TORONTO, Oct. 3 /CNW/ - Today the Ontario Energy Board (the Board) issued
its Decision on an application by Horizon Utilities Corporation (Horizon) for
2008 electricity distribution rates. New rates will take effect the date 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 have their rates set using incentive regulation guidelines
which provide a standard rate adjustment that accounts for inflation and
productivity improvements. Others 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.
For the rate year which started on May 1, 2008, 21 utilities are having
their 2008 rates set by way of a cost of service rate review. 60 utilities are
having their 2008 rates set using the Board's incentive regulation guidelines.
Horizon 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 $1.1 million from the level proposed;
- New lower tax rates, and the Board's recently updated cost levels for
long term debt, short term debt and common equity are to be used to
- Rates charged for Street Lighting are to be raised to better reflect
the costs to serve these customers.
The Board directed Horizon 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 Horizon.
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)