Dec 14-06

Written comments on the Board’s draft report received by December 12, 2006:

• Submissions

Nov 30-06

The Board issued its Report of the Board on Cost of Capital and 2nd Generation Incentive Regulation for Ontario’s Electricity Distributors and Associated Guidelines. Interested parties invited to make written comments to the Board by December 12, 2006.

• Cover Letter
• Report of the Board and Associated Guidelines

Nov 23-06

Today the Board has issued a letter that states in the interests of achieving a more timely setting of electricity distribution rates for the 2007 rate year, the Board will discontinue the code-based approach at this time. The Board will instead implement its cost of capital and 2nd generation incentive regulation policies by means of guidelines.

• Letter to Stakeholders

Nov 22-06

The Board has posted a Decision issued on Monday November 20, 2006 in the Board’s generic licence amendment proceeding – EB-2006-0087.

• Decision

Nov 20-06

The Board has posted submissions filed by parties on November 17, 2006 in response to Procedural Order No. 2 in the generic licence amendment proceeding – EB-2006-0087.

• Submissions

Nov 8-06

The Ontario Energy Board (the "Board") has issued Procedural Order No. 2 in the Licence Amendment Proceeding (EB-2006-0087) with respect to the amending of electricity distributor licences to make provision for methods and techniques to be applied by the Board in determining distribution rates for licensed electricity distributors.

• Procedural Order No.2– Licence Amendment Proceeding

Nov 8-06

Final submissions received by October 27, 2006:

• Submissions

Oct 27-06

Pursuant to Procedural Order No. 1 of the Licence Amendment Proceeding – EB-2006-0087, parties were to file written submissions by October 20, 2006. The submissions have been posted below:

• Submissions

Oct 13-06

Responses from parties received by the Board to the questions from parties posted on September 28th:

• Submissions

Oct 11-06

The Ontario Energy Board issued a letter regarding the technical conference it will on October 17, 2006 on cost of capital and incentive regulation matters. Those interested in attending are asked to register by October 13, 2006. The letter also invites participants to make final written comments following the technical conference. These written comments are due by 4:30 p.m. on October 27, 2006.

• Letter

The objective of the technical conference is to enable Board Members and participants to better understand the issues canvassed in the written questions filed on September 27, 2006. The conference will provide participants and the Board an opportunity to discuss and, where helpful, further explore the written answers provided on October 11, 2006.

Oct 6-06

The Ontario Energy Board (the "Board") has issued Procedural Order No. 1 in the Licence Amendment Proceeding (EB-2006-0087) with respect to the amending of electricity distributor licences to make provision for methods and techniques to be applied by the Board in determining distribution rates for licensed electricity distributors. Parties to the proceeding may file written submissions by October 20, 2006. Following review of the submissions, the Board may determine that an oral hearing is desirable. If the Board determines that an oral hearing will be conducted, parties will be notified in advance.

• Procedural Order No.1 – Licence Amendment Proceeding

Sep 28-06

Questions to parties received by the Board September 27th:

Sep 28-06

Responses to information requests that arose during the September 18-22 Technical Conference.

• Hydro One Networks’ responses to information requests (This MSWord file includes embedded files. Click twice on icons to open embedded files.)
• Public Interest Advocacy Centre response to information request
  (Please refer to page 52 of the September 20th transcript)
  • Time-Series Processes of Utility Betas: Implications for Forecasting Systematic Risk by Gambola and Kahl (Financial Management, Autumn 1990)

Sep 28-06

As outlined in the September 21, 2006 technical conference transcript, the Board is providing for further information to be gathered in this process, as requested by most parties:

• Parties may submit written questions to other parties on or before September 27th;
• Parties will respond to those questions by October 11th;
• The Board will hold a Technical Conference for a discussion with respect to the questions and answers on October 17th;
• The date for filing comments is extended to October 27th.

The Board will not compel anyone to answer any questions with respect to these questions. Parties are free to respond or not respond. Clearly the Board hopes that the parties will co-operate to the maximum degree possible in order that the Board can benefit from all relevant information.

Sep 15-06

Today, Board staff posted presentation materials from stakeholders and interested parties that are participating in the technical conference being held the week of September 18, 2006 on cost of capital and incentive regulation.

• Dr. F. Lazar & Dr. E. Prisman on Cost of Capital
• Dr. M. Lowry on Incentive Regulation
• Board Staff
  • Cost of Capital
  • Incentive Regulation
• The Coalition of Large Distributors
  • Cost of Capital
  • Mr. D. Charmichael on Cost of Capital
  • Incentive Regulation
  • Dr. A. Yatchew on Incentive Regulation
• Mr. R. Warrington on Cost of Capital (with Newmarket Hydro Ltd.)
• Electricity Distributors’ Association and Christensen Associates
• Hydro One Networks Inc.
  • Ms. K. McShane on Cost of Capital
  • Incentive Regulation
  • Mr. J. Todd on Incentive Regulation
  • Hydro One’s Responses to OEB Guide for Presentations

Sep 14-06

The Ontario Energy Board has issued a preliminary schedule of presenters for the technical conference being held the week of September 18, 2006 on cost of capital and incentive regulation.

• Preliminary Schedule for Technical Conference

Sep 6-06

The Ontario Energy Board has provided a list of general questions that participants to the technical conference being held the week of September 18, 2006 on cost of capital and incentive regulation may find useful to guide them in preparing presentations and in topics for questioning at the conference.

• Guide for Presentations

These questions are intended to provide points for general discussion through presentations and questions, and to aid in getting a clearer understanding of the positions of parties on significant general issues and areas of concern. This list of questions, while covering several areas, should not be considered to be all inclusive. Participants may also wish to address other matters in their presentations that they feel are pertinent to Cost of Capital and incentive regulation.

Aug 31-06

The Ontario Energy Board issued a letter regarding the technical conference it will hold the week of September 18, 2006 on cost of capital and incentive regulation matters. Those interested in making a presentation and all other participants interested in attending are requested to register by September 8, 2006. The letter also invites participants to make further written comments following the technical conference. These written comments are due by 4:30 p.m. on October 6, 2006.

• Letter

The objectives of the technical conference are: to allow participants and their respective experts to clarify and elaborate on their written comments; to provide participants with an opportunity to explore in some depth the rationale and merits of alternatives supported by other participants and their respective experts; and to help the Board to gain, through the presentations and an interactive exchange with participants and their respective experts, a clearer understanding of the positions of participants and of significant issues and areas of concern.

Aug 23-06

The Board issued its Cost Eligibility Order in relation to this initiative. Appendix A to the Order sets out a list of all participants in this process.

• Cost Eligibility Order

Aug 16-06

Written comments on Board staff’s July 25, 2006 discussion paper and expert reports received on the cost of capital and 2nd generation incentive regulation for Ontario’s electricity distributors:

Jul 25-06

The Board has issued the Staff Discussion Paper on the cost of capital and 2nd generation incentive regulation for Ontario’s electricity distributors. Interested parties are invited to make written comments to the Board by August 14, 2006. This Paper and the results of the consultations will be factored into the Board’s preparation of the proposed Codes on the cost of capital and on the 2nd Generation IRM.

• Cover Letter
• Staff Discussion Paper on the Cost of Capital and 2nd Generation Incentive Regulation for Ontario’s Electricity Distributors

Jul 7-06

Further to the Board’s letter of June 29, 2006 on cost award eligibility, and in response to parties’ inquiries, the Board issued a letter clarifying cost award eligibility for eligible parties with common viewpoints that collaborate and pool their resources, and clarifying provision for preparation and attendance at the planned technical conference. Electricity Distributors have until July 17, 2006 to file with the Board any objections to the cost eligibility requests that have been posted on the Board’s website.

• Letter of Clarification on Cost Award Eligibility

Jul 7-06

The Ontario Energy Board (the "Board") is commencing a proceeding on its own motion under section 74 of the Ontario Energy Board Act, 1998 to amend the licences of electricity distributors to make provision for methods and techniques to be applied by the Board in determining distribution rates for licensed electricity distributors. Interested parties may participate in one of three ways. A letter of comment may be submitted no later than August 18, 2006. A letter requesting observer status may be submitted no later than July 31, 2006. A request for intervention status may be made by submitting a letter of intervention no later than July 31, 2006. Please refer to the Notice below for more details.

• Notice of Proceeding and Notice of Written Hearing to amend electricity distributor licences
• Avis d’Instance et avis d’audience

Jul 6-06

Written comments received from interested parties by July 5, 2006 on Board staff’s July 19, 2006 Draft Staff Report containing proposals for cost of capital and 2nd generation incentive regulation for Ontario’s electricity distributors:

Jun 29-06

The Board has issued a letter on Cost Award Eligibility in relation to the Board’s consultations on Cost of Capital and 2nd Generation Incentive Regulation Mechanism for electricity distributors. Electricity Distributors have until July 14, 2006 to file with the Board any objections to the cost eligibility requests that have been posted on the Board’s website.

• Letter on Cost Award Eligibility

Jun 21-06

Board staff hosted an information session for interested parties on incentive regulation and the cost of capital on June 20, 2006. Presentation materials from that session are listed below.

• Opening Remarks to the Stakeholder Information Session on Cost of Capital and Incentive Regulation
• The Board’s Multi-Year Electricity Distribution Rate Plan
• Incentive Regulation for Incentive Regulation for Ontario Power Distribution (Dr. Mark Lowry of Pacific Economics Group)
• Calculating the Cost of Capital for LDCs in Ontario (Dr. Eli Prisman and Dr. Fred Lazar of the Schulich School of Business)
• Staff Proposals for the Cost of Capital and 2nd Generation Incentive Regulation

Jun 20-06

The Board has issued a Draft Staff Report regarding proposals for cost of capital and 2nd generation incentive regulation for Ontario’s electricity distributors. Interested parties are invited to make written comments to the Board by June 30, 2006.

• Cover Letter
• Draft Staff Report: Proposals for Cost of Capital and 2nd Generation Incentive Regulation for Ontario’s Electricity Distributors

Jun 20-06

The Board posted a paper on cost of capital prepared by Dr. Fred Lazar and Dr. Eli Prisman of the Schulich School of Business. Attendees to the June 20, 2006 information session are encouraged to review this paper prior to the session.

• Calculating the Cost of Capital for LDCs in Ontario
• Copy of interest rates raw
• Copy of beta estimates
• Copy of spt tsx
• Regression N3 rates
• Regression N6 rates
• Regression N3 discreet rates
• Regression N6 discreet rates
• Sources

The Schulich School of Business has been contracted to examine the cost of capital using the benchmark OEB Decision of May 11, 2005 and the 2006 Electricity Distribution Rate Handbook as the points of departure. The above paper addresses the following issues: differentiation among the LDCs; return on equity; cost of debt; capital structure; and implications of industry sector evolution. This paper is intended to provide stakeholders with a common frame of reference in considering the issues that arise in the cost of capital. The paper closes with summary conclusions as to what might be appropriate for power distributors in Ontario.

Jun 14-06

The Board posted a paper on incentive regulation prepared by Dr. Mark Newton Lowry of Pacific Economics Group. Attendees to the June 20, 2006 information session are encouraged to review this paper prior to the session.

• Second-Generation Incentive Regulation for Ontario Power Distributors

Pacific Economics Group (“PEG”) was recently retained by the Board as an advisor on incentive regulation, also referred to as performance-based ratemaking (“PBR”), issues. The paper discusses criteria for the design of regulatory systems and uses this framework to discuss PBR and its advantages over the traditional cost of service approach to regulation. It then considers at some length the major issues in the design of a PBR plan. This discussion is intended to provide stakeholders with a common frame of reference in considering the issues that arise in PBR plan design. The paper concludes with recommendations for second generation incentive regulation for power distributors in Ontario.

Jun 7-06

Board staff are hosting an information session for interested parties on incentive regulation and the cost of capital. This session is scheduled for June 20, 2006 in the Churchill Ballroom of the Delta Chelsea hotel in Toronto (33 Gerrard Street West, Toronto, Ontario M5G 1Z4 – Gerrard Street, just west of Yonge Street) beginning at 9 a.m. and continuing to 5 p.m.

• Information Session Agenda

If you wish to attend this information session, you must register by sending your name; address; telephone number; e-mail address; and where available, fax number, to edr@oeb.gov.on.ca on or before June 15, 2006. Please quote file numbers EB-2006-0088 (Cost of Capital) and EB-2006-0089 (2nd Generation IRM) in the subject line of your e-mail.

Jun 2-06

Letters received in response to Board staff’s April 27 2006 invitation.

• Brantford Power
• Canadian Manufacturers & Exporters
• Chatham-Kent Energy
• City of Toronto
• Consumers Council of Canada
• Direct Energy
• Electricity Distributors Association
• Energy Cost Management Inc
• Energy Probe
• Enersource
• Horizon Utilities Corporation
• Hydro One Networks Inc.
• Hydro Ottawa
• Industrial Gas Users Association
• London Property Management Association (LPMA)
• Ontario Power Generation
• Power Workers Union
• Powerstream
• School Energy Coalition
• Thomas G. Weir
• Toronto Hydro
• Union Gas
• Veridian Connections
• Vulnerable Energy Consumers Coalition
• Waterloo North Hydro Inc.

Apr 28-06

The Board advised that a correction was made to the letter issued on April 27, 2006 (below) regarding the cost of capital and 2nd generation incentive regulation mechanism to confirm that the invitation to participate extends to all interested parties:

• Letter (revised salutation)

The appendices have not changed and are available below.

Apr 27-06

The Board issued a “kick-off” letter outlining the process that it intends to use in relation to the cost of capital and 2nd generation incentive regulation mechanism elements of its multi-year electricity distribution rate setting plan. The letter also addresses the issue of cost awards. Interested parties are invited to indicate their interest in participating in this project by May 19, 2006.

• Letter
• Appendix A: OEB’s Multi-year electricity distribution rate setting plan
• Appendix B: Cost awards

Dec 1998

Paper prepared for Board staff by Dr. William T. Cannon:

• A Discussion Paper on the Determination of Return on Equity and Return on Rate Base for Electricity Distribution Utilities in Ontario