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2008 Electricity Distribution Rate Applications
As part of its regulation of the electricity distributors, the Ontario Energy Board established a multi-year electricity distribution rate setting plan, which indicated that, commencing with the 2008 rates, each year a limited number of distributors would be identified and if any of them sought a general change in their distribution rates, the application had to be based on Chapter 2 of the Board’s Filing Requirements, issued November 14, 2006 (EB-2006-0170). This meant that the distributor had to submit a forward test year, cost of service based application (CoS application).
For any of the other distributors seeking approval to change their distribution rates, the basis for their applications would be a mechanistic, formulaic update of their current rates (IRM application), similar to the process used for the 2007 rates.
On May 4, 2007, the Board identified a list of 25 electricity distributors that would be subject to this process, should any of them seek changes to their distribution rates for 2008. The letter requested that each of these distributors file a letter with the Board confirming they will file a forward test year rate application by August 15, 2007 for rates to become effective May 1, 2008. The filing instructions and timing for the remaining distributors will be issued later this year.
The following table lists the key standard documents of a distributor’s rate application. These documents include:
- The “Application” as filed by the distributor, provided as an Adobe Acrobat PDF file.
- The “Notice of Application” issued by the Board and to be published by the distributor. The purpose of the Notice is to inform the affected ratepayers and other stakeholders of the application, its nature and the impact on affected customers. It also outlines the process for the making of submissions and/or participation in the Board’s proceeding to consider the application.
- For those distributors applying for rates based on the IRM application, the “Decision Model” provides the application model modified as necessary to reflect the Board’s decision.
- The “Decision and Rate Order” issued by the Board when it has adjudicated on the application (the Decision) and the subsequent Rate Order that reflects the Decision in the actual Tariff of Rates and Charges.
UPDATES
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Today the Ontario Energy Board posted staff’s discussion paper entitled, Account 1562 – Deferred Payments in Lieu of Taxes, Methodology and Disposition of Balances for Electricity Distribution Companies affected by section 93 of the Electricity Act, 1998. This discussion paper is the next step in the EB-2007-0820 proceeding as announced on March 3, 2008. The paper is designed to assist parties in the EB-2007-0820 proceeding to resolve outstanding issues with respect to the disposition of balances in account 1562. The EB-2007-0820 proceeding is planned to begin in the fall of 2008. |
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Mar 12-08 |
Today the Board announced the price escalator (or inflation index) for the 2nd Generation Incentive Regulation mechanism for adjusting electricity distribution rates effective May 1, 2008. Consistent with the Board’s findings in its December 20, 2006 Report of the Board on Cost of Capital and 2nd Generation Incentive Regulation for Ontario's Electricity Distributorsnd, the Board will use the annual percent change in the Implicit Price Index for National Gross Domestic Product (GDP-IPI) for Final Domestic Demand. On March 3, 2008, Statistics Canada published change for 2007 over 2006. The percent change is 2.1% (ref: http://www.statcan.ca/english/freepub/13-010-XIE/2007004/tables/table07.htm). The Board will adjust the price escalator in each distributor’s Incentive Regulation model such that this change is reflected in the 2008 distribution rates for electricity distributors that are under the 2nd Generation Incentive Regulation mechanism. |
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Mar 7-08 |
Today the Board issued a letter to all licensed electricity distributors informing them of Cost of Capital Parameter Updates for 2008 Cost of Service Applications.
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Today, the Board issued a letter to describe how the changes in federal corporate income taxes scheduled to be effective January 1, 2008 would be reflected in the 2008 Incentive Regulation Mechanism (2008 IRM). |
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Today the Board has issued a letter to electricity distributors dealing with filing of 2008 rate applications later than dates established by the Board. |
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Today, the Board has posted the presentation from the webcast conducted by Board staff providing information on the 2008 Incentive Regulation Mechanism rate adjustment process and filing requirements. The 2008 IRM Q&A document will shortly be updated to reflect questions which were unable to be answered during the webcast. |
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Today the Board has posted Questions and Answers to assist affected distributors in preparing their 2008 Incentive Regulation Mechanism (“2008 IRM”) applications for adjusted distribution rates for May 1, 2008. The Board is also posting a Version 2.0 of the 2008 IRM spreadsheet model that each distributor should use in preparing its application. Distributors are reminded that the target date for filing their 2008 IRM applications is November 1, 2007, and are also reminded of the webcast on the 2008 IRM process and rate adjustment model that the Board will be conducting on Monday, October 15, 2007 from 11:00 a.m. to 12 noon. Details on the webcast are provided in the invitation. |
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Today the Board has announced a webcast scheduled for October 15, 2007 from 11:00 a.m. to 12 noon, to assist distributors who may be filing for a May 1, 2008 rate adjustment based on the 2nd Generation Incentive Regulation Mechanism. The webcast will guide staff of involved distributors through the process, filing requirements and the IRM Excel model in preparing a 2008 IRM rate application. |
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Sep 28-07 |
Today the Ontario Energy Board issued Filing Requirements for 2008 Incentive Regulation Mechanism Distribution Rate Adjustments. These Filing Requirements and a corresponding spreadsheet model are based on Report of the Board on Cost of Capital and 2nd Generation Incentive Regulation for Ontario’s Electricity Distributors, issued December 20, 2006, and are to guide electricity distributors in the preparation and filing of incentive regulation mechanism applications to adjust distribution rates for 2008. The target date for distributors to file their IRM applications is November 1, 2007. |
CONTACT
For further information on the 2008 EDR Rate Applications, contact Market Operations at 416-440-7604 or market.operations@oeb.gov.on.ca.
Disclaimer: Information contained in documents of applicants, intervenors and other interested parties represent the views of the individual parties alone, and in no way reflect official Ontario Energy Board position or opinion.