Prescribed interest rates

Applicable to the approved regulatory accounts of natural gas utilities, electricity distributors and other rate-regulated entities

On November 28, 2006, the Ontario Energy Board (OEB) approved a methodology to prescribe interest rates for the approved regulatory accounts under the Uniform System of Accounts for natural gas utilities and electricity distributors (EB-2006-0117). The prescribed interest rates also apply to the regulatory accounts of other rate or payment amounts regulated entities when authorized by the OEB to use these rates. The prescribed interest rate methodology was updated in the OEB’s generic proceeding on cost of capital and other matters (EB-2024-0063), as set out below, in accordance with the OEB’s March 27, 2025 Decision and Order (Cost of Capital Decision).

The prescribed interest rate for the OEB-approved deferral and variance accounts (DVAs) has changed over time:

• Up until Q3 2024, it was equal to the Bankers' Acceptances three-month rate, plus a spread of 25 basis points.
• For Q4 2024 and Q1 2025,  it was  based on the three-month T-bill rate, plus a 25 basis points spread, in accordance with the OEB letter, July 26, 2024 (EB-2024-0063).
• For Q2 2025, it was based on the Bloomberg ticker BVCAUA3M BVLI Index (3-month), in accordance with the Cost of Capital Decision.

The prescribed interest rate for the construction work in progress (CWIP) account is equal to the FTSE Canada (formerly DEX) Mid Term Bond Index All Corporate yield. The OEB, under contract, obtains this yield rate from PC Bond Analytics, a business unit of FTSE. 

These prescribed rates are reviewed and updated each quarter. However, no change is made to the prescribed interest rate where the difference between the calculated rate and the previous quarter's OEB-prescribed interest rate is less than 25 basis points. That is, the previous quarter's OEB-prescribed interest rate is continued for the current quarter.

For each quarter commencing Q2 2006, the prescribed interest rates are shown in the table below.