Decision on Hydro One’s 2015-2019 Distribution Rates Application

August 31, 2017 – The OEB will be filing a report by September 7, 2017 that summarizes the consumer presentations, questions, comments and concerns raised at the ten community meetings held across the province in relation to Hydro One’s 2018 – 2022 distribution rate application. In addition to the feedback from the meetings, OEB received more than 3,000 letters of comment from Hydro One customers in respect of this matter.

OEB wants to ensure that these customer comments and questions are incorporated into the hearing, and will require Hydro One to address them. OEB will also provide customers of Hydro One with additional opportunities to voice their opinions.
On September 26, 2017 Hydro One will make a presentation of its application to the OEB decisions-makers in which it must address the issues raised by customers during the OEB community meetings. The Hydro One presentation is scheduled for and will be held at the OEB’s offices in Toronto. Customers of Hydro One are invited to attend the presentation and for those who are not able to attend, you can listen live on the OEB website.

See more information:

August 30, 2017 letter from OEB

August 30, 2017 letter from Hydro One


March 31, 2017 – Hydro One’s 2018-2022 Distribution Rate Application (background, public consultations, and more)

December 1, 2015 – Public inquiry needed on Green Energy Act (Bob Runciman/ Toronto Star)

August 31, 2015: Following up on the August 4, 2015 submission to the Ontario Energy Board (OEB) by Hydro One, FOCA has written to the OEB to express concerns about looming rate impacts to customers, especially those being moved out of the seasonal rate class. Read the FOCA letter to OEB (August 2015).

July 21, 2015: Following the stakeholder consultation convened June 10 by Hydro One about revised customer classifications (and the related impacts on customer bills), FOCA has provided our comments and our concerns to Hydro One, the OEB, and have sent a letter to Minister of Energy, Bob Chiarelli. Early August is when Hydro One makes their formal proposal to the OEB, and FOCA anticipates participatng in the related technical hearings and consultations.

June 10, 2015: Further to the decision (see below) to reassign customers formerly in the “seasonal” customer class, FOCA is participating in discussions with Hydro One about how to roll people into new rate classes effective January 1, 2016. The meeting held this June 10th allowed FOCA to see several proposed options of how this could be done, what rate changes to expect and how the changes could be phased in over time. The changes will affect some hydro consumers more than others, and FOCA is assessing how large consumers, typical consumers and small consumers will see their hydro bills change. Hydro One will make its final recommendation to the Ontario Energy Board August 4th. Intervenors including FOCA will be providing feedback during this process.


March 12, 2015 – The Ontario Energy Board (OEB) today released the final decision on the rate proposal EB-2013-0416/EB-2014-0247. FOCA was one of the Intervenors in this most recent Hydro One rate application, pertaining to electricity distribution rates effective January 1, 2015.

The approved rates are based on the OEB’s determination of the revenues required by Hydro One to cover the costs of operating and maintaining the distribution system at a level of service that meets the needs of its customers. It also determines the proportion of revenue to be recovered from each customer rate class.

Hydro One had requested a 29% increase to distribution rates over 5 years starting January 1, 2015.

The OEB Decision  (72-pages)

See the FOCA OEB Submission to Hydro One Rate Submission EB20130416 (October 2014)

Key Implications:

 

  • The major decision by the OEB was to collapse the Seasonal Class. Customers are being reclassified according to density.

 

  • Reclassification will have cost implications for all customers. Some will experience decreases, others will see significant increases. Specific cost implications from the rate class realignment (to be implemented for January 1, 2016) will be determined over the coming months. Hydro One has until August to propose how to phase in any increases, and FOCA will remain vigilant during this period to represent our members’ interests, and are part of  a “key stakeholders” meeting scheduled for early summer 2015 to discuss the reassignment of Seasonal customers.

 

  • OEB agrees with FOCA and others that Hydro One’s customer consultation in relation to its application was deficient from the perspective of Seasonal ratepayers.

 

  • With respect to Hydro One’s proposed increased vegetation management budget (including the costs for tree and brush clearing), the OEB finds that a reduction of $39 million to the total vegetation management costs over the 2015 to 2017 period is appropriate. It is the OEB’s view that Hydro One needs to manage this program more cost effectively, and to show continuous improvement in these areas.

 

The OEB did not consider Hydro One’s application to be sufficiently aligned with the objectives of their *“RRFE policy” (see footnote below) to approve the application as presented.

The OEB thusly denied Hydro One’s request for five year rate setting, but did approve a three-year (2015, 2016, 2017) distribution rate increase of 19%.

A copy of the decision and other related information is available on the OEB’s website at www.oeb.gov.on.ca.


Some further background on electricity pricing in Ontario:

  • Electrical utilities are regulated in Ontario by the Ontario Energy Board (OEB)
  • Hydro One is the primary LDC (local distribution company) that serves Ontario waterfront communities
  • FOCA participates in Hydro One rate hearings on behalf of our members, and FOCA has members in every rate class
  • Utilities are required to collect (charge) revenues that offset (equal) their cost of delivering electricity from generating stations across the Province to your home or business via the high voltage (transmission) and low voltage (distribution) electricity systems
  • Delivery charges are only one aspect of your bill (though for low-use customers it can be a significant part of the overall bill). Electricity prices are set separately by the OEB.
  • These costs, along with government-imposed regulations and obligations, are rising, as is the cost of maintaining the aging infrastructure


*The Renewed Regulatory Framework for Electricity Distributors (RRFE) allows flexibility so that a distributor can choose a rate-setting structure that supports the cost-effective planning and operation of the electricity distribution network. This is intended to provide a sustainable, financially viable electricity sector and also meet the expectations of customers for reliable service at a reasonable price. This includes three main areas: rate-setting, planning, and measuring performance. The OEB evaluated Hydro One’s application against the policy objectives pertaining to these areas and the RRFE policy in general. The OEB determined that Hydro One’s approach lacked adequate performance measurement and continuous improvement and is directed in this Decision to initiate a number of activities and report the results as part of its next rate application.

Fixed rates in the News:

Plan for fixed hydro rates called ‘Robin Hood in reverse’ (Hamilton Spectator)

Terry ReesDecision on Hydro One’s 2015-2019 Distribution Rates Application