Cost of Capital Parameter Updates

The OEB determines the values for the Return on Equity (ROE) and the deemed Long-Term (LT) and Short-Term (ST) debt rates for use in cost of service and custom incentive rate-setting (custom IR) applications. The ROE and the LT and ST debt rates are collectively referred to as the cost of capital parameters.

Sector
General Regulatory
Last revised
October 31, 2019

Rates effective

Return on equity (ROE)

Deemed long-term debt rate

Deemed short-term debt rate

Weighted average cost of capital (WACC)*

Letter (issuance date)

Jan 1, 2020 8.52% 3.21% 2.75% 5.32% Oct 31, 2019
Jan 1, 2019 8.98% 4.13% 2.82% 6.02% Nov 22, 2018
Jan 1, 2018 9.00% 4.16% 2.29% 6.02% Nov 23, 2017
Jan 1, 2017 8.78% 3.72% 1.76% 5.67% Oct 27, 2016
Jan 1, 2016 9.19% 4.54% 1.65% 6.28% Oct 15, 2015
Jan 1, 2015 9.30% 4.77% 2.16% 6.48% Nov 20, 2014
Jan 1, 2014 9.36% 4.88% 2.11% 6.56% Nov 25, 2013
May 1, 2013 8.98% 4.12% 2.07% 5.98% Feb 14, 2013
Jan 1, 2013 8.93% 4.03% 2.08% 5.91% Nov 15, 2012
May 1, 2012 9.12% 4.41% 2.08% 6.20% Mar 2, 2012
Jan 1, 2012 9.42% 5.01% 2.08% 6.66% Nov 10, 2011
May 1, 2011 9.58% 5.32% 2.46% 6.91% Mar 3, 2011
Jan 1, 2011 9.66% 5.48% 2.43% 7.03% Nov 15, 2010
May 1, 2010 9.85% 5.87% 2.07% 7.31% Feb 24, 2010
*Assuming a deemed capital structure of 40% equity, 56% long-term debt and 4% short-term debt

Related documents

Report of the Board on the Cost of Capital for Ontario’s Regulated Utilities (EB-2009-0084) (pdf) December 11, 2009

Review of the Existing Methodology of the Cost of Capital for Ontario’s Regulated Utilities January 14, 2016: