Ontario Energy Board. Version 3.0. Last COS Re-based Year Note: Drop-down lists are shaded blue; Input cells are shaded green.

Transcription

1 Version 3. Utility Name Niagara Peninsula Energy Inc. Assigned EB Number Name and Title EB21496 Suzanne Wilson, VP Finance Phone Number Address Date 9/23/214 Last COS Rebased Year 211 Note: Dropdown lists are shaded blue; Input cells are shaded green. This Workbook Model is protected by copyright and is being made available to you solely for the purpose of filing your rate application. You may use and copy this model for that purpose, and provide a copy of this model to any person that is advising or assisting you in that regard. Except as indicated above, any copying, reproduction, publication, sale, adaptation, translation, modification, reverse engineering or other use or dissemination of this model without the express written consent of the Ontario Energy Board is prohibited. If you provide a copy of this model to a person that is advising or assisting you in preparing the application or reviewing your draft rate order, you must ensure that the person understands and agrees to the restrictions noted above. While this model has been provided in Excel format and is required to be filed with the applications, the onus remains on the applicant to ensure the accuracy of the data and the results.

2 1. Info K. Sch 13 Tax Reserves Bridge A. Data Input Sheet L. Sch 71 Loss Cfwd Bridge B. Tax Rates & Exemptions M. Adj. Taxable Income Bridge C. Sch 8 Hist N. PILs,Tax Provision Bridge D. Schedule 1 CEC Hist O. Schedule 8 CCA Test Year E. Sch 13 Tax Reserves Hist P. Schedule 1 CEC Test Year F. Sch 71 Loss Cfwd Hist Q Sch 13 Tax Reserve Test Year G. Adj. Taxable Income Historical R. Sch 71 Loss Cfwd H. PILs,Tax Provision Historical S. Taxable Income Test Year I. Schedule 8 CCA Bridge Year T. PILs,Tax Provision J. Schedule 1 CEC Bridge Year 1

3 Rate Base $ 143,761,898 Return on Ratebase Deemed ShortTerm Debt % 4.% T 5,75,476 Deemed Long Term Debt % 56.% U 8,56,663 Deemed Equity % 4.% V 57,54,759 $ W = S * T $ X = S * U $ Y = S * V $ AC = W * Z $ AD = X * AA $ AE = Y * AB $ AF = AC + AD + AE Short Term Interest Rate 2.11% Z 121,335 Long Term Interest 4.28% AA 3,445,899 Return on Equity (Regulatory Income) 9.36% AB 5,382,445 Return on Rate Base 8,949,68 Questions that must be answered Historical Bridge Test Year 1. Does the applicant have any Investment Tax Credits (ITC)? 2. Does the applicant have any SRED Expenditures? 3. Does the applicant have any Capital Gains or Losses for tax purposes? 4. Does the applicant have any Capital Leases? 5. Does the applicant have any Loss CarryForwards (noncapital or net capital)? 6. Since 1999, has the applicant acquired another regulated applicant's assets? 7. Did the applicant pay dividends? If Yes, please describe what was the tax treatment in the manager's summary. 8. Did the applicant elect to capitalize interest incurred on CWIP for tax purposes? Yes Yes Yes No No No No No No No No No No No No Yes Yes Yes Yes Yes Yes No No No

4 Tax Rates Federal & Provincial Effective Effective Effective Effective Effective As of June 2, 212 ################ ################ ################ ################ ################ Federal income tax General corporate rate 38.% 38.% 38.% 38.% 38.% Federal tax abatement 1.% 1.% 1.% 1.% 1.% Adjusted federal rate 28.% 28.% 28.% 28.% 28.% Rate reduction 11.5% 13.% 13.% 13.% 13.% 16.5% 15.% 15.% 15.% 15.% Ontario income tax 11.75% 11.5% 11.5% 11.5% 11.5% Combined federal and Ontario 28.25% 26.5% 26.5% 26.5% 26.5% Federal & Ontario Small Business Federal small business threshold 5, 5, 5, 5, 5, Ontario Small Business Threshold 5, 5, 5, 5, 5, Federal small business rate 11.% 11.% 11.% 11.% 11.% Ontario small business rate 4.5% 4.5% 4.5% 4.5% 4.5%

5 Schedule 8 Historical Year Class Class Description UCC End of Year Historical per tax returns Less: Non Distribution Portion UCC Regulated Historical Year 1 Distribution System post ,259,372 56,259,372 1 Enhanced Nonresidential Buildings Reg. 11(1)(a.1) election 2 Distribution System pre ,633,291 3,633,291 8 General Office/Stores Equip 1,666,79 1,666,79 1 Computer Hardware/ Vehicles 2,75,841 2,75, Certain Automobiles 12 Computer Software 57,371 57, Lease # Lease # Lease # Lease # 4 14 Franchise 17 New Electrical Generating Equipment Acq'd after Feb 27/ Other Than Bldgs 282,48 282,48 42 Fibre Optic Cable 43.1 Certain EnergyEfficient Electrical Generating Equipment 43.2 Certain Clean Energy Generation Equipment 45 Computers & Systems Software acq'd post Mar 22/4 2,832 2, Data Network Infrastructure Equipment (acq'd post Mar 22/4) 47 Distribution System post February 25 48,6,734 48,6,734 5 Data Network Infrastructure Equipment post Mar ,65 364,65 52 Computer Hardware and system software 95 CWIP 3 Buildings acquired before ,275,277 1,275,277 1b Buildings > ,969,771 4,969,771 1b Buildings > ,425,531 2,425,531 SUBTOTAL UCC 121,73, ,73,868

6 Schedule 1 CEC Historical Year Cumulative Eligible Capital 1,5,8 Additions Cost of Eligible Capital Property Acquired during Test Year Other Adjustments Subtotal x 3/4 = Nontaxable portion of a nonarm's length transferor's gain realized on the transfer of an ECP to the Corporation after Friday, December 2, 22 x 1/2 = Amount transferred on amalgamation or windup of subsidiary Subtotal 1,5,8 Deductions Proceeds of sale (less outlays and expenses not otherwise deductible) from the disposition of all ECP during Test Year Other Adjustments Subtotal x 3/4 = Cumulative Eligible Capital Balance 1,5,8 Current Year Deduction 1,5,8 x 7% = 73,51 Cumulative Eligible Capital Closing Balance 976,57

7 Schedule 13 Tax Reserves Historical Continuity of Reserves Description Historical Balance as per tax returns NonDistribution Eliminations Utility Only Capital Gains Reserves ss.4(1) Tax Reserves Not Deducted for accounting purposes Reserve for doubtful accounts ss. 2(1)(l) Reserve for goods and services not delivered ss. 2(1)(m) Reserve for unpaid amounts ss. 2(1)(n) Debt & Share Issue Expenses ss. 2(1)(e) Other tax reserves Total Financial Statement Reserves (not deductible for Tax Purposes) General Reserve for Inventory Obsolescence (nonspecific) General reserve for bad debts Accrued Employee Future Benefits: Medical and Life Insurance Short & Longterm Disability Accmulated Sick Leave Termination Cost Other PostEmployment Benefits Provision for Environmental Costs Restructuring Costs Accrued Contingent Litigation Costs Accrued SelfInsurance Costs Other Contingent Liabilities Bonuses Accrued and Not Paid Within 18 Days of YearEnd ss. 78(4) Unpaid Amounts to Related Person and Not Paid Within 3 Taxation Years ss. 78(1) Other Total

8 Schedule 71 Loss Carry Forward Historical Corporation Loss Continuity and Application NonCapital Loss Carry Forward Deduction Actual Historical Total Non Distribution Portion Utility Balance Net Capital Loss Carry Forward Deduction Actual Historical Total Non Distribution Portion Utility Balance

9 Adjusted Taxable Income Historical Year T2S1 line # Total for Legal NonDistribution Historic Entity Eliminations Wires Only Income before PILs/Taxes A 3,187,387 3,187,387 Additions: Interest and penalties on taxes 13 Amortization of tangible assets 14 5,321,41 5,321,41 Amortization of intangible assets 16 Recapture of capital cost allowance from Schedule 8 17 Gain on sale of eligible capital property from Schedule 1 18 Income or loss for tax purposes joint ventures or partnerships 19 Loss in equity of subsidiaries and affiliates 11 Loss on disposal of assets 111 Charitable donations 112 Taxable Capital Gains 113 Political Donations 114 Deferred and prepaid expenses 116 Scientific research expenditures deducted on financial statements 118 Capitalized interest 119 Nondeductible club dues and fees 12 Nondeductible meals and entertainment expense 121 Nondeductible automobile expenses 122 Nondeductible life insurance premiums 123 Nondeductible company pension plans 124 Tax reserves deducted in prior year 125 Reserves from financial statements balance at end of year 126 Soft costs on construction and renovation of buildings 127 Book loss on joint ventures or partnerships 25 Capital items expensed 26 Debt issue expense 28 Development expenses claimed in current year 212 Financing fees deducted in books 216 Gain on settlement of debt 22 Nondeductible advertising 226 Nondeductible interest 227 Nondeductible legal and accounting fees 228 Recapture of SR&ED expenditures 231 Share issue expense 235 Write down of capital property 236 Amounts received in respect of qualifying environment trust per paragraphs 12(1)(z.1) and 12(1)(z.2) 237 Other Additions Interest Expensed on Capital Leases 29 Realized Income from Deferred Credit Accounts 291 Pensions 292 Nondeductible penalties 293 Previous years apprenticeship tax credit claimed ,351 16, ARO Accretion expense Capital Contributions Received (ITA 12(1)(x)) Lease Inducements Received (ITA 12(1)(x)) Deferred Revenue (ITA 12(1)(a)) Prior Year Investment Tax Credits received Change in Employee Future Benefits 17,944 17,944

10 Change in Regulatory variance accounts 879, ,966 Inducement ITA 12(1)(x)ITC from apprenticeship job creation expenditures 12,572 12,572 Total Additions 6,427,874 6,427,874 Deductions: Gain on disposal of assets per financial statements 41 Dividends not taxable under section Capital cost allowance from Schedule ,552,56 8,552,56 Terminal loss from Schedule 8 44 Cumulative eligible capital deduction from Schedule ,51 73,51 Allowable business investment loss 46 Deferred and prepaid expenses 49 Scientific research expenses claimed in year 411 Tax reserves claimed in current year 413 Reserves from financial statements balance at beginning of year 414 Contributions to deferred income plans 416 Book income of joint venture or partnership 35 Equity in income from subsidiary or affiliates 36 Other deductions: (Please explain in detail the nature of the item) Interest capitalized for accounting deducted for tax 39 Capital Lease Payments 391 Nontaxable imputed interest income on deferral and variance accounts ARO Payments Deductible for Tax when Paid ITA 13(7.4) Election Capital Contributions Received ITA 13(7.4) Election Apply Lease Inducement to cost of Leaseholds Deferred Revenue ITA 2(1)(m) reserve Principal portion of lease payments Lease Inducement Book Amortization credit to income Financing fees for tax ITA 2(1)(e) and (e.1) Apprenticeship credits included in FS income 118,62 118,62 Total Deductions 8,743,619 8,743,619 Net Income for Tax Purposes 871, ,642 Charitable donations from Schedule Taxable dividends deductible under section 112 or 113, from Schedule 3 (item 82) 32 Noncapital losses of preceding taxation years from Schedule Netcapital losses of preceding taxation years from Schedule 4 (Please include explanation and calculation in Manager's summary) 332 Limited partnership losses of preceding taxation years from Schedule TAXABLE INCOME 871, ,642

11 PILs Tax Provision Historical Year Note: Input the actual information from the tax returns for the historical year. Wires Only Regulatory Taxable Income $ 871,642 A Ontario Income Taxes Income tax payable Ontario Income Tax 11.5% B $ 1,239 C = A * B Small business credit Ontario Small Business Threshold $ 5, D Rate reduction (negative) 7.% E $ 35, F = D * E Ontario Income tax $ 65,239 J = C + F Combined Tax Rate and PILs Effective Ontario Tax Rate 7.48% K = J / A Federal tax rate (Maximum 15%) 15.% L Combined tax rate 22.48% M = K + L Total Income Taxes $ 195,985 N = A * M Investment Tax Credits $ 8,99 O Miscellaneous Tax Credits $ 19,153 P Total Tax Credits $ 118,62 Q = O + P Corporate PILs/Income Tax Provision for Historical Year $ 77,923 R = N Q

12 Schedule 8 CCA Bridge Year Class Class Description 1/2 Year Rule {1/2 UCC Regulated Disposals UCC Before 1/2 Yr UCC End of Bridge Additions Additions Less Reduced UCC Rate % Bridge Year CCA Historical Year (Negative) Adjustment Year Disposals} 1 Distribution System post 1987 $ 56,259,372 $ 56,259,372 $ $ 56,259,372 4% $ 2,25,375 $ 54,8,997 1 Enhanced Nonresidential Buildings Reg. 11(1)(a.1) election $ $ $ $ 6% $ $ 2 Distribution System pre 1988 $ 3,633,291 $ 3,633,291 $ $ 3,633,291 6% $ 217,997 $ 3,415,294 8 General Office/Stores Equip $ 1,666,79 $ 526,5 $ 2,193,29 $ 263,25 $ 1,93,4 2% $ 386,8 $ 1,87,282 1 Computer Hardware/ Vehicles $ 2,75,841 $ 672, $ 3,377,841 $ 336, $ 3,41,841 3% $ 912,552 $ 2,465, Certain Automobiles $ $ $ 3% $ $ 12 Computer Software $ 57,371 $ 737,966 $ 795,337 $ 368,983 $ 426,354 1% $ 426,354 $ 368, Lease # 1 $ $ $ $ $ 13 2 Lease #2 $ $ $ $ $ 13 3 Lease # 3 $ $ $ $ $ 13 4 Lease # 4 $ $ $ $ $ 14 Franchise $ $ $ $ $ 17 New Electrical Generating Equipment Acq'd after Feb 27/ Other Than Bldgs $ 282,48 $ 282,48 $ $ 282,48 8% $ 22,593 $ 259, Fibre Optic Cable $ $ $ 12% $ $ 43.1 Certain EnergyEfficient Electrical Generating Equipment $ $ $ 3% $ $ 43.2 Certain Clean Energy Generation Equipment $ $ $ 5% $ $ 45 Computers & Systems Software acq'd post Mar 22/4 $ 2,832 $ 2,832 $ $ 2,832 45% $ 1,274 $ 1, Data Network Infrastructure Equipment (acq'd post Mar 22/4) $ $ $ 3% $ $ 47 Distribution System post February 25 $ 48,6,734 $ 11,49,193 $ 59,19,927 $ 5,524,596 $ 53,585,33 8% $ 4,286,826 $ 54,823,1 5 Data Network Infrastructure Equipment post Mar 27 $ 364,65 $ 32,295 $ 666,945 $ 151,148 $ 515,798 55% $ 283,689 $ 383, Computer Hardware and system software $ $ $ 1% $ $ 95 CWIP $ $ $ $ $ 3 Buildings acquired before 1988 $ 1,275,277 $ 1,275,277 $ $ 1,275,277 5% $ 63,764 $ 1,211,513 1b Buildings > 1837 $ 4,969,771 $ 1,5,485 $ 6,47,256 $ 75,243 $ 5,72,14 6% $ 343,21 $ 6,127,55 1b Buildings > 1837 $ 2,425,531 $ 2,425,531 $ $ 2,425,531 6% $ 145,532 $ 2,279,999 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTAL $ 121,73,868 $ 14,788,439 $ $ 136,492,37 $ 7,394,219 $ 129,98,87 $ 9,34,165 $ 127,152,142

13 Schedule 1 CEC Bridge Year Cumulative Eligible Capital 976,57 Additions Cost of Eligible Capital Property Acquired during Test Year Other Adjustments Subtotal x 3/4 = Nontaxable portion of a nonarm's length transferor's gain realized on the transfer of an ECP to the Corporation after Friday, December 2, 22 x 1/2 = Amount transferred on amalgamation or windup of subsidiary Subtotal 976,57 Deductions Proceeds of sale (less outlays and expenses not otherwise deductible) from the disposition of all ECP during Test Year Other Adjustments Subtotal x 3/4 = Cumulative Eligible Capital Balance 976,57 Current Year Deduction 976,57 x 7% = 68,356 Cumulative Eligible Capital Closing Balance 98,152

14 Schedule 13 Tax Reserves Bridge Year Continuity of Reserves Description Historical Utility Only Eliminate Amounts Not Relevant for Bridge Year Adjusted Utility Balance Bridge Year Adjustments Additions Disposals Balance for Bridge Year Change During the Year Disallowed Expenses Capital Gains Reserves ss.4(1) Tax Reserves Not Deducted for accounting purposes Reserve for doubtful accounts ss. 2(1)(l) Reserve for goods and services not delivered ss. 2(1)(m) Reserve for unpaid amounts ss. 2(1)(n) Debt & Share Issue Expenses ss. 2(1)(e) Other tax reserves Total Financial Statement Reserves (not deductible for Tax Purposes) General Reserve for Inventory Obsolescence (nonspecific) General reserve for bad debts Accrued Employee Future Benefits: Medical and Life Insurance Short & Longterm Disability Accmulated Sick Leave Termination Cost Other PostEmployment Benefits Provision for Environmental Costs Restructuring Costs Accrued Contingent Litigation Costs Accrued SelfInsurance Costs Other Contingent Liabilities Bonuses Accrued and Not Paid Within 18 Days of YearEnd ss. 78(4) Unpaid Amounts to Related Person and Not Paid Within 3 Taxation Years ss. 78(1) Other Total

15 Corporation Loss Continuity and Application Schedule 71 Loss Carry Forward Bridge Year NonCapital Loss Carry Forward Deduction Total Actual Historical Application of Loss Carry Forward to reduce taxable income in Bridge Year Other Adjustments Add (+) Deduct () Balance available for use in Test Year Amount to be used in Bridge Year Balance available for use post Bridge Year Net Capital Loss Carry Forward Deduction Total Actual Historical Application of Loss Carry Forward to reduce taxable income in Bridge Year Other Adjustments Add (+) Deduct () Balance available for use in Test Year Amount to be used in Bridge Year Balance available for use post Bridge Year

16 Adjusted Taxable Income Bridge Year T2S1 line # Total for Regulated Utility Income before PILs/Taxes A 3,715,712 Additions: Interest and penalties on taxes 13 Amortization of tangible assets 14 Amortization of intangible assets 16 5,678,6 Recapture of capital cost allowance from Schedule 8 17 Gain on sale of eligible capital property from Schedule 1 18 Income or loss for tax purposes joint ventures or partnerships 19 Loss in equity of subsidiaries and affiliates 11 Loss on disposal of assets 111 Charitable donations 112 Taxable Capital Gains 113 Political Donations 114 Deferred and prepaid expenses 116 Scientific research expenditures deducted on financial statements 118 Capitalized interest 119 Nondeductible club dues and fees 12 Nondeductible meals and entertainment expense 121 Nondeductible automobile expenses 122 Nondeductible life insurance premiums 123 Nondeductible company pension plans 124 Tax reserves deducted in prior year 125 Reserves from financial statements balance at end of year 126 Soft costs on construction and renovation of buildings 127 Book loss on joint ventures or partnerships 25 Capital items expensed 26 Debt issue expense 28 Development expenses claimed in current year 212 Financing fees deducted in books 216 Gain on settlement of debt 22 Nondeductible advertising 226 Nondeductible interest 227 Nondeductible legal and accounting fees 228 Recapture of SR&ED expenditures 231 Share issue expense 235 Write down of capital property 236 Amounts received in respect of qualifying environment trust per paragraphs 12(1)(z.1) 237 and 12(1)(z.2)

17 Adjusted Taxable Income Bridge Year Other Additions Interest Expensed on Capital Leases 29 Realized Income from Deferred Credit Accounts 291 Pensions 292 Nondeductible penalties 293 ARO Accretion expense Capital Contributions Received (ITA 12(1)(x)) Lease Inducements Received (ITA 12(1)(x)) Deferred Revenue (ITA 12(1)(a)) Prior Year Investment Tax Credits received 8,99 Change in Employee Benefits 2,994 Previous years Ontario apprenticeship tax credits claimed 19,153 Change in regulatory variance accounts Total Additions 5,817,116 Deductions: Gain on disposal of assets per financial statements 41 Dividends not taxable under section Capital cost allowance from Schedule ,34,165 Terminal loss from Schedule 8 44 Cumulative eligible capital deduction from Schedule ,356 Allowable business investment loss 46 Deferred and prepaid expenses 49 Scientific research expenses claimed in year 411 Tax reserves claimed in current year 413 Reserves from financial statements balance at beginning of year 414 Contributions to deferred income plans 416 Book income of joint venture or partnership 35 Equity in income from subsidiary or affiliates 36 Other deductions: (Please explain in detail the nature of the item)

18 Adjusted Taxable Income Bridge Year Interest capitalized for accounting deducted for tax 39 Capital Lease Payments 391 Nontaxable imputed interest income on deferral and variance accounts ARO Payments Deductible for Tax when Paid ITA 13(7.4) Election Capital Contributions Received ITA 13(7.4) Election Apply Lease Inducement to cost of Leaseholds Deferred Revenue ITA 2(1)(m) reserve Principal portion of lease payments Lease Inducement Book Amortization credit to income Financing fees for tax ITA 2(1)(e) and (e.1) 394 Apprenticeship credits included in FS income 111,27 Total Deductions 9,519,548 Net Income for Tax Purposes 13,28 Charitable donations from Schedule Taxable dividends deductible under section 112 or 113, from Schedule 3 (item 82) Noncapital losses of preceding taxation years from Schedule 4 Netcapital losses of preceding taxation years from Schedule 4 (Please include explanation and calculation in Manager's summary) Limited partnership losses of preceding taxation years from Schedule TAXABLE INCOME 13,28

19 PILS Tax Provision Bridge Year Wires Only Regulatory Taxable Income $ 13,28 A Ontario Income Taxes Income tax payable Ontario Income Tax 4.5% B $ 598 C = A * B Small business credit Ontario Small Business Threshold $ D Rate reduction 7.% E $ F = D * E Ontario Income tax $ 598 J = C + F Combined Tax Rate and PILs Effective Ontario Tax Rate 4.5% K = J / A Federal tax rate (Maximum 15%) 11.% L Combined tax rate 15.5% M = K + L Total Income Taxes $ 2,58 N = A * M Investment Tax Credits $ 7,329 O Miscellaneous Tax Credits $ 13,699 P Total Tax Credits $ 111,28 Q = O + P Corporate PILs/Income Tax Provision for Bridge Year $ R = N Q Note: 1. This is for the derivation of Bridge year PILs income tax expense and should not be used for Test year revenue requirement calculations.

20 Schedule 8 CCA Test Year Class Class Description 1/2 Year Rule {1/2 UCC Test Year Disposals UCC Before 1/2 Yr UCC End of Test Additions Additions Less Reduced UCC Rate % Test Year CCA Opening Balance (Negative) Adjustment Year Disposals} 1 Distribution System post 1987 $ 54,8,997 $ 54,8,997 $ $ 54,8,997 4% $ 2,16,36 $ 51,848,637 1 Enhanced Nonresidential Buildings Reg. 11(1)(a.1) election $ $ $ $ 6% $ $ 2 Distribution System pre 1988 $ 3,415,294 $ 3,415,294 $ $ 3,415,294 6% $ 24,918 $ 3,21,376 8 General Office/Stores Equip $ 1,87,282 31,627 $ 2,117,99 $ 155,313 $ 1,962,595 2% $ 392,519 $ 1,725,389 1 Computer Hardware/ Vehicles $ 2,465, ,878 $ 3,164,167 $ 349,439 $ 2,814,728 3% $ 844,418 $ 2,319, Certain Automobiles $ $ $ $ 3% $ $ 12 Computer Software $ 368, ,74 $ 737,723 $ 184,37 $ 553,353 1% $ 553,353 $ 184, Lease # 1 $ $ $ $ $ $ 13 2 Lease #2 $ $ $ $ $ $ 13 3 Lease # 3 $ $ $ $ $ $ 13 4 Lease # 4 $ $ $ $ $ $ 14 Franchise $ $ $ $ $ $ 17 New Electrical Generating Equipment Acq'd after Feb 27/ Other Than B $ 259,815 $ 259,815 $ $ 259,815 8% $ 2,785 $ 239,3 42 Fibre Optic Cable $ $ $ $ 12% $ $ 43.1 Certain EnergyEfficient Electrical Generating Equipment $ $ $ $ 3% $ $ 43.2 Certain Clean Energy Generation Equipment $ $ $ $ 5% $ $ 45 Computers & Systems Software acq'd post Mar 22/4 $ 1,558 $ 1,558 $ $ 1,558 45% $ 71 $ Data Network Infrastructure Equipment (acq'd post Mar 22/4) $ $ $ $ 3% $ $ 47 Distribution System post February 25 $ 54,823,1 1,35,575 $ 65,173,676 $ 5,175,288 $ 59,998,388 8% $ 4,799,871 $ 6,373,85 5 Data Network Infrastructure Equipment post Mar 27 $ 383,256 24,248 $ 623,54 $ 12,124 $ 53,38 55% $ 276,859 $ 346, Computer Hardware and system software $ $ $ $ 1% $ $ 95 CWIP $ $ $ $ % $ $ 3 Buildings acquired before 1988 $ 1,211,513 $ 1,211,513 $ $ 1,211,513 5% $ 6,576 $ 1,15,937 1b Buildings > 1837 $ 6,127,55 $ 6,127,55 $ $ 6,127,55 6% $ 367,623 $ 5,759,432 1b Buildings > 1837 $ 2,279,999 44, $ 2,323,999 $ 22, $ 2,31,999 6% $ 138,12 $ 2,185,879 $ $ $ $ % $ $ $ $ $ $ % $ $ $ $ $ $ % $ $ $ $ $ $ % $ $ $ $ $ $ % $ $ $ $ $ $ % $ $ $ $ $ $ % $ $ TOTAL $ 127,152,142 $ 12,13,68 $ $ 139,165,21 $ 6,6,534 $ 133,158,676 $ 9,82,13 $ 129,345,16

21 Schedule 1 CEC Test Year Cumulative Eligible Capital 98,152 Additions Cost of Eligible Capital Property Acquired during Test Year Other Adjustments Subtotal x 3/4 = Nontaxable portion of a nonarm's length transferor's gain realized on the transfer of an ECP to the Corporation after Friday, December 2, 22 x 1/2 = Amount transferred on amalgamation or windup of subsidiary Subtotal 98,152 Deductions Proceeds of sale (less outlays and expenses not otherwise deductible) from the disposition of all ECP during Test Year Other Adjustments Subtotal x 3/4 = Cumulative Eligible Capital Balance 98,152 Current Year Deduction (Carry Forward to Tab "Test Year Taxable Income") 98,152 x 7% = 63,571 Cumulative Eligible Capital Closing Balance 844,581

22 Schedule 13 Tax Reserves Test Year Continuity of Reserves Description Bridge Year Eliminate Amounts Not Relevant for Bridge Year Adjusted Utility Balance Test Year Adjustments Additions Disposals Balance for Test Year Change During the Year Disallowed Expenses Capital Gains Reserves ss.4(1) Tax Reserves Not Deducted for accounting purposes Reserve for doubtful accounts ss. 2(1)(l) Reserve for goods and services not delivered ss. 2(1)(m) Reserve for unpaid amounts ss. 2(1)(n) Debt & Share Issue Expenses ss. 2(1)(e) Other tax reserves Total Financial Statement Reserves (not deductible for Tax Purposes) General Reserve for Inventory Obsolescence (nonspecific) General reserve for bad debts Accrued Employee Future Benefits: Medical and Life Insurance Short & Longterm Disability Accmulated Sick Leave Termination Cost Other PostEmployment Benefits Provision for Environmental Costs Restructuring Costs Accrued Contingent Litigation Costs Accrued SelfInsurance Costs Other Contingent Liabilities Bonuses Accrued and Not Paid Within 18 Days of YearEnd ss. 78(4) Unpaid Amounts to Related Person and Not Paid Within 3 Taxation Years ss. 78(1) Other Total

23 Schedule 71 Loss Carry Forward Test Year Corporation Loss Continuity and Application NonCapital Loss Carry Forward Deduction Actual/Estimated Bridge Year Total Non Distribution Utility Balance Portion Other Adjustments Add (+) Deduct () Balance available for use in Test Year Amount to be used in Test Year Balance available for use post Test Year Net Capital Loss Carry Forward Deduction Actual/Estimated Bridge Year Total Non Distribution Utility Balance Portion Other Adjustments Add (+) Deduct () Balance available for use in Test Year Amount to be used in Test Year Balance available for use post Test Year

24 Taxable Income Test Year Test Year Taxable Income Net Income Before Taxes 5,382,445 T2 S1 line # Additions: Interest and penalties on taxes 13 Amortization of tangible assets 24 ADJUSTED ACCOUNTING DATA P Amortization of intangible assets 24 ADJUSTED ACCOUNTING DATA P ,936,879 Recapture of capital cost allowance from Schedule 8 17 Gain on sale of eligible capital property from Schedule 1 18 Income or loss for tax purposes joint ventures or partnerships 19 Loss in equity of subsidiaries and affiliates 11 Loss on disposal of assets 111 Charitable donations 112 Taxable Capital Gains 113 Political Donations 114 Deferred and prepaid expenses 116 Scientific research expenditures deducted on financial statements 118 Capitalized interest 119 Nondeductible club dues and fees 12 Nondeductible meals and entertainment expense 121 Nondeductible automobile expenses 122 Nondeductible life insurance premiums 123 Nondeductible company pension plans 124 Tax reserves beginning of year 125 Reserves from financial statements balance at end of year 126 Soft costs on construction and renovation of buildings 127 Book loss on joint ventures or partnerships 25 Capital items expensed 26 Debt issue expense 28 Development expenses claimed in current year 212 Financing fees deducted in books 216 Gain on settlement of debt 22 Nondeductible advertising 226 Nondeductible interest 227 Nondeductible legal and accounting fees 228 Recapture of SR&ED expenditures 231 Share issue expense 235 Write down of capital property 236

25 Amounts received in respect of qualifying environment trust per paragraphs 12(1)(z.1) and (1)(z.2) Other Additions: (please explain in detail the nature of the item) Interest Expensed on Capital Leases 29 Realized Income from Deferred Credit Accounts 291 Pensions 292 Nondeductible penalties ARO Accretion expense Capital Contributions Received (ITA 12(1)(x)) Lease Inducements Received (ITA 12(1)(x)) Deferred Revenue (ITA 12(1)(a)) Prior Year Investment Tax Credits received 7,329 Change in Regulatory variance accounts Change in Employee future benefits 11,99 Previous years Ontario apprenticeship tax credit claimed 13, Total Additions 5,149,816 Deductions: Gain on disposal of assets per financial statements 41 Dividends not taxable under section Capital cost allowance from Schedule ,82,13 Terminal loss from Schedule 8 44 Cumulative eligible capital deduction from Schedule 1 CEC 45 63,571 Allowable business investment loss 46 Deferred and prepaid expenses 49 Scientific research expenses claimed in year 411 Tax reserves end of year 413 Reserves from financial statements balance at beginning of year 414 Contributions to deferred income plans 416 Book income of joint venture or partnership 35 Equity in income from subsidiary or affiliates 36 Other deductions: (Please explain in detail the nature of the item) Interest capitalized for accounting deducted for tax 39 Capital Lease Payments 391

26 Nontaxable imputed interest income on deferral and variance accounts ARO Payments Deductible for Tax when Paid ITA 13(7.4) Election Capital Contributions Received ITA 13(7.4) Election Apply Lease Inducement to cost of Leaseholds Deferred Revenue ITA 2(1)(m) reserve Principal portion of lease payments Lease Inducement Book Amortization credit to income Financing fees for tax ITA 2(1)(e) and (e.1) Apprenticeship credits included in FS income 81,3 Total Deductions 9,964,677 NET INCOME FOR TAX PURPOSES 567,584 Charitable donations 311 Taxable dividends received under section 112 or Noncapital losses of preceding taxation years from Schedule Netcapital losses of preceding taxation years (Please show calculation) 332 Limited partnership losses of preceding taxation years from Schedule REGULATORY TAXABLE INCOME 567,584

27 PILs Tax Provision Test Year Wires Only Regulatory Taxable Income $ 567,584 A Ontario Income Taxes Income tax payable Ontario Income Tax 11.5% B $ 65,272 C = A * B Small business credit Ontario Small Business Threshold $ 5, D Rate reduction 7.% E $ 35, F = D * E Ontario Income tax $ 3,272 J = C + F Combined Tax Rate and PILs Effective Ontario Tax Rate 5.33% K = J / A Federal tax rate (Maximum 15%) 15.% L Combined tax rate 2.33% M = K + L Total Income Taxes $ 115,41 N = A * M Investment Tax Credits $ 6,28 O Miscellaneous Tax Credits $ 74,795 P Total Tax Credits $ 81,3 Q = O + P Corporate PILs/Income Tax Provision for Test Year $ 34,47 R = N Q Corporate PILs/Income Tax Provision Gross Up % S = 1 M $ 8,782 T = R / S R Income Tax (grossedup) $ 43,189 U = R + T Note: 1. This is for the derivation of revenue requirement and should not be used for sufficiency/deficiency calculations.