HRNNF 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: May 2025

Commission File Number: 333-225519-01

HYDRO ONE LIMITED

(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 months ended March 31, 2025 and 2024
99.2		Management’s Discussion and Analysis of the Registrant as at and for the three months ended March 31, 2025 and 2024
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 LIMITED
/s/ Harry Taylor
Name: Harry Taylor
Title:   Executive Vice President, Chief Financial and Regulatory Officer
Date:	May 8, 2025

Document

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

Three months ended March 31 (millions of Canadian dollars, except per share amounts)	2025	2024
Revenues
Distribution (includes $111 related party revenues; 2024 - $106) (Note 22)	1,761	1,605
Transmission (includes $622 related party revenues; 2024 - $551) (Note 22)	636	553
Other	11	8
	2,408	2,166
Costs
Purchased power (includes $930 related party costs; 2024 - $825) (Note 22)	1,220	1,096
Operation, maintenance and administration	332	322
Depreciation, amortization and asset removal costs (Note 4)	264	254
	1,816	1,672
Income before financing charges and income tax expense	592	494
Financing charges (Note 5)	163	148
Income before income tax expense	429	346
Income tax expense (Note 6)	68	51
Net income	361	295
Other comprehensive (loss) income	(1)	4
Comprehensive income	360	299
Net income attributable to:
Noncontrolling interest	3	2
Common shareholders	358	293
	361	295
Comprehensive income attributable to:
Noncontrolling interest	3	2
Common shareholders	357	297
	360	299
Earnings per common share (Note 20)
Basic	$0.60	$0.49
Diluted	$0.60	$0.49
Dividends per common share declared (Note 19)	$0.31	$0.30

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

HYDRO ONE LIMITED

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (unaudited)

As at March 31, 2025 and December 31, 2024

As at (millions of Canadian dollars)	March 31,<br>2025	December 31,<br>2024
Assets
Current assets:
Cash and cash equivalents	123	716
Accounts receivable (Note 7)	1,003	911
Due from related parties	341	325
Other current assets (Note 8)	165	165
	1,632	2,117
Property, plant and equipment (Note 9)	29,609	29,093
Other long-term assets:
Regulatory assets (Note 11)	3,569	3,503
Deferred income tax assets	128	127
Intangible assets (Note 10)	658	661
Goodwill	378	373
Other assets (Note 12)	1,120	808
	5,853	5,472
Total assets	37,094	36,682
Liabilities
Current liabilities:
Short-term notes payable (Note 15)	659	200
Long-term debt payable within one year (Notes 15, 16)	1,250	1,150
Accounts payable and other current liabilities (Note 13)	1,825	1,809
Due to related parties	257	342
	3,991	3,501
Long-term liabilities:
Long-term debt (Notes 15, 16)	15,829	16,329
Regulatory liabilities (Note 11)	1,613	1,476
Deferred income tax liabilities	1,549	1,452
Other long-term liabilities (Note 14)	1,771	1,751
	20,762	21,008
Total liabilities	24,753	24,509
Contingencies and Commitments (Notes 24, 25)
Subsequent Events (Note 27)
Noncontrolling interest subject to redemption	19	19
Equity
Common shares (Note 18)	5,713	5,713
Additional paid-in capital	29	28
Retained earnings	6,530	6,360
Accumulated other comprehensive loss	(13)	(12)
Hydro One shareholders’ equity	12,259	12,089
Noncontrolling interest	63	65
Total equity	12,322	12,154
	37,094	36,682

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

HYDRO ONE LIMITED

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

For the three months ended March 31, 2025 and 2024

Three months ended March 31, 2025<br><br>(millions of Canadian dollars)	Common<br>Shares	Additional Paid-in <br>Capital	Retained Earnings	Accumulated<br>Other<br>Comprehensive <br>Loss	Hydro One Shareholders’ Equity	Non-controlling Interest	Total<br>Equity
January 1, 2025	5,713	28	6,360	(12)	12,089	65	12,154
Net income	—	—	358	—	358	2	360
Other comprehensive loss	—	—	—	(1)	(1)	—	(1)
Distributions to noncontrolling interest	—	—	—	—	—	(4)	(4)
Dividends on common shares (Note 19)	—	—	(188)	—	(188)	—	(188)
Stock-based compensation	—	1	—	—	1	—	1
March 31, 2025	5,713	29	6,530	(13)	12,259	63	12,322
Three months ended March 31, 2024<br><br>(millions of Canadian dollars)	Common<br>Shares	Additional Paid-in <br>Capital	Retained Earnings	Accumulated<br>Other<br>Comprehensive <br>Loss	Hydro One Shareholders’ Equity	Non-controlling Interest	Total<br>Equity
---	---	---	---	---	---	---	---
January 1, 2024	5,706	30	5,947	(3)	11,680	65	11,745
Net income	—	—	293	—	293	1	294
Other comprehensive loss	—	—	—	4	4	—	4
Distributions to noncontrolling interest	—	—	—	—	—	(2)	(2)
Dividends on common shares (Note 19)	—	—	(178)	—	(178)	—	(178)
Stock-based compensation	—	1	—	—	1	—	1
March 31, 2024	5,706	31	6,062	1	11,800	64	11,864

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

HYDRO ONE LIMITED

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

For the three months ended March 31, 2025 and 2024

Three months ended March 31 (millions of Canadian dollars)	2025	2024
Operating activities
Net income	361	295
Environmental expenditures	(1)	(3)
Adjustments for non-cash items:
Depreciation and amortization (Note 4)	233	222
Regulatory assets and liabilities	55	52
Deferred income tax expense	34	42
Other	6	(2)
Changes in non-cash balances related to operations (Note 23)	(178)	(144)
Net cash from operating activities	510	462
Financing activities
Long-term debt issued	—	800
Long-term debt repaid	(400)	—
Short-term notes issued	1,075	500
Short-term notes repaid	(615)	(280)
Dividends paid (Note 19)	(188)	(178)
Distributions paid to noncontrolling interest	(5)	(4)
Costs to obtain financing	—	(5)
Net cash (used in) from financing activities	(133)	833
Investing activities
Capital expenditures (Note 23)
Property, plant and equipment	(622)	(645)
Intangible assets	(21)	(22)
Additions to future use assets	(59)	(19)
Investment in East-West Tie Limited Partnership (Note 12)	(261)	—
Capital contributions received	4	2
Other	(11)	(4)
Net cash used in investing activities	(970)	(688)
Net change in cash and cash equivalents	(593)	607
Cash and cash equivalents, beginning of period	716	79
Cash and cash equivalents, end of period	123	686

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

HYDRO ONE LIMITED

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the three months ended March 31, 2025 and 2024

1.    DESCRIPTION OF THE BUSINESS

Hydro One Limited (Hydro One or the Company) was incorporated on August 31, 2015, under the Business Corporations Act (Ontario). On October 31, 2015, the Company acquired Hydro One Inc., a company previously wholly-owned by the Province of Ontario (Province). As at March 31, 2025, the Province held approximately 47.1% (December 31, 2024 - 47.1%) of the common shares of Hydro One. The businesses of Hydro One are comprised of the following three segments:

•The Transmission segment owns and operates Hydro One’s transmission system which transmits high voltage electricity across the province, interconnecting local distribution companies and certain large directly connected industrial customers throughout the Ontario electricity grid. The transmission business consists of the transmission system operated by Hydro One Inc.’s rate-regulated subsidiaries, Hydro One Networks Inc. (Hydro One Networks), Hydro One Sault Ste. Marie LP (HOSSM), and Chatham x Lakeshore Limited Partnership (CLLP), as well as an approximate 66% interest in B2M Limited Partnership (B2M LP), and an approximate 55% interest in Niagara Reinforcement Limited Partnership (NRLP). The Transmission segment also includes Hydro One Network’s approximate 48% minority interest in the East-West Tie Limited Partnership (EWT LP) which was completed on March 4, 2025.

•The Distribution segment owns and operates Hydro One’s distribution system which delivers electricity to end customers and certain other municipal electricity distributors within Ontario. The distribution business consists of the distribution systems operated by Hydro One Inc.'s rate-regulated subsidiaries, Hydro One Networks and Hydro One Remote Communities Inc. (Hydro One Remotes).

•The Other segment consists principally of Hydro One’s telecommunications business, which provides telecommunications support for the Company’s transmission and distribution businesses, as well as certain corporate activities, and is not rate-regulated. The telecommunications business is carried out by Hydro One's wholly-owned subsidiary, Acronym Solutions Inc. (Acronym). In addition to supporting Hydro One's regulated business segments, Acronym offers a comprehensive suite of Information Communications Technology solutions. Furthermore, Hydro One's other segment also includes Aux Energy Inc., a wholly-owned subsidiary that provides energy solutions to commercial and industrial clients, and Ontario Charging Network (OCN) LP, a wholly-owned subsidiary (2024 - a joint venture) that owns and operates electric vehicle fast charging stations across Ontario under the Ivy Charging Network brand.

Earnings for interim periods are impacted by seasonal weather conditions affecting customer demand, market pricing, and the timing of regulatory decisions.

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 (U.S.) 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, 2024, with the exception of the adoption of new accounting standards as described in Note 3 - New Accounting Pronouncements, and the inclusion of Equity Method Investments following the EWT LP transaction in the current period. 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, 2024.

Equity Method Investments

The Company accounts for its investments in entities over which it has significant influence but not a controlling interest using the equity method of accounting. Significant influence is generally presumed to exist when the Company owns 20% to 50% of the voting stock of the investee, but can also exist when the Company owns less than 20% if it has the ability to exercise significant influence through other means. Under this method, the investment is initially recorded at cost and subsequently adjusted to recognize the Company’s share of the earnings or losses of the investee, as well as any distributions received from the investee.

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

3.    NEW ACCOUNTING PRONOUNCEMENTS

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

Recently Adopted Accounting Guidance

Guidance	Date issued	Description	ASU Effective Date	Impact on Hydro One
ASU 2024-02	March 2024	The amendments contain modifications to the codification that remove various concept statements which may be extraneous and not required to understand or apply the guidance or references used in prior statements to provide guidance in certain topical areas.	Fiscal years beginning after December 15, 2024.	No impact upon adoption
ASU 2023-09	December 2023	The amendments address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.	Annual periods beginning after December 15, 2024.	Under assessment

Recently Issued Accounting Guidance Not Yet Adopted

Guidance	Date issued	Description	ASU Effective Date	Impact on Hydro One
ASU 2023-06	October 2023	The amendments represent changes to clarify or improve disclosure or presentation requirements of a variety of subtopics in the FASB Codification. Many of the amendments allow users to more easily compare entities subject to the U.S. Securities and Exchange’s (SEC) existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations.<br><br>Applicable to all entities, if by June 30, 2027 the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.	Two years subsequent to the date on which the SEC’s removal of that related disclosure becomes effective.	Under assessment
ASU<br>2024-03	November 2024	The amendments require public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods, which are not generally presented in the current financial statements.	Annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.	Under assessment

4.    DEPRECIATION, AMORTIZATION AND ASSET REMOVAL COSTS

Three months ended March 31 (millions of dollars)	2025	2024
Depreciation of property, plant and equipment	211	200
Amortization of intangible assets	21	19
Amortization of regulatory assets	1	3
Depreciation and amortization	233	222
Asset removal costs	31	32
	264	254

5. FINANCING CHARGES

Three months ended March 31 (millions of dollars)	2025	2024
Interest on long-term debt	178	165
Interest on regulatory accounts	7	6
Interest on short-term notes	3	5
Other	3	2
Less: Interest capitalized on construction and development in progress	(24)	(19)
Interest earned on cash and cash equivalents	(5)	(10)
Realized loss (gain) on cash flow hedges (interest-rate swap agreements) (Note 16)	1	(1)
	163	148

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

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 deferred income tax regulatory liabilities, with an offset to deferred income tax recovery or deferred income tax expense, respectively. The Company’s consolidated income tax expense or income tax 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 income tax 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 March 31 (millions of dollars)	2025	2024
Income before income tax expense	429	346
Income tax expense at statutory rate of 26.5% (2024 - 26.5%)	114	92
Increase (decrease) resulting from:
Net temporary differences recoverable in future rates charged to customers:
Capital cost allowance in excess of depreciation and amortization	(22)	(22)
Overheads capitalized for accounting but deducted for tax purposes	(12)	(11)
Interest capitalized for accounting but deducted for tax purposes	(9)	(6)
Pension and post-retirement benefit contributions in excess of expense	(1)	(1)
Environmental expenditures	—	(1)
Other	(2)	—
Net temporary differences attributable to regulated business	(46)	(41)
Total income tax expense	68	51		Effective income tax rate	15.9	%	14.7	%
---	---	---	---	---

7.    ACCOUNTS RECEIVABLE

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Accounts receivable - billed	520	433
Accounts receivable - unbilled	545	539
Accounts receivable, gross	1,065	972
Allowance for doubtful accounts	(62)	(61)
Accounts receivable, net	1,003	911

The following table shows the movements in the allowance for doubtful accounts for the three months ended March 31, 2025 and the year ended December 31, 2024:

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Allowance for doubtful accounts – beginning	(61)	(57)
Write-offs	4	18
Additions to allowance for doubtful accounts	(5)	(22)
Allowance for doubtful accounts – ending	(62)	(61)

8.    OTHER CURRENT ASSETS

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Prepaid expenses and other assets	98	94
Regulatory assets (Note 11)	37	42
Materials and supplies	30	29
	165	165

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

9.    PROPERTY, PLANT AND EQUIPMENT

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Property, plant and equipment	41,683	41,320
Less: accumulated depreciation	(14,514)	(14,340)
	27,169	26,980
Construction in progress	2,440	2,113
	29,609	29,093

10. INTANGIBLE ASSETS

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Intangible assets	1,517	1,487
Less: accumulated depreciation	(899)	(877)
	618	610
Development in progress	40	51
	658	661

11.    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)	March 31,<br>2025	December 31,<br>2024
Regulatory assets:
Deferred income tax regulatory asset	3,327	3,263
Post-retirement and post-employment benefits - non-service cost	66	72
Broadband deferral	56	48
Environmental	43	44
Getting Ontario connected act variance	25	24
Stock-based compensation	24	24
Rural and remote rate protection variance	13	18
Other	52	52
Total regulatory assets	3,606	3,545
Less: current portion	(37)	(42)
	3,569	3,503
Regulatory liabilities:
Pension benefit regulatory liability	697	647
Post-retirement and post-employment benefits	376	376
Retail settlement variance (RSVA)	146	157
Earnings sharing mechanism (ESM) deferral	145	150
Distribution rate riders	100	45
External revenue variance	46	31
Capitalized overhead tax variance	38	38
OPEB asymmetrical carrying charge variance	38	33
Tax rule changes variance	35	34
Asset removal costs cumulative variance	26	26
Pension cost differential	24	21
Deferred income tax regulatory liability	4	4
Other	32	36
Total regulatory liabilities	1,707	1,598
Less: current portion	(94)	(122)
	1,613	1,476

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

Distribution Rate Riders

As part of the Joint Rate Application (JRAP) Decision, 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. The amounts are being disposed of over a three-year period ending December 31, 2025. As part of Hydro One Networks’ application for 2025 distribution rates, the OEB approved the disposition of certain balances as at December 31, 2023, including accrued interest on an interim basis. This amount is being disposed of over a one-year period ending December 31, 2025. This rider, together with those approved in JRAP, make up the majority of this balance.

12.    OTHER LONG-TERM ASSETS

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Deferred pension assets	697	647
Investments in associates1	305	46
Right-of-Use assets	51	55
Other long-term assets	67	60
	1,120	808

1 On March 4, 2025, Hydro One Networks completed the acquisition of an approximate 48% interest in the EWT LP for approximately $261 million in cash, including closing adjustments.

13.    ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Accrued liabilities	885	794
Accounts payable	328	348
Unearned revenue	306	336
Accrued interest	181	180
Regulatory liabilities (Note 11)	94	122
Lease obligations	14	14
Environmental liabilities	11	11
Derivative liabilities (Note 16)	6	4
	1,825	1,809

14.    OTHER LONG-TERM LIABILITIES

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Post-retirement and post-employment benefit liability	1,606	1,590
Lease obligations	37	41
Asset retirement obligations	38	38
Environmental liabilities	35	36
Derivative liabilities (Note 16)	3	3
Other long-term liabilities	52	43
	1,771	1,751

15.    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 Hydro One Inc.’s 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 Hydro One Inc.’s revolving standby credit facilities totalling $3,050 million.

As at March 31, 2025, Hydro One’s consolidated committed, unsecured, and revolving credit facilities (Operating Credit Facilities) were $3,300 million, comprised of Hydro One Inc.'s credit facilities of $3,050 million and Hydro One's credit facilities of $250 million. As at March 31, 2025, no amounts have been drawn on the Operating Credit Facilities.

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

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 Operating Credit Facilities include a pricing adjustment which can increase or decrease Hydro One’s cost of borrowing based on its performance on certain sustainability performance measures, which are related to Hydro One's sustainability goals. The obligation of each lender to extend credit under its credit facility is subject to various conditions including that no event of default has occurred or would result from such credit extension.

Subsidiary Debt Guarantee

Hydro One Holdings Limited (HOHL) is an indirect wholly-owned subsidiary of Hydro One that may offer and sell debt securities. Any debt securities issued by HOHL are fully and unconditionally guaranteed by the Company. As at March 31, 2025, no debt securities have been issued by HOHL.

Long-Term Debt

The following table presents long-term debt outstanding as at March 31, 2025 and December 31, 2024:

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Hydro One Inc. long-term debt (a)	16,670	17,070
Hydro One long-term debt (b)	425	425
	17,095	17,495
Add: Net unamortized debt premiums	41	41
Add: Realized mark-to-market gain1	2	3
Less: Unamortized deferred debt issuance costs	(59)	(60)
Total long-term debt	17,079	17,479
Less: Long-term debt payable within one year	(1,250)	(1,150)
	15,829	16,329

1 In October 2023, Hydro One Inc. entered into a $400 million fixed-to-floating interest-rate swap agreement to convert the $400 million Medium-Term Note (MTN) Series 57 notes maturing October 20, 2025, into a variable rate debt. This swap was accounted for as a fair value hedge. In December 2023, this swap was terminated with a payment received of $6 million on settlement, which is being amortized over the term of the related note.

(a) Hydro One Inc. long-term debt

As at March 31, 2025, long-term debt of $16,670 million (December 31, 2024 - $17,070 million) was outstanding, the majority of which was issued under Hydro One Inc.’s MTN Program. In February 2024, Hydro One Inc. filed a short form base shelf prospectus in connection with its MTN Program, which expires in March 2026. During the three months ended March 31, 2025, no long-term debt was issued (2024 - $800 million) and $400 million long-term debt was repaid (2024 - $nil).

(b) Hydro One long-term debt

As at March 31, 2025, long-term debt of $425 million (December 31, 2024 - $425 million) was outstanding. On August 19, 2024, Hydro One filed a short form base shelf prospectus (Universal Base Shelf Prospectus) with securities regulatory authorities in Canada. The Universal Base Shelf Prospectus allows Hydro One to offer, from time to time in one or more public offerings, debt, equity or other securities, or any combination thereof, during the 25-month period ending in September 2026. As at March 31, 2025, no securities have been issued under the Universal Base Shelf Prospectus. During the three months ended March 31, 2025 and 2024, no long-term debt was issued or repaid.

Principal and Interest Payments

As at March 31, 2025, future principal repayments, interest payments, and related weighted-average interest rates were as follows:

	Long-Term Debt<br>Principal Repayments	Interest<br>Payments	Weighted-Average<br>Interest Rate
	(millions of dollars)	(millions of dollars)	(%)
Year 1	1,250	718	3.7
Year 2	425	669	3.6
Year 3	1,175	661	3.6
Year 4	—	618	—
Year 5	1,500	610	3.1
	4,350	3,276	3.5
Years 6-10	4,210	2,491	4.6
Thereafter	8,535	4,474	4.4
	17,095	10,241	4.2

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

16.    FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Non-Derivative Financial Assets and Liabilities

As at March 31, 2025 and December 31, 2024, 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 carrying values and fair values of the Company’s long-term debt as at March 31, 2025 and December 31, 2024 are as follows:

	March 31, 2025		December 31, 2024
As at (millions of dollars)	Carrying Value	Fair Value	Carrying Value	Fair Value
Long-term debt, including current portion	17,079	17,166	17,479	17,364

Fair Value Measurements of Derivative Instruments

Fair Value Hedges

As at March 31, 2025 and December 31, 2024, Hydro One Inc. had no fair value hedges.

Cash Flow Hedges

As at March 31, 2025 and December 31, 2024, Hydro One Inc. had a $425 million, pay-fixed, receive-floating interest-rate swap agreement designated as a cash flow hedge. This cash flow hedge is intended to offset the variability of interest rates between December 21, 2023 and September 21, 2026.

As at March 31, 2025 and December 31, 2024, the Company had no derivative instruments classified as undesignated contracts.

Fair Value Hierarchy

The fair value hierarchy of financial assets and liabilities as at March 31, 2025 and December 31, 2024 is as follows:

As at March 31, 2025 (millions of dollars)	Carrying<br>Value	Fair<br> Value	Level 1	Level 2	Level 3
Liabilities:
Long-term debt, including current portion	17,079	17,166	—	17,166	—
Derivative instruments (Notes 13 & 14)
Cash flow hedges, including current portion	9	9	—	9	—
	17,088	17,175	—	17,175	—		As at December 31, 2024 (millions of dollars)	Carrying<br>Value	Fair<br> Value	Level 1	Level 2	Level 3
---	---	---	---	---	---
Liabilities:
Long-term debt, including current portion	17,479	17,364	—	17,364	—
Derivative instruments (Notes 13 & 14)
Cash flow hedges, including current portion	7	7	—	7	—
	17,486	17,371	—	17,371	—

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 three months ended March 31, 2025 or the year ended December 31, 2024.

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.

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

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 not have resulted in a significant decrease to Hydro One’s net income for the three months ended March 31, 2025 and 2024, respectively.

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 other comprehensive income (OCI) or other comprehensive loss (OCL) and is reclassified to net income or net loss in the same period during which the hedged transaction affects results of operations. The following table shows the amounts recorded in OCL and reclassified to financing charges for the three months ended March 31, 2025 and 2024:

Three months ended March 31 (millions of dollars)	2025	2024
Amounts recorded in OCL/OCI
Before tax loss (gain)	3	(6)
After tax loss (gain)	2	(4)
Amounts reclassified to financing charges
Before tax loss (gain)	1	(1)
After tax loss (gain)	1	(1)

This resulted in an accumulated other comprehensive loss (AOCL) of $6 million related to cash flow hedges as at March 31, 2025 (December 31, 2024 - $5 million).

The Company estimates that the amount of AOCL, after tax, related to cash flow hedges to be reclassified to results of operations in the next 12 months is approximately $4 million. Actual amounts reclassified to results of operations depend on the interest rate in effect until the derivative contracts mature. For all forecasted transactions, as at March 31, 2025, the maximum term over which the Company is hedging exposures to the variability of cash flows is approximately one year.

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 17 - 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. As at March 31, 2025 and 2024, 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. As at March 31, 2025 and 2024, there was no material accounts receivable balance due from any single customer.

As at March 31, 2025, the Company’s allowance for doubtful accounts was $62 million (December 31, 2024 - $61 million). The allowance for doubtful accounts reflects the Company's current expected credit loss for all accounts receivable balances, which are based on historical overdue balances, customer payments and write-offs. As at March 31, 2025, approximately 8% (December 31, 2024 - 7%) 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. As at March 31, 2025 and 2024, Hydro One’s credit exposure for all derivative instruments and applicable payables was with one financial institution with investment grade credit ratings as counterparty.

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

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.

In February 2024, Hydro One Inc. filed a short form base shelf prospectus in connection with its MTN Program, which expires in March 2026. Hydro One’s Universal Base Shelf Prospectus allows it to offer, from time to time in one or more public offerings, debt, equity or other securities, or any combination thereof, during the 25-month period ending on September 19, 2026.

On November 29, 2024, HOHL filed a short form base shelf prospectus (U.S. Debt Shelf Prospectus) with securities regulatory authorities in Canada and the U.S., that expires in December 2026. The U.S. Debt Shelf Prospectus allows HOHL to offer, from time to time in one or more public offerings, debt securities, unconditionally guaranteed by Hydro One. As at March 31, 2025, no securities have been issued under the U.S. Debt Shelf Prospectus.

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.

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

The following table provides the components of the net periodic benefit (recovery) costs for the three months ended March 31, 2025 and 2024:

	Pension Benefits		Post-Retirement and<br>Post-Employment Benefits
Three months ended March 31 (millions of dollars)	2025	2024	2025	2024
Current service cost	37	34	15	14
Interest cost	103	100	20	18
Expected return on plan assets, net of expenses1	(166)	(151)	—	—
Amortization of prior service (credit) cost	(1)	(1)	2	2
Amortization of actuarial losses (gains)	(4)	4	(4)	(5)
Net periodic benefit (recovery) costs	(31)	(14)	33	29
Charged to results of operations2	6	6	23	20

1    The expected long-term rate of return on pension plan assets for the year ending December 31, 2025 is 7.20% (2024 - 7.00%).

2    The Company accounts for pension costs consistent with their inclusion in OEB-approved rates. During the three months ended March 31, 2025, pension costs of $20 million (2024 - $18 million) were attributed to labour, of which $6 million (2024 - $6 million) was charged to operations, and $14 million (2024 - $12 million) was capitalized as part of the cost of property, plant and equipment and intangible assets.

18.    SHARE CAPITAL

Common Shares

The Company is authorized to issue an unlimited number of common shares. As at March 31, 2025, the Company had 599,439,136 (December 31, 2024 - 599,435,650) common shares issued and outstanding.

Preferred Shares

The Company is authorized to issue an unlimited number of preferred shares, issuable in series. As at March 31, 2025 and December 31, 2024, the Company had no preferred shares issued and outstanding.

19.    DIVIDENDS

During the three months ended March 31, 2025, common share dividends in the amount of $188 million (2024 - $178 million) were declared and paid. See Note 27 - Subsequent Events for dividends declared subsequent to March 31, 2025.

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

20.    EARNINGS PER COMMON SHARE

Basic earnings per common share (EPS) is calculated by dividing net income attributable to common shareholders of Hydro One by the weighted-average number of common shares outstanding.

Diluted EPS is calculated by dividing net income attributable to common shareholders of Hydro One by the weighted-average number of common shares outstanding adjusted for the effects of potentially dilutive stock-based compensation plans, including the share grant plans and the Long-term Incentive Plan (LTIP), which are calculated using the treasury stock method.

Three months ended March 31	2025	2024
Net income attributable to common shareholders (millions of dollars)	358	293
Weighted-average number of shares
Basic	599,436,037	599,077,067
Effect of dilutive stock-based compensation plans	1,214,371	1,507,329
Diluted	600,650,408	600,584,396
EPS
Basic	$0.60	$0.49
Diluted	$0.60	$0.49

21.    STOCK-BASED COMPENSATION

Share Grant Plans

There were no changes in share grants under the Share Grant Plans during the three months ended March 31, 2025 and 2024.

Directors' Deferred Share Unit (DSU) Plan

A summary of DSU awards activity under the Directors' DSU Plan during the three months ended March 31, 2025 and 2024 is presented below:

Three months ended March 31 (number of DSUs)	2025	2024
DSUs outstanding - beginning	107,296	94,624
Granted	5,902	5,463
DSUs outstanding - ending	113,198	100,087

As at March 31, 2025, a liability of $5 million (December 31, 2024 - $5 million) related to Directors' DSUs has been recorded at the closing price of the Company's common shares of $48.39 (December 31, 2024 - $44.27). This liability is included in other long-term liabilities on the consolidated balance sheets.

Management DSU Plan

A summary of DSU awards activity under the Management DSU Plan during the three months ended March 31, 2025 and 2024 is presented below:

Three months ended March 31 (number of DSUs)	2025	2024
DSUs outstanding - beginning	85,690	134,370
Granted	12,571	14,262
DSUs outstanding - ending	98,261	148,632

As at March 31, 2025, a liability of $5 million (December 31, 2024 - $4 million) related to Management DSUs has been recorded at the closing price of the Company's common shares of $48.39 (December 31, 2024 - $44.27). This liability is included in other long-term liabilities on the consolidated balance sheets.

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

LTIP

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

A summary of PSU and RSU awards activity under the LTIP during the three months ended March 31, 2025 and 2024 is presented below:

	PSUs		RSUs
Three months ended March 31 (number of units)	2025	2024	2025	2024
Units outstanding - beginning	286,554	142,925	322,925	186,971
Granted	167,324	159,660	134,518	148,474
Forfeited	(17,206)	(1,198)	(8,910)	(3,349)
Vested	(7,184)	—	(3,069)	—
Units outstanding - ending	429,488	301,387	445,464	332,096

The total grant date fair value of the awards granted during the three months ended March 31, 2025 was $14 million (2024 - $13 million). The compensation expense related to these awards during the three months ended March 31, 2025 was $4 million (2024 – $1 million).

22.    RELATED PARTY TRANSACTIONS

The Province is a shareholder of Hydro One with approximately 47.1% (2024 - 47.1%) ownership as at March 31, 2025. The Ministry of Infrastructure (MOI) is a related party to Hydro One because it is controlled by the Province. The IESO, Ontario Power Generation Inc. (OPG), Ontario Electricity Financial Corporation (OEFC), and the OEB are related parties to Hydro One because they are controlled or significantly influenced by the Ministry of Energy and Mines. Hydro One also has transactions in the normal course of business with various government ministries and organizations in Ontario that fall under the purview of the Province. The following is a summary of the Company’s related party transactions during the three months ended March 31, 2025 and 2024:

Three months ended March 31 (millions of dollars)
Related Party	Transaction	2025	2024
Province	Dividends paid	88	84
MOI	Broadband subsidy1	13	—
IESO	Power purchased	918	819
	Revenues for transmission services	621	550
	Amounts related to electricity rebates	275	327
	Distribution revenues related to rural rate protection	63	63
	Distribution revenues related to Wataynikaneyap Power LP	33	30
	Distribution revenues related to supply of electricity to remote northern communities	12	12
OPG	Power purchased	11	6
	Transmission revenues related to provision of services and supply of electricity	1	1
	Distribution revenues related to provision of services and supply of electricity	3	1
	Capital contribution received from OPG	10	1
OEFC	Power purchased from power contracts administered by the OEFC	1	—
OEB	OEB fees	3	3

1 On October 31, 2024, the Ministry of Infrastructure announced that it has developed a program to deliver up to $400 million in subsidies to internet service providers (ISPs) for work associated with designated broadband projects. The program is intended to enable ISPs to successfully and safely attach their material and equipment to the Company’s poles to bring connectivity to rural communities as part of a designated broadband project as defined under Building Broadband Faster Act (Ontario). A portion of these subsidies is used to reimburse Hydro One Networks on behalf of ISPs for their share of enablement costs incurred to facilitate the program to date.

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

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

23.    CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Three months ended March 31 (millions of dollars)	2025	2024
Accounts receivable (Note 7)	(92)	(52)
Due from related parties	(16)	(12)
Materials and supplies (Note 8)	—	1
Prepaid expenses and other assets	(4)	(13)
Other long-term assets	(9)	(1)
Accounts payable	(20)	(71)
Accrued liabilities	54	32
Unearned revenue (Note 13)	(30)	21
Due to related parties	(85)	(91)
Accrued interest (Note 13)	1	24
Long-term accounts payable and other long-term liabilities	1	(2)
Post-retirement and post-employment benefit liability	22	20
	(178)	(144)

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 months ended March 31, 2025 and 2024. The reconciling items include net change in accruals, transfers, and capitalized depreciation.

Three months ended March 31, 2025 (millions of dollars)	Property, Plant and Equipment	Intangible Assets	Total
Capital investments	(718)	(17)	(735)
Reconciling items	96	(4)	92
Cash outflow for capital expenditures	(622)	(21)	(643)		Three months ended March 31, 2024 (millions of dollars)	Property, Plant and Equipment	Intangible Assets	Total
---	---	---	---
Capital investments	(649)	(24)	(673)
Reconciling items	4	2	6
Cash outflow for capital expenditures	(645)	(22)	(667)

Supplementary Information

Three months ended March 31 (millions of dollars)	2025	2024
Net interest paid	174	129
Income taxes paid	12	17

24.    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.

25.    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 March 31, 2025 (millions of dollars)	Year 1	Year 2	Year 3	Year 4	Year 5	Thereafter
Outsourcing and other agreements	66	20	21	9	4	14
Long-term software/meter agreement	2	2	2	2	2	—

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

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 March 31, 2025 (millions of dollars)	Year 1	Year 2	Year 3	Year 4	Year 5	Thereafter
Operating Credit Facilities1	—	—	—	—	3,300	—
Letters of credit2	160	14	—	—	—	—
Guarantees3	510	—	—	—	—	—

1 On June 1, 2024, the maturity date for the Operating Credit Facilities was extended to 2029.

2 Letters of credit consist of $153 million letters of credit related to retirement compensation arrangements, a $14 million letter of credit provided to the IESO for prudential support, and $7 million in letters of credit for various operating purposes.

3 Guarantees consist of $475 million prudential support provided to the IESO by Hydro One Inc. on behalf of its subsidiaries, as well as $30 million guarantees provided by Hydro One to ONroute relating to OCN LP (OCN Guarantee), and $5 million relating to Aux Energy Inc.

26.    SEGMENTED REPORTING

The Company has three reportable segments: Transmission, Distribution, and Other. The composition of these segments is described in Note 1 to the consolidated financial statements.

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 (CODM) in deciding how to allocate resources and evaluate the performance of each of the segments. Hydro One’s CODM consists of its Chief Executive Officer and certain members of the executive leadership team. The CODM evaluates segment performance based on income before financing charges and income tax expense from continuing operations (excluding certain allocated corporate governance costs) (EBIT). The CODM considers the key components of EBIT to understand the variances to prior period on a quarterly basis and measures them against the Company’s budget and forecast across each of the three segments on a monthly basis in order to properly allocate resources between and within the operating segments.

Three months ended March 31, 2025 (millions of dollars)	Transmission	Distribution	Other	Consolidated
Revenues	636	1,761	11	2,408
Purchased power	—	1,220	—	1,220
Operation, maintenance and administration	129	181	22	332
Depreciation, amortization and asset removal costs	139	122	3	264
Income (loss) before financing charges and income tax expense	368	238	(14)	592
Capital investments	459	272	4	735		Three months ended March 31, 2024 (millions of dollars)	Transmission	Distribution	Other	Consolidated
---	---	---	---	---
Revenues	553	1,605	8	2,166
Purchased power	—	1,096	—	1,096
Operation, maintenance and administration	121	180	21	322
Depreciation, amortization and asset removal costs	133	118	3	254
Income (loss) before financing charges and income tax expense	299	211	(16)	494
Capital investments	421	249	3	673

Total Assets by Segment:

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Transmission	22,299	21,630
Distribution	14,353	14,040
Other	442	1,012
Total assets	37,094	36,682

Total Goodwill by Segment:

As at (millions of dollars)	March 31,<br>2025	December 31,<br>2024
Transmission	157	157
Distribution	216	216
Other	5	—
Total goodwill	378	373

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

HYDRO ONE LIMITED

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

For the three months ended March 31, 2025 and 2024

27.    SUBSEQUENT EVENTS

Dividends

On May 7, 2025, common share dividends of $200 million ($0.3331 per common share) were declared.

18

Document

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2025 and 2024

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 Limited (Hydro One or the Company) for the three months ended March 31, 2025, as well as the Company’s audited consolidated financial statements and MD&A for the year ended December 31, 2024. The Consolidated Financial Statements have been prepared in accordance with United States (U.S.) 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 U.S./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 U.S. This MD&A provides information as at and for the three months ended March 31, 2025, based on information available to management as of May 7, 2025.

CONSOLIDATED FINANCIAL HIGHLIGHTS AND STATISTICS

Three months ended March 31 (millions of dollars, except as otherwise noted)	2025	2024	Change
Revenues	2,408	2,166	11.2	%
Purchased power	1,220	1,096	11.3	%
Revenues, net of purchased power1	1,188	1,070	11.0	%
Operation, maintenance and administration (OM&A) costs	332	322	3.1	%
Depreciation, amortization and asset removal costs	264	254	3.9	%
Financing charges	163	148	10.1	%
Income tax expense	68	51	33.3	%
Net income attributable to common shareholders of Hydro One	358	293	22.2	%
Basic earnings per common share (EPS)	0.60	0.49	22.4	%
Diluted EPS	0.60	0.49	22.4	%
Net cash from operating activities	510	462	10.4	%
Funds from operations (FFO)1	683	602	13.5	%
Annualized FFO to Net Debt1	13.4	%	14.1	%	(0.7	%)
Capital investments	735	673	9.2	%
Assets placed in-service	423	240	76.3	%
Transmission: Average monthly Ontario 60-minute peak demand (MW)	21,181	19,799	7.0	%
Distribution: Electricity distributed to Hydro One customers (GWh)	9,324	8,613	8.3	%

All values are in US Dollars.

As at	March 31, 2025		December 31, 2024
Net Debt to capitalization ratio1	59.0	%	58.4	%

1     See section “Non-GAAP Financial Measures”.

OVERVIEW

The Company's transmission business consists of the electricity transmission system operated by subsidiaries of Hydro One Inc. (a wholly-owned subsidiary of the Company), which include Hydro One Networks Inc. (Hydro One Networks), Hydro One Sault Ste. Marie LP, and Chatham x Lakeshore Limited Partnership (CLLP), as well as an approximate 66% interest in B2M Limited Partnership (B2M LP) and an approximate 55% interest in Niagara Reinforcement Limited Partnership (NRLP). The Transmission segment also includes Hydro One Networks’ approximate 48% minority interest in the East-West Tie Limited Partnership (EWT LP) (see section “Other Developments - EWT LP”).

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

The other segment consists primarily of Hydro One's subsidiary, Acronym Solutions Inc., which provides telecommunications support for the Company’s transmission and distribution businesses, as well as a comprehensive suite of Information Communication Technology solutions. The other segment also includes a wholly-owned subsidiary (2024 - a joint venture) that owns and operates electric vehicle fast charging stations across Ontario under the Ivy Charging Network brand, as well as certain corporate activities, and is not rate-regulated.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

For the three months ended March 31, 2025 and 2024, Hydro One's segments accounted for the Company's total revenues, as follows:

Three months ended March 31	2025		2024
Transmission	26	%	25	%
Distribution	73	%	74	%
Other	1	%	1	%

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 three months ended March 31, 2025 and 2024 as follows:

Three months ended March 31	2025		2024
Transmission	54	%	51	%
Distribution	45	%	48	%
Other	1	%	1	%

As at March 31, 2025 and December 31, 2024, Hydro One’s segments accounted for the Company’s total assets as follows:

As at	March 31,<br>2025		December 31,<br>2024
Transmission	60	%	59	%
Distribution	39	%	38	%
Other	1	%	3	%

RESULTS OF OPERATIONS

Net Income

Net income attributable to common shareholders of Hydro One for the quarter ended March 31, 2025 of $358 million is an increase of $65 million, or 22.2%, compared to the same period in 2024. Significant influences on the change in net income attributable to the common shareholders include:

•higher revenues, net of purchased power,1 mainly resulting from an increase in transmission and distribution revenues due to Ontario Energy Board (OEB) approved 2025 rates as well as higher average monthly peak demand;

•higher OM&A as a result of higher work program expenditures, including higher information technology-related expenditures;

•higher depreciation, amortization and asset removal costs primarily due to the growth in capital assets as the Company continues to place new assets in-service;

•higher financing charges attributable to an increase in outstanding long-term debt and higher weighted average interest rates; and

•higher income tax expense primarily due to higher pre-tax earnings.

EPS

EPS was $0.60 for the three months ended March 31, 2025, compared to EPS of $0.49 in 2024. The increase in EPS was primarily driven by the impact of higher earnings year-over-year, as discussed above.

Revenues

Three months ended March 31 (millions of dollars, except as otherwise noted)	2025	2024	Change
Transmission	636	553	15.0	%
Distribution	1,761	1,605	9.7	%
Other	11	8	37.5	%
Total revenues	2,408	2,166	11.2	%
Transmission	636	553	15.0	%
Distribution revenues, net of purchased power1	541	509	6.3	%
Other	11	8	37.5	%
Total revenues, net of purchased power1	1,188	1,070	11.0	%
Transmission: Average monthly Ontario 60-minute peak demand (MW)	21,181	19,799	7.0	%
Distribution: Electricity distributed to Hydro One customers (GWh)	9,324	8,613	8.3	%

1 See section “Non-GAAP Financial Measures”.

1 See section “Non-GAAP Financial Measures”.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Transmission Revenues

Transmission revenues increased by 15.0% compared to the quarter ended March 31, 2024, primarily due to:

•higher average monthly peak demand; and

•higher revenues resulting from OEB-approved 2025 rates.

Distribution Revenues

Distribution revenues increased by 9.7% compared to the quarter ended March 31, 2024, primarily due to:

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

•higher revenues resulting from OEB-approved 2025 rates; and

•higher energy consumption.

Distribution revenues, net of purchased power,2 increased by 6.3% compared to the quarter ended March 31, 2024, primarily due to the reasons noted above.

OM&A Costs

Three months ended March 31 (millions of dollars, except as otherwise noted)	2025	2024	Change
Transmission	129	121	6.6	%
Distribution	181	180	0.6	%
Other	22	21	4.8	%
	332	322	3.1	%

Transmission OM&A Costs

Transmission OM&A costs were 6.6% higher than the quarter ended March 31, 2024, primarily due to higher work program expenditures, including those attributable to information technology-related expenditures.

Distribution OM&A Costs

Distribution OM&A costs of $181 million for the quarter ended March 31, 2024, were in-line with the prior year.

Depreciation, Amortization and Asset Removal Costs

Depreciation, amortization and asset removal costs increased by $10 million, or 3.9%, for the quarter ended March 31, 2025, compared to the same period in 2024, primarily due to the growth in capital assets as the Company continues to place new assets in-service, consistent with its ongoing capital investment program, partially offset by lower amortization of regulatory assets.

Financing Charges

Financing charges increased by $15 million, or 10.1%, for the quarter ended March 31, 2025, primarily due to an increase in outstanding long-term debt and higher weighted-average interest rates.

Income Tax Expense

Income tax expense was $68 million for the three months ended March 31, 2025, compared to $51 million for the same period in 2024. The $17 million year-over-year increase was primarily due to:

•higher pre-tax earnings partially offset by

•higher deductible timing differences than the prior year.

The Company realized an effective tax rate of approximately 15.9% for the three months ended March 31, 2025, compared to approximately 14.7% realized in the same period in 2024. The year over year increase was primarily attributable to the factors noted above.

SHARE CAPITAL

The common shares of Hydro One are publicly traded on the Toronto Stock Exchange (TSX) under the trading symbol "H". 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 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 May 7, 2025, Hydro One had 599,774,691 issued and outstanding common shares.

2 See section “Non-GAAP Financial Measures”.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

The Company is authorized to issue an unlimited number of preferred shares, issuable in series. As at May 7, 2025, the Company had no preferred shares issued and outstanding.

The number of additional common shares of Hydro One that would be issued if all outstanding awards under the share grant plans and the Long-term Incentive Plan were vested and exercised as at May 7, 2025 was 1,501,227.

Common Share Dividends

In 2025, the Company declared and paid cash dividends to common shareholders as follows:

Date Declared	Record Date	Payment Date	Amount per Share	Total Amount<br><br>(millions of dollars)
February 19, 2025	March 12, 2025	March 31, 2025	$0.3142	188

Following the conclusion of the first quarter of 2025, the Company declared a cash dividend to common shareholders as follows:

Date Declared	Record Date	Payment Date	Amount per Share	Total Amount<br><br>(millions of dollars)
May 7, 2025	June 11, 2025	June 30, 2025	$0.3331	$200

QUARTERLY RESULTS OF OPERATIONS

Quarter ended (millions of dollars, except EPS and ratio)	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023
Revenues	2,408	2,095	2,192	2,031	2,166	1,979	1,934	1,857
Purchased power	1,220	1,060	1,047	940	1,096	990	854	798
Revenues, net of purchased power1	1,188	1,035	1,145	1,091	1,070	989	1,080	1,059
Net income attributable to common shareholders	358	200	371	292	293	181	357	265
Basic EPS	$0.60	$0.33	$0.62	$0.49	$0.49	$0.30	$0.60	$0.44
Diluted EPS	$0.60	$0.33	$0.62	$0.49	$0.49	$0.30	$0.59	$0.44
Earnings coverage ratio1	2.8	2.8	2.8	2.8	2.8	2.9	3.0	3.1

1    See section “Non-GAAP Financial Measures”.

Variations in revenues and net income attributable to common shareholders 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 months ended March 31, 2025 and 2024:

Three months ended March 31 (millions of dollars)	2025	2024	Change
Transmission	187	64	192.2	%
Distribution	230	172	33.7	%
Other	6	4	50.0	%
Total assets placed in-service	423	240	76.3	%

Transmission Assets Placed In-Service

Transmission assets placed in-service increased by $123 million, or 192.2%, for the quarter ended March 31, 2025, compared to the same period in 2024, primarily due to:

•timing of assets placed in-service for station refurbishments and replacements primarily related to the Mackenzie Transmission Station, the Longueuil Transmission Station, and the John Transmission Station;

•investments placed in-service at South Middle Road Transmission Station; and

•higher level of demand capital investments resulting from equipment failures.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Distribution Assets Placed In-Service

Distribution assets placed in-service increased by $58 million, or 33.7%, for the quarter ended March 31, 2025, compared to the same period in 2024, primarily due to:

•investments placed in-service for the Orillia Operation Centre; and

•higher volume of storm-related asset replacements.

Capital Investments

The following table presents Hydro One’s capital investments during the three months ended March 31, 2025 and 2024:

Three months ended March 31 (millions of dollars)	2025	2024	Change
Transmission
Sustaining	272	288	(5.6	%)
Development	178	109	63.3	%
Other	9	24	(62.5	%)
	459	421	9.0	%
Distribution
Sustaining	143	107	33.6	%
Development	95	115	(17.4	%)
Other	34	27	25.9	%
	272	249	9.2	%
Other	4	3	33.3	%
Total capital investments	735	673	9.2	%

Transmission Capital Investments

Transmission capital investments increased by $38 million, or 9.0%, in the first quarter of 2025 compared to the first quarter of 2024, primarily due to:

•investments in the Waasigan Transmission Line;

•higher volume of work on customer connections; and

•higher spend on spare transformer purchases; partially offset by

•lower volume of station refurbishments and equipment replacements;

•lower spend on specified equipment to support long-term projects; and

•lower spend on wood pole replacements.

Distribution Capital Investments

Distribution capital investments increased by $23 million, or 9.2%, in the first quarter of 2025 compared to the first quarter of 2024, primarily due to:

•investments in Ontario’s broadband initiative; and

•higher spend on storm-related asset replacements; partially offset by

•lower volume of work on customer connections; and

•lower volume of wood pole replacements.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Major Transmission Capital Investment Projects

The following table summarizes the status of significant transmission projects as at March 31, 2025:

Project Name	Location	Type	Anticipated <br>In-Service Date	Estimated<br><br>Cost1	Capital Cost <br>To Date
			(year)	(millions of dollars)
Development Projects:
Centennial Transmission Station2	Southwestern Ontario	New transmission station and<br>  connection	2025	229	83
Islington Transmission Station	Toronto Southern Ontario	New transmission station and<br>  connection	2025	109	66
Waasigan Transmission Line3	Thunder Bay-Atikokan-Dryden<br>  Northwestern Ontario	New transmission line and <br>  station expansion	2027	1,200	240
Holt Transmission Station	Bowmanville Central Ontario	New transmission station and <br>  connection	2027	137	8
St. Clair Transmission Line4	Southwestern Ontario	New transmission line and<br>  station expansion	2028	472	131
Longwood to Lakeshore<br> Transmission Line5	Southwestern Ontario	New transmission line and<br>  station expansion	TBD	TBD	21
Durham Kawartha Power Line6	Eastern Ontario	New transmission line and<br>  station expansion	TBD	TBD	11
Northeast Power Line6,7	Northeastern Ontario	New transmission line and<br>  station expansion	TBD	TBD	10
North Shore Link6,7	Northeastern Ontario	New transmission line and<br>  station expansion	TBD	TBD	7
Wawa Timmins Power Line6,7	Northeastern Ontario	New transmission line and<br>  station expansion	TBD	TBD	1
Second Longwood to Lakeshore<br> Transmission Line5	Southwestern Ontario	New transmission line and<br>  station expansion	TBD	TBD	—
Lakeshore to Windsor<br><br>Transmission Line5	Southwestern Ontario	New transmission line and<br>  station expansion	TBD	TBD	—
Sustainment Projects:
Bruce B Switching Station<br><br>Circuit Breaker Replacement8	Tiverton<br>  Southwestern Ontario	Station sustainment	2025	185	176
Middleport Transmission Station <br>     Circuit Breaker Replacement	Middleport<br>  Southwestern Ontario	Station sustainment	2025	184	165
Lennox Transmission Station<br>     Circuit Breaker Replacement	Napanee<br>  Southeastern Ontario	Station sustainment	2026	152	145
Esplanade x Terauley<br>     Underground Cable Replacement	Toronto<br>  Southern Ontario	Line sustainment	2026	117	70
Bridgman Transmission Station<br>     Refurbishment	Toronto<br>  Southern Ontario	Station sustainment	2026	108	85
Bruce A Transmission Station<br>     Switchyard Replacement	Tiverton<br>  Southwestern Ontario	Station sustainment	2027	555	348
Otto Holden Transmission Station<br>     Refurbishment	Mattawa<br>  Northeast Ontario	Station sustainment	2028	128	43
Merivale Transmission Station<br><br>Replacement and Upgrades9	Ottawa<br>  Eastern Ontario	Station sustainment and<br>  upgrade	2029	271	114
Synchronous Optical Network <br>     Telecommunication Replacement	Ontario	Telecommunication sustainment	2029	137	13

1 Estimated costs are presented gross of any potential contribution from external parties.

2 This Project is part of a two-phase project, which includes the construction of a transmission station and a transmission line to meet the needs of, and is anticipated to be largely funded by, an industrial customer. Phase 1 of the Centennial Transmission Station Project includes a new transmission station in St. Thomas and an approximately 2 km, 230 kV double-circuit transmission line between the new transmission station and an existing transmission station in the city. This phase of the project is anticipated to be in service by the end of 2025. Scope and timing of the second phase, an approximately 20 km, 230 kV double-circuit transmission line from London to St. Thomas, is currently under review.

3 The Waasigan Transmission Line Project includes construction of new transmission lines as well as station 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 anticipated completion in 2027.

4 The St. Clair Transmission Line Project includes the line and associated facilities.

5 The capital cost to date relates to costs incurred in the development phase of the project. The scope and timing of these Southwestern Ontario transmission reinforcement projects are currently under review.

6 The capital cost to date relates to costs incurred in the development phase of the project. The scope and timing of these Northeastern and Eastern Ontario transmission reinforcements are currently under review. The Wawa Timmins Power Line was previously referred to as the Wawa to Porcupine Transmission Line.

7 The Independent Electricity System Operator (IESO) has recommended a target in-service date by 2030 for the Wawa Timmins Power Line, and by 2029 for the Northeast Power Line and North Shore Link.

8 Major portions of the Bruce B Switching Station Circuit Breaker Replacement were completed and placed in-service.

9 The coordinated project includes both an asset replacement and station expansion. The anticipated in-service dates are between 2026 to 2029.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

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 Company includes projects when there is a high degree of confidence that the project will go forward and when there is a thorough estimate of the expected expenditures.

The forecast below does not include the impact of restoration costs associated with a severe 3-day storm that began on March 28, 2025 causing significant damage to system infrastructure and outages to customers in the central and eastern regions of the Province, with restoration efforts continuing to mid-April. The Company is currently compiling total costs incurred, including those by third party contractors and other local distribution companies that supported the restoration efforts until mid-April. On April 29, 2025, the Company notified the OEB that it intends to submit a Z-Factor application to seek recovery of these costs. The forecast is expected to be updated pending the outcome of that application.

The following tables summarize Hydro One’s annual projected capital investments for 2025 to 2027 by business segment and by category:

By business segment: (millions of dollars)	2025	2026	2027
Transmission1	2,284	1,760	1,375
Distribution	1,225	1,061	912
Other	33	47	32
Total capital investments2	3,542	2,868	2,319		By category: (millions of dollars)	2025	2026	2027
---	---	---	---
Sustainment	1,733	1,359	1,065
Development1	1,569	1,336	1,096
Other3	240	173	158
Total capital investments2	3,542	2,868	2,319

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

2 Since the first quarter of 2022, the Minister of Energy and Electrification (formerly the Minister of Energy) (Minister) has directed the OEB to amend Hydro One Networks’ transmission licence to require it to develop and seek approvals for eight priority transmission lines in Ontario. The future capital investments presented do not include capital expenditures, nor development costs, associated with the following three priority Southwestern Ontario transmission line projects: Longwood to Lakeshore Transmission Line, Second Longwood to Lakeshore Transmission Line, and Lakeshore to Windsor Transmission Line; nor the following four priority Northeastern and Eastern Ontario transmission line projects: North Shore Link, Northeast Power Line, Durham Kawartha Power Line, and Wawa to Porcupine Transmission Line (see section “Other Developments - Supporting Critical Transmission Infrastructure in Northeastern and Eastern Ontario”). Hydro One is currently evaluating the scope and timing of these seven lines.

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 March 31 (millions of dollars)	2025	2024
Net cash from operating activities	510	462
Net cash (used in) from financing activities	(133)	833
Net cash used in investing activities	(970)	(688)
Net change in cash and cash equivalents	(593)	607

Net cash from operating activities

Net cash from operating activities increased by $48 million for the three months ended March 31, 2025, compared to the same period in 2024. The increase was impacted by various factors, including the following:

•higher pre-tax earnings; partially offset by

•increase in net working capital deficiency primarily attributable to higher accounts payable, and higher cost of power payable, partially offset by higher accounts receivable, higher transmission revenues receivable, and lower accrued liabilities.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Net cash (used in) from financing activities

Net cash used in financing activities increased by $966 million for the three months ended March 31, 2025, compared to the same period of 2024. This increase was impacted by various factors, including the following:

Uses of cash

•the Company repaid $615 million of short-term notes in the first quarter of 2025, compared to $280 million repaid in the same period last year.

•the Company repaid $400 million of long-term debt in the first quarter of 2025, compared to $nil repaid in the same period last year.

•the Company paid common share dividends of $188 million in the first quarter of 2025, compared to dividends paid of $178 million in the same period last year.

Sources of cash

•the Company received proceeds of $1,075 million from the issuance of short-term notes in the first quarter of 2025, compared to $500 million received in the same period last year.

•the Company issued no long-term debt in the first quarter of 2025, compared to $800 million of long-term debt issued in the same period last year.

Net cash used in investing activities

Net cash used in investing activities for the three months ended March 31, 2025 was $282 million higher than the same period of 2024, as a result of the investment in EWT LP (see section “Other Developments - EWT LP”), and higher capital investments. See section “Capital Investments” for comparability of capital investments made by the Company during the period ended March 31, 2025 against the prior year.

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.

As at March 31, 2025, Hydro One Inc. had $659 million in commercial paper borrowings outstanding, compared to $200 million outstanding at December 31, 2024. The Company also has committed, unsecured, and revolving credit facilities (Operating Credit Facilities) with a total available balance of $3,300 million as at March 31, 2025. The Operating Credit Facilities include a pricing adjustment which can increase or decrease Hydro One’s cost of borrowing based on its performance on certain sustainability performance measures, which are related to Hydro One's sustainability goals. The Company may use the Operating Credit Facilities for working capital and general corporate purposes. No amounts were drawn on the Operating Credit Facilities as at March 31, 2025 or December 31, 2024. 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.

As at March 31, 2025, the Company had long-term debt outstanding in the principal amount of $17,095 million, which included $425 million of long-term debt issued by Hydro One and $16,670 million of long-term debt issued by Hydro One Inc. The majority of long-term debt issued by Hydro One Inc. has been issued under its Medium-Term Note (MTN) Program, as further described below. The Company's total long-term debt consists of notes and debentures that mature between 2025 and 2064, and as at March 31, 2025 had a weighted-average term to maturity of approximately 13.7 years (December 31, 2024 - 13.7 years) and a weighted-average coupon rate of 4.2% (December 31, 2024 - 4.2%).

In February 2024, Hydro One Inc. filed a short form base shelf prospectus in connection with its MTN Program, which expires in March 2026.

On August 19, 2024, Hydro One filed the Universal Base Shelf Prospectus with securities regulatory authorities in Canada. The short form base shelf prospectus (Universal Base Shelf Prospectus) allows Hydro One to offer, from time to time in one or more public offerings, debt, equity or other securities, or any combination thereof, during the 25-month period ending in September 2026. As at March 31, 2025, no securities have been issued under the Universal Base Shelf Prospectus.

3 See section “Non-GAAP Financial Measures”.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

On November 29, 2024, Hydro One Holdings Limited (HOHL) filed a short form base shelf prospectus (U.S. Debt Shelf Prospectus) with securities regulatory authorities in Canada and the U.S., that expires in December 2026. The U.S. Debt Shelf Prospectus allows HOHL to offer, from time to time in one or more public offerings, debt securities, unconditionally guaranteed by Hydro One. As at March 31, 2025, no securities have been issued under the U.S. Debt Shelf Prospectus.

Compliance

As at March 31, 2025, the Company was in compliance with all financial covenants and limitations associated with the outstanding borrowings and credit facilities.

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 March 31, 2025 (millions of dollars)	Total	Less than<br>1 year	1-3 years	3-5 years	More than <br>5 years
Contractual obligations (due by year)
Long-term debt - principal repayments	17,095	1,250	1,600	1,500	12,745
Long-term debt - interest payments	10,241	718	1,330	1,228	6,965
Short-term notes payable	659	659	—	—	—
Pension contributions1	488	78	164	177	69
Outsourcing and other agreements	134	66	41	13	14
Environmental and asset retirement obligations	78	13	6	4	55
Lease obligations	54	16	27	9	2
Long-term software/meter agreement	10	2	4	4	—
Total contractual obligations	28,759	2,802	3,172	2,935	19,850
Other commercial commitments (by year of expiry)
Operating Credit Facilities	3,300	—	—	3,300	—
Letters of credit2	174	160	14	—	—
Guarantees3	510	510	—	—	—
Total other commercial commitments	3,984	670	14	3,300	—

1 Contributions 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.

2 Letters of credit consist of $153 million letters of credit related to retirement compensation arrangements, a $14 million letter of credit provided to the IESO for prudential support, and $7 million in letters of credit for various operating purposes.

3 Guarantees consist of $475 million prudential support provided to the IESO by Hydro One Inc. on behalf of its subsidiaries, as well as $30 million of guarantees provided by Hydro One to ONroute relating to OCN LP (OCN Guarantee) and $5 million relating to Aux Energy Inc.

REGULATION

OEB Cost of Capital Policy Review

On March 6, 2024, the OEB commenced a hearing on its own motion to consider the methodology for determining the values of the cost of capital parameters and deemed capital structure to be used in the rate-setting process, as well as the methodology for determining the OEB’s prescribed interest rates and matters related to the Incremental Cloud Computing Implementation Costs deferral account, including what type of interest rate, if any, should apply to the account. On March 27, 2025, the OEB issued its Decision and Order, issuing new cost of capital parameters and confirming that the new cost of capital parameters will take effect at a utility’s next rebasing rate application. The OEB’s approach for deemed capital structure remained unchanged at 40% equity and 60% debt, for transmission and distribution electricity utilities. The OEB also concluded that the prescribed interest rate for deferral and variance accounts will continue to apply to the Incremental Cloud Computing Implementation Costs deferral account, and that each utility, in its next rebasing rate application, can propose the treatment of any future cloud solutions during the rate term, which could include a new cloud solution deferral account. If no proposal is made during that rebasing rate application, the account will be closed.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Extended Horizons Variance Account

On March 20, 2025, the OEB established a generic deferral and variance account, effective November 18, 2024. This variance account allows rate-regulated electricity distributors to record the incremental revenue requirement impacts resulting from reductions in the forecasted customer capital contributions embedded in distribution rates related to the OEB’s amendments to the Distribution System Code in December, 2024, which extend the connection horizon and revenue horizon for certain customer connections. The Company has not recorded any amounts in this account as at March 31, 2025, and is assessing the potential impact of establishing the account for future periods.

Building Broadband Faster Act, 2021

In March 2021, the Province of Ontario (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 (OEBA) to provide the Province with regulation-making authority regarding the development of, access to, or use of electricity infrastructure for non-electricity purposes. The BBFA Guideline and two regulations informing the legislative changes were also published in 2021, with a third regulation on annual wireline attachment rate for telecommunications carriers issued in December 2021. The most recent Order and Decision from the OEB adjusts the annual wireline attachment rate to $39.14 per attacher per pole, effective January 1, 2025.

In March 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.

A regulation regarding electricity infrastructure and designated broadband projects under the OEBA (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. In September 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. On March 28, 2023, the Province amended the OEBA (O.Reg. 410/22) with respect to performance timelines associated with designated broadband projects.

On August 14, 2023, the third edition of the BBFA Guideline was issued with amendments providing 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.

The Company has developed and adapted an appropriate management framework that meets the government’s objectives, including arrangements to sustain the Company’s revenues and recovery of reasonable associated costs.

On October 31, 2024, the Ministry of Infrastructure announced that it has developed a program to deliver up to $400 million in subsidies to internet service providers (ISPs) for work associated with designated broadband projects. The program is intended to enable ISPs to successfully and safely attach their material and equipment to the Company’s poles to bring connectivity to rural communities as part of a designated broadband project. A portion of the subsidies will be used to reimburse Hydro One Networks on behalf of ISPs for their share of enablement costs incurred to facilitate the program to date (see section “Related Party Transactions”).

Affordable Energy Act, 2024 and Ontario Integrated Energy Plan

In January 2024, the Electrification and Energy Transition Panel, an advisory body to the Province, released its report outlining a roadmap for Ontario’s transition to a clean energy economy. In October 2024, the Province released its vision for Ontario’s energy sector, Ontario’s Affordable Energy Future, outlining key objectives to meet growing electricity demand in Ontario. This vision is intended to help guide the Province’s first integrated energy plan, among other initiatives. In support, Bill 214, Affordable Energy Act, 2024, was introduced and subsequently received Royal Assent on December 4, 2024. The Affordable Energy Act, 2024 amended various statutes, including the Electricity Act and the OEBA, providing a legislative framework to replace the Province’s long-term energy plans (including the 2017 Long-Term Energy Plan), with integrated energy plans. Integrated energy plans are expected to detail actions and policy steps to build an affordable, reliable and clean energy system over the long term. Whereas the focus of the long-term energy plan has been primarily on the electricity system, the integrated energy plan is intended to address all sources of energy. The amendments effected by the Affordable Energy Act, 2024 also allow the Minister, subject to the approval of the Lieutenant Governor in Council, to issue directives to the IESO and OEB setting out implementation requirements relating to the integrated energy plan. From October to December 2024, the Ministry of Energy and Mines (Ministry) (formerly the Ministry of Energy and Electrification) ran a consultation requesting feedback to assist the Province in developing its first plan, to be released this year.

The changes made by the Affordable Energy Act, 2024 to the OEBA, among other things, also provide the Province with the ability to make regulations specifying amendments to the Distribution System Code and the Transmission System Code in

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

relation to certain cost allocation and cost recovery matters relating to the construction, expansion or reinforcement of distribution systems or transmission systems, or of connections to those systems. The changes made by the Affordable Energy Act, 2024 also allow regulations to be made exempting persons or things from provisions of the Distribution System Code and the Transmission System Code relating to cost allocation or cost recovery, as well as alternative provisions that apply instead.

OTHER DEVELOPMENTS

EWT LP

On March 4, 2025, Hydro One Networks completed the acquisition of an approximate 48% interest in the EWT LP for approximately $261 million in cash, including closing adjustments. The partnership owns the East-West Tie Line, a 450-kilometre, 230-kV double-circuit transmission line spanning between Wawa and Thunder Bay, along the north shore of Lake Superior.

Northern Ontario Voltage Study

In December 2023, the IESO published its Northern Ontario Voltage Study Report (Bulk System Reactive Requirements in Northern Ontario) (the Study), which recommended installation of reactive compensation devices at several stations in Northern Ontario to address both current and future system conditions that are expected once new Northern transmission lines are in-service. This study includes projects being developed by Hydro One, including: the East-West Tie Station Expansion, the Waasigan Transmission Line, the Northeast Power Line (previously referred to as the Hanmer to Mississagi Line), and the North Shore Link (previously referred to as Mississagi to Third Line Line).

In March 2024, the Company received a letter from the IESO recommending Hydro One proceed with the implementation of the reactive devices, in line with the timelines identified by the IESO. The Company has reviewed and assessed the results of the Study and recommendation from the IESO and has incorporated them into the associated projects so as to meet the timelines identified by the IESO.

Collective Agreements

Hydro One’s current collective agreements with the Power Workers’ Union (PWU) and Society of United Professionals (Society) will expire on September 30, 2025. On May 4, 2025, Hydro One Inc. reached tentative renewal agreements with the PWU for both its main collective agreement and its Customer Service Operations collective agreement, which are subject to ratification by the PWU membership. Once ratified, they will be effective October 1, 2025. Bargaining to renew the Society collective agreement is anticipated to begin in June 2025.

The construction building trade unions have collective agreements with the Electrical Power Systems Construction Association (EPSCA). EPSCA is an employers’ association of which Hydro One is a member. All 20 of the EPSCA construction collective agreements, which bind Hydro One, expired on April 30, 2025. Hydro One and EPSCA ratified five-year renewal collective agreements, covering the period from May 1, 2025 to April 30, 2030, for 19 of the 20 collective agreements. Collective bargaining to renew the one outstanding EPSCA agreement is ongoing.

Supporting Critical Transmission Infrastructure in Northeastern and Eastern Ontario

On July 10, 2023, the Ministry (formerly the Ministry of Energy) announced a proposal to take certain actions to facilitate the timely development of three transmission projects across Northeastern and Eastern Ontario: North Shore Link, Northeast Power Line, Durham Kawartha Power Line. On October 23, 2023, the Minister (formerly the Minister of Energy) directed the OEB to amend Hydro One Networks’ licence to require it to develop and seek approvals for these three priority transmission line projects. On November 14, 2023, further to the Minister’s Directive, the OEB amended Hydro One Networks’ electricity transmission licence to require it to develop and seek approvals for these projects in accordance with the recommendations of the IESO.

On August 1, 2024, the Ministry announced a proposal to declare the Wawa to Porcupine line as a priority project and designate Hydro One Networks, in partnership with the Wabun Tribal Council, its members and Missanabie Cree First Nation, as the transmitter. These actions are intended to facilitate the timely development of a new 230 kV, 260 km transmission line in Northeastern Ontario from the Wawa Transformer Station (south of Wawa) to the Porcupine Transformer Station (Timmins area); based on IESO forecasts, the government has identified a targeted in-service date of 2030; planned development work will inform the final construction schedule. The proposal was open for a 45 day consultation period ending September 15, 2024. On November 28, 2024, the Minister directed the OEB to amend Hydro One Networks’ transmission license to require it to develop and seek approvals for this project. On December 23, 2024, further to the Minister’s Directive, the OEB amended Hydro One Networks’ electricity transmission licence to allow it to develop and seek approvals for this Project in accordance with the recommendations of the IESO.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

HYDRO ONE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

Board of Directors

Effective March 24, 2025, Timothy Hodgson, Chair of the Board of Directors, took an unpaid leave of absence to run in the federal election. On the same day, Susan Wolburgh Jenah was appointed by the Board of Directors as Interim Chair of the Board. Effective April 28, 2025, Mr. Hodgson resigned from the Board of Directors. Ms. Wolburgh Jenah will continue to serve as Interim Chair of the Board, until a new Chair has been selected.

Executive Officers

Effective February 18, 2025, Gillian Whitebread joined Hydro One as Executive Vice President (EVP), Head of Human Resources. On the same day, Megan Telford’s title became EVP, Strategy and Energy Transition.

NON-GAAP FINANCIAL MEASURES

Hydro One uses a number of non-GAAP financial measures to assess its performance. The Company presents FFO or “funds from operations” to reflect a measure of the Company’s cash flow, revenues, net of purchased power, to reflect the impact of revenue on net income, and net debt to reflect a measure of the Company’s financial leverage.

Hydro One also uses financial ratios that are non-GAAP ratios such as the net debt to capitalization ratio and annualized FFO to net debt ratio to reflect a measure of the Company’s financial leverage, and the earnings coverage ratio to reflect a measure of liquidity.

FFO

FFO is defined as net cash from operating activities, adjusted for changes in non-cash balances related to operations and 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 March 31
(millions of dollars)	2025	2024
Net cash from operating activities		510	462
Changes in non-cash balances related to operations		178	144
Distributions to noncontrolling interest		(5)	(4)
FFO		683	602

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 reported GAAP revenues to non-GAAP revenues, net of purchased power, on a consolidated basis.

Quarter ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023
Revenues	2,408	2,095	2,192	2,031	2,166	1,979	1,934	1,857
Less: Purchased power	1,220	1,060	1,047	940	1,096	990	854	798
Revenues, net of purchased power	1,188	1,035	1,145	1,091	1,070	989	1,080	1,059		Quarter ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023
---	---	---	---	---	---	---	---	---
Distribution revenues	1,761	1,583	1,551	1,436	1,605	1,459	1,329	1,285
Less: Purchased power	1,220	1,060	1,047	940	1,096	990	854	798
Distribution revenues, net of purchased power	541	523	504	496	509	469	475	487

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Net Debt

The Company uses net debt as an alternative measure of outstanding debt. Management considers net debt as an important measure in assessing the financial leverage of the Company. Net debt is used by management to assess the Company’s overall debt position and financial leverage.

The following table provides a reconciliation of net debt as reported in the Company’s Consolidated Financial Statements.

As at (millions of dollars)	Mar 31, 2025	Dec 31, 2024
Short-term notes payable	659	200
Less: cash and cash equivalents	(123)	(716)
Long-term debt (current portion)	1,250	1,150
Long-term debt (long-term portion)	15,829	16,329
Net Debt	17,615	16,963

Net Debt to Capitalization Ratio

The Company believes that the net debt to capitalization ratio is an important non-GAAP ratio as a measure of the Company’s financial leverage. Net debt to capitalization ratio has been calculated as net debt, as described above, divided by net debt plus total shareholders’ equity, but excluding any amounts related to noncontrolling interest. Management believes that the net 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)	Mar 31, 2025	Dec 31, 2024
Net debt (A)	17,615	16,963
Shareholders' equity (excluding noncontrolling interest)	12,259	12,089
Net debt plus shareholders' equity (B)	29,874	29,052
Net Debt-to-capitalization ratio (A/B)	59.0	%	58.4	%
---	---	---	---	---

Annualized FFO to Net Debt

Management believes that the annualized FFO to net debt ratio is helpful as a measure of the Company’s financial leverage. Annualized FFO to net debt ratio has been calculated as FFO (see section “Non-GAAP Financial Measures - FFO”) on a rolling twelve-month period divided by net debt at the period end date (see section “Non-GAAP Financial Measures – Net Debt”). Management believes the annualized FFO to net debt ratio is helpful as a measure of the company’s ability to pay off its debt using the Company’s net operating income.

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

Twelve months and period ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023
Annualized FFO (A)	2,356	2,275	2,238	2,221	2,256	2,150	2,108	2,091
Net Debt (B)	17,615	16,963	16,679	16,308	16,016	15,610	15,370	15,154		Annualized FFO to Net Debt (A/B)	13.4	%	13.4	%	13.4	%	13.6	%	14.1	%	13.8	%	13.7	%	13.8	%
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

Earnings Coverage Ratio

Earnings coverage ratio is defined as earnings before income taxes and financing charges attributable to shareholders, 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.

Quarter ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023
Net income attributable to common shareholders	358	200	371	292	293	181	357	265
Income tax expense	68	17	56	57	51	13	36	65
Financing charges	163	158	158	157	148	147	143	144
Earnings before income taxes and financing charges attributable to common shareholders	589	375	585	506	492	341	536	474		Twelve months ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024
---	---	---
Earnings before income taxes and financing charges attributable to common shareholders (A)	2,055	1,958		Quarter ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023
---	---	---	---	---	---	---	---	---
Financing charges	163	158	158	157	148	147	143	144
Capitalized interest	24	24	24	22	19	19	20	18
Financing charges and capitalized interest	187	182	182	179	167	166	163	162		Twelve months ended (millions of dollars)	Mar 31, 2025	Dec 31, 2024
---	---	---
Financing charges and capitalized interest (B)	730	710
Earnings coverage ratio = A/B	2.8	2.8

RELATED PARTY TRANSACTIONS

The Province is a shareholder of Hydro One with approximately 47.1% ownership as at March 31, 2025. The Ministry of Infrastructure (MOI) is a related party to Hydro One because it is controlled by the Province. The IESO, Ontario Power Generation Inc. (OPG), Ontario Electricity Financial Corporation (OEFC), and the OEB are related parties to Hydro One because they are controlled or significantly influenced by the Ministry of Energy and Mines. Hydro One also has transactions in the normal course of business with various government ministries and organizations in Ontario that fall under the purview of the Province. The following is a summary of the Company’s related party transactions during the three months ended March 31, 2025 and 2024:

Three months ended March 31 (millions of dollars)
Related Party	Transaction	2025	2024
Province	Dividends paid	88	84
MOI	Broadband subsidy1	13	—
IESO	Power purchased	918	819
	Revenues for transmission services	621	550
	Amounts related to electricity rebates	275	327
	Distribution revenues related to rural rate protection	63	63
	Distribution revenues related to Wataynikaneyap Power LP	33	30
	Distribution revenues related to supply of electricity to remote northern communities	12	12
OPG	Power purchased	11	6
	Transmission revenues related to provision of services and supply of electricity	1	1
	Distribution revenues related to provision of services and supply of electricity	3	1
	Capital contribution received from OPG	10	1
OEFC	Power purchased from power contracts administered by the OEFC	1	—
OEB	OEB fees	3	3

1 See section “Building Broadband Faster Act, 2021”.

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 2024 MD&A.

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

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 March 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s disclosure controls and procedures and internal control over financial reporting.

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	ASU Effective Date	Impact on Hydro One
ASU 2024-02	March 2024	The amendments contain modifications to the codification that remove various concept statements which may be extraneous and not required to understand or apply the guidance or references used in prior statements to provide guidance in certain topical areas.	Fiscal years beginning after December 15, 2024.	No impact upon adoption
ASU 2023-09	December 2023	The amendments address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.	Annual periods beginning after December 15, 2024.	Under assessment

Recently Issued Accounting Guidance Not Yet Adopted

Guidance	Date issued	Description	ASU Effective Date	Impact on Hydro One
ASU 2023-06	October 2023	The amendments represent changes to clarify or improve disclosure or presentation requirements of a variety of subtopics in the FASB Codification. Many of the amendments allow users to more easily compare entities subject to the U.S. Securities and Exchange’s (SEC) existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations.<br><br>Applicable to all entities, if by June 30, 2027 the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.	Two years subsequent to the date on which the SEC’s removal of that related disclosure becomes effective.	Under assessment
ASU<br>2024-03	November 2024	The amendments require public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods, which are not generally presented in the current financial statements.	Annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.	Under assessment

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

HYDRO ONE HOLDINGS LIMITED - CONSOLIDATING SUMMARY FINANCIAL INFORMATION

Hydro One Limited fully and unconditionally guarantees the payment obligations of its wholly-owned subsidiary HOHL issuable under the short form base shelf prospectus dated November 29, 2024. Accordingly, the following consolidating summary financial information is provided in compliance with the requirements of section 13.4 of National Instrument 51-102 - Continuous Disclosure Obligations providing for an exemption for certain credit support issuers. The tables below contain consolidating summary financial information as at March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and March 31, 2024 for: (i) Hydro One Limited; (ii) HOHL; (iii) the subsidiaries of Hydro One Limited, other than HOHL, on a combined basis, (iv) consolidating adjustments, and (v) Hydro One Limited and all of its subsidiaries on a consolidated basis, in each case for the periods indicated. Such summary financial information is intended to provide investors with meaningful and comparable financial information about Hydro One Limited and its subsidiaries. This summary financial information should be read in conjunction with Hydro One Limited's most recently issued annual and interim financial statements. This summary financial information has been prepared in accordance with U.S. GAAP, as issued by the FASB.

Three months ended March 31<br><br>(millions of dollars)	Hydro One Limited		HOHL		Subsidiaries of <br>Hydro One Limited, <br>other than HOHL		Consolidating Adjustments		Total Consolidated <br>Amounts of Hydro <br>One Limited
	2025	2024	2025	2024	2025	2024	2025	2024	2025	2024
Revenue	188	178	—	—	2,659	2,387	(439)	(399)	2,408	2,166
Net Income (Loss) Attributable to Common Shareholders	196	178	—	—	573	491	(411)	(376)	358	293
As at March 31, 2025 and December 31, 2024<br><br>(millions of dollars)	Hydro One <br>Limited		HOHL		Subsidiaries of <br>Hydro One Limited, <br>other than HOHL		Consolidating <br>Adjustments		Total Consolidated <br>Amounts of Hydro <br>One Limited
---	---	---	---	---	---	---	---	---	---	---
	Mar. 2025	Dec. 2024	Mar. 2025	Dec. 2024	Mar. 2025	Dec. 2024	Mar. 2025	Dec. 2024	Mar. 2025	Dec. 2024
Current Assets	953	953	—	—	3,891	4,229	(3,212)	(3,065)	1,632	2,117
Non-Current Assets	3,234	3,226	—	—	55,256	54,743	(23,028)	(23,404)	35,462	34,565
Current Liabilities	1,060	1,061	—	—	6,105	5,468	(3,174)	(3,028)	3,991	3,501
Non-Current Liabilities	425	425	—	—	35,648	36,291	(15,311)	(15,708)	20,762	21,008

FORWARD-LOOKING STATEMENTS AND INFORMATION

The Company’s oral and written public communications, including this document, often contain “forward-looking information” within the meaning of applicable Canadian securities laws and “forward-looking statements” within the meaning of applicable U.S. securities laws (collectively, “forward-looking information”). Statements containing forward-looking information are made pursuant to the “safe harbour” provisions of applicable Canadian and U.S. securities laws. Forward-looking information in this document is 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 and revenue requirement applications including the JRAP and its proposed investment plan, resulting and related decisions as well as resulting rates, recovery and expected impacts and timing; 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, funding sources and in-service and completion dates; expectations regarding the Company’s Z-Factor application and impacts of its outcome; contractual obligations and other commercial commitments; the BBFA and expected impacts; expectations regarding the Ministry of Infrastructure’s subsidies program to ISPs and its results; the Company’s assessment of recovery and impacts related to the OEB-established generic variance and deferral accounts; expected impacts of the OEB’s new cost of capital parameters; future pension plan contributions, including estimates of total Company pension contributions; the expected results of the Province’s first integrated energy plan; the Company’s expectations regarding the renewal of its collective agreements with PWU, Society, and EPSCA in 2025; expectations regarding the Interim Chair of the Board; dividends; non-GAAP financial measures; internal controls over financial reporting and disclosure; the MTN Program; the Universal Base Shelf Prospectus; the US Debt Shelf Prospectus; and recent accounting-related guidance and expected impacts. 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: 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

HYDRO ONE LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

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 U.S. 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; 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 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;

•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;

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

•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;

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

•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 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;

•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, the risk of a downgrade in the Company’s credit ratings or risks associated with investor interest in ESG performance and reporting;

•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;

•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 relating to Hydro One and the electricity industry;

•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;

•risks relating to an outbreak of infectious disease;

•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 LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

For the three months ended March 31, 2025 and 2024

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

Document

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS – FULL CERTIFICATE

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

1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Hydro One Limited (the “issuer”) for the interim period ended March 31, 2025.

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 January 1, 2025 and ended on March 31, 2025 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date:		May 8, 2025
		/s/ David Lebeter
		President and Chief Executive Officer

Document

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS – FULL CERTIFICATE

I, Harry Taylor, Executive Vice President, Chief Financial and Regulatory Officer, Hydro One Limited, certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Hydro One Limited (the “issuer”) for the interim period ended March 31, 2025.

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 January 1, 2025 and ended on March 31, 2025 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date:		May 8, 2025
		/s/ Harry Taylor
		Executive Vice President, Chief Financial and Regulatory Officer