TORONTO, Feb. 11 /CNW/ - Today the Ontario Energy Board issued a Decision
on a settlement agreement regarding an application by Enbridge Gas
Distribution Inc. (Enbridge) for approval of a multi-year incentive rate
mechanism for its regulated natural gas distribution, transmission and storage
The Incentive Regulation Plan approved is a five year plan, beginning
January 1, 2008. The Plan limits any rate increase due to inflation by a
revenue per customer cap that deducts an amount for productivity. This will
encourage Enbridge to develop efficiencies in its operations and put downward
pressures on rates. If Enbridge's earnings reach a certain threshold, the
extra earnings will be shared with customers. Some costs will continue to be
passed through directly to customers.
The Plan will be used to calculate rates expected to be implemented
July 1, 2008. The estimated rate increase for residential customers from
implementation of the Plan in the first year will be less than 2%.
In its Decision, the Board stated an acceptable Incentive Rate Plan must:
- Establish incentives for sustainable efficiency improvements that
benefit customers and shareholders;
- Ensure appropriate quality of service for customers; and
- Create an environment that is conducive to investment, to the benefit
of customers and shareholders.
The Board determined this Plan meets these criteria and is in the public
interest. The Board stated that the Plan is an important step forward in
establishing long term rate stability in a manner that will promote maximum
efficiencies for the benefit of both ratepayers and shareholders.
The matter of treatment of customer additions under incentive regulation
was unresolved. The Board indicated it will render a further decision on the
matter in due course.
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)