TORONTO, Aug. 16 /CNW/ - Today the Ontario Energy Board (OEB) issued a
Decision with Reasons regarding Hydro One Networks Inc.'s (Hydro One)
application for approval of its transmission revenue requirement for 2007 and
The Decision applies to 55 utilities and 65 end-users of Hydro One's
transmission network with over 500 customer delivery points.
The Board's Decision for Hydro One transmission revenues will form part
of the calculation of the Uniform Ontario transmission rates, which apply to
Ontario's other transmitters (Great Lakes Power Limited, Five Nations Energy
Inc. and Canadian Niagara Power Inc.). The proceeding to set the rates will
begin shortly, in order for new transmission rates to be implemented on the
target date of November 1, 2007.
Hydro One had applied for a revenue requirement of $1.240 billion for
2007 and $1.277 billion for 2008. The previously approved revenue requirement
for Hydro One transmission was $1.249 billion and therefore the 2007 amount
represented a decrease of $9 million.
The Board did not approve a number of requests made in Hydro One's
application, thus reducing the 2007 and 2008 revenue requirements that the
company applied for. The most significant decision was the reduction of Hydro
One's applied-for return on equity from 10% in 2007 and 10.25% in 2008 to
8.35%, for both years in line with the Board's return on equity formula that
applies to electricity distribution companies. This will reduce Hydro One's
transmission revenue requirement by approximately $80 - $90 million in each
year for 2007 and 2008.
In other areas of the Decision, the Board:
- approved Hydro One's Operations, Administration and Capital
- approved a capital structure for Hydro One transmission that is equal
to the structure for all electricity distributors in Ontario;
- approved the disposition of certain deferral accounts which will
result in a reduction in 2007 and 2008 revenue requirements;
- did not approve Hydro One's proposal for a Revenue Requirement
Adjustment Mechanism for 2009 and 2010; and
- did not approve the request for allowing certain capital expenditures
into rate base before the projects were complete.
Transmission rates account for approximately 7% of the average total
electricity bill. The impact of today's Decision is expected to reduce the
average bill by about 1% when new transmission rates take effect after
November 1, 2007. The impact is normally reflected on the "delivery" line of
residential consumer bills.
Today's Decision is available on the OEB website at www.oeb.gov.on.ca.
The Ontario Energy Board regulates the province's electricity and natural
gas sectors in the public interest. It envisions a healthy and efficient
energy sector with informed consumers, and works towards this vision through
regulatory processes that are effective, fair and transparent.
For more information on the Board or the Decision, please visit our
website 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: Paul Crawford, Ontario Energy Board, (416)