OEB Issues Decision on 2008 Electricity Distribution Rate Application for Espanola Regional Hydro Distribution Corporation

    TORONTO, June 3 /CNW/ - Today the Ontario Energy Board (the Board) issued
its Decision on an application by Espanola Regional Hydro Distribution
Corporation (Espanola) for 2008 electricity distribution rates. New rates will
take effect July 1, 2008.
    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 2006, the Board developed a revolving three-year plan to set
electricity distribution rates using two different, alternating methodologies.
Under the plan, in one year out of three, utilities would typically have their
rates set by way of a public review, known as a cost of service review, in
which the utility applies for rates based on the costs it incurred to deliver
electricity. In the other two years, utilities would typically have their
rates set by way of incentive regulation guidelines. These reviews, which were
first used in 2007, provide a standard rate adjustment that accounts for
inflation and productivity improvements.
    For the rate year which starts on May 1, 2008, 20 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.
Espanola's rates are being set by way of a cost of service review.

    In its Decision, the Board:

    -   Approved capital expenditures of $165,000, approximately 80% of the
        proposed 2008 capital expenditure budget
    -   Approved total controllable OM&A expenses of $964,229, approximately
        2.5% higher than the level in 2007
    -   Approved the continuation of a smart meter rate adder of $0.26 per
        month per metered customers
    -   Directed Espanola to adjust its revenue to cost ratios for the
        various rate classes to bring them in line with the Board's target
        ranges over three years
    -   Reduced Espanola's retail transmittion network rate by 22% and retail
        transmission connection rates by 11%
    -   Approved the disposition of balances in certain deferral accounts
    -   Denied Espanola's request for a late payment class action law suit
        deferral account.

    The Board directed Espanola 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 will be
announced in the coming weeks after the utilities have submitted draft rate
schedules to the Board reflecting today's decision. The Board will announce
the rate impacts when it approves and issues final rate orders to the
    A table of the estimated bill impacts on residential consumers will be
available once any potential adjustments to the RPP are determined and as
specific rate orders for individual utilities are issued by the Board. This
table will be published on the Board's website 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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