New Cost Assessment Model For The Ontario Energy Board

Case number
Natural Gas

The Ontario Energy Board (the OEB) recovers its operating and capital costs through assessments to the natural gas and electricity market participants that it regulates. The cost assessment model is the approach used by the OEB to allocate costs first across types of market participants (classes) and then amongst the individual participants within each class.

A cost assessment study was undertaken to ensure a complete, fair and transparent review of all alternative cost assessment models and recommend a new model that would address the impact of both recent legislative changes on the OEB and changes in the current mix of energy market participants. The study examined: the current cost assessment processes within the OEB; the mix of market participants today and how their activities drive the OEB’s costs; new financing options for the OEB; and regulatory best practices in other jurisdictions.

In the Board’s letter to stakeholders of March 27, 2006, the Board concluded from its commissioned EES Consulting survey of other regulatory jurisdictions, that no major changes were needed in its existing regulatory cost allocation procedures. The existing Board allocation methods were in keeping with industry best practices and generally accepted utility regulation. The Board therefore accepted and adopted the EES Consulting study as final.

Date Issue / Document
April 7, 2006

March 27, 2006 cost allocation letter to stakeholders:

Responses received from Stakeholders:

February 1, 2006

The OEB jas posted the report by EES Consulting on a worldwide review of alternative processes to allocate regulatory costs and recommended approach for the OEB.

March 15, 2005

The Board posted the new Cost Assessment Model, to be effective for the April 1, 2005 to March 31, 2006 fiscal year. A report is also available on the OEB cost assessment model development and consultation process.

January 19, 2005

Sixteen submissions were received in response to the report from Navigant Consulting Ltd on a proposed new Cost Assessment Model for the OEB.

November 1, 2004

The OEB is posting the report of Navigant Consulting Ltd. on a proposed new Cost Assessment Model for the OEB.