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
Electricity
Natural Gas
Category
Applications/Filing
Last revised
October 20, 2022

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, 2023 9.36% 4.88% 4.79% 6.67% Letter (Oct 20, 2022)
Jan 1, 2022 8.66% 3.49% 1.17% 5.47%

Letter (Oct 28, 2021)

 

Appendix (Oct 28, 2021)

Jan 1, 2021 8.34% 2.85% 1.75% 5.00% Nov 9, 2020
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: