Consultation Process on Cost of Capital Review (EB-2009-0084)

Mar 3-11

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for Cost of Service Applications effective May 1, 2011.

• Letter

Nov 15-10

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for 2011 Cost of Service Applications effective January 1, 2011.

• Letter

Feb 24-10

The Board has issued a letter which sets out the Cost of Capital Parameter Updates for 2010 Cost of Service Applications.

• Letter

Dec 11-09

The Board issued its Report of the Board on the Cost of Capital for Ontario's Regulated Utilities.

• Cover Letter
• Report of the Board

Nov 2-09

Final written comments received from interested stakeholders in response to the Board letters dated October 5 & 23, 2009:

• Building Owners and Managers Association of the Greater Toronto Area & London Property Management Association
• Canadian Manufacturers & Exporters, Consumers Council of Canada, & Vulnerable Energy Consumers Coalition
  • Guidance on Moody’s Investors Service, Inc.'s Rating Methodology
  • Final written comments (corrected version posted Nov 10-09)
• Coalition of Large Distributors
• Concentric Energy Advisors (consultant for the Coalition of Large Distributors, Enbridge Gas Distribution Inc., & Hydro One Networks Inc.)
• Electricity Distributors Association
• Enbridge Gas Distribution Inc.
• EnergyProbe
• Great Lakes Power Transmission LP
• Industrial Gas Users Association
• Ontario Power Generation Inc.
• Power Workers' Union
• School Energy Coalition
• Union Gas Limited

Oct 23-09

In a letter issued by the Board on October 5, 2009, participants were invited to provide their final written comments to the Board by October 26, 2009.  Please be advised that in response to requests received by the Board from participants, the Board is extending the due date for written comments to 12:00 noon on October 30, 2009.

• Letter

Oct 5-09

The Board issued a letter to participants in this consultation advising them that subsequent to the stakeholder conference, participants are invited to provide final written comments to the Board:

• Letter

Sep 28-09

The Board advised participants in this consultation that the cost of capital stakeholder conference will resume at 9:30am on October 6, 2009 in the North Hearing Room.  Below is a draft agenda.

• Draft Agenda

Please note that the presentations filed by participants for the Stakeholder Conference were posted on Sep 16-09, below.

Sep 23-09

The Board is informing interested stakeholders that due to a presenter scheduling conflict it is rescheduling the second portion of the Stakeholder Conference on the Cost of Capital Review (EB-2009-0084).  The next scheduled date for the Stakeholder Conference will be communicated shortly.  It is expected that the Stakeholder Conference will reconvene in the week of October 5, 2009.

Sep 22-09

The Board has posted the transcripts of the cost of capital stakeholder conference (updated daily for the duration of the Stakeholder Conference):

• Transcripts

Sep 16-09

The Board has posted a draft agenda and the presentations filed by participants for the Stakeholder Conference to be held the week of September 21st.

• Draft Agenda
• Capital Markets Panel Presentations:
  • Mr. Matthew Akman, Managing Director, Infrastructure Equity Research, Macquarie Capital Markets Canada
  • Mr. Stephen Dafoe, Director, Corporate Bond Research, Scotia Capital
  • Mr. Harold Holloway, Managing Director, Global Energy and Power, Investment Banking, TD Securities Inc.
  • Ms. Alexandra Zvarich, Director, Public Fixed Income, Sun Life Financial
• Presentations:
  • Dr Laurence D. Booth, Professor, University of Toronto (consultant for the Building Owners and Managers Association of the Greater Toronto Area, the Consumers Council of Canada, Canadian Manufacturers and Exporters, Industrial Gas Users Association, London Property Management Association, and the Vulnerable Energy Consumer's Coalition)
    • Presentation by Merrill Lynch referenced in Dr. Booth’s presentation
  • Mr. Donald A. Carmichael, Independent Consultant (consultant for Enbridge, Fortis Ontario Inc., and Toronto Hydro-Electric System Limited)
    • Royal Bank of Canada report referenced in Mr. Carmichael’s presentation 
  • Mr. James M. Coyne, Senior Vice President, Concentric Energy Advisors (consultant for Enbridge, Hydro One Networks, Inc. and the Coalition of Large Distributors (Enersource Hydro Missisauga Inc., Horizon Utilities Corporation, Hydro Ottawa Limited, PowerStream Inc., Toronto Hydro-Electric System Limited and Veridian Connections Inc.)
    • California Public Utilities Commission Decision Referenced in Mr. Coyne’s Presentation and in Concentric’s Written Comments (footnoted on page 55:  Application of Southern California Edison Company (U338E) for Authorized Cost of Capital for Utility Operations for 2008 and Related Matters, Decision of ALJ Michael J. Galvin, mailed April 29, 2008, at 13).
    • Analysis of selected Bloomberg and Moody’s bond yield indices
  • Mr. John Dalton, Power Advisory LLC (consultant for Great Lakes Power Transmission )
  • Ms Kathleen McShane, President, Foster Associates (consultant for Electricity Distributors Association)
  • Dr Lawrence P. Schwartz, Consulting Economist (consultant for Energy Probe Research Foundation)
  • Dr. James Vander Weide, Research Professor of Finance and Economics, Duke University, The Fuqua School of Business (consultant for Union Gas)

Sep 10-09

Written comments received from interested stakeholders on the issues list posted on the Board’s web site on July 30, 2009:

• Building Owners and Managers Association of the Greater Toronto Area, Canadian Manufacturers & Exporters, Consumers Council of Canada, Vulnerable Energy Consumers Coalition, Industrial Gas Users Association & London Property Management Association
• Building Owners and Managers Association of the Greater Toronto Area & London Property Management Association
• Canadian Manufacturers & Exporters
• Coalition of Large Distributors & Hydro One Networks Inc.
• Electricity Distributors Association
• Enbridge Gas Distribution Inc.
• EnergyProbe
• FortisOntario Inc.
• Great Lakes Power Transmission LP
• Ontario Power Generation Inc.
• Power Workers' Union
• School Energy Coalition
• Toronto Hydro-Electric System Limited
• Union Gas Limited

Sep 2-09

The Board issued a letter to participants in this consultation advising them that a Capital Markets Panel will “kick off” the Stakeholder Conference on the morning of September 21, 2009:

• Letter

Aug 20-09

The Board issued its response to a letter it received on August 13, 2009 from Mr. Robert Warren, sent on behalf of the Consumers Council of Canada, the Vulnerable Energy Consumers Coalition and the London Property Management Association, in which a number of questions are listed concerning the Board’s cost of capital consultation process:

• Letter from Mr. Warren
• The Board’s Response

Aug 11-09

The Board has issued a letter setting out important information in relation to the stakeholder conference to be held in Toronto the week of September 21, 2009. 

• Letter

Aug 7-09

On June 18, 2009, the Board issued a letter announcing a review of its policy regarding the cost of capital.  The Board set an issues list to form the basis of its review.  This issues list was posted to the Board’s web site on July 30, 2009.  Interested stakeholders were invited to file written comments identifying their views and positions on the listed issues by August 27, 2009.  Please be advised that in response to requests received by the Board from interested stakeholders, the Board is extending the due date for written comments to September 8, 2009.

Also, in response to inquiries received by staff, the Board would like to clarify that stakeholders are asked to provide in their written comments answers to the questions identified in the Board’s issues list.

Additional information on logistics for the September stakeholder conference will be issued next week.

Jul 30-09

The Board has issued its issues list in relation to this consultation.  As previously communicated, the Board will hold a stakeholder conference during the week of September 21, 2009 to provide a forum for discussion on the issues identified by the Board.  Interested stakeholders are invited to file written comments identifying their views and positions on the listed issues by August 27, 2009 in accordance with the filing instructions set out in the letter below.  Written comments on the substantive matters contained in the Board’s issues list will inform the stakeholder conference.

• Letter
• Issues List

Jun 18-09

The Board has issued a letter setting out its determination on the cost of capital parameter values for 2009 rates.

The letter also notifies interested stakeholders that the Board is proceeding with a review of its policy regarding the cost of capital.

• Letter

Mar 16-09

The Board has initiated a consultative process to help it to determine whether current economic and financial market conditions warrant an adjustment to any of the Cost of Capital parameter values (i.e., the Return on Equity, Long Term Debt rate, and/or Short Term Debt rate) set out in the Board’s letter of February 24, 2009.  Interested stakeholders are invited to provide written comments on issues identified by the Board (set out in letter, below).

• Letter
• Comments Received:
  • Canadian Manufacturers & Exporters
  • Chatham-Kent Hydro/Middlesex Power
  • Coalition of Large Distributors
  • Consumers Council of Canada
  • Electricity Distributors Association
  • Enbridge Gas Distribution Inc.
  • EnergyProbe
  • Great Lakes Power Transmission LP
  • Hydro One Networks Inc.
  • Industrial Gas Users Association
  • London Property Management Association
  • Ontario Power Generation
  • Power Workers' Union
  • School Energy Coalition
  • Stephen Dafoe
  • Sun Life Financial
  • Union Gas Limited
  • Vulnerable Energy Consumers Coalition

Feb 24-09

The Board has issued a letter to all licensed electricity distributors informing them of Cost of Capital Parameter Updates for 2009 Cost of Service Applications.

• Letter

Feb 26-10

The Board has issued its Decision and Order on Cost Awards:

• Decision and Order on Cost Awards

Jan 7-10

In response to requests received by the Board from eligible participants, the Board has agreed to revise the timeline for the Hearing for Cost Awards as follows:

All other requirements set out in the Board’s December 18, 2009 Notice of Hearing for Cost Awards remain in effect.

Dec 18-09

The Board has issued its Notice of Hearing for Cost Awards regarding the Consultation on Cost of Capital for Ontario’s Regulated Utilities.

• Notice of Hearing for Cost Awards
• Attachment B - Cost Claim Summary Forms (.xls)

Sep 18-09

The Board has determined that cost awards will be available to eligible participants for up to 15 hours to review the written comments filed with the Board prior to the September 21, 2009 stakeholder conference.  On September 17, 2009, the Board received a letter from Mr. Jay Shepherd, counsel for the School Energy Coalition, asking that the Board to consider increasing the limit on the preparation hours to a level that reflects the unexpected amount of material that has been presented for review and analysis.

• Board Letter
• Letter from the School Energy Coalition

Sep 8-09

The Board issued its supplemental decision on cost eligibility.

• Decision

Sep 8-09

On August 7, 2009 the Board received a request for cost eligibility from:

• The Building Owners and Managers Association of the Greater Toronto Area

Apr 14-09

The Board issued its decision on cost eligibility.

• Decision

Mar 23-09

The Board received requests for cost eligibility from the following stakeholders:

• The Consumers Council of Canada
• Canadian Manufacturers and Exporters
• Energy Probe Research Foundation
• Industrial Gas Users Association
• London Property Management Association
• School Energy Coalition
• The Vulnerable Energy Consumer's Coalition