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.

March 6, 2024 - The OEB has commenced a generic proceeding regarding cost of capital and other matters (EB-2024-0063)

Sector
Electricity
Natural Gas
Category
Applications/Filing
Last revised
October 31, 2023
Rates effectiveReturn on equity (ROE)Deemed long-term debt rateDeemed short-term debt rateWeighted average cost of capital (WACC)*Letter (issuance date)
Jan 1, 20249.21%4.58%6.23%6.50%Letter (Oct 31, 2023)
Jan 1, 20239.36%4.88%4.79%6.67%Letter (Oct 20, 2022)
Jan 1, 20228.66%3.49%1.17%5.47%

Letter (Oct 28, 2021)

 

Appendix (Oct 28, 2021)

Jan 1, 20218.34%2.85%1.75%5.00%Nov 9, 2020
Jan 1, 20208.52%3.21%2.75%5.32%Oct 31, 2019
Jan 1, 20198.98%4.13%2.82%6.02%Nov 22, 2018
Jan 1, 20189.00%4.16%2.29%6.02%Nov 23, 2017
Jan 1, 20178.78%3.72%1.76%5.67%Oct 27, 2016
Jan 1, 20169.19%4.54%1.65%6.28%Oct 15, 2015
Jan 1, 20159.30%4.77%2.16%6.48%Nov 20, 2014
Jan 1, 20149.36%4.88%2.11%6.56%Nov 25, 2013
May 1, 20138.98%4.12%2.07%5.98%Feb 14, 2013
Jan 1, 20138.93%4.03%2.08%5.91%Nov 15, 2012
May 1, 20129.12%4.41%2.08%6.20%Mar 2, 2012
Jan 1, 20129.42%5.01%2.08%6.66%Nov 10, 2011
May 1, 20119.58%5.32%2.46%6.91%Mar 3, 2011
Jan 1, 20119.66%5.48%2.43%7.03%Nov 15, 2010
May 1, 20109.85%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: