Filed: December, 00 Schedule Page of 0 0 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List General Issues. Ref: Exhibit A, Tab, Schedule, paragraph Exhibit A, Tab, Schedule, page Exhibit A, Tab, Schedule, pages to. The revenue requirement requested for 00 is $,.M and $,.0M for 00. The Board approved revenue requirement for 00 is $,0.0M. The 00 over 00 revenue deficiency is about $M or.% of the 00 Board approved revenue requirement. The 00 over 00 revenue requirement increase is $0M or about an.% increase in the requested 00 revenue requirement of $,M. According to the evidence, the.% increase in revenue requirement between 00 and 00 translates into an increase in rates of.% and the.% increase in the 00 requested revenue requirement over 00 translates into a.% increase in 00 rates over 00 rates. The evidence indicates that a.% increase in rates in 00 results in an estimated total customer bill impact of 0.% and that a.% increase in 00 rates over 00 rates results in an estimated.% impact on a customer s total bill. In the context of this evidence, we request the following additional information: (a) Please list, describe, and quantify, if possible, each of the major factors that explain why the percentage increases in rates for 00 over 00 of.%, and for 00 over 00 of.% materially exceed the percentage increase in the corresponding revenue requirement amounts of.% and.% respectively. (b) Please show how the total customer bill impacts of 0.% for 00 over 00, and.% for 00 over 00 have been derived, and include in the total amount of the customer bills used in this calculation all of its separate components, such as distribution charges, energy charges, global adjustment, etc. (c) Please calculate the 00 and 00 revenue deficiency amounts on the basis of a Price Cap escalator applicable to Hydro One s Board approved 00 Transmission Rates of.% plus the amount that results from applying the Incremental Capital Module which the Board approved as part of the rd Generation Incentive Regulation Mechanism for electricity distributors so that these revenue requirement calculations can be used as comparators when considering the appropriateness of the overall revenue requirements for 00 and 00 which Hydro One asks the Board to approve.
Filed: December, 00 Schedule Page of 0 (a) The table below details the difference between the percentage increases in revenue requirement and the required rate change. 00 to 00 Rates revenue requirement should be used when calculating the increase in revenue requirement compared to the increase in rates. Revenue requirement increases.% from 00 to 00, while rates revenue requirement increases by.% over the same period. The estimated impact of load reduction of 0.% on rates revenue requirement results in a rate increase required of.%. Description 00 00 Difference Change (a) (b) (c) = (b)-(a) (d) = (c)/(a) Revenue Requirement *,0,.% Rates Revenue Requirement *,,.% *, Exhibit E, Tab, Schedule, Table Estimated Impact of Load Reduction 0.% Total Rate Change Required =.% + 0.%.% 0 0 00 to 00 Rates revenue requirement should be used when calculating the increase in revenue requirement compared to the increase in rates. Revenue requirement increases.% from 00 to 00, while rates revenue requirement increases by.% over the same period. The estimated impact of load reduction of.% on rates revenue requirement results in a rate increase required of.%. b) The pre-filed evidence has been updated and the customer bill impacts are 0.% for 00 over 00 and 0.% for 00 over 00 as stated in the Notice of Application for this proceeding. The derivation of the customer bill impacts is based on the Transmission Rate Impact multiplied by the estimated share of transmission costs as a percentage of the total cost of electricity. The estimated total cost of electricity is described below.
Filed: December, 00 Schedule Page of 0 Cost Component Estimated Costs ( /kwh) Source Commodity. IESO August 00 Monthly Market Report page Wholesale Market 0. IESO August 00 Monthly Market Service charge Wholesale Transmission Report page 0. As above adjusted for.% increase in Transmission rates effective January 00 (0. /kwh*.0) Debt Retirement 0. IESO August 00 Monthly Market Report page Distribution Services. $. billion per OEB 00 Yearbook page / TWh sales (per IESO data) Total. The share of transmission costs as a percentage of total cost is.%, (0. /kwh /. /kwh). The 00 Transmission Rate Impact is estimated at.% and for 00 it is estimated at.%, (Exhibit A, Tab, Schedule, page ). Therefore, the estimated 00 customer impact is 0.% (.%*.%) and the estimated 00 customer impact is 0.% (.%*.%). c) As outlined in the question, the data requested is to be created as per the OEB s G IRM model for LDC s. However, this mechanism is not applied by the OEB to Transmitters, it is only applied to LDC s. As such, it would be inappropriate to generate such data for Hydro One Transmission using the LDC G IRM model. Further, the question is incorrect in that the G IRM model is NOT applied to Revenue Requirement, rather it is applied to rates. Consequently, for these reasons the requested data cannot be provided.
0 0 Filed: December, 00 Schedule Page of Canadian Manufacturers & Exporters (CME) INTERROGATORY # List General Issues. Ref: Exhibit E, Tab, Schedule, Tables and. A Change in Load Forecast of $M is identified as a component of the $M revenue deficiency for 00 over Board approved 00 in Table found at Exhibit E, Tab, Schedule, page, and Change in Load Forecast is identified as a $M contributor to the $0M revenue deficiency for 00 over 00 at Table found at Exhibit E, Tab, Schedule, page. In the context of this information, we request the following: (a) Please provide detailed calculations showing how the amounts of each of the Change in Load Forecast contributors to revenue deficiency were calculated. Detailed calculation of the change in gross change in load forecast provided below: 00 Note Hydro One Determinants (avg monthly MW) 00 Note 00 Note Difference 00 to 00 Difference 00 to 00 Current Tx Rates ($/kw) Note 00 Revenue Impact ($M) Tx Service a b c d=b-a e=c-b f g=d**f/000 Estimated 00 Tx Rates ($/kw) h=f*(+.%) x(-d/a) 00 Revenue Impact ($M) i=e**h/000 Network, 0, 0, (0) (). (). () Line Connection 0, 0,00, () () 0.0 () 0. () Transformation Connection,,,0 (). 0. (0) Revenue Deficiency Due to Gross Change in Load: ($0M) ($M) 0 Note : Per Schedule. of OEB Order in EB-00-00 Note : Per Table of Exhibit H, Tab, Schedule Note : Per Current Uniform Transmission Rate Schedule issued October, 00 Included in the net change in load forecast is the change in external revenues. The approximate change to external revenues in 00 is +$M and in 00 is +$M (see Table and in Exhibit E, Tab, Schedule, line no ). The addition of the gross change in load forecast calculated in the table above together with the change in external revenues results in the approximate $M and $M change in load forecast for 00 and 00 respectively.
Filed: December, 00 Schedule Page of 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List Operating Maintenance and Administration ( OM&A ) Issues. to. Ref: Exhibit A, Tab, Schedule, page Exhibit C, Tab, Schedule Exhibit C, Tab, Schedule. Hydro One asks the Board to approve total OM&A for 00 of $.M and for 00 of $.M. These amounts are up from the 00 Board approved OM&A of $.M and Hydro One s estimated actual 00 OM&A of $0.M. In the context of this evidence, please provide the following information: (a) Please describe how Hydro One would alter its 00 and 00 OM&A budgets and spending to manage its OM&A expenditures in those years in the event that the Board were to adopt an envelope approach to assessing the reasonableness of Hydro One s OM&A budgets and were to approve total OM&A budgets in each of the years 00 and 00 in amounts of $0M less, $M less, and $0M less than the total amounts Hydro One asks the Board to approve in each of the years 00 and 00. (a) Please refer to Hydro One s response provided at, Tab, Schedule 0 with respect to project and program reprioritization.
Filed: December, 00 Schedule Page of 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List Capital Expenditures and Rate Base Issues. to. Re: Exhibit A, Tab, Schedule, page Exhibit D, Tab, pages and. The evidence indicates that Hydro One is budgeting total capital expenditures in 00 of about $M and in 00 of about $,0.. Each amount is significantly higher than the Board approved capital budget for 00 of $.M. In the context of this evidence, please provide the following information: (a) Please describe how Hydro One would alter its capital budgets and spending priorities in 00 and 00 in the event that the Board were to adopt an envelope approach to Hydro One s requested capital budgets for 00 and 00 and were to approve total capital budgets in each of the years 00 and 00 in amounts of $0M, $00M and $0M less than the amounts requested by Hydro One. (a) Please refer to Hydro One s response provided at, Tab, Schedule 0 with respect to project and program reprioritization.
Filed: December, 00 Schedule Page of 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List Capital Expenditures and Rate Base Issues. to. Ref: Exhibit A, Tab, Schedule, page re: Facilities for New Renewable Generation. What portion of the capital and operating budgets for 00 and 00 pertain to the development, construction, ownership and operation of enabler facilities for renewable resource clusters to serve new renewable resource electricity generators? The expenditures planned by Hydro One for enabler facilities are for pre-engineering only. Per Exhibit C, Tab, Schedule, Section.0, these expenditures are proposed to be captured in a variance account and Hydro One is not seeking to recover these costs as part of its revenue requirement in this submission.
Filed: December, 00 Schedule Page of 0 0 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List Capital Expenditures and Rate Base Issues. to. Ref: Exhibit A, Tab, Schedule, page re: Facilities for New Renewable Generation. In its Notice of Proposed Amendments (the Notice ) to the Transmission System Code (the Code ) dated October, 00, the Board indicates that it intends to implement the hybrid option for constructing, owning, operating and eventually connecting enabler facilities for renewable resource clusters to new renewable resource electricity generators. The Notice indicates that once these new generators have been connected to the Transmission System, they will be required to pay their fully allocated share of the costs incurred by the transmitter to construct, own and operate the enabler facilities. In the context of the foregoing, please provide the following information: (a) How does Hydro One propose to calculate the carrying costs they incur with respect to the construction, ownership and operation of enabler facilities for new renewable generation? In particular, is Hydro One seeking a full rate of return on costs incurred with respect to such enabler facilities or something less than a full return such as the Allowance for Funds Used During Construction ( AFUDC )? (b) What measures does Hydro One envisage it will apply to track all of the costs it incurs with respect to the construction, ownership and operation of enabler facilities so that those costs can be assigned to renewable resource generators as they are connected? (c) How does Hydro One envisage that renewable resource generators will discharge their cost responsibility for enabler facilities when they eventually become connected to the Transmission System? Will they be called upon to make a one time payment, or will their cost responsibility for enabler facilities be discharged gradually? (d) How does Hydro One envisage that its transmission revenue requirement recoverable in rates will be adjusted as renewable resource generators are attached to the system? (e) Does Hydro One subscribe to the principle that all of the owning and operating costs of enabler facilities incurred by transmitters, including all of the carrying costs thereon incurred between the outset of construction of
Filed: December, 00 Schedule Page of 0 0 0 such facilities and the points in time when new generators are attached should eventually be fully assigned to the new renewable generators? (a) Hydro One notes that the Board s proposed amendments to the Transmission System Code are yet to be finalized. Additionally, the Board has stated (in its October, 00 Notice of Proposed Amendments) that implementation of the hybrid option will involve a number of steps or processes, including a rates process to deal with the costs of the enabler facility. Hydro One expects to calculate and seek recovery of the costs of enabler facilities, including the allowed return and carrying costs, in accordance with the Transmission System Code, once it is amended, and based on any rules or guidelines that the Board chooses to issue in this respect. (b) Based on the proposed amendments, Hydro One expects to track the costs of enabler facilities using the same project costing and accounting policies, processes and systems that it uses for tracking the construction, ownership and operation of other transmission assets and for assigning those costs to the appropriate rate pools. (c) Hydro One expects that the amended Transmission System Code and any associated rules and guidelines from the Board will prescribe the manner by which generators would discharge their cost responsibility for enabler facilities. (d) Hydro One anticipates that the rates process noted in (a) above, possibly accompanied by other direction from the Board, will prescribe the mechanism for adjusting the transmitter s revenue requirements for the costs associated with enabler facilities. (e) Hydro One participated in the Transmission Connection Cost Responsibility Review and has made a number of submissions in that proceeding. The Board recently issued its proposed amendments dealing with enabler facilities, and the Company plans to comply with the Board s final decisions for cost responsibility and with the requirements of the Transmission System Code.
Filed: December, 00 Schedule Page of 0 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List Deferral/Variance Accounts Issue. Ref: Exhibit F, Tab, page. Hydro One seeks continuation of the pension cost differential deferral account. In this context, please provide the following information: (a) Please indicate the extent to which the significant drop in the market value of pension plan investments will be attributable to ratepayers through the operation of the provisions of this deferral account. The current Pension Cost Differential account is intended to capture differences between estimated pension costs for rate setting purposes up to June 0, 00 and actual pension costs, where actual pension costs are influenced by the level of base pensionable earnings. As these pension costs are estimated based on the actuarial valuation as at December, 00 the current decline in the market value of pension plan investments does not impact this deferral account. The Pension Cost Differential deferral account requested will commence July, 00. However the next actuarial valuation is not required until December, 00, at which time the current decline in market value of pension plan investments, and any subsequent changes in the level of investment earnings, will be incorporated.
Filed: December, 00 Schedule Page of 0 0 Canadian Manufacturers & Exporters (CME) INTERROGATORY # List Rate Design and Customer Bills Ref: Exhibit H, Tab, Schedule, Tables and Exhibit H, Tab, Schedule Exhibit H, Tab, Schedule. Please provide sample bills for the typical or average of the 0 LDC Customers; the typical or average of the End-Use Customers, and the typical or average of the Transmission Connected Generators shown in Tables and Exhibit H, Tab, Schedule at page and. The following information was provided by the IESO. a) Representative LDC Transmission Customer The following table provides a sample invoice of typical wholesale charges for a representative LDC customer. Type Description Amount 0 Net Energy Market Settlement for Non-Dispatchable Load $,,.0 0 TR Clearing Account Credit -$0. Regulated Price Plan Settlement Amount -$,.0 Global Adjustment Settlement Amount $00,0. Regulated Price Plan Retailer Settlement Amount -$,. 0 Net Energy Market Settlement Uplift $,.0 Congestion Management Settlement Uplift $0,. Station Service Reimbursement Debit $,. 0 Local Market Power Rebate -$,. Generation Cost Guarantee Recovery Debit $,. Intertie Failure Rebate -$,. 0 0-Minute Spinning Market Reserve Hourly Uplift $,0. 0-Minute Non-Spinning Market Reserve Hourly Uplift $,. 0-Minute Operating Reserve Market Hourly Uplift $,. 0 Black Start Capability Settlement Debit $. Reactive Support and Voltage Control Settlement Debit $,.0 Regulation Service Settlement Debit $0,. 0 Must-Run Contract Settlement Debit $,0. 0 Network Service $,0. Line Connection Service $0,.
Filed: December, 00 Schedule Page of Type Description Amount Transformation Connection Service $,. Rural Rate Settlement $,0. OPA Administration $,0. 00 GST Credit -$0,0. 0 GST Debit $,0. Total $,,. b) Representative End-use Transmission Customer The following table provides a sample invoice of typical wholesale charges for a representative end-use transmission customer. Type Description Amount 00 Net Energy Market Settlement for Generators and Dispatchable Load $,0. 0 Net Energy Market Settlement for Non-Dispatchable Load $,. 0 TR Clearing Account Credit -$0. 0 Congestion Management Settlement Credit for Energy -$,.0 0 Congestion Management Settlement Credit for 0 Minute Non-Spinning Res -$. Global Adjustment Settlement Amount $,. 0 Net Energy Market Settlement Uplift $,00. Congestion Management Settlement Uplift $,0. Station Service Reimbursement Debit $. 0 Local Market Power Rebate -$,. Generation Cost Guarantee Recovery Debit $,0. Intertie Failure Rebate -$,. 0 0-Minute Non-Spinning Reserve Market Settlement Credit -$,0. 0 0-Minute Spinning Market Reserve Hourly Uplift $,0. 0-Minute Non-Spinning Market Reserve Hourly Uplift $,0. 0-Minute Operating Reserve Market Hourly Uplift $,.0 0 Black Start Capability Settlement Debit $. Reactive Support and Voltage Control Settlement Debit $,. Regulation Service Settlement Debit $,. 0 Must-Run Contract Settlement Debit $,0.00 0 Network Service $,. Line Connection Service $,0. Debt Retirement $,. Rural Rate Settlement $,0.
Filed: December, 00 Schedule Page of Type Description Amount OPA Administration $0,. 00 GST Credit -$,. 0 GST Debit $,. 0 IESO Administration $,.0 Physical Market Invoice Prepayment -$00,000.00 Total $,,0. c) Representative Generator Transmission Customer The following table provides a sample invoice of typical wholesale charges for a representative generator transmission customer. Type Description Amount 00 Net Energy Market Settlement for Generators and Dispatchable Load -$,,. 0 Net Energy Market Settlement for Non-Dispatchable Load $,,0.0 0 Congestion Management Settlement Credit for Energy -$,. 0 Congestion Management Settlement Credit for 0 Minute Spinning Reserve -$,. 0 Congestion Management Settlement Credit for 0 Minute Non-spinning Reserve -$,. 0 Congestion Management Settlement Credit for 0 Minute Operating Reserve -$0,0. Ontario Power Generation Rebate -$0,. Station Service Reimbursement Credit -$,. Generation Cost Guarantee Payment -$,.0 Global Adjustment Settlement Amount $,. 0 Net Energy Market Settlement Uplift $,.0 Congestion Management Settlement Uplift $,0.0 Station Service Reimbursement Debit $. 0 Local Market Power Rebate -$. Generation Cost Guarantee Recovery Debit $,. Intertie Failure Rebate -$. 00 0 Minute Spinning Reserve Market Settlement Credit -$,. 0-Minute Non-Spinning Reserve Market Settlement 0 Credit -$,. 0 0 Minute Operating Reserve Market Settlement Credit -$,0. 0 0-Minute Spinning Market Reserve Hourly Uplift $,.0 0-Minute Non-Spinning Market Reserve Hourly Uplift $,. 0-Minute Operating Reserve Market Hourly Uplift $,0. Reactive Support and Voltage Control Settlement Credit -$,. 0 0 Regulation Service Settlement Credit -$,. 0 Black Start Capability Settlement Debit $.0
Filed: December, 00 Schedule Page of Type Description Amount Reactive Support and Voltage Control Settlement Debit $.0 Regulation Service Settlement Debit $,. 0 Must-Run Contract Settlement Debit $,0.0 0 Network Service $,.0 Line Connection Service $,. Transformation Connection Service $0,00.0 Export Transmission Service $.00 Debt Retirement $0,. Rural Rate Settlement $0,0.0 OPA Administration $,. 00 GST Credit -$,,. 0 GST Debit $,. 0 IESO Administration $,.0 Total -$0,,0.