TORONTO, Dec. 11 /CNW/ - Today the Ontario Energy Board (the Board) issued the Report of the Board on the Cost of Capital for Ontario's Regulated Utilities (the Report). The Board will continue to use a formula-based equity risk premium approach. The Report updates the Board's policies with regard to the cost of capital and refines the methods the Board will use to determine both debt and equity costs.
The cost of capital is the sum of the interest paid on debt and the expected rate of return on equity. Both the interest paid on debt and the expected rate of return on equity are costs of doing business. The expected rate of return on equity is not guaranteed.
The Report has no immediate impact on customer rates. Board panels will use the Report to guide them in determining the cost of capital to set rates beginning with the 2010 rate year. The cost of capital is only one of a number of elements reflected in utility rates.
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 and works toward this vision through regulation that is 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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SOURCE Ontario Energy Board
For further information: For further information: Media Inquiries: Vanda Wall, Ontario Energy Board, (416) 544-5171; Public Inquiries, (416) 314-2455, Or 1-877-632-2727