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OEB COST ALLOCATION REVIEW OEB COST ALLOCATION REVIEW Introduction to Model Defaults April 25 and 27, 2006 John Vrantsidis 2 Objective: Incorporate Defaults into Objective: Incorporate Defaults into Filing ModelFiling Model • To promote consistency and efficiency in completing and reviewing filing...

1 OEB COST ALLOCATION REVIEW Division of Demand-Related Costs: Bulk v Primary v Secondary – Implementation Update April 25th, 2005 John Vrantsidis 2 Why Issue Important Staff Discussion Paper proposed voltage adjustment (primary vs secondary) when allocating demand-related costs – intent: those ...

1 Load Data Inputs: Staff Update April 25th and 27th, 2006 John Vrantsidis, Board Staff 2 Why required for filings? Load data is a required key input to the upcoming cost allocation model Load data will be used to fairly allocate demand-related costs between the various rate classifications of each ...

1 Utility Load Data Analysis Sequence: Updated Suggestions April 25, 2006 John Vrantsidis, OEB Staff 2 Strawman Utility Load Data Input Sequence To assist LDCs, Board Staff has prepared an updated strawman schedule for forwarding utility specific load data inputs and survey results to the Hydro One ...

Potential Questions for Residential Appliance Survey (Abridged from HONI Appliance Saturation Survey incorporating suggestions from the Working Group) Priority Questions: 1 Customer Account # 2 What type(s) of space heating system(s) do you have? Main System Supplementary System Space Heating System...

Suggested Questions for Seasonal Residential Appliance Survey (Abridged from HONI Appliance Saturation Survey incorporating suggestions from the Working Group) Priority Questions: 1 Customer Account # 2 What type(s) of space heating system(s) do you have? Main System Supplementary System Space Heati...

1 Update from Load Data Team April 25th & 27th, 2006 2 General Update • Load data requirements updated reflecting comments received to date from conference calls and working group • Generic load shape analysis is underway; current plan is to complete the analysis by end of May 2006 • End produ...

1 OEB Cost Allocation Review Technical Workshop Introduction to Draft Model Introduction to Workshop and Project Update April 25 and 27, 2006 Marika Hare Kirsten Walli 2 Purposes of Workshop • To update on development of draft cost allocation filing model • To illustrate key inputs likely to be ...

1 Cost of Service Study 101 Anthony Lam, Toronto Hydro Neil Yeung OEB Staff Consultant 2 Overview of Major Steps in Cost of Service Study Residential General Service Large User Residential General Service Large User CATEGORIZE ALLOCATE ResidentialResidential General Service General Service Large Use...

1 Required General Information for OEB Cost Allocation Model April 25 and 27, 2006 Neil Yeung OEB Staff Consultant 2 Proposed Required General Information Sources of Data Readily Available • Accounting Records – Depreciation Schedule • 2006 Approved EDR • Billing Records – Customer Informa...

1 Proposed Grouping of Accounts in OEB Cost Allocation Informational Filing April 25th, 2006 John Vrantsidis and Neil Yeung 2 Key Policy Objectives • Reasonable disclosure is important to meet project goal of a transparent cost allocation review process • But unnecessary disclosure of LDC accoun...

Table Listing Accounts Grouping for Cost Allocation The headings are identical to the 2006 EDR. The 2006 EDR groupings will have to be sub-divided any time there is a change in the Allocation Factors. A/Cs Description EDR Groupings Allocators Land and Buildings 1805-2 Land Station <50 kV Land and Bu...

1 OEB COST ALLOCATION REVIEW Introduction to Potential Supplemental Questions April 25th and 27th, 2006 John Vrantsidis 2 Model to be built on core of common principles and key defaults • To promote consistency and efficiency in completing and reviewing filings, various default methodologies will ...

List of Accounts included in the calculation of a cost-based Floor for monthly fixed charge - Basic Customer Charge Method 1860 Meters 2105 Accumulated Amortization - Meters only 4080 Distribution Services Revenue 4082 Retail Services Revenues 4084 Service Transaction Requests (STR) Revenues 4220 Ot...

Estimation of Line Losses - Proposal (objective to promote cost causality while remaining reasonable to complete) Subfunctions • Bulk • Treatment >50 kV assets • Primary • Secondary Secondary < 750 v Bulk (functional definition) Primary = Balance Standard Example Function Losses as % of Load...

1 Common Cost Allocation Principles for Standby Rates John Vrantsidis June 15, 2006 2 Objectives of Present Filings Develop common distribution-sector cost allocation principles for standby rates to customers with load displacement facilities - will apply to LDCs with current standby rates, or with ...

1 Direct Allocation John Vrantsidis, OEB Staff June 15 , 2006 2 Direct Allocation As an initial step, distributors should identify significant distribution facilities that are 100% dedicated to a single customer classification - not applicable where some parts of system used for additional reliabili...

Direct Allocation Examples Substations 10 MW LU 10 MW LU Large User = 10 = 5% LDC = 190 = 95 Total = 200 = 100% LDC/190 MWLDC/190 MW Distribution Substation Distribution SubstationHigh Voltage Input Measurement at Time of Substation Peak 10 MW LU 10 MW LU Large User = 10 = 5% LDC = 190 = 95 Total = ...

1 Functionalization into Sub-accounts Implementation: Key Issues John Vrantsidis and Gary Saleba June 15, 2006 2 Functional Approach to Identifying “Bulk” Assets Factors: Bulk assets are designed to support the distribution system’s peak (e.g. feeders supplying substations) Assets designed to ...

1 Update from Load Data Team Stan But Hydro One June 15, 2005 2 Topics to be covered • Update on generic load shapes • Update on load data requirements • Update on weather normalization methodology • Update on utility-specific load shape methodology 3 Update on test cases • Provided load s...

Weather Normalization for Total Utility Load Hydro One’s weather correction methodology was developed jointly by forecasting and meteorology staff of the former Ontario Hydro. This weather correction method was used for the total system load since 1988 and for local electric utilities since 1994. ...

Methodology for Preparing Utility-Specific Load Shapes This note summarizes the methodology Hydro One Load Data Team plans to use in generating utility-specific load shapes for LDCs in Ontario. LDCs opted to do their own load shape analysis work will be required to defend their methodology separatel...

DATA REQUIREMENTS FOR UTILITY-SPECIFIC LOAD PROFILE ANALYSIS Section A: General Comments 1. This data requirement pertains to data required for preparing utility-specific load profiles for Run 1, Run 2 and Run 3 as specified in the OEB’s Staff Proposal Regarding Rate Classifications and Associated...

1 Updating Transformer Ownership Allowance John Vrantsidis June 15, 2006 2 Background Currently, Transformer Ownership Allowance is $0.60 per kW for most LDCs - above amount has not been reviewed or updated recently for most LDCs - cost rationale behind legacy allowance is not widely known 3 General...

Potential Basis of Transformer Ownership Allowance Credit – Conceptual Illustration Higher Principle • Cost based • Credit = part of GS/LU rate attributable to lower voltage transformers Credit Should Include “All In” Costs for Transformer including Overheads Simple Illustration • GS rat...