The OEB initiated a consultation to complete the work begun in EB-2010-0060 on revenue decoupling for electricity and natural gas distributors. The OEB indicated, when first initiating the renewed regulatory framework project in 2010, that the revenue decoupling consultation would move forward once the renewed regulatory framework initiative was substantially complete.
The OEB coordinated its consideration of revenue decoupling with the ratemaking policies proposed in the renewed regulatory framework for electricity. One of the tenets of the Renewed Regulatory Framework for Electricity Distributors: A Performance-Based Approach (RRFE) was to increase the planned period between reviews (and rebasing) to a minimum of five years. In the case of the index plan, the period could be indefinite. In light of these longer periods, the OEB examined how best to address changes in demand, including potential declines in average use.
On April 3, 2014, the OEB issued its draft policy on Rate Design for Electricity Distributors along with a Letter seeking comments from interested stakeholders on the draft policy. The OEB considered the comments of stakeholders and on April 2, 2015, released its final policy A New Distribution Rate Design for Residential Electricity Customers. Distribution delivery costs would be recovered from residential customers of a distributor through a monthly service charge. The report also set out the OEB’s approach for implementing the policy with respect to residential customer classes. The OEB determined the new rate design policy would be implemented across all distributors’ service areas over a four year period to manage any customer bill impacts.
Related policy initiatives:
This initiative builds on extensive work and consultations previously undertaken by the OEB.
- Renewed Regulatory Framework for Electricity
- Revenue Decoupling (EB-2010-0060)
- Rate Design for the Recovery of Electricity Distribution Costs (EB-2007-0031)
Rate Design Working Group:
The OEB formed a Rate Design Working Group (RDWG) to assist in developing guidance for the implementation of fully fixed distribution charges for residential customers in Ontario.
List of Member Organizations:
- Consumers Council of Canada
- FortisOntario Inc.
- Hydro One Networks Inc.
- Midland Power Utility Corporation
- Toronto Hydro-Electric System Ltd.
- Veridian Connections Inc.
- Wasaga Distribution Inc.
- Vulnerable Energy Consumers Coalition