The OEB has commenced a consultation on a deferral account (the Account), established in relation to the impacts arising from the COVID-19 emergency, approved for all rate-regulated utilities in the electricity and natural gas sectors and Ontario Power Generation Inc. (collectively, the Utilities).
On authorization of the Account through the issuance of an Accounting Order on March 25, 2020, the OEB acknowledged that Utilities may incur incremental costs as a result of the ongoing COVID-19 emergency, the severity and duration of which is uncertain at this time. The objective of the consultation is to assist the OEB in the development of new accounting guidance related to the Account and filing requirements, where appropriate, for the review and disposition of the Account, giving due regard to bill impacts on customers.
Further detailed accounting guidance, including policy direction, will be required to be issued by the OEB on key issues in order for Utilities to be able to assess the need for, and if necessary, properly make applications for review and disposition of the Account balance in due course such as:
- Rules on the operations of the three sub-accounts
- The nature of the costs/revenue to be recorded
- Timing of recovery (including the nature of any near term relief, if needed)
- How materiality will be assessed
- Whether any additional revenues or offsetting cost savings need to be considered
- Rate impacts and rate mitigation consideration