Cost of Capital Review

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for Cost of Service Applications effective May 1, 2011.

• Letter

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for 2010 Cost of Service Applications.

• Letter

Final written comments received from interested stakeholders in response to the Board letters dated October 5 & 23, 2009:

• Building Owners and Managers Association of the Greater Toronto Area & London Property Management Association
• Canadian Manufacturers & Exporters, Consumers Council of Canada, & Vulnerable Energy Consumers Coalition
  • Guidance on Moody’s Investors Service, Inc.'s Rating Methodology
  • Final written comments (corrected version posted Nov 10-09)
• Coalition of Large Distributors
• Concentric Energy Advisors (consultant for the Coalition of Large Distributors, Enbridge Gas Distribution Inc., & Hydro One Networks Inc.)
• Electricity Distributors Association
• Enbridge Gas Distribution Inc.
• EnergyProbe
• Great Lakes Power Transmission LP
• Industrial Gas Users Association
• Ontario Power Generation Inc.
• Power Workers' Union
• School Energy Coalition
• Union Gas Limited

The Board has posted a draft agenda and the presentations filed by participants for the Stakeholder Conference to be held the week of September 21st.

• Draft Agenda
• Capital Markets Panel Presentations:
  • Mr. Matthew Akman, Managing Director, Infrastructure Equity Research, Macquarie Capital Markets Canada
  • Mr. Stephen Dafoe, Director, Corporate Bond Research, Scotia Capital
  • Mr. Harold Holloway, Managing Director, Global Energy and Power, Investment Banking, TD Securities Inc.
  • Ms. Alexandra Zvarich, Director, Public Fixed Income, Sun Life Financial
• Presentations:
  • Dr Laurence D. Booth, Professor, University of Toronto (consultant for the Building Owners and Managers Association of the Greater Toronto Area, the Consumers Council of Canada, Canadian Manufacturers and Exporters, Industrial Gas Users Association, London Property Management Association, and the Vulnerable Energy Consumer's Coalition)
    • Presentation by Merrill Lynch referenced in Dr. Booth’s presentation
  • Mr. Donald A. Carmichael, Independent Consultant (consultant for Enbridge, Fortis Ontario Inc., and Toronto Hydro-Electric System Limited)
    • Royal Bank of Canada report referenced in Mr. Carmichael’s presentation 
  • Mr. James M. Coyne, Senior Vice President, Concentric Energy Advisors (consultant for Enbridge, Hydro One Networks, Inc. and the Coalition of Large Distributors (Enersource Hydro Missisauga Inc., Horizon Utilities Corporation, Hydro Ottawa Limited, PowerStream Inc., Toronto Hydro-Electric System Limited and Veridian Connections Inc.)
    • California Public Utilities Commission Decision Referenced in Mr. Coyne’s Presentation and in Concentric’s Written Comments (footnoted on page 55:  Application of Southern California Edison Company (U338E) for Authorized Cost of Capital for Utility Operations for 2008 and Related Matters, Decision of ALJ Michael J. Galvin, mailed April 29, 2008, at 13).
    • Analysis of selected Bloomberg and Moody’s bond yield indices
  • Mr. John Dalton, Power Advisory LLC (consultant for Great Lakes Power Transmission )
  • Ms Kathleen McShane, President, Foster Associates (consultant for Electricity Distributors Association)
  • Dr Lawrence P. Schwartz, Consulting Economist (consultant for Energy Probe Research Foundation)
  • Dr. James Vander Weide, Research Professor of Finance and Economics, Duke University, The Fuqua School of Business (consultant for Union Gas)

The Board issued its response to a letter it received on August 13, 2009 from Mr. Robert Warren, sent on behalf of the Consumers Council of Canada, the Vulnerable Energy Consumers Coalition and the London Property Management Association, in which a number of questions are listed concerning the Board’s cost of capital consultation process:

• Letter from Mr. Warren
• The Board’s Response

The Board has issued its issues list in relation to this consultation.  As previously communicated, the Board will hold a stakeholder conference during the week of September 21, 2009 to provide a forum for discussion on the issues identified by the Board. Written comments on the substantive matters contained in the Board’s issues list will inform the stakeholder conference.

• Letter
• Issues List