2009 electricity distribution rate applications

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As part of its regulation of the electricity distributors, the Ontario Energy Board established a multi-year electricity distribution rate setting plan, which indicated that, commencing with the 2008 rates, each year a limited number of distributors would be identified and if any of them sought a general change in their distribution rates, the application had to be based on Chapter 2 of the Board’s Filing Requirements, issued November 14, 2006 (EB-2006-0170). This meant that the distributor had to submit a forward test year, cost of service based application (CoS application).

For any of the other distributors seeking approval to change their distribution rates, the basis for their applications would be a mechanistic, formulaic update of their current rates (IRM application), similar to the process used for the 2007 rates.

On May 27, 2008, the Board identified a list of 28 electricity distributors that would be subject to this process, should any of them seek changes to their distribution rates for 2009. The letter requested that any distributor wishing to be removed from the list file a letter with the Board by June 20, 2008. Three distributors filed letters indicating their desire to be removed from the list. Should these distributors seek approval to change their distribution rates for 2009, the basis for their applications would be a mechanistic, formulaic update of their current rates (IRM application).

The following table lists the key standard documents of a distributor’s rate application. These documents include: 

  • The “Application” as filed by the distributor, provided as an Adobe Acrobat PDF file.
  • The “Notice of Application” issued by the Board and to be published by the distributor. The purpose of the Notice is to inform the affected ratepayers and other stakeholders of the application, its nature and the impact on affected customers. It also outlines the process for the making of submissions and/or participation in the Board’s proceeding to consider the application.
  • For those distributors applying for rates based on the IRM application, the “Decision Model” provides the application model modified as necessary to reflect the Board’s decision.
  • The “Decision and Rate Order” issued by the Board when it has adjudicated on the application (the Decision) and the subsequent Rate Order that reflects the Decision in the actual Tariff of Rates and Charges.
Related information

Estimated Total Bill Impacts (pdf) (For those utilities whose Rate Orders have not yet been issued, no information is supplied in the bill impact chart. The chart will be updated as Rate Orders are released)

Estimated Total Bill Impacts for Hydro One Networks (pdf)

 

 

APPLICATION DOCUMENTS

 

UPDATES

Date Issue/Document

Apr 27-09

The Ontario Energy Board has posted the Revenue Requirement Work Form (“RRWF”) for use by electricity distributors to support draft Rate Order filings to implement Board Decisions in Cost of Service electricity distribution applications.  The RRWF is a  spreadsheet that, when completed, will provide key summary information on the rate base, net income, cost of capital, revenue requirement and bill impacts in accordance with the Board’s decision.

The RRWF does not replace any detailed rate model(s) that an applicant distributor may use to support its application.  Rather it provides key information in a common format to aid the Board, distributors and other stakeholders after the Board’s Decision is made and before a Rate Order is filed.

Mar 16-09

Today, the Ontario Energy Board initiated a consultative process to help it to determine whether current economic and financial market conditions warrant an adjustment to any of the Cost of Capital parameter values (i.e., the Return on Equity, Long Term Debt rate, and/or Short Term Debt rate) set out in the Board’s letter of February 24, 2009.

Mar 5-09

Today the Board announced the price escalator (or inflation index) for the 2nd and 3rd Generation Incentive Regulation mechanisms for adjusting electricity distribution rates effective May 1, 2009.

 

Consistent with the Board’s findings in its December 20, 2006 Report of the Board on Cost of Capital and 2nd Generation Incentive Regulation for Ontario's Electricity Distributors, the Board will use the annual percent change in the Implicit Price Index for National Gross Domestic Product (GDP-IPI) for Final Domestic Demand.  On March 2, 2009, Statistics Canada published the change for 2008 over 2007 as part of the National Economic Accounts.  The percent change is 2.3% (click for Statistics Canada reference).

The Board will adjust the price escalator in each distributor’s Incentive Regulation model such that this change is reflected in the 2009 distribution rates for electricity distributors that are under the 2nd and 3rd Generation Incentive Regulation mechanisms.

Feb 24-09

Today the Board issued a letter to all licensed electricity distributors informing them of Cost of Capital Parameter Updates for 2009 Cost of Service Applications.

Oct 29-08

Today the Board has posted an updated Questions and Answers to assist affected distributors in preparing their 2009 Incentive Regulation Mechanism (“2009 IRM”) applications for adjusted distribution rates for May 1, 2009.

Oct 23-08

Today the Board has posted Version 2.0 of the 2009 2nd and 3rd IRM Rate Generators that distributors should use in preparing its application.

Oct 22-08

Today, the Board has made available the 2nd and 3rd Generation IRM webcast conducted by Board staff on October 17, 2008 providing information on the 2009 Incentive Regulation Mechanism rate adjustment process and filing requirements.

Oct 21-08

Today the Board has posted OEB filing numbers assigned to distributors filing their 2009 Incentive Regulation Mechanism (“2009 IRM”) applications for adjusted distribution rates for May 1, 2009.

Oct 20-08

Today the Board has posted Questions and Answers to assist affected distributors in preparing their 2009 Incentive Regulation Mechanism (“2009 IRM”) applications for adjusted distribution rates for May 1, 2009.

Oct 3-08

Today, the Ontario Energy Board issued the 2009 electricity distribution incentive regulation (“IR”) rate application models. The models are to guide electricity distributors in the preparation and filing of incentive regulation mechanism applications to adjust distribution rates for 2009.