TORONTO, Oct. 27 /CNW/ - Today the Ontario Energy Board (the Board)
issued its Decision on an application by Erie Thames Powerlines Corporation
(Erie Thames) for 2008 electricity distribution rates. New rates will take
effect when the final Rate Order is issued.
Distribution rates are set to recover the cost to deliver electricity to
consumers and reflect an individual utility's cost of service. Utilities apply
to have their proposed rates to deliver electricity reviewed by the Board
through a public process to determine what costs can be passed on to
consumers. Distribution rates are reflected in the "Delivery" line of
In 2008, distribution rates are set using two different methodologies.
Most utilities had their rates set using incentive regulation guidelines which
provide a standard rate adjustment that accounts for inflation and
productivity improvements. Others had or will have their rates set by way of a
cost of service review, in which the utility applies for rates based on the
costs it incurs to deliver electricity. Erie Thames had its rates set by way
of a cost of service review.
Key points in the Board's Decision include:
- The cost allowances for operations, maintenance and administration
were lowered by $235,000 from the level proposed;
- Lower tax rates and the Board's guideline cost levels for long term
debt, short term debt and common equity are to be used to set rates;
- Three deferral accounts were ordered to be cleared to customers via a
- Approval of the rate restructuring proposal which will better match
costs and revenues for each service class.
The Board directed Erie Thames to file a draft rate order, reflecting the
findings in this Decision, and a schedule of proposed final distribution rates
Bill impacts resulting from 2008 distribution rate decisions are
announced after the utilities have submitted draft rate schedules to the Board
reflecting the Board's Decision. The Board will announce the rate impacts when
it approves and issues its final rate order to Erie Thames.
A table of the estimated bill impacts on residential consumers is
available for individual utilities that have had rate orders issued by the
Board. This table is published on the Board's website at www.oeb.gov.on.ca.
For more information please refer to the 2008 Electricity Distribution
Rates Backgrounder on the OEB website site at
The Ontario Energy Board regulates the province's electricity and natural
gas sectors in the public interest. It envisions a viable and efficient energy
sector with informed consumers served by responsive regulatory processes that
are effective, fair and transparent. For more information on the Board, please
visit our web site at www.oeb.gov.on.ca or contact the Consumer Relations
Centre at 416-314-2455 or toll-free at 1-877- 632-2727.
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For further information:
For further information: Vanda Wall, Ontario Energy Board, (416)