OEB Issues Decision on 2008 Electricity Distribution Rate Application for Atikokan Hydro Inc.

    TORONTO, Aug. 21 /CNW/ - Today the Ontario Energy Board (the Board)
issued its Decision on an application by Atikokan Hydro Inc. (Atikokan) 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
consumers' bills.
    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 starts 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.
Atikokan had its rates set by way of a cost of service review.

    Key points in the Board's Decision include:
    -   Lowering regulatory cost allowances in Operations, Maintenance and
        Administration by two thirds from the level proposed,
    -   Allowing a Payments in Lieu of taxes provision in the test year
        revenue requirement,
    -   Directing the Applicant to recalculate its Working Capital Allowance
        to reflect various changes and updated information as set out in the
    -   Determining rates are to be increased for the following classes -
        General Service over 50 kilowatts, Street Lighting, Sentinel Lights,
        and Unmetered Scattered Load to better reflect the costs associated
        with serving these customers.

    The Board directed Atikokan to file a draft rate order, reflecting the
findings in this Decision, and a schedule of proposed final distribution rates
for 2008.
    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 Atikokan.
    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.

For further information:

For further information: Vanda Wall, Ontario Energy Board, (416)

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