Deferral and Variance Accounts and Darlington CWIP in Rate Base

Transcription

1 Deferral and Variance Accounts and Darlington CWIP in Rate Base OPG Regulated Facilities Payment Amounts Stakeholder Meeting #2 April 1, 2010 Andrew Barrett Vice President, Regulatory Affairs & Corporate Strategy

2 Outline Deferral and Variance Accounts: Description of Current Accounts Proposed Disposition of Account Balances Accounts Proposed for the Test Period Continuing Accounts Proposed New Account Darlington CWIP in Rate Base 2

3 Current Accounts Common: Ancillary Services Net Revenue Income and Other Taxes Tax Loss Hydroelectric: Water Conditions Interim Period Shortfall Deferral and Variance Over/Under Recovery Nuclear Pickering A Return to Service (PARTS) Deferral Nuclear Liability Deferral Nuclear Development Variance Transmission Outages and Restrictions Capacity Refurbishment Nuclear Fuel Cost Bruce Lease Net Revenue Interim Period Shortfall Deferral and Variance Over/Under Recovery 3

4 Hydroelectric Accounts Year End Balances 2010 Proposed for Account ($M) Recovery Tax Loss Variance Income and Other Taxes Variance 0.0 (0.2) (0.3) (7.5) Other (0.2) (0.1) (8.2) Ancillary Services Net Revenue Variance 7.2 (2.4) (16.0) (22.3) Hydroelectric Water Conditions Variance 6.3 (21.6) (55.3) (84.3) Total 13.5 (4.1) (24.4) (43.5) 1 Other includes: Over/Under Recovery Variance and Interim Period Shortfall 4

5 Nuclear Accounts Year End Balances Tax Loss Variance Bruce Lease Net Revenues Variance Nuclear Liability Deferral Pickering A Return To Service Deferral Other 1 (0.0) (8.9) (11.8) 23.6 Income and Other Taxes Variance 0.0 (11.9) (20.5) (36.3) Nuclear Development Variance 11.7 (21.7) (55.6) (95.3) Total Other includes: Over/Under Recovery Variance, Interim Period Shortfall, Nuclear Fuel Cost Variance, Ancillary Services Net Revenue Variance, Transmission Outages and Restrictions Variance and Capacity Refurbishment Variance 5

6 Proposed Disposition of Account Balances Use the end of 2010 balances Bulk of changes over 2010 are due to calculated rather than forecast amounts Avoids carrying 2010 transactions over to next application True-up to actual in next application via Over/Under accounts Recovery Period: All balances to be recovered over the two years of the test period Resulting Riders: Hydroelectric: ($1.13/MWh) (Credit to ratepayers) Nuclear: $7.02/MWh 6

7 Accounts Proposed for the Test Period Continuing during the test period Common: Ancillary Services Net Revenue Income and Other Taxes Tax Loss (amortization and interest only) Hydroelectric: Water Conditions Deferral and Variance Over/Under Recovery Nuclear PARTS (amortization and interest only) Nuclear Liability Variance Nuclear Development Capacity Refurbishment Nuclear Fuel Cost Bruce Lease Net Revenue Deferral and Variance Over/Under Recovery 7

8 New Account Proposed for the Test Period IESO Non-Energy Charges Variance Account Covers Global Adjustment, Transmission, Uplift, etc Beyond management control Set by IESO and fluctuates based on changes in wholesale market Volatile and difficult to forecast 2008: Nuclear: 74% under budget Hydroelectric: 42% under budget 2009: Nuclear: 95% over budget Hydroelectric: 108% over budget Material 2008: $9.7M under budget 2009: $24.2M over budget 8

9 Regulatory Treatment Darlington Construction Work in Progress January 15, 2010, OEB Report indicated it will consider applications to include allowance for Construction Work in Progress (CWIP) in rate base on a case-by-case basis. OPG is seeking such treatment for the Darlington refurbishment project. Project satisfies OEB s criteria for alternate regulatory mechanisms Multi year project, reduction of rate shock, etc. Large cost in relation to current rate base ($6B $10B vs current Nuclear rate base of $4B) Differences between forecast and actual expenditures (O&M expenses and carrying costs of capital) for the Darlington refurbishment project will be recorded in the Capacity Refurbishment Variance Account. 9

10 Regulatory Treatment Construction Work in Progress Gross ((a)+(b))/2 (c) x (d) Plant Gross Plant Pretax Opening Closing Rate Base Carrying Revenue Prescribed Facility Balance Balance Amount Charges Requirement 2011 Plan: 1 Darlington Refurbishment CWIP % Plan: 1 Darlington Refurbishment CWIP % Income Tax 5.0 Revenue Requirement Impact ($M) 36.3 Total Nuclear Test Period Production (TWh) 98.9 Rate Impact ($/MWh) Excludes capitalized interest and allocation of certain environmental assessment overhead Costs 10

11 Questions? 11