November 13, 2023
Cost of Service Rate Application – Case Number EB-2023-0055
Local distribution companies (LDC) such as Wasga Distribution Inc., are funded by the distribution rates included in the delivery charge paid by their customers. Electricity distributors are required to file a rate application with the electricity regulator, the Ontario Energy Board (OEB), to request a change in distribution rates. This is called a Cost of Service (COS) application.
The COS determines the level of spending and investments that Wasaga Distribution Inc. will make, including equipment, infrastructure, maintenance, service offerings, rates customers pay and more. All costs must be presented and justified by the LDC before being reviewed by the OEB. Wasaga Distribution Inc. last completed a COS application for 2016 rates.
Key components of the COS application include:
- A detailed operating budget including comparisons and a history from the last COS application.
- A detailed capital plan including comparisons and history from the last COS application.
- A Distribution System Plan that lays out the strategic vision for the system over the next five years.
- An Asset Management Plan that lays out how we will ensure the system is being maintained efficiently and cost-effectively.
- Our capital structure (debt and equity).
- The resulting calculation of rates and what the impact will be on customers.
Why is Wasaga Distribution Inc. submitting a Cost-of-Service rate application?
Under the Price Cap Incentive Rate setting method (regulated by the Ontario Energy Board), Wasaga Distribution Inc. is required to “rebase” distribution rates on a five-year cycle through the Cost-of-Service rate application process.
In order to “rebase” rates, Wasaga Distribution Inc. is required to submit projected costs and revenues, as well as the number of customers and consumption for the year 2024 (using OEB regulated models). The OEB will use this information to determine new distribution rates, effective May 1, 2024.
Who is involved in a Cost-of-Service application?
In addition to Wasaga Distribution Inc., the following parties are involved in the Cost-of-Service rate application process:
- Customers: Our customers are important to us. It is important that we plan the future of Wasaga Distribution Inc. together, making the changes our customers want to see while ensuring we continue to provide safe and reliable electricity services. Wasaga Distribution Inc. seeks to continually update and gather feedback from its customers in a variety of ways such as social media, customer surveys, community events and direct lines of communication.
- Shareholder: The Town of Wasaga Beach, Wasaga Distribution Inc.’s sole shareholder, will play a role in shaping the future of Wasaga Distribution Inc. as we continue to grow and evolve within the municipality.
- Intervenors: Intervenors are individuals or groups who have our permission to actively participate in a public hearing about a utility’s application. Intervenors represent various customer groups such as low-income consumers, school boards and commercial customers. They also sometimes represent special interests such as environmental and conservation groups.
- Ontario Energy Board: The OEB is responsible for reviewing Wasaga Distribution Inc.’s application, setting rates and outlining any additional directives.
When will the Cost-of Service rate application be submitted?
Wasaga Distribution Inc.’s application was submitted to the OEB on October 20, 2023. A copy of the application and all other relevant documentation can be found below.
How can I participate in the Ontario Energy Board’s public hearing on Wasaga Distribution Inc.’s Cost-of-Service application?
The Ontario Energy Board has issued the Notice of Public Hearing to Wasaga Distribution Inc. Customers. The notice can be found linked below.