The Ontario Energy Board (the OEB) recovers its operating and capital costs through assessments to the natural gas and electricity market participants that it regulates. The cost assessment model is the approach used by the OEB to allocate costs first across types of market participants (classes) and then amongst the individual participants within each class.
A cost assessment study was undertaken to ensure a complete, fair and transparent review of all alternative cost assessment models and recommend a new model that would address the impact of both recent legislative changes on the OEB and changes in the current mix of energy market participants. The study examined: the current cost assessment processes within the OEB; the mix of market participants today and how their activities drive the OEB’s costs; new financing options for the OEB; and regulatory best practices in other jurisdictions.
In the Board’s letter to stakeholders of March 27, 2006, the Board concluded from its commissioned EES Consulting survey of other regulatory jurisdictions, that no major changes were needed in its existing regulatory cost allocation procedures. The existing Board allocation methods were in keeping with industry best practices and generally accepted utility regulation. The Board therefore accepted and adopted the EES Consulting study as final.