The Board implemented Ontario's first generation of performance-based rate regulation for electricity distribution. Local Distribution Companies (distribution utilities) are allowed to include in rates a return on equity of up to 9.88 per cent, phasing in any rate increases evenly over three years.
First Generation PBR Distribution Rate Handbook
Read the Distribution Rate Handbook here.
Updates
The Board has issued various instructions for dealing with specific aspects of the implementation of the First Generation PBR plan for LDCs:
One-year Extension to First Generation PBR Plan (Aug 19, 2002):
- Letter to LDCs exending first generation PBR by one year to 2005
Input Price Index (IPI) Mechanism (Jan 21, 2002):
- Staff Backgrounder - Input Price Index for 2002
Rates Filings (Dec 21, 2001):
- Letter to LDCs re 2002 Filing Requirements
Transition Costs (Nov 9, 2001):
- Letter to LDCs re interim recovery of transition costs
Board decisions
RP-1999-0034 Decision (January 18, 2000) re price cap framework
RP-2000-0069 Decision (September 29, 2000) re: three year phase-in (and select submissions)
First generation stakeholder consultations
OEB PBR Initiatives:
Letter announcing development of PBR for Regulated Utilities in Ontario (October 2, 1998)
OEB Draft Policy on Performance Based Regulation (October 2, 1998)
Staff Options Paper:
Letter: Consultation on the Board's Performance Based Regulation Initiative, with Issues List (October 16, 1998)
PBR Options for Electricity Distribution in Ontario (OEB Staff Paper, October 15, 1998)
Productivity Analyses:
Productivity and Price Performance for Electric Distributors In Ontario (prepared for OEB Staff by Hagler Bailly, July 6, 1999)
Appendix A - Example of Productivity and Price Performance
Appendix B - Utilities included in analysis
Corrected New Appendix C - Background data on IPI and TFP (September 16, 1999)
- Average Annual Productivity Performance LDCs Segmented by Average Growth in Output; Comparison of the Average to the Median of Average Annual Productivity Growth of all LDCs
New Table 4-2 of the Productivity and Price Performance for Electric Distributors in Ontario Report (September 10, 1999 addendum)
Statistics Canada, Industry Price Indices, 62-011-XPB [re: references to Industrial Product Price Index.]. The IPPI, downloadable from Statistics Canada's Cansim database, is copyrighted and can be purchased from Statistics Canada: www.statcan.ca/english/reference/books.htm
Rate of Return Paper:
A Discussion Paper on the Determination of Return on Equity and Return on Rate Base for Electricity Distribution Utilities in Ontario (Dr. William T. Cannon, December 1998)
OEB Draft Guidelines on a Formula-Based Return on Common Equity for Regulated Utilities (Ontario Energy Board, March 1997)
Consultation Process:
Summary of Written Comments Received in Response to Ontario Energy Board Issues List (Hagler Bailly, November 1998).
Performance-Based Ratemaking Educational Seminar (Hagler Bailly for OEB, October 29, 1998)
Letter re Formation of Task Forces (December 17,1998), with attached OEB Staff Report Performance Based Regulation Framework for Electricity Distributors in Ontario”
Generic presentation used in the July 1999 information sessions. The complete presentation is composed of four separate parts:
1. Overview
2. Overview of the Draft Electric Distribution Rate Handbook
3. Timelines and Filing Requirements / Service Quality
4. Rate Adjustment Mechanism
Data Collection:
PBR Data Requirements (Letter from OEB Staff, January 22, 1999)
Clarification and Modification of PBR Data Requirement (OEB Staff, January 27, 1999)
Letter re: PBR Performance Indicators (March 18, 1999), with attached Surveys on Customer Service and Reliability
Task Force Reports:
Four Task Forces, composed of Board staff and consultants along with industry representatives and other stakeholders, conducted initial research for the development of a Performance-Based Regulation regime for Ontario's electrical distribution utilities. The Terms of Reference, minutes, and final recommendations are set out below:
1. Cap Mechanism Task Force Documents
2. Yardstick Grouping Task Force Documents
3. Implementation Task Force Documents
4. Distribution Rates Task Force Documents
Draft Distribution Rate Handbook:
OEB Staff Proposed Draft Electric Distribution Rate Handbook (June 30, 1999)
Supplement to Draft Proposed Electric Distribution Rate Handbook (August 12, 1999)
Questions and Answers from Seminars on the Ontario Energy Board Staff Proposed Electric Distribution Rate Handbook (July 13-23, 1999)