2012 electricity distribution rate applications

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As part of its regulation of electricity distributors, the Ontario Energy Board established a multi-year electricity distribution rate setting plan which indicated that, commencing with 2008 rates, a limited number of distributors would be identified each year to file a future test year cost of service application based on Chapter 2 of the Board’s Filing Requirements, re-issued June 22, 2011. The plan would run for four years enabling each rate regulated distributor in the province to rebase its rates once during the four year plan.

For any of the other distributors seeking approval to change their distribution rates, distributors would file a mechanistic, formulaic update to their current rates based on the Board’s incentive regulation mechanism (IRM).

On March 1, 2011, the Board issued a letter identifying the list of electricity distributors that are expected to file a cost of service application in respect of their 2012 rates. The letter indicated that any distributor that is on the list and that believes that its next cost of service application should be deferred beyond the 2012 rate year must notify the Board in writing as soon as possible and in any event no later than April 29, 2011. The Board received seven requests for deferrals. The seven distributors are: Brantford Power Inc., E.L.K. Energy Inc., Enersource Hydro Mississauga Inc., Fort Frances Power Corporation, PUC Distribution Inc., Sioux Lookout Hydro Inc., and Wasaga Distribution Inc.

On June 16, 2011, the Board granted the requested deferrals to five distributors. On July 18, 2011, the Board issued correspondence that stated that the Board did not accept the requests for deferrals from E.L.K. Energy Inc. and Wasaga Distribution Inc. The Board also issued a Notice of Proceeding and Order Respecting Interim Rates on July 18, 2011 declaring E.L.K.’s and Wasaga’s rates interim pending the hearing of a cost of service application by E.L.K. and Wasaga. The Board noted that its expectation is that E.L.K. and Wasaga will file their respective applications in a timely manner.

The March 1, 2011 letter also indicated that a distributor that proposes to file a cost of service application for 2012 rates, and that is not on the list attached to the March 1 letter must so notify the Board in writing as soon as possible, and in any event no later than April 29, 2011. The Board noted that in keeping with the Board’s approach as set out in its April 20, 2010 letter, a distributor that seeks to have its rates rebased earlier than scheduled must justify, in its cost of service application, why early rebasing is required and why and how the distributor cannot adequately manage its resources and financial needs during the remainder of the 3rd generation IR plan term. The Board received a letter from two distributors indicating their intention to file an early rebasing application. The two distributors are Hydro One Networks Inc. and Toronto Hydro-Electric System Limited.

On January 5, 2012 the Board dismissed Toronto Hydro’s early rebasing application and invited Toronto Hydro to apply for a rate adjustment for 2012 rates on the basis of the IR mechanism. In correspondence dated February 6, 2012, Toronto Hydro indicated its intent to file an application based on the IR framework.

In its application for the establishment of a deferral account related to its conversion to US GAAP, filed on December 1, 2011, Hydro One noted that it would not seek a distribution cost of service rate adjustment for 2012.

It is anticipated that the following distributors will file cost of service applications for the 2012 rate year:

  • Atikokan Hydro Inc.
  • Attawapiskat Power Corporation
  • Chapleau Public Utilities Corporation
  • E.L.K. Energy Inc.
  • Erie Thames Powerlines Corporation
  • Espanola Regional Hydro Distribution Corporation
  • Fort Albany Power Corporation
  • Grimsby Power Incorporated
  • Guelph Hydro Electric Systems Inc.
  • Halton Hills Hydro Inc.
  • Hydro 2000 Inc.
  • Hydro Ottawa Ltd.
  • Kashechewan Power Corporation
  • Lakefront Utilities Inc.
  • Norfolk Power Distribution Inc.
  • Oshawa PUC Networks Inc.
  • Rideau St. Lawrence Distribution Inc.
  • Wasaga Distribution Inc.
  • Wellington North Power Inc.

The following table contains 81 docket numbers representing all 78 rate regulated electricity distributors in Ontario, plus two additional docket numbers for Toronto Hydro as explained in the table. The table contains links to select documents of a distributor’s rate application. These documents include:

  • Key correspondence regarding the status of an application, including requests to change from COS to IRM or vice versa;
  • The Notice of Application ("NoA") 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; and
  • The Decision issued by the Board when it has adjudicated on the application and the subsequent Rate Order that reflects the Decision in the Tariff of Rates and Charges.
Related information

2012 Electricity Distribution Rates Backgrounder (pdf)

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)

 

APPLICATION DOCUMENTS

This table provides a list of select documents related to each application. To view all publicly available documents for the application, click the case number associated with that particular distributor.

 

UPDATES

Date

Issue / Document

Mar 13-12

The Board has announced the price escalator (or inflation index) for the 3rd Generation Incentive Regulation mechanisms for adjusting electricity distribution rates effective May 1, 2012.

Consistent with the Board’s findings in its July 14, 2008, Report of the Board on 3rd 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, 2012, Statistics Canada published statistical data for the National Economic Accounts for 2011 Q2 (click for Statistics Canada reference (1)Statistics Canada reference (2)Statistics Canada Reference (3) referencing the annual average). The annual percentage change is 2.0%, calculated as the percentage change in the GDP-IPI for the 4-quarter period from 2011 Q1 to 2011 Q4 relative to the preceding 4-quarter period from 2010 Q1 to 2010 Q4, as shown in this table.

 

 

The Board will adjust the price escalator in each distributor’s Incentive Regulation Mechanism model, if necessary, such that this change is reflected in the 2012 distribution rates for electricity distributors that are under the 3rd Generation Incentive Regulation mechanisms with effective dates for rates of May 1, 2012.

Mar 2-12

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for Cost of Service Applications effective May 1, 2012.

Jan 20-12

The Board has issued its Decision and Order (EB-2012-0009) under Ontario Regulation 330/09 which establishes the generation connection rate protection amounts for the consumers of qualifying Local Distribution Companies, effective January 1, 2012.

Dec 15-11

The Board has issued Guideline G-2011-0001: Smart Meter Funding and Cost Recovery – Final Disposition. This guideline replaces Guideline G-2008-0002: Smart Meter Funding and Cost Recovery issued October 22, 2008.

 

Guideline G-2011-0001 contains information to assist electricity distributors to make applications seeking approval and disposition of smart meter costs as smart meter deployment and TOU price implementation are completed or nearly completed. The Board has also issued an associated Smart Meter Model which corresponds to Guideline G-2011-0001 and previously communicated accounting guidance for smart meter cost accounting and recovery.

Nov 10-11

The Board has announced the price escalator (or inflation index) for the 3rd Generation Incentive Regulation mechanisms for adjusting electricity distribution rates effective January 1, 2012.

 

Consistent with the Board’s findings in its July 14, 2008, Report of the Board on 3rd 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.

 

In Chapter 3 of the Filing Requirements for Transmission and Distribution Applications, updated June 22, 2011, the Board stated that:

 

For those distributors whose rate year has been aligned with their fiscal year, the annual percentage change in the GDP-IPI for the period 2010 Q3 to 2011 Q2 to 2009 Q3 to 2010 Q2 will be used in the final rate application model. (pg. 8)

 

On August 31, 2011, Statistics Canada published statistical data for the National Economic Accounts for 2011 Q2 (click for Statistics Canada reference (1)Statistics Canada reference (2)). The percent change is 1.7%, calculated as the percentage change in the GDP-IPI for the 4-quarter period from 2010 Q3 to 2011 Q2 relative to the preceding 4-quarter period from 2009 Q3 to 2010 Q2, as shown in this table.

 

 

The Board will adjust the price escalator in each distributor’s Incentive Regulation Mechanism model, if necessary, such that this change is reflected in the 2012 distribution rates for electricity distributors that are under the 3rd Generation Incentive Regulation mechanism with effective dates for rates of January 1, 2012.

 

For distribution rates effective May 1, 2012, the Board will continue to use the year over year change in the GDP-IPI. The 2011 annual statistics are scheduled to be published by Statistics Canada by the beginning of March 2012, and the Board will convey the annual change shortly thereafter.

Nov 10-11

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for Cost of Service Applications effective January 1, 2012.

Oct 19-11

The Board has issued an updated version of the 2012 IRM Rate Generator Model for distributors to complete as part of their 2012 electricity IRM applications.

Sep 13-11

The Board has issued an updated version of the 2012 IRM Rate Generator and 2012 IRM Shared Tax Savings Microsoft Excel workbooks for distributors to complete as part of their 2012 electricity IRM applications.

  • 2012 IRM Rate Generator - version 1.3 (.xls, 13 MB) see version updated Oct 19-11
  • 2012 Tax Sharing Workform - version 1.2 (.xls, 2 MB)

Sep 6-11

The Board has issued an updated version of the IRM rate generator model.

  • Letter
  • 2012 IRM Rate Generator - version 1.2 (.xls, 13 MB) see version updated Oct 19-11

Aug 29-11

The Board has issued an updated version of the 2012 IRM Rate Generator Microsoft Excel workbook for distributors to complete as part of their 2012 electricity IRM applications.

  • Letter
  • 2012 IRM Rate Generator - version 1.1 (.xls, 13 MB) see version updated Oct 19-11

Aug 26-11

The Board has updated the following Microsoft Excel workbooks for distributors to complete as part of their 2012 IRM rate application:

Aug 19-11

The Board has made available the following Microsoft Excel workbook for distributors to complete as part of their 2012 IRM rate application:

  • 2012 IRM Rate Generator - version 1.0 (.xls, 13 MB) see version updated Oct 19-11
  • 2012 Revenue Cost Ratio Model (.xls, 2 MB)
  • 2012 Tax Sharing Workform (.xls, 2 MB) see version updated Sep 13-11

Aug 5-11

The Board has issued its revised Cost Allocation model to be used by distributors filing a cost of service application for 2012 distribution rates. It has also released the staff report to the Board that documents the changes in the model resulting from the Report of the Board: Review of Electricity Distribution Cost Allocation Policy issued on March 31, 2011 as well as instructions for the revised Cost Allocation model. The Board has expressed its appreciation to the Cost Allocation Working Group, Elenchus Research Associates, and others who assisted in the development and testing of the model.

Aug 2-11

The Board has issued a letter outlining the process for 2012 Incentive Regulation Mechanism distribution rate applications. The letter assigns electricity distributors to one of six application groupings. These groupings and associated filing deadlines pertain to electricity distributors that are scheduled to apply for new distribution rates effective May 1, 2012.

Jul 8-11

The Board has issued the 2012 Deferral/Variance Accounts Continuity Schedule for Cost of Service Applicants.

The Board has issued the 2012 Test Year Income Tax/PILs Workform for Cost of Service Applicants.

Jul 7-11

The Board has updated the 2012 Retail Transmission Service Rates (“RTSR”) Model. This version supersedes the version that was previously posted.

  • RTSR Adjustment Workform (.xls) (Jul 7-11) see version updated Aug 26-11

Jun 28-11

The Board has posted the presentation from the June 28, 2011 webinar on Updated Filing Requirements for Transmission and Distribution Applications (including Smart Meters and IFRS).

Jun 22-11

The Board has sent out a letter and survey, canvassing all electricity distributors that are scheduled to file a 2012 IRM application.

Jun 22-11

The Board has issued revision 3.0 to Guideline G-2008-0001 - Electricity Distribution Retail Transmission Service Rates. This guideline outlines the information that the Board requires an electricity distributor file to seek approval to adjust its retail transmission service rates.

Jun 22-11

The Board has issued updated versions of Chapters 2 and 3 of the “Filing Requirements for Transmission and Distribution Applications” which detail the Board’s expectations as to what electricity transmitters and distributors are to file when respectively requesting cost of service rate adjustments based on a forward test year and incentive regulation mechanism (“IRM”) based rates.

Mar 1-11

The Board has issued a letter identifying the list of distributors that are expected to file a cost of service application in respect of their 2012 rates.

 

IRM FREQUENTLY ASKED QUESTIONS

Question:
I filed our IRM rate application today, however, was unable to file the Excel models – I get an error saying invalid extension. What do I need to do?

Answer
See Saving Excel 2007 or higher documents in earlier version format.pdf