Slide 1: Density Study: Background and Scope of Study
Distribution Density Study Background and Scope of Study Sept. 8, 2010 Henry Andre Manager - Pricing 1
Slide 2: 2008 Distribution Application (EB-2007-0681)
2008 Distribution Application (EB-2007-0681) Decision pgs.30-31 “The Board directs Hydro One to provide a more detailed analysis of the relationship between density and cost allocation to the Board.” “ should consider whether the number of Residential and General Service classes is adequate and whet
Slide 3: 2010/11 Distribution Application (EB-2009-0096)
2010/11 Distribution Application (EB-2009-0096) • Phase 1 report by Elenchus Research • Intervenor (SEC) evidence • Decision … pages 66-67 “The Board will direct Hydro One to comply with the Board’s prior direction regarding this issue” “ … will not specify at this point the precise methodology or a
Slide 4: Existing Density Based Rate Classes
Existing Density Based Rate Classes Residential General Service Criteria Urban >3000 cluster UGSe, UGSd & >60 per km R1 – High >100 cluster Density & > 15 per km R2 – Normal remainder GSe, GSd Density 4
Slide 5: Density Weighting Factors
Density Weighting Factors • Used to allocate Overhead Lines and Transformer related costs • Two Components: – Fixed Cost weighting factors based on the number of customers (lines related) or NBV of transformation assets (transformer related) by class for each feeder – Variable Cost weighting factors
Slide 6: Existing Weighting Factors
Existing Weighting Factors Overhead Lines Transformers Fixed Variable Fixed Variable Costs Costs Costs Costs UR 0.19 0.18 0.77 0.75 R1 0.66 0.64 0.93 0.88 R2 1.61 1.42 1.23 1.12 Seasonal 1.20 1.60 0.87 1.28 GSe 1.11 1.15 1.00 1.04 GSd 1.14 1.18 1.05 1.01 UGe 0.24 0.18 1.03 0.79 UGd 0.31 0.30 0.76 0.
Slide 7: Moving Ahead
Moving Ahead • Hydro One intends to engage a consultant to complete the Density study • Looking for input from stakeholders on the scope of the study in order to issue RFP • Hydro One will gather stakeholder input and communicate to the OEB the approach it intends to follow in order to satisfy the B
Slide 8: Draft Scope of Study - 1
Draft Scope of Study - 1 • Develop options for the “density” definitions that will be evaluated as part of this study • Develop methodology for collecting the data required to assess the relationship between costs and density for the various options • Gather the necessary data
Slide 9: Draft Scope of Study - 2
Draft Scope of Study - 2 • Analyze the data collected to develop rate class and weighting factor alternatives that will be put through the cost allocation model. • Evaluate the cost allocation model results and assess the impacts on customers’ bills. • Prepare Final Report documenting the work under
Slide 10: Timing of Study
Timing of Study • Issue RFP and award contract: Dec 2010 • Develop study methodology and collect necessary data: Apr 2011 • Analyze data and propose cost allocation model inputs: May 2011 • Run model, evaluate results and assess customer impacts: Jul 2011 • Prepare Final Report: Aug 2011 10