Accounting Procedures for Electricity

A corrected version of Appendix A, addressing a mapping error related to IESO Charge Types 651 and 652.

• Cover Letter
• Appendix A

A finalized update to the Accounting Guidance Related to Commodity Pass-Through Accounts 1588 & 1589, resulting from the Independent Electricity System Operator’s (IESO) Market Renewal Program (MRP).

• Cover Letter
• Accounting Procedures Handbook Update
• Accounting Procedures Handbook Update - Tracked Changes
• Updated Illustrative Commodity Model (xlsx)
• Appendix A

A draft update to the Accounting Guidance Related to Commodity Pass-Through Accounts 1588 & 1589, resulting from the Independent Electricity System Operator's (IESO) Market Renewal Program (MRP).

• Cover Letter
• Draft Accounting Procedures Handbook Update
• Draft Accounting Procedures Handbook Update - Tracked Changes
• Updated Illustrative Commodity Model (xlsx)
• Appendix A to Cover Letter

Update to Accounting Procedures Handbook Update - Accounting Guidance related to Accounts 1588 RSVA Power, and 1589 RSVA Global Adjustment issued in February 2019 resulting from the implementation of a new optional ultra-low overnight (ULO) price plan:

• Cover Letter
• Accounting Procedures Handbook Update - Accounting Guidance
• Accounting Procedures Handbook Update - Accounting Guidance (tracked changes version)
• Updated Illustrative Commodity Model (xlsx)

Accounting guidance related to Accounts 1588 RSVA Power, and 1589 RSVA Global Adjustment to standardize accounting procedures:

• Letter to all rate-regulated licensed electricity distributors
• APH Update - Accounting Guidance
• Illustrative Commodity Model (xlsx)
• Accounting Guidance Training
• Q&A's

A letter to advise electricity distributors of the OEB’s initiative to standardize the accounting processes used by distributors relating to RPP wholesale settlements and accounting procedures (including the treatment of unbilled revenue) to improve the accuracy of accounts 1588 - RSVA Power and 1589 - Global Adjustment (the commodity pass-through variance accounts).

• Letter

Accounting guidance on Capacity Based Recovery (Previously called Capacity Based Demand Responses)

• Accounting Guidance on Capacity Based Recovery

The OEB has provided further guidance on the treatment of CBDR charges and new guidance on a one-time credit under the charge type 9920 Adjustment Account Credit arising from the IESO’s settlement dispute process:

• Accounting Guidance: Wholesale Market Services Accounting for Capacity Based Demand Response (CBDR) and Updated Charge Types Applicable to Account 4708 WMS Charges

Further accounting guidance issued regarding pole attachment charges:

• Accounting Guidance for Sub-account Pole Attachment Revenue Variance

Accounting guidance regarding the establishment of a variance account in connection with the implementation of the new wireline pole attachment charge, as advised in the OEB Report on Wireline Pole Attachment Charges issued on March 22, 2018.

• Additional Accounting Guidance for Sub-account Pole Attachment Revenue Variance

Accounting guidance related to the changes under the ORECA and provide accounting guidance on the RPP Settlement and Final RPP Variance Settlement.

• Accounting Guidance: Changes to the Ontario Rebate for Electricity Consumer Act, 2016, RPP Settlement, and Resuming the Final RPP Variance Settlement

The OEB letter provides notice of OEB's approach to addressing accounting or other errors in respect of certain electricity distributor variance accounts through retroactive adjustments in appropriate cases.

• OEB's Approach to Correcting Errors through Retroactive Adjustments

Accounting direction regarding the impacts of the Bill C-97 CCA rule changes and future legislative or regulatory changes to tax rates or CCA rules.

• Accounting Direction: Bill C-97 and Other Changes in Regulatory or Legislated Tax Rules for Capital Cost Allowance (CCA)

Accounting guidance issued for the new IESO charge type 2148 Class B Global Adjustment Prior Period Correction Settlement Amount.

• Accounting Guidance: IESO Charge Type 2148
• Charge Type 2148 Example (xlsx)

Accounting guidance on RCVA accounts (Account 1518, 1548 and a new 1508 sub-account).

• Accounting Guidance on RCVA accounts (Account 1518, 1548 and a new 1508 sub-account)

The OEB has updated accounting guidance on the appropriate accounting treatment with respect to changes to the Smart Metering Entity Charge, which were announced on March 1, 2018.

• Accounting Guidance: Smart Metering Entity Charge

The OEB has established a new requirement intended to address issues with account balances in distributors’ RSVA Power (1588) and Global Adjustment (1589) variance accounts that result from the RPP settlement claims process with the IESO.

• Accounting Guidance: Disposition of Accounts 1588 and 1589

The OEB has established a deferral account for electricity distributors and transmitters to record any material differences between OEB cost assessments currently built into rates, and cost assessments that will result from the application of the new cost assessment model effective April 1, 2016.

• Revisions to the Ontario Energy Board Cost Assessment Model

The OEB has approved the use of a new account to record the stranded costs associated with conventional or accumulation meters removed at the time of installation of smart meters. Distributors will report the stranded meter costs in a new sub-account: Smart Meter Capital and Recovery Offset Variance Account 1555, sub-account Stranded Meter Costs.

• Accounting Guidance: Standard Meter Costs Relate to the Installation of Smart Meters

The OEB has identified the USoA accounts approved for smart meters and low voltage or wheeling charges arising from the OEB's 2006 EDR decision on common or generic issues (RP-2005-0020/EB-2005-0529).

• Accounting Guidance: Accounts for Smart Meters and Low Voltage Charges

Accounting guidance issued related to the implementation of the Fair Hydro Act, 2017.

• Accounting Guidance: Implementation of Fair Hydro Act, 2017

Accounting guidance on a new sub-account of the LRAM Variance Account (Account 1568-0001).

• LRAM Variance Account 1568-New Sub Account 1568-0001 LRAMVA Demand Response

The OEB has authorized Account 1521, Special Purpose Charge Assessment Variance Account for Ministry of Energy and Infrastructure Conservation and Renewable Energy Program Costs.

• Accounting Guidance: Establishment of Variance Account 1521 and related accounts 4324 and 5681 for "Special Purpose Charge" Assessment

This document sets out a regulatory framework for the regulatory and accounting requirements for electricity distributors that own and operate distributor-owned generation facilities.

• Cover Letter
• Guidelines: Regulatory and Accounting Treatments for Distributor-Owned Generation Facilities

Accounting guidance regarding:   
1) Approval of variance account for global adjustments (sub-account 1588);    
2) Approval of deferral account for cash pension contributions (sub-account 1508);    
3) Guidance on recording of Ontario Power Authority (OPA) fees (account 1580); and, 4) Guidance on recording of revenues in account 1565.

• Introduction of New Accounts and Guidance on Accounting Issues

The OEB has established a deferral account for all electricity distributors to record the OEB costs assessments for the OEB's fiscal year 2004 and subsequent fiscal year(s) in order that these costs may be given consideration for rate recovery in the future.

• Accounting Guidance: Deferral Account to record OEB Cost Assessments

OEB letter to provide LDCs with information concerning the deferral account established to record the costs of their conservation and demand management activities and investment expenditures, and related revenues (i.e., the third tranche of market adjusted revenue requirement or MARR). The OEB has authorized Account 1565, Conservation and Demand Management Expenditures and Recoveries for the purposes of this initiative.

• Accounting Guidance: Account 1565, Conservation and Demand Management Expenditures and Recoveries

Accounting Order for the Establishment of a Deferral Account to Record Impacts Arising from Implementing the Electric Vehicle Charging Rate.

• Accounting Order - EVC Rates

Accounting Order for the establishment of the Extended Horizons Variance Account to record the incremental revenue requirement impact resulting from reductions in the forecasted customer capital contributions embedded in distribution rates that arise from the OEB’s December 23, 2024 amendments to the Distribution System Code (DSC).

• Final Rate Order and Accounting Order

Accounting Orders for the establishment of new accounts in respect of the deemed long-term debt rate (DLTDR) and return on equity (ROE).

• OEB Letter and Accounting Orders – DLTDR and ROE

Accounting Order for the establishment of a new account in respect of the deemed short-term debt rate (DSTDR).

• OEB Letter and Accounting Order - DVA Rate and DSTDR

Accounting Orders for the establishment of two deferral accounts intended to facilitate the implementation of the changes to the LEAP EFA by electricity and gas distributors.

• Letter (including Accounting Orders for LEAP EFA Funding Deferral Account)

Accounting order for the establishment of a deferral account to record incremental cloud computing arrangement implementation costs.

• Accounting Order
• Appendix B - KPMG Report on Cloud Computing Costs
• Cloud Computing Implementation Cost Deferral Account QA (Feb 15, 2024)

Accounting Order for the establishment of the Getting Ontario Connected Act Variance Account to track incremental costs of locates in 2023 and future years arising from the implementation of recent provincial legislation: Bill 93 (the Getting Ontario Connected Act, 2022).

• Accounting Order

Accounting order issued for the establishment of a generic deferral account for distributors to track the revenue requirement impacts of their material costs of implementing the ULO option. 

• Establishment of a Deferral Account: Impacts Arising from Implementing the Ultra-Low Overnight Option

Accounting order issued for the establishment of a generic deferral account for rate regulated distributors to record the incremental impacts associated with carrying out activities pertaining to designated broadband projects.

• Establishment of a Deferral Account: Impacts Pertaining to Ontario Regulation 410/22 (Electricity Infrastructure-Designated Broadband projects)

Accounting order issued for the establishment of a generic deferral account for rate regulated distributors to record the incremental costs directly attributable to the implementation of the Green Button initiative, in a manner that accords with the requirements set out in the Green Button Regulation.

• Establishment of Deferral Account: Cost Associated with the Implementation of the Green Button Initiative

Accounting order issued for the establishment of a new deferral account for electricity distributors involved in the IESO's Local Initiatives Program (LIP)  to track incremental costs. 

• Establishment of a Deferred Account: Costs associated with Distributor Partnership in the Local Initiatives Program Under the 2021-2024 Conservation and Demand Management Framework

Accounting order issued for rate-regulated electricity distributors to establish a new deferral account called Accounts Receivable for Financial Assistance and to provide supplementary accounting guidance for the Ontario Electricity Rebate (OER).

• Establishment of an Accounts Receivable Account for Financial Assistance Provided to Customers
• Appendix A - Example (xlsx)

Accounting order issued for the establishment of a deferral account for rate-regulated electricity distributors to record incremental costs directly attributable to the customer choice initiative.

• Establishment of Deferral Account: Impacts Arising from Implementing the Customer Choice Initiative

The report of regulatory treatment on impacts arising from Covid-19 Emergency.

• Cover Letter: Report of the Ontario Energy Board: Regulatory Treatment of Impacts Arising from the Covid-19 Emergency

Accounting guidance issued to electricity distributors regarding the recovery of the Global Adjustment (GA) charges that were previously deferred for the months of April, May and June 2020 for Class A customers and Class B customers that are not on the Regulated Price Plan (RPP).

• The recovery of the Global Adjustment charges that were previously deferred for the months of April, May and June 2020

Accounting order issued to establish a new sub-account: Impacts Arising from the COVID-19 Emergency, Sub-account Bad Debt.

• Establishment of a Sub-account: Impacts Arising from the COVID-19 from Bad Debt

Accounting order for the establishment of a sub-account named "Impacts Arising from the COVID-19 Emergency - Sub-account Forgone Revenues from Postponing Rate Implementation.

• Establishment of a Sub-account: Impacts Arising from the COVID-19 Emergency for Forgone Revenues from Postponing Rate Implementation

Accounting Guidance on the implementation of the May 1, 2020 Emergency Order under which a portion of the Global Adjustment (GA) is being deferred for Class A customers and Class B customers that are not on the Regulated Price Plan (RPP).

• Implementing the Emergency Order Regarding the Deferral of a Portion of the Global Adjustment

Accounting order to establish a deferral account to record impacts arising from the COVID-19 emergency for OPG and electricity transmitters.

• Establishment of Deferral Account: Impacts Arising from the COVID-19 for Ontario Power Generation Inc. and Electricity Transmitters

Further clarification and guidance provided relating to the impacts of the emergency TOU prices on RPP settlements to address distributors’ inquiries since the issuance of the March 24, 2020 letter.

• Accounting Guidance: The Regulated Price Plan Settlement with Respect to the Emergency Order

Accounting order issued for the establishment of Account 1509, Impacts Arising from the COVID-19 Emergency and three sub-accounts for electricity distributors. Natural gas distributors may establish new sub-accounts under Account 179.

• Establishment of Deferral Accounts: Impacts Arising from the COVID-19

The OEB issued an Addendum to Report of the OEB: Implementing International Financial Reporting Standards in an Incentive Rate Mechanism Environment. The Addendum sets out regulatory policy for the transition to IFRS for utility rates rebased using a cost of service methodology and subsequently set using an incentive rate-setting mechanism.

• Cover Letter
• Addendum to Report of the OEB: Implementing International Financial Reporting Standards in an Incentive Rate Mechanism Environment

The OEB issued an amendment to its Report on Transition to IFRS (originally issued Jul 28-09) to reflect the Canadian Accounting Standards Board pronouncement allowing the option to delay transition to IFRS to January 1, 2012.

Note: Amendment made only in Appendix B of original Report of the OEB of July 28, 2009.

• Cover letter and amendment to Report of the OEB on Transition to IFRS
• Appendix B (amended November 8, 2010)

The OEB has issued a depreciation study prepared by Kinectrics Inc. to assist electricity distributors in Ontario in their transition to International Financial Reporting Standards.

• Cover letter
• Asset Depreciation Study for the Ontario Energy Board, July 8, 2010

OEB Report on transition to International Financial Reporting Standards (IFRS) in recognition of the fact that Canadian Generally Accepted Accounting Principles will transition to IFRS applicable to most utilities regulated by the OEB effective January 1, 2011.

• Cover letter
• Report of the OEB, Transition to International Financial Reporting Standards

OEB letter to inform electricity distributors of accounting policy changes to Accounts 1575 and 1576 with respect to the disposition of these account balances effective for the 2014 cost of service rate applications and subsequent rate years.

• Accounting policy changes for Accounts 1575 and 1576

Accounting guidance permitting electricity distributors electing to remain on CGAAP in 2012 to implement regulatory accounting changes for depreciation expense and capitalization policies effective on January 1, 2012. These changes are mandatory in 2013 for all distributors that have not yet made these changes. Account 1576 is created for distributors to record the financial differences arising from these accounting changes.

• Accounting Guidance: Establishment of Account 1576 for changes to depreciation expense and capitalization policies in 2012 and 2013 under CGAAP

The OEB issued a letter providing guidance for all electricity utilities regarding the impact of the decision by the Canadian Accounting Standards Board (the “AcSB”) to defer the mandatory changeover to International Financial Reporting Standards (“IFRS”) to January 1, 2013.

• Letter

The OEB posted a staff Discussion Paper on the Transition to IFRS – Implementation in an IRM Environment. 

• Letter
• Staff Discussion Paper: Transition to IFRS - Implementation in an IRM Environment

OEB letter further amending Section 9.1.2 of its Report on Transition to IFRS (originally issued Jul-28-09) to advise electricity distributors regarding the use of IFRS in filing cost of service applications for rates for 2012.

• Letter

OEB draft report of Kinectrics Inc., Asset Amortization Study for the Ontario Energy Board, in relation to electricity distributors for comment to assist Kinectrics Inc. in finalizing their report.

• Cover Letter
• Draft Asset Amortization Study for the Ontario Energy Board, Kinectrics Inc.

OEB letter clarifying “Accounting for Overhead Costs Associated with Capital Work” to assist utilities with their transition to IFRS.

• Letter

Accounting Guidance on the implementation of the Fair Hydro Act, 2017.

• Letter

OEB letter to provide direction to licensees regarding implementation issues related to the Ontario Rebate for Electricity Consumers Act (2016).

• Letter

The OEB has established the rate of interest to be used for calculating carry charges in the deferral account (1508 - Other Regulatory Assets - Sub-account Pension Contributions) in 2005.

• Interest Rate for Account 1508 - Other Regulatory Assets - Sub-account Pension Contributions

The OEB has updated the list of Independent Electricity System Operator (IESO) wholesale market service (WMS) charge codes that apply to Account 4708, WMS – Charges.

• New and Amended Charge Types for Recording in Account 4708

The OEB has updated the list of Independent Electricity System Operator (IESO) wholesale market service (WMS) charge codes that apply to Account 4708, WMS – Charges.

• New and Amended Charge Types for Recording in Account 4708

The OEB has approved Account 4708, Charges WMS, for the classification and recording of two new WMS charge types (186 and 1188) resulting from the Day-Ahead Commitment Process (DACP) in the IESO-administered wholesale market, effective June 1, 2006. Charge types 703 Rural and Remote Settlement Credit and 704 Credit OPA Administration Credit have been removed.

• Account 4708 New IESO Charge Types related to Day-Ahead Commitment Process and the removal of certain charge types

OEB letter re. the revisions made to the classifications of the Independent Electricity System Operator (IESO) WMS (Wholesale Market Services) charge types in the Uniform System of Accounts (USoA) accounts.

The revised classifications for recording WMS charges in accounts 4708, Charges WMS and 4712, WMS Charges – One-Time, will be effective from January 1, 2006. These changes will also impact the account balances related to the RSVA-WMS accounts 1580 and 1582.

• IESO Charge Type Reclassifications (Accounts 4708 and 4712)