BUSINESS PLANNING ASSUMPTIONS

Transcription

1 EB-00-0 Exhibit C Tab Schedule Page of BUSINESS PLANNING ASSUMPTIONS INTRODUCTION Following is a summary of key assumptions related to THESL s financial projections included in this Application. ECONOMIC Table : Interest and Bond Rates (%) 00 Historical 00 Bridge 0 Test -Month T-Bills Prime Rate Year Government of Canada Bonds Year Government of Canada Bonds Year Government of Canada Bonds.0.0. Table : Other 00 Historical 00 Bridge 0 Test CPI 0.0%.0%.0% Cdn$/US$ Exchange Rate Source: Conference Board of Canada. Forecast Date: March, 00.

2 EB-00-0 Exhibit C Tab Schedule Page of TAX RATES Table : Tax Rates (%) 00 Historical 00 Bridge 0 Test Federal Tax Rate. Ontario Tax Rate (Jan-Jun) (Jul-Dec) (Jan-Jun). (Jul-Dec) Combined Statutory Tax Rate. Ontario Capital Tax Rate COMPENSATION Table : Full Time Equivalent ( FTE ) (Number of FTE) 00 Bridge 0 Test Total Table : Payroll Burden Rate (%) 00 Bridge 0 Test Benefit Burden Rate 0.0. Source: Income Tax Act (Canada). Source: Taxation Act, 00 (Ontario). Source: Taxation Act, 00 (Ontario). Ontario capital tax is eliminated effective July, 00. As a result, when calculating capital tax in respect of the 00 taxation year, the calculated amount must be pro-rated for the number of days in the year after December, 00 and before July, 00. Percentage of base pay related to payroll benefits (including medical, dental, post-employment benefits, longterm disability, life insurance, pension, workers compensation, AD&D, EAP and non-occupational health).

3 EB-00-0 Exhibit C Tab Schedule Page of CAPITAL EXPENDITURES Table : Allowance for Funds Used During Construction ( AFUDC ) (%) AFUDC Rate (as per OEB prescribed rate for Q 00) (as per OEB prescribed rate for Q 00). 00 Bridge 0 Test. AFUDC is calculated on quarterly construction work in progress ( CWIP ) closing balance for distribution plant, net of capital construction. Depreciation and Amortization Rates The amortization rates outlined in Appendix B of the 00 Electricity Distribution Rate Handbook ( DRH ) published by the OEB are applied to historical and projected capitalized expenditures. 0 0 The DRH is silent on the amortization rates related to capitalized software and land rights expenditures. THESL s current capitalization policy outlines the amortization period applicable to capitalized software costs to be over three to five years. Land rights are amortized over 0 years. Capital expenditures related to smart meter implementation are amortized over years beginning January 00. REVENUE Distribution Revenue Assuming normal weather conditions based on historic weather patterns. Dated May, 00.

4 EB-00-0 Exhibit C Tab Schedule Page of CUSTOMER AND SERVICE AREA Table : By Class (mid-year) 00 Historical 00 Bridge 0 Test Residential 0,,,0 General Service <0kW,0,, General Service 0kW -kw (non interval),,,0 General Service 000kW - kw Large Users Unmetered Scattered Load,0,0,0 Total,, 0, Service Area Assuming no significant changes to service area. REGULATORY Table : Carrying Charges (%) 00 Historical 00 Bridge 0 Test Q. 0.. Q 0.. Q Q 0... OPERATIONAL Table : Operational (%) 0 Test Inventory Surcharge. Vehicle Surcharge.

5 EB-00-0 Exhibit C Tab Schedule Page of Smart Meters Smart meter operational and capital costs are included in the revenue requirement for 0. Operational costs are included in the on-going Metering Services group while capital requirements are included in the Capital Budget for 0. 0 IFRS The application includes projected costs related to the International Financial Reporting Standards ( IFRS ) assessment and modifications of key processes. These costs, which include projected IT and Finance costs that can be reasonably estimated given information available at the time the application was prepared, are operational and are included in the revenue requirement for 0. Related projections will likely need to be revised as IFRS impact assessments are completed. Refer to Exhibit F, Tab, Schedule for further details.