OEB Issues Hydro One Networks Inc. Electricity Distribution Rate Decision

The Ontario Energy Board issued its Decision for 2005 electricity distribution rates for Hydro One Networks Inc.'s acquired local distribution companies (LDCs).

The application filed by Hydro One reflects changes to the distribution rates as a result of two factors. The first is a change in the distribution rates, permitted under government policy to all LDCs, on the condition they reinvest the equivalent of one year of these monies in conservation programs. The second is an adjustment in the rate consumers started paying last year to recover, over four years, costs the utility was previously not able to recover from consumers.

The Board indicated in its Decision that it was concerned with the rate impacts for some of the customers served by some of Hydro One's acquired LDCs. The Board has directed Hydro One to adjust its application to reflect a distribution rate increase that impacts the total annualized bill by no more than 10% for typical residential and general service customers consuming 1,000 kWh per month. The same threshold of 10% will also apply to individual large consumers served by these LDCs.

As a result of this Decision, Hydro One must now file draft rate schedules for each of the acquired LDCs that show the rate impact for each customer class.

Once these rate schedules are approved by the Board, the change in distribution rates will take effect April 1, 2005 and will appear under the "Delivery" line of consumer bills. This line covers the costs to deliver electricity from generators to utilities, and for utilities to deliver the electricity to homes and businesses.

These changes follow the new electricity price plan that applies to the "Electricity" line of consumers' bills, announced by the Board on March 11. That price plan also takes effect April 1, 2005. The impact of the price plan on the "Electricity" line of the bill for a typical residential consumer using 1,000 kWh per month is 4.4%.

Utilities apply to the OEB for any changes to the rates they charge under the "Delivery" line of electricity bills. Applications to change rates are reviewed by the OEB through a public process to determine what costs the utilities may pass on to consumers.

Further information regarding the specifics of Hydro One's application can be obtained by contacting the utility directly.