Energy Regulatory Update (Q2, 2023)

Ontario Energy Board

The OEB issued several notable decisions over the past few months, including:

• Rejecting a request from Ontario Power Generation to establish a variance account to record the impacts of the overturning of Bill 124 on its nuclear revenue requirement, finding it was not unforeseeable and the amounts did not meet the materiality criteria.
• Granting approval of EPCOR Natural Gas LP’s request to establish a variance account to capture the difference in assumed versus actual average customer consumption for its South Bruce distribution system, albeit on a modified basis. The OEB allowed only recovery of 50% of the annual balance from customers, until such a point that actual earnings reach 300 basis points below approved ROE. EPCOR has filed a Motion to Review.
• Providing the necessary interim approvals for Hydro One to take possession and control of Chapleau PUC, which had been experiencing difficulty managing the day-to-day operations of the utility.
• Setting EPCOR Electricity Distribution Ontario’s 2023 distribution rates. In its decision the OEB made a number of reductions to the proposed revenue requirement, including with respect to capital, OM&A and cost of debt.
• Approving the Settlement Proposal in PUC Distribution’s 2023 distribution rates application, which included a unique cost recovery and performance incentive mechanism related to its previously approved Sault Smart Grid project.
• Denying Grandbridge Energy’s request to make certain adjustments and reducing their proposed recovery from customers of amounts related to an accounting error in previously disposed of balances in certain commodity pass-through accounts.
• Updating the Uniform Transmission Rates (UTRs).

Both the Chief Executive Officer and Chief Commissioner provided their respective 2022-2023 year-end updates. As it looks forward, the OEB also published its 2023-2026 Business Plan, which was approved by the Minister of Energy. 

As part of its Electric Vehicle Integration (EVI) Initiative, the OEB released a consultant’s report on Electricity Delivery Rates for EV Charging, held a stakeholder meeting and sought written comments to gather feedback.

The OEB released its inaugural Innovation Sandbox 2.0 report covering activities of the Innovation Sandbox since July 2020.

In advance of the filing of 2024 incentive regulation applications, the OEB issued:

• Updated Chapter 3 Filing Requirements for Electricity Distribution Rate Applications
• 2024 Inflation Factor for electricity distributers and transmitters 

The OEB made changes to the Distributed Energy Resources Connection Procedures, requiring the use of standard template forms for certain information provided to a distributor by a customer, and for responding information provided by a distributor.

On the compliance front, the OEB issued its annual Compliance Report. A further 4 Assurances of Voluntary Compliance (AVC) were accepted from electricity distributors (Synergy North, Fort Francis Power, Atikokan Hydro, and Sioux Lookout Hydro) related to billing errors that resulted in the overcharging of customers through the fixed monthly service charge. The OEB also accepted AVCs from two electricity wholesalers (Carmeuse Lime (Canada) and Enbridge Pipelines) who had been operating without a license.