Total assets	32,357	31,290
Liabilities
Current liabilities:
Bank indebtedness	33	—
Short-term notes payable (Note 16)	927	1,374
Long-term debt payable within one year(Notes 16, 17)	700	733
Accounts payable and other current liabilities (Note 14)	1,304	1,250
Due to related parties (Note 23)	74	251
	3,038	3,608
Long-term liabilities:
Long-term debt(Notes 16, 17)	13,378	12,606
Regulatory liabilities (Note 12)	1,307	1,123
Deferred income tax liabilities	1,004	713
Other long-term liabilities (Note 15)	1,567	1,558
	17,256	16,000
Total liabilities	20,294	19,608
Contingencies and Commitments(Notes 25, 26)
Subsequent Events(Note 28)
Noncontrolling interest subject to redemption	20	20
Equity
Common shares (Note 19)	2,957	2,957
Retained earnings	9,028	8,634
Accumulated other comprehensive (loss) income	(7)	5
Hydro One shareholder’s equity	11,978	11,596
Noncontrolling interest	65	66
Total equity	12,043	11,662
	32,357	31,290

See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited).

2

HYDRO ONE INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

For the nine months ended September 30, 2023 and 2022

Nine months ended September 30, 2023 (millions of Canadian dollars)	Common Shares	Retained Earnings	Accumulated Other Comprehensive Loss	Hydro One Shareholder’s Equity	Non- controlling Interest	Total Equity
January 1, 2023	2,957	8,634	5	11,596	66	11,662
Net income	—	911	—	911	5	916
Other comprehensive loss (Note 7)	—	—	(12)	(12)	—	(12)
Distributions to noncontrolling interest	—	—	—	—	(6)	(6)
Dividends on common shares (Note 20)	—	(517)	—	(517)	—	(517)
September 30, 2023	2,957	9,028	(7)	11,978	65	12,043

Nine months ended September 30, 2022 (millions of Canadian dollars)	Common Shares	Retained Earnings	Accumulated Other Comprehensive Loss	Hydro One Shareholder’s Equity	Non- controlling Interest	Total Equity
January 1, 2022	2,957	8,229	(14)	11,172	68	11,240
Net income	—	876	—	876	5	881
Other comprehensive income (Note 7)	—	—	14	14	—	14
Distributions to noncontrolling interest	—	—	—	—	(6)	(6)
Dividends on common shares (Note 20)	—	(487)	—	(487)	—	(487)
September 30, 2022	2,957	8,618	—	11,575	67	11,642

See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited).

3

HYDRO ONE INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

For the three and nine months ended September 30, 2023 and 2022

	Three months ended September 30		Nine months ended September 30
(millions of Canadian dollars)	2023	2022	2023	2022
Operating activities
Net income	362	311	918	883
Environmental expenditures	(3)	(5)	(27)	(24)
Adjustments for non-cash items:
Depreciation and amortization (Note 4)	212	210	643	630
Regulatory assets and liabilities	26	(3)	1	18
Deferred income tax expense	23	92	131	228
Other	4	2	11	21
Changes in non-cash balances related to operations (Note 24)	(2)	(31)	(81)	(155)
Net cash from operating activities	622	576	1,596	1,601
Financing activities
Long-term debt issued	425	—	1,475	—
Long-term debt repaid	—	—	(731)	(601)
Short-term notes issued	2,120	1,730	5,480	4,590
Short-term notes repaid	(2,295)	(1,650)	(5,930)	(4,120)
Dividends paid (Note 20)	(176)	(165)	(517)	(487)
Distributions paid to noncontrolling interest	(2)	(2)	(8)	(8)
Change in bank indebtedness	(25)	11	33	39
Costs to obtain financing	(1)	(1)	(7)	(5)
Net cash from (used in) financing activities	46	(77)	(205)	(592)
Investing activities
Capital expenditures (Note 24)
Property, plant and equipment	(576)	(473)	(1,626)	(1,435)
Intangible assets	(36)	(28)	(95)	(81)
Change in future use assets	(59)	—	(133)	—
Capital contributions received	—	3	2	13
Other	3	(1)	3	(5)
Net cash used in investing activities	(668)	(499)	(1,849)	(1,508)
Net change in cash and cash equivalents	—	—	(458)	(499)
Cash and cash equivalents, beginning of period	—	—	458	499
Cash and cash equivalents, end of period	—	—	—	—

See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited).

4

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the three and nine months ended September 30, 2023 and 2022

1.    DESCRIPTION OF THE BUSINESS

Hydro One Inc. (Hydro One or the Company) was incorporated on December 1, 1998, under the Business Corporations Act (Ontario) and is wholly-owned by Hydro One Limited. The principal businesses of Hydro One are the transmission and distribution of electricity to customers within Ontario.

Earnings for interim periods may not be indicative of results for the year due to the impact of seasonal weather conditions on customer demand and market pricing.

The Company's transmission business consists of the transmission system operated by its subsidiaries, which include Hydro One Networks Inc. (Hydro One Networks) and Hydro One Sault Ste. Marie LP (HOSSM), as well as an approximately 66% interest in B2M Limited Partnership (B2M LP), and an approximately 55% interest in Niagara Reinforcement Limited Partnership (NRLP).

Hydro One’s distribution business consists of the distribution system operated by its subsidiaries, Hydro One Networks and Hydro One Remote Communities Inc. (Hydro One Remotes).

Rate Setting

Hydro One Networks

On August 15, 2021, Hydro One Networks filed a custom Joint Rate Application (JRAP) for distribution rates and transmission revenue requirement for the period from 2023-2027. On November 29, 2022, the Ontario Energy Board (OEB) issued a Decision and Order approving the application and issued its final rate order for 2023-2027 transmission and distribution rates. As part of this decision, the OEB approved revenue requirement of $1,952 million for 2023, $2,073 million for 2024, $2,168 million for 2025, $2,277 million for 2026 and $2,362 million for 2027 for the Transmission Business. The OEB also approved revenue requirement of $1,727 million for 2023, $1,813 million for 2024, $1,886 million for 2025, $1,985 million for 2026 and $2,071 million for 2027 for the Distribution Business.

Deferred Tax Asset (DTA)

On March 7, 2019, the Ontario Energy Board (OEB) issued its reconsideration decision (DTA Decision) with respect to Hydro One's rate-setting treatment of the benefits of the DTA resulting from the transition from the payments in lieu of tax regime to tax payments under the federal and provincial tax regimes. On July 16, 2020, the Ontario Divisional Court rendered its decision on the Company's appeal of the OEB's DTA Decision. On April 8, 2021, the OEB rendered its decision and order (DTA Implementation Decision) regarding the recovery of the DTA amounts allocated to ratepayers for the 2017 to 2022 period. See Note 12 - Regulatory Assets and Liabilities for additional details.

Hydro One Remotes

On August 31, 2022, Hydro One Remotes filed its distribution rate application for 2023-2027. On March 2, 2023, the OEB approved Hydro One Remote Communities' 2023 revenue requirement of $128 million with a price cap escalator index for 2023-2027, and a 3.72% rate increase effective May 1, 2023.

2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation and Presentation

These unaudited condensed interim consolidated financial statements (Consolidated Financial Statements) include the accounts of the Company and its subsidiaries. Inter-company transactions and balances have been eliminated.

Basis of Accounting

These Consolidated Financial Statements are prepared and presented in accordance with United States (US) Generally Accepted Accounting Principles (GAAP) for interim financial statements and in Canadian dollars.

The accounting policies applied are consistent with those outlined in Hydro One's annual audited consolidated financial statements for the year ended December 31, 2022, with the exception of the adoption of new accounting standards as described in Note 3. These Consolidated Financial Statements reflect adjustments, that are, in the opinion of management, necessary to reflect fairly the financial position and results of operations for the respective periods. These Consolidated Financial Statements do not include all disclosures required in the annual financial statements and should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2022.

5

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

3.    NEW ACCOUNTING PRONOUNCEMENTS

The following table presents Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board that are applicable to Hydro One:

Recently Adopted Accounting Guidance

Guidance	Date issued	Description	Effective date	Impact on Hydro One
ASU 2021-08	October 2021	The amendments address how to determine whether a contractual obligation represents a liability to be recognized by the acquirer in a business combination.	January 1, 2023	No impact upon adoption
ASU 2022-02	March 2022	The amendments eliminate the troubled debt restructuring (TDR) accounting model for entities that have adopted Topic 326 Financial Instrument – Credit Losses and modifies the guidance on vintage disclosure requirements to require disclosure of current-period gross write-offs by year of origination.	January 1, 2023	No impact upon adoption

4.    DEPRECIATION, AMORTIZATION AND ASSET REMOVAL COSTS

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Depreciation of property, plant and equipment	191	186	560	548
Amortization of intangible assets	18	19	56	58
Amortization of regulatory assets	3	5	27	24
Depreciation and amortization	212	210	643	630
Asset removal costs	33	28	96	98
	245	238	739	728

5.    FINANCING CHARGES

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Interest on long-term debt	143	124	422	369
Interest on short-term notes	14	9	36	14
Interest on regulatory accounts	4	3	13	5
Realized (gain) loss on cash flow hedges (interest-rate swap agreements) (Notes 7, 17)	—	(2)	(2)	2
Other	2	3	9	10
Less: Interest capitalized on construction and development in progress	(20)	(16)	(53)	(47)
Interest earned on cash and cash equivalents	(1)	—	(8)	(1)
DTA carrying charges	—	—	—	1
	142	121	417	353

6

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

6.    INCOME TAXES

As a rate regulated utility company, the Company recovers income taxes from its ratepayers based on estimated current income tax expense in respect of its regulated business. The amounts of deferred income taxes related to regulated operations which are considered to be more likely-than-not to be recoverable from, or refundable to, ratepayers in future periods are recognized as deferred income tax regulatory assets or liabilities, with an offset to deferred income tax recovery or expense, respectively. The Company’s consolidated tax expense or recovery for the period includes all current and deferred income tax expenses for the period net of the regulated accounting offset to deferred income tax expense arising from temporary differences to be recovered from, or refunded to, customers in future rates. Thus, the Company’s income tax expense or recovery differs from the amount that would have been recorded using the combined Canadian federal and Ontario statutory income tax rate.

The reconciliation between the statutory and the effective tax rates is provided as follows:

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Income before income tax expense	399	412	1,087	1,132
Income tax expense at statutory rate of 26.5% (2022 - 26.5%)	106	109	288	300
Increase (decrease) resulting from:
Net temporary differences recoverable in future rates charged to customers:
Capital cost allowance in excess of depreciation and amortization	(42)	(22)	(103)	(74)
Impact of DTA Implementation Decision1	—	24	48	72
Overheads capitalized for accounting but deducted for tax purposes	(17)	(7)	(35)	(20)
Interest capitalized for accounting but deducted for tax purposes	(7)	(5)	(16)	(14)
Pension and post-retirement benefit contributions in excess of pension expense	1	2	(4)	(8)
Environmental expenditures	(2)	—	(6)	(7)
Other	(3)	—	(4)	—
Net temporary differences attributable to regulated business	(70)	(8)	(120)	(51)
Net permanent differences	1	—	1	—
Total income tax expense	37	101	169	249

Effective income tax rate 9.3  % 24.5  % 15.5  % 22.0  %

1 Pursuant to the DTA Implementation Decision, the amounts represent the recovery of DTA amounts that were previously shared with ratepayers which ended June 30, 2023. See Note 12 - Regulatory Assets and Liabilities.

7.    OTHER COMPREHENSIVE INCOME (LOSS)

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Gain (loss) on cash flow hedges (interest-rate swap agreements) (Notes 5, 17)1	—	2	(4)	12
Gain (loss) on transfer of other post-employment benefits (OPEB) (Note 18)	—	—	(8)	2
	—	2	(12)	14

1 No realized gain for the three months ended September 30, 2023 (2022 - after-tax $1 million gain and before-tax $2 million gain), and $2 million after-tax realized gain (2022 - $1 million loss) and $2 million before-tax realized gain (2022 - $2 million loss) on cash flow hedges reclassified to financing charges for nine months ended September 30, 2023.

8.    ACCOUNTS RECEIVABLE

As at (millions of dollars)	September 30, 2023	December 31, 2022
Accounts receivable - billed	386	356
Accounts receivable - unbilled	419	472
Accounts receivable, gross	805	828
Allowance for doubtful accounts	(58)	(63)
Accounts receivable, net	747	765

7

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

The following table shows the movements in the allowance for doubtful accounts for the nine months ended September 30, 2023 and the year ended December 31, 2022:

(millions of dollars)	September 30, 2023	December 31, 2022
Allowance for doubtful accounts – beginning	(63)	(56)
Write-offs	14	25
Additions to allowance for doubtful accounts	(9)	(32)
Allowance for doubtful accounts – ending	(58)	(63)

9.     OTHER CURRENT ASSETS

As at (millions of dollars)	September 30, 2023	December 31, 2022
Prepaid expenses and other assets	72	58
Regulatory assets (Note 12)	67	189
Materials and supplies	32	24
Derivative assets (Note 17)	—	5
	171	276

10.    PROPERTY, PLANT AND EQUIPMENT

As at (millions of dollars)	September 30, 2023	December 31, 2022
Property, plant and equipment	38,136	36,989
Less: accumulated depreciation	(13,663)	(13,220)
	24,473	23,769
Construction in progress	1,709	1,201
	26,182	24,970

11. INTANGIBLE ASSETS

As at (millions of dollars)	September 30, 2023	December 31, 2022
Intangible assets	1,341	1,180
Less: accumulated depreciation	(798)	(742)
	543	438
Development in progress	100	167
	643	605

8

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

12.    REGULATORY ASSETS AND LIABILITIES

Regulatory assets and liabilities arise as a result of the rate-setting process. Hydro One has recorded the following regulatory assets and liabilities:

As at (millions of dollars)	September 30, 2023	December 31, 2022
Regulatory assets:
Deferred income tax regulatory asset	2,961	2,724
Post-retirement and post-employment benefits - non-service cost	105	141
Environmental	67	93
Rural and Remote Rate Protection variance	29	25
Stock-based compensation	28	34
Conservation and Demand Management (CDM) variance	5	25
Deferred tax asset sharing	5	73
Other	53	38
Total regulatory assets	3,253	3,153
Less: current portion	(67)	(189)
	3,186	2,964
Regulatory liabilities:
Post-retirement and post-employment benefits	506	506
Pension benefit regulatory liability	476	358
Distribution rate riders	112	2
Earnings sharing mechanism deferral (ESM)	62	75
Retail settlement variance account (RSVA)	57	53
Tax rule changes variance	38	100
External revenue variance	28	50
Asset removal costs cumulative variance	28	41
Capitalized overhead tax variance	26	16
Pension cost differential	9	26
Deferred income tax regulatory liability	4	4
Green energy expenditure variance	—	5
Other	34	26
Total regulatory liabilities	1,380	1,262
Less: current portion	(73)	(139)
	1,307	1,123

Deferred Tax Asset Sharing

At September 30, 2023, Hydro One has a regulatory asset of $5 million (December 31, 2022 - $73 million) representing the interest accrued within the Transmission Business on the cumulative DTA amounts shared with ratepayers over the 2017 to 2021 period. At December 31, 2022, the regulatory asset of $73 million consists of $24 million and $49 million for Hydro One Networks’ distribution and transmission segments, respectively. The principal balance of this regulatory account was fully recovered as at June 30, 2023. The Company will seek recovery of the remaining interest balance in the next rate application.

Post-Retirement and Post-Employment Benefits - Non-Service Cost

This balance includes the rider established for the disposition of the approved balances from Hydro One Networks' JRAP for 2023-2027 rates.

Distribution Rate Riders

As part of the decision received in November 2022 for Hydro One Networks' JRAP, the OEB approved the disposition of certain deferral and variance account balances as at December 31, 2020, including accrued interest. These approved balances, including those for RSVA, tax rule changes variance, pension cost differential, and ESM were accumulated in distribution rate riders which makes up the majority of this balance. The amounts are being disposed of over a period of 36 months ending December 31, 2025.

9

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

13.    OTHER LONG-TERM ASSETS

As at (millions of dollars)	September 30, 2023	December 31, 2022
Deferred pension assets (Note 18)	476	358
Right-of-Use assets	47	53
Other long-term assets	11	11
	534	422

14.    ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

As at (millions of dollars)	September 30, 2023	December 31, 2022
Accrued liabilities	824	673
Accounts payable	233	284
Accrued interest	144	118
Regulatory liabilities (Note 12)	73	139
Environmental liabilities	20	25
Lease obligations	10	11
	1,304	1,250

15.    OTHER LONG-TERM LIABILITIES

As at (millions of dollars)	September 30, 2023	December 31, 2022
Post-retirement and post-employment benefit liability (Note 18)	1,402	1,364
Environmental liabilities	47	68
Lease obligations	37	42
Asset retirement obligations	30	28
Due to related parties (Note 23)	21	26
Long-term accounts payable	—	1
Other long-term liabilities	30	29
	1,567	1,558

16.    DEBT AND CREDIT AGREEMENTS

Short-Term Notes and Credit Facilities

Hydro One meets its short-term liquidity requirements in part through the issuance of commercial paper under its Commercial Paper Program which has a maximum authorized amount of $2,300 million. These short-term notes are denominated in Canadian dollars with varying maturities up to 365 days. The Commercial Paper Program is supported by the Company’s revolving standby credit facilities totalling $2,300 million (Operating Credit Facilities). In January 2022, Hydro One successfully amended its Operating Credit Facilities to incorporate environmental, social and governance targets. On June 1, 2023, the maturity date for the Operating Credit Facilities was extended from 2027 to 2028. At September 30, 2023, no amounts have been drawn on the Operating Credit Facilities.

The Company may use the Operating Credit Facilities for working capital and general corporate purposes. If used, interest on the Operating Credit Facilities would apply based on Canadian benchmark rates. The obligation of each lender to make any credit extension under its credit facility is subject to various conditions including that no event of default has occurred or would result from such credit extension.

10

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

Long-Term Debt

The following table presents long-term debt outstanding at September 30, 2023 and December 31, 2022:

As at (millions of dollars)	September 30, 2023	December 31, 2022
Hydro One long-term debt (a)	14,120	13,245
HOSSM long-term debt (b)	—	133
	14,120	13,378
Add: Net unamortized debt premiums	8	8
Less: Unamortized deferred debt issuance costs	(50)	(47)
Total long-term debt	14,078	13,339
Less: Long-term debt payable within one year	(700)	(733)
	13,378	12,606

(a) Hydro One long-term debt

At September 30, 2023, long-term debt of $14,120 million (December 31, 2022 - $13,245 million) was outstanding, the majority of which was issued under Hydro One Inc.’s Medium Term Note (MTN) Program. In June 2022, Hydro One Inc. filed a short form base shelf prospectus in connection with its MTN Program, which has a maximum authorized principal amount of notes issuable of $4,000 million and expires in July 2024. At September 30, 2023, $1,775 million remained available for issuance under the MTN Program prospectus. During the three and nine months ended September 30, 2023 $425 million and $1,475 million long-term debt was issued, respectively, (2022 - $nil) and $600 million long-term debt was repaid (2022 - $600 million).

See Note 28 - Subsequent Events for long-term debt issued under Hydro One Inc.'s MTN Program subsequent to September 30, 2023.

(b) HOSSM long-term debt

On June 16, 2023, the HOSSM long-term debt matured and was fully repaid, leaving no debt outstanding at September 30, 2023 (December 31, 2022 - $133 million). During the three months ended September 30, 2023 and 2022, no debt was issued or repaid. During the nine months ended September 30, 2023, $131 million of long-term debt was repaid (2022 - $1 million) and no long-term debt was issued.

Principal and Interest Payments

At September 30, 2023, future principal repayments, interest payments, and related weighted-average interest rates were as follows:

	Long-Term Debt Principal Repayments	Interest Payments	Weighted-Average Interest Rate
	(millions of dollars)	(millions of dollars)	(%)
Year 1	700	583	2.5
Year 2	750	562	2.3
Year 3	925	541	4.0
Year 4	—	510	—
Year 5	750	492	4.9
	3,125	2,688	3.5
Years 6-10	3,450	2,061	4.0
Thereafter	7,545	3,684	4.5
	14,120	8,433	4.1

11

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

17.    FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Non-Derivative Financial Assets and Liabilities

At September 30, 2023 and December 31, 2022, the Company’s carrying amounts of cash and cash equivalents, accounts receivable, due from related parties, short-term notes payable, accounts payable, and due to related parties are representative of fair value due to the short-term nature of these instruments.

Fair Value Measurements of Long-Term Debt

The fair values and carrying values of the Company’s long-term debt at September 30, 2023 and December 31, 2022 are as follows:

	September 30, 2023		December 31, 2022
As at (millions of dollars)	Carrying Value	Fair Value	Carrying Value	Fair Value
Long-term debt, including current portion	14,078	12,824	13,339	12,655

Fair Value Measurements of Derivative Instruments

Fair Value Hedges

At September 30, 2023 and December 31, 2022, Hydro One had no fair value hedges.

Cash Flow Hedges

At September 30, 2023 and December 31, 2022, Hydro One Inc. had $nil and a total of $800 million, respectively, in pay-fixed, receive-floating interest-rate swap agreements designated as cash flow hedges. These cash flow hedges were intended to offset the variability of interest rates on the issuances of short-term commercial paper between January 9, 2020 and March 9, 2023.

At September 30, 2023 and December 31, 2022, the Company had no derivative instruments classified as undesignated contracts.

Fair Value Hierarchy

The fair value hierarchy of financial assets and liabilities at September 30, 2023 and December 31, 2022 is as follows:

As at September 30, 2023 (millions of dollars)	Carrying Value	Fair  Value	Level 1	Level 2	Level 3
Liabilities:
Long-term debt, including current portion	14,078	12,824	—	12,824	—

As at December 31, 2022 (millions of dollars)	Carrying Value	Fair  Value	Level 1	Level 2	Level 3
Assets:
Derivative instruments(Note 9)
Cash flow hedges, including current portion	5	5	—	5	—
Liabilities:
Long-term debt, including current portion	13,339	12,655	—	12,655	—

The fair value of the interest rate swaps designated as cash flow hedges is determined using a discounted cash flow method based on period-end swap yield curves.

The fair value of the long-term debt is based on unadjusted period-end market prices for the same or similar debt of the same remaining maturities.

There were no transfers between any of the fair value levels during the nine-months ended September 30, 2023 or the year ended December 31, 2022.

Risk Management

Exposure to market risk, credit risk and liquidity risk arises in the normal course of the Company’s business.

Market Risk

Market risk refers primarily to the risk of loss which results from changes in values, foreign exchange rates and interest rates. The Company is exposed to fluctuations in interest rates, as its regulated return on equity is derived using a formulaic approach that takes anticipated interest rates into account. The Company is not currently exposed to material commodity price risk or material foreign exchange risk.

12

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

The Company uses a combination of fixed and variable-rate debt to manage the mix of its debt portfolio. The Company also uses derivative financial instruments to manage interest-rate risk. The Company may utilize interest-rate swaps designated as fair value hedges as a means to manage its interest rate exposure to achieve a lower cost of debt. The Company may also utilize interest-rate derivative instruments, such as cash flow hedges, to manage its exposure to short-term interest rates or to lock in interest-rate levels on forecasted financing.

A hypothetical 100 basis points increase in interest rates associated with variable-rate debt would have resulted in an increase to financing charges for the three and nine months ended September 30, 2023 of $3 million and $7 million, respectively. There would have been no significant decrease in Hydro One’s net income for the three and nine months ended September 30, 2022.

For derivative instruments that are designated and qualify as cash flow hedges, the unrealized gain or loss, after tax, on the derivative instrument is recorded as OCI or OCL and is reclassified to results of operations in the same period during which the hedged transaction affects results of operations. During the three months ended September 30, 2023, there was a $nil after-tax change (2022 - $3 million gain), $nil before-tax change (2022 - $4 million gain), recorded in OCI, and a $nil after-tax realized gain (2022 - $1 million gain), $nil before-tax gain (2022 - $2 million gain), reclassified to financing charges. During the nine months ended September 30, 2023, a $2 million after-tax change (2022 - $11 million gain), $3 million before-tax change (2022 - $15 million gain), was recorded in OCI, and a $2 million after-tax realized gain (2022 - $1 million loss), $2 million before-tax gain (2022 - $2 million loss), was reclassified to financing charges. This resulted in an accumulated other comprehensive income (AOCI) of $nil related to cash flow hedges at September 30, 2023 (December 31, 2022 - $4 million).

The Pension Plan manages market risk by diversifying investments in accordance with the Pension Plan’s Statement of Investment Policies and Procedures. Interest rate risk arises from the possibility that changes in interest rates will affect the fair value of the Pension Plan’s financial instruments. In addition, changes in interest rates can also impact discount rates which impact the valuation of the pension and post-retirement and post-employment liabilities. Currency risk is the risk that the value of the Pension Plan’s financial instruments will fluctuate due to changes in foreign currencies relative to the Canadian dollar. Other price risk is the risk that the value of the Pension Plan’s investments in equity securities will fluctuate as a result of changes in market prices, other than those arising from interest risk or currency risk. All three factors may contribute to changes in values of the Pension Plan investments. See Note 18 - Pension and Post-Retirement and Post-Employment Benefits for further details.

Credit Risk

Financial assets create a risk that a counterparty will fail to discharge an obligation, causing a financial loss. At September 30, 2023 and 2022, there were no significant concentrations of credit risk with respect to any class of financial assets. The Company’s revenue is earned from a broad base of customers. As a result, Hydro One did not earn a material amount of revenue from any single customer. At September 30, 2023 and 2022, there was no material accounts receivable balance due from any single customer.

At September 30, 2023, the Company’s allowance for doubtful accounts was $58 million (December 31, 2022 - $63 million). The allowance for doubtful accounts reflects the Company's Current Expected Credit Loss (CECL) for all accounts receivable balances, which are based on historical overdue balances, customer payments and write-offs. At September 30, 2023, approximately 5% (December 31, 2022 - 4%) of the Company’s net accounts receivable were outstanding for more than 60 days.

Hydro One manages its counterparty credit risk through various techniques including (i) entering into transactions with highly rated counterparties, (ii) limiting total exposure levels with individual counterparties, (iii) entering into master agreements which enable net settlement and the contractual right of offset, and (iv) monitoring the financial condition of counterparties. The Company monitors current credit exposure to counterparties on both an individual and an aggregate basis. The Company’s credit risk for accounts receivable is limited to the carrying amounts on the consolidated balance sheets.

Derivative financial instruments result in exposure to credit risk since there is a risk of counterparty default. The maximum credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts in an asset position at the reporting date. At September 30, 2023, there was no counterparty party risk. At September 30, 2022, the counterparty credit risk exposure on the fair value of these interest-rate swap contracts was not material.

The Pension Plan manages its counterparty credit risk with respect to bonds by investing in investment-grade corporate and government bonds and with respect to derivative instruments by transacting only with highly rated financial institutions and by ensuring that exposure is diversified across counterparties.

Liquidity Risk

Liquidity risk refers to the Company’s ability to meet its financial obligations as they come due. Hydro One meets its short-term operating liquidity requirements using cash and cash equivalents on hand, funds from operations, the issuance of commercial paper, and the Operating Credit Facilities. The short-term liquidity under the commercial paper program, the Operating Credit Facilities, and anticipated levels of funds from operations are expected to be sufficient to fund the Company’s operating requirements.

At September 30, 2023, $1,775 million remained available for issuance under the MTN Program prospectus, and $2,000 million remained available for issuance under the Universal Base Shelf Prospectus.

13

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

The Pension Plan’s short-term liquidity is provided through cash and cash equivalents, contributions, investment income and proceeds from investment transactions. In the event that investments must be sold quickly to meet current obligations, the majority of the Pension Plan’s assets are invested in securities that are traded in an active market and can be readily disposed of as liquidity needs arise.

18.    PENSION AND POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS

The following table provides the components of the net periodic benefit (recovery) costs for the three and nine months ended September 30, 2023 and 2022:

	Pension Benefits		Post-Retirement and Post-Employment Benefits
Three months ended September 30 (millions of dollars)	2023	2022	2023	2022
Current service cost	24	53	12	16
Interest cost	98	71	19	15
Expected return on plan assets, net of expenses1	(141)	(127)	—	—
Amortization of prior service (credit) cost	(1)	1	3	2
Amortization of actuarial (gains) losses	(4)	15	(7)	—
Net periodic benefit (recovery) costs	(24)	13	27	33
Charged to results of operations2	1	10	14	16

	Pension Benefits		Post-Retirement and Post-Employment Benefits
Nine months ended September 30 (millions of dollars)	2023	2022	2023	2022
Current service cost	74	161	38	48
Interest cost	296	213	55	45
Expected return on plan assets, net of expenses1	(425)	(381)	—	—
Amortization of prior service (credit) cost	(2)	2	7	9
Amortization of actuarial (gains) losses	(14)	45	(21)	1
Net periodic benefit (recovery) costs	(71)	40	79	103
Charged to results of operations2	13	25	49	56

1The expected long-term rate of return on pension plan assets for the year ending December 31, 2023 is 7.00% (2022 - 6.00%).

2The Company accounts for pension costs consistent with their inclusion in OEB-approved rates. During the three and nine months ended September 30, 2023, pension costs of $2 million (2022 - $27 million) and $47 million (2022 - $65 million), respectively, were attributed to labour, of which $1 million (2022 - $10 million) and $13 million (2022 - $25 million), respectively was charged to operations, and $1 million (2022 - $17 million) and $34 million (2022 - $40 million), respectively, was capitalized as part of the cost of property, plant and equipment and intangible assets.

Transfers from Other Plans

Hydro One and Inergi LP agreed to transfer the employment of certain Inergi LP employees (Transferred Employees) to Hydro One Networks. Employees related to the Information Technology Operations, Finance and Accounting, Payroll, Source to Pay, Settlements and certain Shared Services functions transferred over a period ending January 1, 2022. The Transferred Employees who are participants in the Inergi LP Pension Plan (Inergi Plan) became participants in the Hydro One Pension Plan (the Plan) upon transfer to Hydro One Networks. On March 2, 2023, the assets and liabilities of the Inergi Plan were transferred to the Plan. The value of assets and liabilities of the Inergi Plan transferred to the Plan were approximately $378 million and $333 million, respectively, at the date of transfer. Inergi and Hydro One Networks also agreed to transfer OPEB liabilities related to the Transferred Employees to Hydro One’s post-retirement and post-employment benefit plans, which occurred on the date of transfer of each group of Transferred Employees.

The transfer of Finance and Accounting, Payroll and certain Shared Services functions occurred on January 1, 2022 and the transfer of the OPEB liability of $9 million related to these Employees was completed in the first quarter of 2022. The liability was recorded as a post-retirement and post-employment benefit liability with an offset to OCL, and cash totalling $10 million was transferred to Hydro One and recorded as an asset with an offset to OCI. Both the OCI resulting from the transfer of the cash asset and the OCL resulting from the transfer of the other post-retirement benefit liability are being recognized in net income over the expected average remaining service lifetime (EARSL) of the Finance and Accounting, Payroll and certain Shared Services employees.

Eligible Inergi retirees were transferred to the Plan on June 1, 2023. The transfer of the OPEB liability of $15 million related to these retirees was completed in the second quarter of 2023. The liability was recorded as a post-retirement and post-employment benefit liability with an offset to OCL, and cash totalling $3 million was transferred to Hydro One, in accordance with the agreement. Both the OCI resulting from the transfer of the cash asset and the OCL resulting from the transfer of OPEB

14

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

liabilities are being recognized in net income over the expected average remaining life expectancy of the Retirees and Other Former Members employees.

19.    SHARE CAPITAL

Common Shares

The Company is authorized to issue an unlimited number of common shares. At September 30, 2023 and December 31, 2022, the Company had 142,239 common shares issued and outstanding.

Preferred Shares

The Company is authorized to issue an unlimited number of preferred shares, issuable in series. At September 30, 2023 and December 31, 2022, the Company had no preferred shares issued and outstanding.

20.     DIVIDENDS

During the three months ended September 30, 2023, common share dividends in the amount of $176 million (2022 - $165 million) were declared and paid.

During the nine months ended September 30, 2023, common share dividends in the amount of $517 million (2022 - $487 million) were declared and paid. See Note 28 - Subsequent Events for dividends declared subsequent to September 30, 2023.

21.    EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share is calculated by dividing net income attributable to common shareholder of Hydro One by the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding during the three and ninemonths ended September 30, 2023 and 2022 were 142,239. There were no dilutive securities during the three and ninemonths ended September 30, 2023 and 2022.

22.    STOCK-BASED COMPENSATION

Share Grant Plans

Hydro One Limited has two share grant plans (Share Grant Plans), one for the benefit of certain members of the Power Workers’

Union (the PWU Share Grant Plan) and one for the benefit of certain members of the Society of United Professionals (the Society Share Grant Plan). A summary of share grant activity under the Share Grant Plans during the three and nine months ended September 30, 2023 and 2022 is presented below:

	Three months ended September 30		Nine months ended September 30
(number of share grants)	2023	2022	2023	2022
Share grants outstanding - beginning	1,795,524	2,234,425	2,151,578	2,616,351
Granted	339	—	339	—
Vested and issued1	(339)	—	(356,393)	(381,926)
Share grants outstanding - ending	1,795,524	2,234,425	1,795,524	2,234,425

1During the nine months ended September 30, 2023, Hydro One Limited issued 356,393 (2022 - 381,926) common shares from treasury to eligible employees in accordance with provisions of the PWU and the Society Share Grant Plans.

Directors' Deferred Share Unit (DSU) Plan

A summary of DSU awards activity under the Directors' DSU Plan during the three and nine months ended September 30, 2023 and 2022 is presented below:

	Three months ended September 30		Nine months ended September 30
(number of DSUs)	2023	2022	2023	2022
DSUs outstanding - beginning	92,418	90,999	99,939	80,813
Granted	5,303	4,606	27,886	14,792
Paid	—	—	(30,104)	—
DSUs outstanding - ending	97,721	95,605	97,721	95,605

At September 30, 2023, a liability of $3 million (December 31, 2022 - $4 million) related to Directors' DSUs has been recorded at the closing price of Hydro One Limited common shares of $34.58 (December 31, 2022 - $36.27). This liability is included in other long-term liabilities on the consolidated balance sheets.

15

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

Management DSU Plan

A summary of DSU awards activity under the Management DSU Plan during the three and nine months ended September 30, 2023 and 2022 is presented below:

	Three months ended September 30		Nine months ended September 30
(number of DSUs)	2023	2022	2023	2022
DSUs outstanding - beginning	138,081	125,866	118,505	90,240
Granted	1,063	1,013	20,639	36,639
Paid	(5,778)	—	(5,778)	—
DSUs outstanding - ending	133,366	126,879	133,366	126,879

At September 30, 2023, a liability of $5 million (December 31, 2022 - $4 million) related to Management DSUs has been recorded at the closing price of Hydro One Limited common shares of $34.58 (December 31, 2022 - $36.27). This liability is included in other long-term liabilities on the consolidated balance sheets.

Long-term Incentive Plan (LTIP)

Performance Share Units (PSU) and Restricted Share Units (RSU)

A summary of PSU and RSU awards activity under the LTIP during the three and nine months ended September 30, 2023 and 2022 is presented below:

	Three months ended September 30				Nine months ended September 30
	PSUs		RSUs		PSUs		RSUs
(number of units)	2023	2022	2023	2022	2023	2022	2023	2022
Units outstanding - beginning	140,330	—	178,031	—	—	—	—	—
Granted	1,007	—	3,608	—	141,337	—	181,639	—
Forfeited	(1,312)	—	(2,623)	—	(1,312)	—	(2,623)	—
Units outstanding - ending	140,025	—	179,016	—	140,025	—	179,016	—

The grant date total fair value of the awards granted during the three and nine months ended September 30, 2023 was $nil and $12 million (2022 – $nil and $nil), respectively. The compensation expense related to these awards recognized by the Company during the three and nine months ended September 30, 2023 was $1 million and $2 million (2022 – $nil and $nil), respectively.

Society RSU Plan

A summary of RSU awards activity under the Society RSU Plan during the three and nine months ended September 30, 2023 and 2022 is presented below:

	Three months ended September 30		Nine months ended September 30
(number of RSUs)	2023	2022	2023	2022
RSUs outstanding - beginning	—	35,029	34,619	68,005
Granted	—	—	—	1,638
Transfers1	—	—	140	—
Vested and issued	—	—	(31,688)	(32,841)
Settled	—	—	(2,942)	(1,106)
Forfeited	—	—	(129)	(667)
RSUs outstanding - ending	—	35,029	—	35,029

1 Transfers relate to PWU employees transferred from Acronym Inc. to Hydro One Inc. during 2023.

16

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

23.    RELATED PARTY TRANSACTIONS

Hydro One is owned by Hydro One Limited. The Province is a shareholder of Hydro One Limited with approximately 47.1% ownership at September 30, 2023. The IESO, Ontario Power Generation Inc. (OPG), Ontario Electricity Financial Corporation (OEFC), the OEB, Acronym Solutions Inc. (Acronym Solutions) and Hydro One Broadband Solutions Inc. (HOBSI) are related parties to Hydro One because they are controlled or significantly influenced by the Ministry of Energy or by Hydro One Limited. The following is a summary of the Company’s related party transactions during the three and nine months ended September 30, 2023 and 2022:

(millions of dollars)		Three months ended September 30		Nine months ended September 30
Related Party	Transaction	2023	2022	2023	2022
IESO	Power purchased	451	553	1,596	1,739
	Revenues for transmission services	589	558	1,694	1,586
	Amounts related to electricity rebates	199	259	628	803
	Distribution revenues related to rural rate protection	63	62	187	183
	Distribution revenues related to supply of electricity to remote northern communities	12	8	35	26
	Distribution revenues related to Wataynikaneyap Power LP	14	—	41	—
	Funding received related to CDM programs	—	2	1	2
OPG	Power purchased	5	1	12	12
	Revenues related to provision of services and supply of electricity	1	2	5	6
	Capital contribution received from OPG	1	3	4	5
	Costs related to the purchase of services	—	1	1	2
OEFC	Power purchased from power contracts administered by the OEFC	—	1	1	2
OEB	OEB fees	3	2	9	7
Hydro One Limited	Dividends paid	176	165	517	487
	Stock-based compensation costs	1	1	4	4
	Cost recovery for services provided	3	1	8	5
Acronym	Services received – costs expensed	8	8	23	19
	Revenues for services provided	1	—	2	1
HOBSI	Reduction in capital contribution from HOBSI	—	—	—	2
	Revenues for services provided	—	1	—	1

Sales to and purchases from related parties are based on the requirements of the OEB’s Affiliate Relationships Code. Outstanding balances at period end from external related parties are interest-free and settled in cash. Invoices are issued monthly, and amounts are due and paid on a monthly basis.

24.    CONSOLIDATED STATEMENTS OF CASH FLOWS

The changes in non-cash balances related to operations consist of the following:

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Accounts receivable	—	(58)	18	(45)
Due from related parties	(14)	11	(63)	(37)
Materials and supplies (Note 9)	8	(2)	(8)	(3)
Prepaid expenses and other assets (Note 9)	3	1	(14)	(11)
Other long-term assets (Note 13)	1	—	—	(2)
Accounts payable	(56)	12	(74)	(39)
Accrued liabilities (Note 14)	35	(37)	151	56
Due to related parties	(2)	20	(176)	(123)
Accrued interest (Note 14)	6	19	26	6
Long-term accounts payable and other long-term liabilities (Note 15)	1	(3)	—	5
Post-retirement and post-employment benefit liability	16	6	59	38
	(2)	(31)	(81)	(155)

17

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

Capital Expenditures

The following tables reconcile investments in property, plant and equipment and intangible assets and the amounts presented in the consolidated statements of cash flows for the three and nine months ended September 30, 2023 and 2022. The reconciling items include net change in accruals and capitalized depreciation.

	Three months ended September 30, 2023			Nine months ended September 30, 2023
(millions of dollars)	Property, Plant and Equipment	Intangible Assets	Total	Property, Plant and Equipment	Intangible Assets	Total
Capital investments	(594)	(39)	(633)	(1,673)	(96)	(1,769)
Reconciling items	18	3	21	47	1	48
Cash outflow for capital expenditures	(576)	(36)	(612)	(1,626)	(95)	(1,721)

	Three months ended September 30, 2022			Nine months ended September 30, 2022
(millions of dollars)	Property, Plant and Equipment	Intangible Assets	Total	Property, Plant and Equipment	Intangible Assets	Total
Capital investments	(468)	(28)	(496)	(1,457)	(88)	(1,545)
Reconciling items	(5)	—	(5)	22	7	29
Cash outflow for capital expenditures	(473)	(28)	(501)	(1,435)	(81)	(1,516)

Supplementary Information

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Net interest paid	152	110	421	371
Income taxes paid	10	4	43	26

25.    CONTINGENCIES

Hydro One is involved in various lawsuits and claims in the normal course of business. In the opinion of management, the outcome of such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

26.     COMMITMENTS

The following table presents a summary of Hydro One’s commitments under outsourcing and other agreements due in the next five years and thereafter:

As at September 30, 2023 (millions of dollars)	Year 1	Year 2	Year 3	Year 4	Year 5	Thereafter
Outsourcing and other agreements	76	54	25	6	6	13
Capital agreements	4	45	75	—	—	—
Long-term software/meter agreement	2	11	4	1	1	3

Outsourcing and other agreements

In February 2021, Hydro One entered into a three-year agreement for information technology services with Capgemini Canada Inc., which expires on February 29, 2024 and includes an option to extend for two additional one-year terms at Hydro One's discretion. In June 2023, Hydro One provided Capgemini Canada Inc. with notice to extend the agreement, effective March 1, 2024 and to expire March 1, 2026.

Capital Agreements

In the course of business, Hydro One has entered into agreements committing to the purchase of specified equipment from various suppliers upon successful completion of certain milestones. As at September 30, 2023, Hydro One has committed to future contingent payments of $124 million.

18

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

The following table presents a summary of Hydro One’s other commercial commitments by year of expiry in the next five years and thereafter:

As at September 30, 2023 (millions of dollars)	Year 1	Year 2	Year 3	Year 4	Year 5	Thereafter
Operating Credit Facilities	—	—	—		2,300	—
Letters of credit1	171	—	—	—	—	—
Guarantees2	475	—	—	—	—	—

1 Letters of credit consist of $163 million letters of credit related to retirement compensation arrangements, a $7 million letter of credit provided to the IESO for prudential support, and $1 million in letters of credit for various operating purposes.

2 Guarantees consist of $475 million prudential support provided to the IESO by Hydro One on behalf of its subsidiaries.

27.    SEGMENTED REPORTING

Hydro One has three reportable segments:

•The Transmission Segment, which comprises the transmission of high voltage electricity across the province, interconnecting local distribution companies and certain large directly connected industrial customers throughout the Ontario electricity grid;

•The Distribution Segment, which comprises the delivery of electricity to end customers and certain other municipal electricity distributors; and

•Other Segment, which includes certain corporate activities. The Other Segment includes a portion of the DTA which arose from the revaluation of the tax bases of Hydro One’s assets to fair market value when the Company transitioned from the provincial payments in lieu of tax regime to the federal tax regime at the time of Hydro One’s initial public offering in 2015. This DTA is not required to be shared with ratepayers, the Company considers it not to be part of the regulated transmission and distribution segment assets, and it is included in the other segment.

The designation of segments has been based on a combination of regulatory status and the nature of the services provided. Operating segments of the Company are determined based on information used by the chief operating decision-maker in deciding how to allocate resources and evaluate the performance of each of the segments. The Company evaluates segment performance based on income before financing charges and income tax expense from continuing operations (excluding certain allocated corporate governance costs).

Three months ended September 30, 2023 (millions of dollars)	Transmission	Distribution	Other	Consolidated
Revenues	594	1,329	—	1,923
Purchased power	—	854	—	854
Operation, maintenance and administration	116	164	3	283
Depreciation, amortization and asset removal costs	131	114	—	245
Income (loss) before financing charges and income tax expense	347	197	(3)	541
Capital investments	384	249	—	633

Three months ended September 30, 2022 (millions of dollars)	Transmission	Distribution	Other	Consolidated
Revenues	563	1,459	—	2,022
Purchased power	—	963	—	963
Operation, maintenance and administration	110	176	2	288
Depreciation, amortization and asset removal costs	131	107	—	238
Income (loss) before financing charges and income tax expense	322	213	(2)	533
Capital investments	311	185	—	496

Nine months ended September 30, 2023 (millions of dollars)	Transmission	Distribution	Other	Consolidated
Revenues	1,710	4,123	—	5,833
Purchased power	—	2,662	—	2,662
Operation, maintenance and administration	373	541	14	928
Depreciation, amortization and asset removal costs	385	354	—	739
Income (loss) before financing charges and income tax expense	952	566	(14)	1,504
Capital investments	1,055	714	—	1,769

19

HYDRO ONE INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

For the three and nine months ended September 30, 2023 and 2022

Nine months ended September 30, 2022 (millions of dollars)	Transmission	Distribution	Other	Consolidated
Revenues	1,599	4,290	—	5,889
Purchased power	—	2,829	—	2,829
Operation, maintenance and administration	316	521	10	847
Depreciation, amortization and asset removal costs	385	343	—	728
Income (loss) before financing charges and income tax expense	898	597	(10)	1,485
Capital investments	899	646	—	1,545

Total Assets by Segment:

As at (millions of dollars)	September 30, 2023	December 31, 2022
Transmission	19,615	18,747
Distribution	12,490	11,880
Other	252	663
Total assets	32,357	31,290

Total Goodwill by Segment:

As at (millions of dollars)	September 30, 2023	December 31, 2022
Transmission	157	157
Distribution	216	216
Total goodwill	373	373

All revenues, assets and costs, as the case may be, are earned, held or incurred in Canada.

28.     SUBSEQUENT EVENTS

Debt Issuance

On October 20, 2023, Hydro One issued $400 million of green bonds (Series 57 notes) under its MTN Program with a maturity date of October 20, 2025 and a coupon rate of 5.54%. Concurrently, Hydro One executed a $400 million fixed-to-floating interest rate swap agreement to convert these notes into daily compounded variable rate debt.

Dividends

On November 7, 2023, common share dividends of $176 million were declared.

20

EX-99.2

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2023 and 2022

The following Management’s Discussion and Analysis (MD&A) of the financial condition and results of operations should be read together with the unaudited condensed interim consolidated financial statements and accompanying notes thereto (Consolidated Financial Statements) of Hydro One Inc. (Hydro One or the Company) for the three and nine months ended September 30, 2023, as well as the Company’s audited consolidated financial statements and MD&A for the year ended December 31, 2022. The Consolidated Financial Statements have been prepared in accordance with United States (US) Generally Accepted Accounting Principles (GAAP). All financial information in this MD&A is presented in Canadian dollars, unless otherwise indicated.

The Company has prepared this MD&A in accordance with National Instrument 51-102 - Continuous Disclosure Obligations of the Canadian Securities Administrators. Under the US/Canada Multijurisdictional Disclosure System, the Company is permitted to prepare this MD&A in accordance with the disclosure requirements of Canadian securities laws and regulations, which can vary from those of the US. This MD&A provides information as at and for the three and nine months ended September 30, 2023, based on information available to management as of November 7, 2023.

CONSOLIDATED FINANCIAL HIGHLIGHTS AND STATISTICS

	Three months ended September 30				Nine months ended September 30
(millions of dollars, except as otherwise noted)	2023	2022	Change		2023	2022	Change
Revenues	1,923	2,022	(4.9	%)	5,833	5,889	(1.0	%)
Purchased power	854	963	(11.3	%)	2,662	2,829	(5.9	%)
Revenues, net of purchased power1	1,069	1,059	0.9	%	3,171	3,060	3.6	%
Operation, maintenance and administration (OM&A) costs	283	288	(1.7	%)	928	847	9.6	%
Depreciation, amortization and asset removal costs	245	238	2.9	%	739	728	1.5	%
Financing charges	142	121	17.4	%	417	353	18.1	%
Income tax expense	37	101	(63.4	%)	169	249	(32.1	%)
Net income to common shareholder of Hydro One	359	308	16.6	%	911	876	4.0	%
Basic earnings per common share (EPS)	$2,524	$2,165	16.6	%	$6,405	$6,159	4.0	%
Diluted EPS	$2,524	$2,165	16.6	%	$6,405	$6,159	4.0	%
Net cash from operating activities	622	576	8.0	%	1,596	1,601	(0.3	%)
Funds from operations (FFO)1	622	605	2.8	%	1,669	1,748	(4.5	%)
Capital investments	633	496	27.6	%	1,769	1,545	14.5	%
Assets placed in-service	681	400	70.3	%	1,324	1,171	13.1	%
Transmission: Average monthly Ontario 60-minute peak demand (MW)	22,588	21,609	4.5	%	20,916	20,818	0.5	%
Distribution: Electricity distributed to Hydro One customers (GWh)	7,225	7,328	(1.4	%)	22,579	22,977	(1.7	%)

As at	September 30, 2023		December 31, 2022
Debt to capitalization ratio2	55.7	%	55.1	%

1The Company prepares and presents its financial statements in accordance with US GAAP. The Company also utilizes non-GAAP financial measures to assess its business and measure overall underlying business performance. Revenues, net of purchased power, and FFO are non-GAAP financial measures. Non-GAAP financial measures do not have a standardized meaning under GAAP, which is used to prepare the Company’s Consolidated Financial Statements and might not be comparable to similar financial measures presented by other entities. See section “Non-GAAP Financial Measures” for a discussion of these non-GAAP financial measures and a reconciliation of such measures to the most directly comparable GAAP measure.

2Debt to capitalization ratio is a non-GAAP ratio. Non-GAAP ratios do not have a standardized meaning under GAAP, which is used to prepare the Company’s Consolidated Financial Statements and might not be comparable to similar financial measures presented by other entities. See section “Non-GAAP Financial Measures” for a discussion of this non-GAAP ratio and its component elements.

OVERVIEW

The Company's transmission business consists of the transmission system operated by its subsidiaries, which includes Hydro One Networks Inc. (Hydro One Networks) and Hydro One Sault Ste. Marie LP, as well as an approximately 66% interest in B2M Limited Partnership, and an approximately 55% interest in Niagara Reinforcement Limited Partnership.

Hydro One’s distribution business consists of the distribution system operated by its subsidiaries, Hydro One Networks and Hydro One Remote Communities Inc. (Hydro One Remotes).

The other segment consists of certain corporate activities and is not rate-regulated.

1

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

For the nine months ended September 30, 2023 and 2022, Hydro One's segments accounted for the Company's total revenues, as follows:

Nine months ended September 30	2023		2022
Transmission	29	%	27	%
Distribution	71	%	73	%
Other	—	%	—	%

When adjusted for the recovery of purchased power costs, Hydro One’s segments accounted for the Company’s total revenues, net of purchased power,1 for the nine months ended September 30, 2023 and 2022 as follows:

Nine months ended September 30	2023		2022
Transmission	54	%	52	%
Distribution	46	%	48	%
Other	—	%	—	%

At September 30, 2023 and December 31, 2022, Hydro One’s segments accounted for the Company’s total assets as follows:

As at	September 30, 2023		December 31, 2022
Transmission	60	%	60	%
Distribution	39	%	38	%
Other	1	%	2	%

RESULTS OF OPERATIONS

Net Income

Net income attributable to the common shareholder for the quarter ended September 30, 2023 of $359 million is an increase of $51 million, or 16.6%, compared to the same period in 2022. Significant influences on the change in net income attributable to common shareholder of Hydro One included:

•higher revenues, net of purchased power,1 resulting from an increase in transmission revenues due to Ontario Energy Board (OEB)-approved 2023 transmission rates and higher monthly average demand.

•higher depreciation, amortization and asset removal costs primarily due to growth in capital assets as the Company continues to place new assets in-service, consistent with its ongoing capital investment program.

•higher financing charges attributable to higher weighted-average interest rates on long-term debt and short-term notes, partially offset by higher capitalized interest due to a higher average balance of assets under construction.

•lower income tax expense primarily attributable to higher deductible timing differences compared to the prior year, partially offset by higher pre-tax earnings when adjusted for net income neutral items.

Revenue during the third quarter was also impacted by the cessation of the OEB approved recovery of deferred tax asset (DTA) amounts previously shared with ratepayers. On April 8, 2021, the OEB approved recovery of the DTA amounts allocated to ratepayers and included in customer rates for the 2017 to 2021 period plus carrying charges over a two-year recovery period from July 1, 2021, to June 30, 2023 (“DTA Recovery Amounts”). The cessation of the recovery period resulted in lower revenues in the third quarter of the current year, as compared to the same quarter of 2022, and is offset by a lower tax expense and net income neutral in the period.

Net income attributable to the common shareholder for the nine months ended September 30, 2023 of $911 million is $35 million, or 4.0%, higher compared to the same period in 2022. Year-to-date results were impacted by similar factors as noted above, as well as higher OM&A costs resulting from higher corporate support costs and work program expenditures, partially offset by lower allowance for doubtful accounts.

1Revenues, net of purchased power, is a non-GAAP financial measure. See section “Non-GAAP Financial Measures”.

2

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Revenues

	Three months ended September 30				Nine months ended September 30
(millions of dollars, except as otherwise noted)	2023	2022	Change		2023	2022	Change
Transmission	594	563	5.5	%	1,710	1,599	6.9	%
Distribution	1,329	1,459	(8.9	%)	4,123	4,290	(3.9	%)
Total revenues	1,923	2,022	(4.9	%)	5,833	5,889	(1.0	%)
Transmission	594	563	5.5	%	1,710	1,599	6.9	%
Distribution revenues, net of purchased power1	475	496	(4.2	%)	1,461	1,461	—	%
Total revenues, net of purchased power1	1,069	1,059	0.9	%	3,171	3,060	3.6	%
Transmission: Average monthly Ontario 60-minute peak demand (MW)	22,588	21,609	4.5	%	20,916	20,818	0.5	%
Distribution: Electricity distributed to Hydro One customers (GWh)	7,225	7,328	(1.4	%)	22,579	22,977	(1.7	%)

1Revenues, net of purchased power, is a non-GAAP financial measure. See section “Non-GAAP Financial Measures”.

Transmission Revenues

Transmission revenues increased by 5.5% compared to the quarter ended September 30, 2022, primarily due to the following:

•higher revenues resulting from OEB-approved 2023 rates; and

•higher average monthly peak demand; partially offset by

•net income neutral items, including lower revenues associated with the cessation of the DTA Recovery period, partially offset by the OEB-approved recovery of historical cost deferrals recognized as regulatory assets in prior periods, which are offset in income tax and OM&A.

Transmission revenues increased by 6.9% compared to the nine months ended September 30, 2022, primarily due to similar factors as noted above.

Distribution revenues

Distribution revenues decreased by 8.9% compared to the quarter ended September 30, 2022, primarily due to the following:

•lower purchased power costs, which are fully recovered from ratepayers and thus net income neutral; and

•net income neutral items, including lower revenues associated with the cessation of the DTA Recovery period, partially offset by higher revenues related to the OEB-approved recovery of historical cost deferrals recognized as regulatory assets in prior periods which are offset in income tax and OM&A.

Distribution revenues decreased by 3.9% compared to the nine months ended September 30, 2022, primarily due to similar factors noted above.

Distribution revenues, net of purchased power,2 decreased by 4.2%compared to the three months ended September 30, 2022, primarily due to the reasons noted above, adjusted for the recovery of purchased power costs.

Distribution revenues, net of purchased power,2 remained in-line with the same period in the prior year largely due to similar factors noted above.

OM&A Costs

	Three months ended September 30				Nine months ended September 30
(millions of dollars)	2023	2022	Change		2023	2022	Change
Transmission	116	110	5.5	%	373	316	18.0	%
Distribution	164	176	(6.8	%)	541	521	3.8	%
Other	3	2	50.0	%	14	10	40.0	%
	283	288	(1.7	%)	928	847	9.6	%

Transmission OM&A Costs

Transmission OM&A costs were 5.5% higher than the quarter ended September 30, 2022, primarily due to higher OM&A associated with the OEB-approved recovery of historical cost deferrals, which are offset in revenue and therefore net income neutral.

2Revenues, net of purchased power, is a non-GAAP financial measure. See section “Non-GAAP Financial Measures”.

3

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Transmission OM&A costs were 18.0% higher than the nine months ended September 30, 2022, primarily due to the factor noted above, as well as:

•higher corporate support costs mainly attributable to lower capitalized overheads associated with the timing and volume of capital activity; and

•higher work program expenditures including information technology initiatives, vegetation management, and station maintenance work.

Distribution OM&A Costs

Distribution OM&A costs were 6.8% lower than the quarter ended September 30, 2022, primarily due to:

•storm restoration costs incurred in the prior year, which were recovered from third parties and offset in revenue, therefore net income neutral; and

•lower work program expenditures including vegetation management; partially offset by

•higher OM&A associated with the OEB-approved recovery of historical cost deferrals, which are offset in revenue and therefore net income neutral.

Distribution OM&A costs were 3.8% higher than the nine months ended September 30, 2022, primarily due to similar factors as noted above, as well as:

•higher corporate support costs mainly attributable to lower capitalized overheads associated with the timing and volume of capital activity; and

•higher work program expenditures including emergency power restoration and information technology initiatives, partially offset by environmental management and vegetation management expenditures; partially offset by

• lower allowance for doubtful accounts.

Depreciation, Amortization and Asset Removal Costs

Depreciation, amortization and asset removal costs increased by $7 million for the quarter ended September 30, 2023, compared to the same period in 2022, primarily due to growth in capital assets as the Company continues to place new assets in-service, consistent with its ongoing capital investment program, as well as higher asset removal costs.

Depreciation, amortization and asset removal costs increased by $11 million for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to similar factors as noted above as well as higher environmental expenditures in the first quarter of 2023.

Financing Charges

Financing charges increased by $21 million and $64 million for the three and nine months ended September 30, 2023, respectively, primarily due to higher weighted-average interest rates on long-term debt and short-term notes, partially offset by higher capitalized interest due to a higher average balance of assets under construction.

Income Tax Expense

Income tax expense was $37 million for the quarter ended September 30, 2023, compared to $101 million for the same period in 2022. The year-over-year decrease in income tax expense was primarily due to the following:

•lower tax expense associated with the cessation of the DTA recovery period on June 30, 2023 and regulatory adjustments associated with the Capitalized Overhead Tax Variance, which are offset by a corresponding decrease in revenue and are therefore net income neutral; and

•higher deductible timing differences compared to the prior year; partially offset by

•higher pre-tax earnings, adjusted for the net income neutral items.

Income tax expense was $169 million for the nine months ended September 30, 2023, compared to $249 million for the same period in 2022. The $80 million year-over-year decrease in income tax expense was primarily due to similar factors as noted above, as well as lower pre-tax earnings on a year-to-date basis compared to the prior year.

The Company realized an effective tax rate of approximately 9.3% and 15.5% for the three and nine months ended September 30, 2023, respectively, compared to approximately 24.5% and 22.0% realized in the same periods in 2022. The decrease of 15.2% and 6.5% respectively, was primarily attributable to the factors noted above.

4

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

QUARTERLY RESULTS OF OPERATIONS

Quarter ended (millions of dollars, except EPS and ratio)	Sep 30, 2023			Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021
Revenues		1,923		1,845		2,065		1,851		2,022		1,830		2,037		1,768
Purchased power		854		798		1,010		895		963		852		1,014		914
Revenues, net of purchased power1		1,069		1,047		1,055		956		1,059		978		1,023		854
Net income to common shareholder		359		267		285		181		308		256		312		159
Basic and diluted EPS		$	2,524	$	1,877	$	2,004	$	1,273	$	2,165	$	1,800	$	2,193	$	1,118
Earnings coverage ratio2		3.0		3.1		3.2		3.4		3.4		3.3		3.3		3.1

1Revenues, net of purchased power, is a non-GAAP financial measure. See section “Non-GAAP Financial Measures”.

2Earnings coverage ratio is a non-GAAP ratio. Non-GAAP ratios do not have a standardized meaning under GAAP, which is used to prepare the Company’s Consolidated Financial Statements and might not be comparable to similar financial measures presented by other entities. See section “Non-GAAP Financial Measures” for a discussion of this non-GAAP ratio and its component elements.

Variations in revenues and net income over the quarters are primarily due to the impact of seasonal weather conditions on customer demand and market pricing, as well as timing of regulatory decisions.

CAPITAL INVESTMENTS

The Company makes capital investments to maintain the safety, reliability and integrity of its transmission and distribution system assets and to provide for the ongoing growth and modernization required to meet the expanding and evolving needs of its customers and the electricity market. This is achieved through a combination of sustaining capital investments, which are required to support the continued operation of Hydro One’s existing assets, and development capital investments, which involve additions to both existing assets and large-scale projects such as new transmission lines and transmission stations.

Assets Placed In-Service

The following table presents Hydro One’s assets placed in-service during the three and nine months ended September 30, 2023 and 2022:

	Three months ended September 30				Nine months ended September 30
(millions of dollars)	2023	2022	Change		2023	2022	Change
Transmission	331	229	44.5	%	659	644	2.3	%
Distribution	350	171	104.7	%	665	527	26.2	%
Total assets placed in-service	681	400	70.3	%	1,324	1,171	13.1	%

Transmission Assets Placed In-Service

Transmission assets placed in-service increased by $102 million, or 44.5%, for the quarter ended September 30, 2023, compared to the same period in 2022, primarily due to the following:

•timing of investments placed in-service for station equipment refurbishments and replacements primarily at the Lambton Transformer Station, Bridgman Transformer Station, Keith Transformer Station and Cherrywood Transformer Station;

•timing of assets placed in-service related to information technology initiatives; and

•higher investments placed in-service for transmission line refurbishments and replacements; partially offset by

•major development projects put in service in the prior year, primarily the new Lakeshore Transformer Station.

Transmission assets placed in-service increased by $15 million, or 2.3%, for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to similar factors noted above as well as the timing of in-service additions earlier this year, including theArnprior Transformer Station and the Nanticoke Transformer Station. In addition, the year-to-date period was impacted by lower investments placed in-service for transmission line refurbishments.

5

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Distribution Assets Placed In-Service

Distribution assets placed in-service increased by $179 million, or 104.7%, for the quarter ended September 30, 2023, compared to the same period in 2022, primarily due to the following:

•timing of assets placed in-service related to information technology initiatives;

•investment placed in-service for the feeder development work at South Middle Road Transformer Station;

•higher volume of storm-related asset replacements; and

•higher volume of work associated with customer connections, line refurbishments, and wood pole replacements; partially offset by

•lower volume of station refurbishments and replacements; and

•completion of the Dunnville Operation Centre in 2022.

Distribution assets placed in-service increased by $138 million, or 26.2%, for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to similar factors noted above, partially offset by lower storm-related asset replacements placed in-service on a year-to-date basis.

Capital Investments

The following table presents Hydro One’s capital investments during the three and nine months ended September 30, 2023 and 2022:

	Three months ended September 30				Nine months ended September 30
(millions of dollars)	2023	2022	Change		2023	2022	Change
Transmission
Sustaining	293	229	27.9	%	761	674	12.9	%
Development	65	59	10.2	%	232	157	47.8	%
Other	26	23	13.0	%	62	68	(8.8	%)
	384	311	23.5	%	1,055	899	17.4	%
Distribution
Sustaining	96	62	54.8	%	289	313	(7.7	%)
Development	121	103	17.5	%	351	275	27.6	%
Other	32	20	60.0	%	74	58	27.6	%
	249	185	34.6	%	714	646	10.5	%
Total capital investments	633	496	27.6	%	1,769	1,545	14.5	%

Transmission Capital Investments

Transmission capital investments increased by $73 million, or 23.5%, in the third quarter of 2023 compared to the third quarter of 2022, primarily due to a higher volume of station refurbishments and equipment replacements.

Transmission capital investments increased by $156 million, or 17.4%, in the nine months ended September 30, 2023, primarily due to the same factor noted above, as well as investments in the new Chatham to Lakeshore and Waasigan Transmission Line projects in the current year.

Distribution Capital Investments

Distribution capital investments increased by $64 million, or 34.6%, in the third quarter of 2023 compared to the third quarter of 2022, primarily due to the following:

•higher spend on storm-related asset replacements;

•higher volume of line refurbishments and wood pole replacements;

•investment in the Advanced Metering Infrastructure System 2.0 project;

•higher spend on information technology initiatives;

•higher volume of work on customer connections; and

•higher spend on minor fixed assets.

Distribution capital investments increased by $68 million, or 10.5%, in the nine months ended September 30, 2023, primarily due to similar factors noted above, as well as timing of work on system capability reinforcement projects and higher volume of externally driven work attributable to joint use assets and line relocations. In addition, the year-to-date period was impacted by lower spend on storm-related asset replacements.

6

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Major Transmission Capital Investment Projects

The following table summarizes the status of significant transmission projects at September 30, 2023:

Project Name	Location	Type	Anticipated In-Service Date	Estimated Cost	Capital Cost To Date
			(year)	(millions of dollars)
Development Projects:
Barrie Area Transmission      Upgrade	Barrie-Innisfil   Southern Ontario	Upgraded transmission line   and stations	2023	125	88
Chatham to Lakeshore Transmission Line1	Southwestern Ontario	New transmission line and   station expansion	2024	253	111
East-West Tie Station Expansion2	Northern Ontario	New transmission connection   and station expansion	2024	191	186
Islington Transmission Station	Toronto Southern Ontario	New transmission station and   connection	2025	109	5
St. Clair Transmission Line3	Southwestern Ontario	New transmission line and   station expansion	2025	38	15
Waasigan Transmission Line4	Thunder Bay-Atikokan-Dryden   Northwestern Ontario	New transmission line and station expansion	2027	1,200	53
Longwood to Lakeshore Transmission Line5	Southwestern Ontario	New transmission line and   station expansion	TBD	TBD	TBD
Second Longwood to Lakeshore Transmission Line5	Southwestern Ontario	New transmission line and   station expansion	TBD	TBD	TBD
Lakeshore to Windsor      Transmission Line5	Southwestern Ontario	New transmission line and   station expansion	TBD	TBD	TBD
Mississagi to Third Line Line6	Northeastern Ontario	New transmission line and   station expansion	TBD	TBD	TBD
Hanmer to Mississagi Line6	Northeastern Ontario	New transmission line and   station expansion	TBD	TBD	TBD
Greater Toronto Area East Line6	Eastern Ontario	New transmission line and   station expansion	TBD	TBD	TBD
Sustainment Projects:
Beck #2 Transmission Station      Circuit Breaker Replacement	Niagara area   Southwestern Ontario	Station sustainment	2023	135	121
Cherrywood Transmission Station      Circuit Breaker Replacement	Pickering   Central Ontario	Station sustainment	2023	115	96
Bruce B Switching Station      Circuit Breaker Replacement	Tiverton   Southwestern Ontario	Station sustainment	2024	185	170
Middleport Transmission Station      Circuit Breaker Replacement	Middleport   Southwestern Ontario	Station sustainment	2025	184	134
Lennox Transmission Station      Circuit Breaker Replacement	Napanee   Southeastern Ontario	Station sustainment	2026	152	126
Esplanade x Terauley      Underground Cable Replacement	Toronto   Southern Ontario	Line sustainment	2026	117	31
Bridgman Transmission Station      Refurbishment	Toronto   Southern Ontario	Station sustainment	2026	108	60
Bruce A Transmission Station      Switchyard Replacement	Tiverton   Southwestern Ontario	Station sustainment	2027	555	78

1 The Chatham to Lakeshore Transmission Line project includes the line and associated facilities and is further discussed in the section “Other Developments - Supporting Critical Infrastructure in Southwestern Ontario.”

2The East-West Tie Station Expansion project has been placed in-service in phases, with significant portions of the project placed in-service over the 2021-22 period, and final project in-service expected in 2024.

3The estimated cost of the St. Clair Transmission Line relates to the development phase of the project and the anticipated in-service date reflects the anticipated completion date of the development phase only. Completion of the line remains subject to stakeholder consultation and regulatory approvals.

4 The Waasigan Transmission Line Project includes both phase 1 and phase 2, inclusive of necessary stations enhancements to support energization of the new lines. The estimated cost relates to the development and construction phases of the project and the anticipated in-service date reflects the anticipated completion of Phase 2 by the end of 2027. The first phase of the project is expected to be in-serviced as close to the end of 2025 as possible. On May 4, 2022 and November 18, 2022, under Hydro One’s equity partnership model, Hydro One entered into agreements with First Nations communities that provide them the opportunity to acquire a 50% equity stake in the transmission line component of the project. Completion of the project remains subject to stakeholder consultation and regulatory approvals. See section "Other Developments - Supporting Critical Infrastructure in Northwestern Ontario" for further details.

5The scope and timing of these Southwestern Ontario transmission reinforcements are currently under review.

6The scope and timing of these Northeastern and Eastern Ontario transmission reinforcements are currently under review.

7

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Future Capital Investments

The Company estimates future capital investments based on management’s expectations of the amount of capital expenditures that will be required to provide transmission and distribution services that are efficient, reliable, and provide value for customers, consistent with the OEB’s Renewed Regulatory Framework.

The 2023 to 2027 capital estimates have been updated during the nine months ended September 30, 2023 to reflect the estimated impact of the Waasigan Transmission Line Project that was filed with the OEB on July 31, 2023 through a leave-to-construct application (see section "Other Developments - Supporting Critical Infrastructure in Northwestern Ontario" for further details), as well as the revised cost and anticipated in-service date estimates of the Chatham to Lakeshore Transmission Line Project (see “Other Developments - Supporting Critical Infrastructure in Southwestern Ontario” for further details).The following tables summarize Hydro One’s annual projected capital investments for 2023 to 2027 by business segment and by category:

By business segment: (millions of dollars)	2023	2024	2025	2026	2027
Transmission1	1,636	1,807	1,778	1,692	1,772
Distribution	924	1,027	1,043	1,001	989
Other	23	18	15	11	10
Total capital investments2	2,583	2,852	2,836	2,704	2,771

By category: (millions of dollars)	2023	2024	2025	2026	2027
Sustainment	1,534	1,658	1,629	1,548	1,480
Development1	764	971	1,001	947	1,124
Other3	285	223	206	209	167
Total capital investments2	2,583	2,852	2,836	2,704	2,771

1 Figures include investments in certain development projects of Hydro One Networks not included in the investment plan approved by the OEB in the Joint Rate Application (JRAP) decision.

2 On March 29, 2021, the Independent Electricity Service Operator (IESO) requested Hydro One to initiate work to develop and construct a new transmission line between Chatham and Lambton (the St. Clair Line) to support agricultural growth in Southwestern Ontario. On March 31, 2022, the Minister of Energy directed the OEB to amend Hydro One Networks' transmission licence to require it to develop and seek approvals for this and three other priority transmission lines to meet growing demand in Southwestern Ontario (see section “Other Developments”). On October 23, 2023, the Minister of Energy further directed the OEB to amend Hydro One Networks' licence to require it to develop and seek approvals for three priority transmission line projects to meet growing electricity demand in Northeastern and Eastern Ontario. The future capital investments presented do not include capital expenditures of the six additional lines, as Hydro One is currently evaluating the scope and timing of this work.

3 “Other” capital expenditures include investments in fleet, real estate, IT, and operations technology and related functions.

SUMMARY OF SOURCES AND USES OF CASH

Hydro One’s primary sources of cash flows are funds generated from operations, capital market debt issuances and bank credit facilities that are used to satisfy Hydro One’s capital resource requirements, including the Company’s capital expenditures, servicing and repayment of debt, and dividend payments.

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Net cash from operating activities	622	576	1,596	1,601
Net cash from (used in) financing activities	46	(77)	(205)	(592)
Net cash used in investing activities	(668)	(499)	(1,849)	(1,508)
Decrease in cash and cash equivalents	—	—	(458)	(499)

Net cash from operating activities

Net cash from operating activities increased by $46 million for the three months ended September 30, 2023, compared to the same period in 2022. The increase was impacted by various factors, including the following:

•increase in net working capital deficiency primarily attributable to a lower cost of power payable to the IESO, driven by lower commodity rates charged, and higher receivables from the IESO due to higher transmission revenues, partially offset by higher accrued liabilities;

•changes in regulatory account balances; and

•higher pre-tax earnings.

Net cash from operating activities decreased by $5 million for the nine months ended September 30, 2023, compared to the same period in 2022. The decrease was mainly attributable to lower pre-tax earnings, partially offset by an increase in net working capital deficiency primarily attributable to higher receivables from the IESO due to higher transmission revenues, partially offset by higher accrued liabilities.

8

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Net cash from (used in) financing activities

Net cash provided by financing activities increased by $123 million and cash used in financing activities decreased by $387 million, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. This was impacted by various factors, including the following:

Sources of cash

•the Company received proceeds of $2,120 million and $5,480 million from the issuance of short-term notes in the three and nine month periods ended September 30, 2023, respectively, compared to $1,730 million and $4,590 million received in the same periods last year.

•the Company issued $425 million and $1,475 million of long-term debt in the three and nine months ended September 30, 2023, respectively, compared to no long-term debt issued in either period of 2022.

Uses of cash

•the Company repaid $2,295 million and $5,930 million of short-term notes in the three and nine month periods ended September 30, 2023, respectively, compared to $1,650 million and $4,120 million repaid in the same periods last year.

•the Company repaid $nil and $731 million of long-term debt in the three and nine month periods ended September 30, 2023, respectively, compared to $nil and $601 million in the same periods of 2022.

•common share dividends paid in the three and nine month periods ended September 30, 2023 were $176 million and $517 million, respectively, compared to dividends of $165 million and $487 million paid in the same periods last year.

Net cash used in investing activities

Net cash used in investing activities increased by $169 million and $341 million, for the three and nine months ended September 30, 2023, respectively, compared to the same period in 2022 primarily due to higher capital investments as well as higher spend on future use assets associated with designated broadband projects. See section “Capital Investments” for comparability of capital investments made by the Company during the three and nine months ended September 30, 2023 compared to the prior year, and section “Building Broadband Faster Act, 2021” for further details on broadband projects.

LIQUIDITY AND FINANCING STRATEGY

Short-term liquidity is provided through FFO,3 Hydro One Inc.’s commercial paper program, and the Company’s consolidated bank credit facilities. Under the commercial paper program, Hydro One Inc. is authorized to issue up to $2,300 million in short-term notes with a term to maturity of up to 365 days.

At September 30, 2023, Hydro One had $927 million in commercial paper borrowings outstanding, compared to $1,374 million outstanding at December 31, 2022. The Company also has revolving bank credit facilities (Operating Credit Facilities) with a total available balance of $2,300 million at September 30, 2023. In January 2022, Hydro One successfully amended its Operating Credit Facilities to incorporate environmental, social and governance targets. The facilities now include a pricing adjustment which can increase or decrease Hydro One’s cost of funding based on its performance on certain Sustainability Performance Measures, which are related to Hydro One's sustainability goals. On June 1, 2023, the maturity date for the Operating Credit Facilities was extended from 2027 to 2028. No amounts were drawn on the Operating Credit Facilities at September 30, 2023 or December 31, 2022. The Company may use the Operating Credit Facilities for working capital and general corporate purposes. The short-term liquidity under the commercial paper program, the Operating Credit Facilities, available cash on hand and anticipated levels of FFO3 are expected to be sufficient to fund the Company’s operating requirements.

At September 30, 2023, the Company had long-term debt outstanding in the principal amount of $14,120 million. The majority of long-term debt issued by Hydro One has been issued under its Medium Term Note (MTN) Program, as further described below. On January 12, 2023, Hydro One published a Sustainable Financing Framework, which allows the Company and its subsidiaries to issue sustainable financing instruments and allocate the net proceeds to investments in eligible green and social project categories. The Company's total long-term debt consists of notes and debentures that mature between 2024 and 2064, and at September 30, 2023, had a weighted-average term to maturity of approximately 14.0 years (December 31, 2022 - 14.2 years) and a weighted-average coupon rate of 4.1% (December 31, 2022 - 3.9%).

In June 2022, Hydro One filed a short form base shelf prospectus in connection with its MTN Program, which has a maximum authorized principal amount of notes issuable of $4,000 million and expires in July 2024. At September 30, 2023, $1,775 million remained available for issuance under the MTN Program prospectus. On October 20, 2023, Hydro One Inc. issued $400 million of green bonds (Series 57 notes) under its MTN Program with a maturity date of October 20, 2025 and a coupon rate of 5.54%. Concurrently, Hydro One Inc. executed a $400 million fixed-to-floating interest rate swap agreement to convert these notes into daily compounded variable rate debt.

3FFO is a non-GAAP financial measure. See section “Non-GAAP Financial Measures”.

9

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Compliance

At September 30, 2023, the Company was in compliance with all financial covenants and limitations associated with the outstanding borrowings and credit facilities.

Credit Ratings

On August 18, 2023, S&P Global Ratings revised its outlooks on the Company to positive from stable and affirmed the Company’s existing issuer and issue-level ratings.

OTHER OBLIGATIONS

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Summary of Contractual Obligations and Other Commercial Commitments

The following table presents a summary of Hydro One’s debt and other major contractual obligations and commercial commitments:

As at September 30, 2023 (millions of dollars)	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Contractual obligations (due by year)
Long-term debt - principal repayments	14,120	700	1,675	750	10,995
Long-term debt - interest payments	8,433	583	1,103	1,002	5,745
Short-term notes payable	927	927	—	—	—
Pension contributions1	476	71	147	155	103
Environmental and asset retirement obligations	97	19	21	4	53
Outsourcing and other agreements	180	76	79	12	13
Capital agreements	124	4	120	—	—
Lease obligations	53	12	21	16	4
Long-term software/meter agreement	22	2	15	2	3
Total contractual obligations	24,432	2,394	3,181	1,941	16,916
Other commercial commitments (by year of expiry)
Operating Credit Facilities	2,300	—	—	2,300	—
Letters of credit2	171	171	—	—	—
Guarantees3	475	475	—	—	—
Total other commercial commitments	2,946	646	—	2,300	—

1Contributions to the Hydro One Pension Plan are based on actuarial reports, including valuations performed at least every three years, and actual or projected levels of pensionable earnings, as applicable. The most recent actuarial valuation was performed effective December 31, 2022 and filed on September 26, 2023.

2 Letters of credit consist of $163 million letters of credit related to retirement compensation arrangements, a $7 million letter of credit provided to the IESO for prudential support, and $1 million in letters of credit for various operating purposes.

3 Guarantees consist of $475 million prudential support provided to the IESO by Hydro One on behalf of its subsidiaries.

SHARE CAPITAL

Hydro One is authorized to issue an unlimited number of common shares. The amount and timing of any dividends payable by Hydro One is at the discretion of the Hydro One's Board of Directors (Board) and is established on the basis of Hydro One’s results of operations, maintenance of its deemed regulatory capital structure, financial condition, cash requirements, the satisfaction of solvency tests imposed by corporate laws for the declaration and payment of dividends and other factors that the Board may consider relevant.As at November 7, 2023, Hydro One had 142,239 issued and outstanding common shares.

The Company is authorized to issue an unlimited number of preferred shares, issuable in series. At November 7, 2023, the Company had no preferred shares issued and outstanding.

10

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

REGULATION

Hydro One Networks

On November 29, 2022 the OEB issued a Decision and Order approving Hydro One Networks' JRAP for distribution rates and transmission revenue requirement for the period 2023-2027. The following table lists the rate base and revenue requirements arising from the approved rate application:

	Hydro One Networks - Transmission		Hydro One Networks - Distribution
Year	Rate Base	Revenue Requirement1	Rate Base	Revenue Requirement1
2023	$14,534 million	$1,952 million	$9,460 million	$1,727 million
2024	$15,342 million	$2,073 million	$9,979 million	$1,813 million
2025	$16,271 million	$2,168 million	$10,573 million	$1,886 million
2026	$17,148 million	$2,277 million	$11,153 million	$1,985 million
2027	$17,940 million	$2,362 million	$11,656 million	$2,071 million

1 Revenue requirements for 2024 to 2027 are updated annually as part of an annual application process to reflect latest inflation factors.

Following the OEB approval of the JRAP Settlement and the completion of the recovery of DTA amounts previously shared with ratepayers in 2023, Hydro One's effective tax rate over the JRAP period is expected to be between 13% and 16%.

Deferred Tax Asset

On April 8, 2021, the OEB rendered its DTA Implementation Decision, approving the recovery of the DTA amounts allocated to ratepayers and included in customer rates for the 2017 to 2021 period, plus carrying charges, over a two-year recovery period from July 1, 2021 to June 30, 2023.

The recovery of the previously shared DTA amounts plus carrying charges resulted in a $67 million contribution to FFO4 for the nine months ended September 30, 2023 (2022 - $132 million). In addition, the DTA Implementation Decision required that Hydro One adjust the transmission revenue requirement and the base distribution rates beginning January 1, 2022 to eliminate any further tax savings flowing to customers. This is expected to result in additional FFO4 of approximately $46 million for 2023, but is anticipated to decline annually thereafter.

Hydro One Remotes

On August 31, 2022, Hydro One Remotes filed its distribution rate application for 2023-2027. On March 2, 2023, the OEB approved Hydro One Remote Communities' 2023 revenue requirement of $128 million with a price cap escalator index for 2023-2027, and a 3.72% rate increase effective May 1, 2023.

Getting Ontario Connected Act Variance Account

On October 31, 2023 the OEB established an industry-wide generic variance account, effective April 1, 2023, which allows rate-regulated electricity distributors to record incremental costs of locating underground infrastructure resulting from the implementation of Bill 93, in a regulatory account for future recovery subject to the approval of the OEB. The Company will continue to assess the impact as more details become available.

Cloud Computing Arrangement Implementation Costs

On November 2, 2023, the OEB established an industry-wide generic deferral account, effective December 1, 2023, which allows rate-regulated entities, including electricity distributors and transmitters, to record incremental cloud computing implementation costs incurred and any related offsetting savings, if applicable, in a regulatory account for future recovery subject to the approval of the OEB. The Company is currently assessing the potential impact of establishing the account.

OTHER DEVELOPMENTS

Collective Agreements

On June 23, 2023, Hydro One Inc. reached a tentative renewal agreement for the collective agreement with the Power Workers’ Union (PWU) for Customer Service Operations (CSO), which had expired on September 30, 2022. On the same date, Hydro One Inc. also reached a tentative renewal agreement with the PWU for the main collective agreement that had expired on March 31, 2023. The main agreement was ratified by the PWU membership on August 16, 2023, while the CSO agreement was ratified on August 21, 2023. Both agreements will expire on September 30, 2025.

4FFO is a non-GAAP financial measure. See section “Non-GAAP Financial Measures”.

11

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

The collective agreement with the Society of United Professionals expired on March 31, 2023. Negotiations to renew this agreement commenced on January 16, 2023 and resulted in a tentative renewal agreement on August 15, 2023. The Society membership ratified the new agreement on September 11, 2023. This agreement will also expire on September 30, 2025.

Chapleau Hydro Purchase Agreement

On November 6, 2023, Hydro One Networks and Chapleau Public Utilities Corporation (Chapleau Hydro) signed a definitive agreement for Hydro One Networks to acquire Chapleau Hydro’s distribution business to serve electricity customers within the Township of Chapleau. The agreement includes purchasing substantially all of Chapleau Hydro’s electricity distribution assets. Chapleau Hydro is owned by the Township of Chapleau. Hydro One Networks is expected to pay approximately $2.3 million for the transaction, subject to adjustments. The acquisition is conditional upon the satisfaction of customary closing conditions and approval by the OEB. Hydro One Networks intends to file an application with the OEB by the end of 2023 for approval of the acquisition.

Building Broadband Faster Act, 2021

In March 2021, the Province introduced Bill 257, Supporting Broadband and Infrastructure Expansion Act, 2021, to create a new act entitled the Building Broadband Faster Act, 2021 (BBFA) that is aimed at supporting the timely deployment of broadband infrastructure within unserved and underserved rural Ontario communities. Bill 257 received Royal Assent on April 12, 2021. Bill 257 amended the Ontario Energy Board Act, 1998 (OEB Act) to provide the Province with regulation-making authority regarding the development of, access to, or use of electricity infrastructure for non-electricity purposes including to reduce or fix the annual rental charge that telecommunications service providers must pay to attach their wireline broadband telecommunications attachments to utility poles, establish performance standards and timelines for how utilities must respond to attachment requests and require utilities to consider joint use of poles during planning processes. The Building Broadband Faster ActGuideline and two regulations informing the legislative changes were published on November 2021.

A third regulation mandating a reduction in the annual wireline attachment rate for telecommunications carriers was issued on December 10, 2021. The OEB issued an Order and Decision on December 16, 2021 that lowered the annual wireline attachment rate for Telecommunications Carriers per the Telecommunications Act from $44.50 per attacher per pole to $34.76 per attacher per pole. The OEB subsequently issued another Order and Decision on November 3, 2022 to adjust the annual wireline attachment rate to $36.05 per attacher per pole. On March 7, 2022, the Province introduced Bill 93 (Getting Ontario Connected Act, 2022). Bill 93 received Royal Assent on April 14, 2022. Bill 93 amends the BBFA to ensure that organizations that own underground utility infrastructure near a designated high-speed internet project provide timely access to their infrastructure data, which would allow internet service providers to quickly start work on laying down underground high-speed internet infrastructure.

The regulation regarding electricity infrastructure and designated broadband projects under the OEB Act (O.Reg. 410/22) came into force on April 21, 2022. On July 7, 2022, the OEB established a deferral account for rate-regulated distributors to record incremental costs associated with carrying out activities pertaining to designated broadband projects. $1.7 million was recorded in this account as of Q4 2022. On September 6, 2022, the Company launched its choice-based operating model to provide internet service providers with choices on how to access the Company’s infrastructure in order to effectively execute designated broadband projects. As part of the project, a contract was signed with Anixter Power Solutions Canada Inc. (Wesco) in support of this project. In December 2022, Hydro One committed to purchases in the amount of $61 million. On March 28 2023, the Province amended the OEB Act (O.Reg. 410/22) updating portions of the previous regulation established on April 21 2022. Key updates focus on amendments to performance timelines associated with designated broadband projects.

On August 14, 2023, the BBFA was further amended to provide additional guidance to support the implementation of legislative and regulatory requirements, including a framework to support cost sharing for pole attachments and make-ready work. .

Supporting Critical Transmission Infrastructure in Southwestern Ontario

On May 9, 2022, Hydro One Networks filed a leave-to-construct application seeking OEB approval for the Chatham to Lakeshore Transmission Line project in Southwestern Ontario. On November 24, 2022, the OEB issued its Decision and Order granting leave to construct as requested in the application, with standard conditions of approval. On December 28, 2022, the Haudenosaunee Development Institute (HDI) filed an appeal to the Divisional Court, under s.22 of the Ontario Energy Board Act, 1998 (OEBA), of this decision. The appeal, among other items, asked to set aside the OEB's decision granting Hydro One approval to construct the Chatham to Lakeshore Transmission Line project and to deny the application. The HDI filed their appeal materials on March 1, 2023. The OEB and Hydro One filed their responding materials on May 1, 2023.

On June 8, 2023, all parties mutually agreed to a dismissal of the appeal without costs, and the appeal was dismissed by the Divisional Court on June 12, 2023. On June 15, 2023, Hydro One commenced construction of the Chatham to Lakeshore Transmission Line Project, which was expected to be in-service by the end of 2025.

On November 3, 2023, the Company announced a revision to the anticipated in-service date and estimated cost of the project. The Chatham to Lakeshore Transmission Line project is now expected to be in-service by December 2024 and completed for a total cost of $253 million.

12

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Supporting Critical Transmission Infrastructure in Northwestern Ontario

In 2013, the Province issued an Order in Council with a directive from the Minister of Energy to the OEB, requiring Hydro One Networks to develop and seek approvals for the Northwest Bulk Transmission Line (now the Waasigan Transmission Line). In response to the 2013 directive, the OEB amended Hydro One Networks’ transmission license in 2014 to develop and seek approval for the project. Hydro One is currently undertaking an environmental assessment which includes both phases of the project (see section “Major Transmission Capital Investment Projects”). Hydro One has agreements with nine First Nation communities providing them the opportunity to acquire 50% ownership in the transmission line component of the project.

On April 25, 2023, the Company received a letter from the IESO confirming the need for reliable electricity in Northwestern Ontario. In this letter, the IESO recommends that Phase 2 of the Waasigan Transmission Line project, a single-circuit 230 kilovolt transmission line between Mackenzie Transformer Station in the Town of Atikokan and Dryden Transformer Station in the City of Dryden, should be in-serviced as soon as practically possible following Phase 1 of the project. This follows an IESO letter received in May 2022 in which it recommended construction of Phase 1 to proceed with an in-service date as close to the end of 2025 as possible.

On July 31, 2023, Hydro One Networks filed a leave-to-construct application seeking OEB approval for the Waasigan Transmission Line Project. See section "Major Transmission Capital Investment Projects".

Supporting Critical Transmission Infrastructure in Northeastern and Eastern Ontario

On July 10, 2023, the Ministry of Energy (Ministry) announced a proposal to take certain actions to facilitate the timely development of three transmission projects across Northeastern and Eastern Ontario. The Ministry proposed to bring forward an Order in Council that would, if approved, declare the following transmission projects, recommended to be in-service by 2029, to be priority projects under s. 96.1 (1) of the OEBA:

•The Mississagi to Third Line – a 230-kilovolt transmission line that is expected to run approximately 75 kilometers from Mississagi Transformer Station (west of Sudbury) to Third Line Transformer Station (Sault Ste Marie);

•The Greater Toronto Area East Line – a 230-kilovolt transmission line that is expected to run approximately 50 kilometers from either Cherrywood Transformer Station (Pickering) or Clarington Transformer Station (Oshawa) into Dobbin Transformer Station (Peterborough); and

•The Hanmer to Mississagi Line – a 500-kilovolt transmission line that is expected to run approximately 205 kilometers from Hanmer Transformer Station (Greater Sudbury) to Mississagi Transformer Station (west of Sudbury).

At the same time, the Ministry also proposed to bring forward an Order in Council and companion Directive, pursuant to s. 28.6.1 of the OEBA that would, if approved, direct the OEB to amend Hydro One Networks’ transmission licence to require it to undertake development work and seek all necessary approvals to construct the three projects listed above. The 60-day consultation period ended on September 8, 2023.

On October 23, 2023, the Minister of Energy directed the OEB to amend Hydro One Networks’ licence to require it to develop and seek approvals for the three priority transmission line projects noted above.

Sustainability Report

The Hydro One Limited 2022 Sustainability Report entitled “Enabling Ontario's Clean Energy Future” is available on the Company’s website atwww.hydroone.com/sustainability.

The 2022 Sustainability Report discloses the Company’s environmental, social and governance performance and provides a better understanding of how Hydro One manages the opportunities and challenges associated with its business. The report also includes disclosure relating to the Company’s current efforts in its priority areas of People, Planet and Community.

HYDRO ONE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

Board of Directors

On June 2, 2023, Mitch Panciuk, Helga Reidel and Brian Vaasjo were appointed by the Board of Hydro One. Their appointments replaced William (Bill) Sheffield, Blair Cowper-Smith and Russel Robertson who did not stand for re-election.

Executive Officers

On January 10, 2023, the Board of Hydro One announced the appointment of David Lebeter as President and Chief Executive Officer effective February 1, 2023. On February 1, 2023, Bill Sheffield stepped down from his role as Interim President and Chief Executive Officer, however, continued in his role as a director of Hydro One until the Annual General Meeting on June 2, 2023 where he did not stand for re-election.

On April 13, 2023, Hydro One announced the appointment of Teri French as Executive Vice President (EVP), Operations and Customer Experience and Andrew Spencer as EVP, Capital Portfolio Delivery. On the same day, the Company announced

13

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

expanded mandates for Megan Telford as EVP, Strategy, Energy Transition, Human Resources and Safety and Chris Lopez as EVP, Chief Financial and Regulatory Officer.

On April 13, 2023, Paul Harricks announced his intention to retire and stepped down from his role as EVP, Chief Legal Officer. On the same day, Cassidy McFarlane was named General Counsel of Hydro One. Paul Harricks is remaining with Hydro One as a Senior Advisor to the Chief Executive Officer until the end of the year.

Effective June 30, 2023, Brad Bowness resigned as Chief Information Officer of Hydro One.

NON-GAAP FINANCIAL MEASURES

Hydro One uses a number of financial measures to assess its performance. The Company presents FFO or “funds from operations” to reflect a measure of the Company’s cash flow; and revenues, net of purchased power, to reflect revenues net of the cost of purchased power. FFO and revenues, net of purchased power, are non-GAAP financial measures which do not have a standardized meaning prescribed by GAAP and might not be comparable to similar measures presented by other entities. They should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under GAAP.

Hydro One also uses financial ratios that are non-GAAP ratios such as debt to capitalization ratio and earnings coverage ratio. Non-GAAP ratios do not have a standardized meaning prescribed by GAAP and might not be comparable to similar measures presented by other entities. They should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under US GAAP.

FFO

FFO is defined as net cash from operating activities, adjusted for (i) changes in non-cash balances related to operations, (ii) dividends paid on preferred shares, and (iii) distributions to noncontrolling interest. Management believes that FFO is helpful as a supplemental measure of the Company’s operating cash flows as it excludes timing-related fluctuations in non-cash operating working capital and cash flows not attributable to common shareholders. As such, management believes that FFO provides a consistent measure of the cash generating performance of the Company’s assets.

The following table provides a reconciliation of GAAP (reported) results to non-GAAP (adjusted) results on a consolidated basis.

	Three months ended September 30		Nine months ended September 30
(millions of dollars)	2023	2022	2023	2022
Net cash from operating activities	622	576	1,596	1,601
Changes in non-cash balances related to operations	2	31	81	155
Distributions to noncontrolling interest	(2)	(2)	(8)	(8)
FFO	622	605	1,669	1,748

Revenues, Net of Purchased Power

Revenues, net of purchased power, is defined as revenues less the cost of purchased power; distribution revenues, net of purchased power, is defined as distribution revenues less the cost of purchased power. These measures are used internally by management to assess the impacts of revenue on net income and are considered useful because they exclude the cost of power that is fully recovered through revenues and therefore net income neutral.

The following tables provide a reconciliation of GAAP (reported) revenues to non-GAAP (adjusted) revenues, net of purchased power, on a consolidated basis.

Quarter ended (millions of dollars)	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Revenues	1,923	1,845	2,065	1,851	2,022	1,830	2,037	1,768
Less: Purchased power	854	798	1,010	895	963	852	1,014	914
Revenues, net of purchased power	1,069	1,047	1,055	956	1,059	978	1,023	854

Quarter ended (millions of dollars)	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Distribution revenues	1,329	1,285	1,509	1,370	1,459	1,314	1,517	1,347
Less: Purchased power	854	798	1,010	895	963	852	1,014	914
Distribution revenues, net of purchased power	475	487	499	475	496	462	503	433

14

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

Debt to Capitalization Ratio

The Company believes that the debt to capitalization ratio is an important non-GAAP ratio in the management of its debt levels. This non-GAAP ratio does not have a standardized meaning under US GAAP and may not be comparable to similar measures presented by other entities. Debt to capitalization ratio has been calculated as total debt (including total long-term debt and short-term borrowings, net of cash and cash equivalents) divided by total debt plus total shareholder's equity, but excluding any amounts related to noncontrolling interest. Management believes that the debt to capitalization ratio is helpful as a measure of the proportion of debt in the Company's capital structure.

As at (millions of dollars)	September 30, 2023	December 31, 2022
Short-term notes payable	927	1,374
Add: bank indebtedness	33	—
Less: cash and cash equivalents	—	(458)
Long-term debt (current portion)	700	733
Long-term debt (long-term portion)	13,378	12,606
Total debt (A)	15,038	14,255
Shareholder's equity (excluding noncontrolling interest)	11,978	11,596
Total debt plus shareholder's equity (B)	27,016	25,851

Debt-to-capitalization ratio (A/B) 55.7 % 55.1 %

Earnings Coverage Ratio

Earnings coverage ratio is defined as earnings before income taxes and financing charges attributable to shareholder, divided by the sum of financing charges and capitalized interest, and is calculated on a rolling twelve-month basis. The Company believes that the earnings coverage ratio is an important non-GAAP measure in the management of its liquidity. This non-GAAP ratio does not have a standardized meaning under US GAAP and may not be comparable to similar measures presented by other entities.

Quarter ended (millions of dollars)	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Net income to common shareholder	359	267	285	181	308	256	312	159
Income tax expense	37	66	66	41	101	68	80	54
Financing charges	142	141	134	125	121	118	114	122
Earnings before income taxes and financing charges attributable to common shareholder	538	474	485	347	530	442	506	335
Twelve months ended (millions of dollars)	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Earnings before income taxes and financing charges attributable to common shareholder (A)	1,844	1,836	1,804	1,825	1,813	1,772	1,698	1,604
Quarter ended (millions of dollars)	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Financing charges	142	141	134	125	121	118	114	122
Capitalized interest	20	18	15	16	16	16	15	16
Financing charges and capitalized interest	162	159	149	141	137	134	129	138
Twelve months ended (millions of dollars)	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Financing charges and capitalized interest (B)	611	586	561	541	538	532	515	513
Earnings coverage ratio = A/B	3.0	3.1	3.2	3.4	3.4	3.3	3.3	3.1

15

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

RELATED PARTY TRANSACTIONS

Hydro One is owned by Hydro One Limited. The Province is a shareholder of Hydro One Limited with approximately 47.1% ownership at September 30, 2023. The IESO, OPG, Ontario Electricity Financial Corporation (OEFC), the OEB, Acronym Solutions Inc. (Acronym) and Hydro One Broadband Solutions Inc, (HOBSI) are related parties to Hydro One because they are controlled or significantly influenced by the Ministry of Energy or by Hydro One Limited. The following is a summary of the Company’s related party transactions during the three and nine months ended September 30, 2023 and 2022:

(millions of dollars)		Three months ended September 30		Nine months ended September 30
Related Party	Transaction	2023	2022	2023	2022
IESO	Power purchased	451	553	1,596	1,739
	Revenues for transmission services	589	558	1,694	1,586
	Amounts related to electricity rebates	199	259	628	803
	Distribution revenues related to rural rate protection	63	62	187	183
	Distribution revenues related to supply of electricity to remote northern communities	12	8	35	26
	Distribution revenues related to Wataynikaneyap Power LP	14	—	41	—
	Funding received related to Conservation and Demand Management programs	—	2	1	2
OPG	Power purchased	5	1	12	12
	Revenues related to provision of services and supply of electricity	1	2	5	6
	Capital contribution received from OPG	1	3	4	5
	Costs related to the purchase of services	—	1	1	2
OEFC	Power purchased from power contracts administered by the OEFC	—	1	1	2
OEB	OEB fees	3	2	9	7
Hydro One Limited	Dividends paid	176	165	517	487
	Stock-based compensation costs	1	1	4	4
	Cost recovery for services provided	3	1	8	5
Acronym	Services received – costs expensed	8	8	23	19
	Revenues for services provided	1	—	2	1
HOBSI	Reduction in capital contribution from HOBSI	—	—	—	2
	Revenues for services provided	—	1	—	1

RISK MANAGEMENT AND RISK FACTORS

Hydro One is subject to numerous risks and uncertainties. Critical to Hydro One’s success is the identification, management, and to the extent possible, mitigation of these risks. Hydro One’s Enterprise Risk Management program assists decision-makers throughout the organization with the management of key business risks, including new and emerging risks and opportunities.

A discussion of the material risks relating to Hydro One and its business that the Company believes would be the most likely to influence an investor’s decision to purchase Hydro One’s securities can be found under the heading “Risk Management and Risk Factors” in the 2022 MD&A.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate disclosure controls and procedures and internal control over financial reporting as defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings. Internal control, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and due to its inherent limitations, may not prevent or detect all misrepresentations.

There were no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2023 that materially affected, or are reasonably likely to materially affect, the Company’s disclosure controls and procedures and internal control over financial reporting.

16

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

NEW ACCOUNTING PRONOUNCEMENTS

The following table presents Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) that are applicable to Hydro One:

Recently Adopted Accounting Guidance

Guidance	Date issued	Description	Effective date	Impact on Hydro One
ASU 2021-08	October 2021	The amendments address how to determine whether a contractual obligation represents a liability to be recognized by the acquirer in a business combination.	January 1, 2023	No impact upon adoption
ASU 2022-02	March 2022	The amendments eliminate the troubled debt restructuring (TDR) accounting model for entities that have adopted Topic 326 Financial Instrument – Credit Losses and modifies the guidance on vintage disclosure requirements to require disclosure of current-period gross write-offs by year of origination.	January 1, 2023	No impact upon adoption

FORWARD-LOOKING STATEMENTS AND INFORMATION

The Company’s oral and written public communications, including this document, often contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about the Company’s business, the industry, regulatory and economic environments in which it operates, and includes beliefs and assumptions made by the management of the Company. Such statements include, but are not limited to, statements regarding: the Company’s transmission and distribution rate applications including the JRAP and its proposed investment plan, resulting and related decisions including the DTA Implementation Decision, as well as resulting rates, recovery and expected impacts and timing; expected timing of the Company's update to its transmission and distribution rate base and revenue requirements; expectations about the Company’s liquidity and capital resources and operational requirements; sustainability goals; the Operating Credit Facilities; expectations regarding the Company’s financing activities; the Company’s maturing debt; the Company’s ongoing and planned projects, initiatives and expected capital investments, including expected approvals, results, costs and in-service and completion dates; contractual obligations and other commercial commitments; collective agreements; BBFA and expected impacts; the Company’s assessment of impacts related to the OEB-established generic variance and deferral accounts; future pension plan and contributions; non-GAAP financial measures; internal controls over financial reporting and disclosure; the MTN Program; and the Company’s acquisitions, including CPUC. Words such as “expect”, “anticipate”, “intend”, “attempt”, “may”, “plan”, “will”, “would”, “believe”, “seek”, “estimate”, “goal”, “aim”, “target”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Hydro One does not intend, and it disclaims any obligation, to update any forward-looking statements, except as required by law.

These forward-looking statements are based on a variety of factors and assumptions including, but not limited to, the following: the scope of the COVID-19 pandemic and duration thereof as well as the effect and severity of corporate and other mitigation measures on the Company’s operations, supply chain or employees; no unforeseen changes in the legislative and operating framework for Ontario’s electricity market or for Hydro One specifically; favourable decisions from the OEB and other regulatory bodies concerning outstanding and future rate and other applications; no unexpected delays in obtaining required regulatory approvals; no unforeseen changes in rate orders or rate setting methodologies for the Company’s distribution and transmission businesses; no unfavourable changes in environmental regulation; continued use of US GAAP; a stable regulatory environment; no significant changes to the Company's current credit ratings; no unforeseen impacts of new accounting pronouncements; no changes to expectations regarding electricity consumption; no unforeseen changes to economic and market conditions; recoverability of costs and expenses related to the COVID-19 pandemic, including the costs of customer defaults resulting from the pandemic; completion of operating and capital projects that have been deferred; and no significant event occurring outside the ordinary course of business. These assumptions are based on information currently available to the Company, including information obtained from third-party sources. Actual results may differ materially from those predicted by such forward-looking statements. While Hydro One does not know what impact any of these differences may have, the Company’s business, results of operations, financial condition and credit stability may be materially adversely affected if any such differences occur. Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking statements include, among other things:

•regulatory risks and risks relating to Hydro One’s revenues, including risks relating to actual performance against forecasts, competition with other transmitters and other applications to the OEB, the rate-setting models for transmission and distribution, the recoverability of capital expenditures, obtaining rate orders or recoverability of total compensation costs;

•risks associated with the Province’s share ownership of Hydro One Limited and other relationships with the Province, including potential conflicts of interest that may arise between Hydro One, the Province and related parties, risks associated with the Province’s exercise of further legislative and regulatory powers, risks relating to the ability of the Company to attract and retain qualified executive talent or the risk of a credit rating downgrade for the Company and its impact on the Company’s funding and liquidity;

17

HYDRO ONE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS(continued)

For the three and nine months ended September 30, 2023 and 2022

•risks relating to the location of the Company’s assets on Reserve lands, that the company’s operations and activities may give rise to the Crown’s duty to consult and potentially accommodate Indigenous communities, and the risk that Hydro One may incur significant costs associated with transferring assets located on Reserves;

•the risk that the Company may be unable to comply with regulatory and legislative requirements or that the Company may incur additional costs for compliance that are not recoverable through rates;

•the risk of exposure of the Company’s facilities to the effects of severe weather conditions, natural disasters, man-made events or other unexpected occurrences for which the Company is uninsured or for which the Company could be subject to claims for damage;

•the risk of non-compliance with environmental regulations and inability to recover environmental expenditures in rate applications and the risk that assumptions that form the basis of the Company’s recorded environmental liabilities and related regulatory assets may change;

•risks associated with information system security and maintaining complex information technology and operational technology system infrastructure, including system failures or risks of cyber-attacks or unauthorized access to corporate information technology and operational technology systems;

•the risk that the Company may not be able to execute plans for capital projects necessary to maintain the performance of the Company’s assets or to carry out projects in a timely manner or the risk of increased competition for the development of large transmission projects or legislative changes affecting the selection of transmitters;

•risks relating to an outbreak of infectious disease, including the COVID-19 pandemic (including a significant expansion in length or severity of the COVID-19 pandemic, including the spread of its variants, restricting or prohibiting the Company’s operations or significantly impacting the Company’s supply chain or workforce; severity of mitigation measures relating to the COVID-19 pandemic and delays in completion of and increases in costs of operating and capital projects; and the regulatory and accounting treatment of incremental costs and lost revenues of the Company related to the COVID-19 pandemic);

•the risk of labour disputes and inability to negotiate or renew appropriate collective agreements on acceptable terms consistent with the Company’s rate decisions;

•risks related to the Company’s work force demographic and its potential inability to attract and retain qualified personnel;

•the risk that the Company is not able to arrange sufficient cost-effective financing to repay maturing debt and to fund capital expenditures or the risk of a downgrade in the Company’s credit ratings;

•risks associated with fluctuations in interest rates and failure to manage exposure to credit and financial instrument risk;

•risks associated with economic uncertainty and financial market volatility;

•risks associated with asset condition, capital projects and innovation, including public opposition to or delays or denials of the requisite approvals and accommodations for the Company’s planned projects;

•the risk of failure to mitigate significant health and safety risks;

•the risk of not being able to recover the Company’s pension expenditures in future rates and uncertainty regarding the future regulatory treatment of pension, other post-employment benefits and post-retirement benefits costs;

•the impact of the ownership by the Province of lands underlying the Company’s transmission system;

•the risk associated with legal proceedings that could be costly, time-consuming or divert the attention of management and key personnel from the Company’s business operations;

•the impact if the Company does not have valid occupational rights on third-party owned or controlled lands and the risks associated with occupational rights of the Company that may be subject to expiry;

•risks relating to adverse reputational events or political actions;

•the potential that Hydro One may incur significant expenses to replace functions currently outsourced if agreements are terminated or expire before a new service provider is selected;

•risks relating to acquisitions, including the failure to realize the anticipated benefits of such transactions at all, or within the time periods anticipated, and unexpected costs incurred in relation thereto;

•the inability to continue to prepare financial statements using U.S. GAAP; and

•the risk related to the impact of any new accounting pronouncements.

Hydro One cautions the reader that the above list of factors is not exhaustive. Some of these and other factors are discussed in more detail in the section entitled “Risk Management and Risk Factors” in this MD&A.

In addition, Hydro One cautions the reader that information provided in this MD&A regarding the Company’s outlook on certain matters, including potential future investments, is provided in order to give context to the nature of some of the Company’s future plans and may not be appropriate for other purposes.

Additional information about Hydro One, including the Company’s Annual Information Form, is available on SEDAR+ at www.sedarplus.com, the US Securities and Exchange Commission’s EDGAR website at www.sec.gov/edgar.shtml, and the Company’s website at www.HydroOne.com/Investors.

18

EX-99.3

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS – FULL CERTIFICATE

I, David Lebeter, President and Chief Executive Officer, Hydro One Inc., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Hydro One Inc. (the “issuer”) for the interim period ended September 30, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)    designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1    Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2    N/A

5.3    N/A

6.    Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date:	November 8, 2023
	/s/ David Lebeter
	President and Chief Executive Officer

EX-99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS – FULL CERTIFICATE

I, Christopher Lopez, Executive Vice President, Chief Financial and Regulatory Officer, Hydro One Inc., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Hydro One Inc. (the “issuer”) for the interim period ended September 30, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)    designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1    Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2    N/A

5.3    N/A

6.    Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date:	November 8, 2023
	/s/ Christopher Lopez
	Executive Vice President, Chief Financial and Regulatory Officer