Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 1 of 118
ONTARIO ENERGY BOARD
IN THE MATTER OF the Ontario Energy Board
Act, 1998, S.O. 1998, c. 15, Sched. B, as amended;
AND IN THE MATTER OF an Application by
Hydro Ottawa Limited for an Order or Orders
approving or fixing just and reasonable rates
for distribution service.
Hydro Ottawa Limited
Manager’s Summary
August 2, 2005
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 2 of 118
CHAPTER 1 – INTRODUCTION ...................................................................................................................7
1.0
HISTORICAL PERSPECTIVE....................................................................................................7
CHAPTER 2 – COMPONENTS OF THE APPLICATION AND SCHEDULES .......................................8
2.0
INTRODUCTION ..........................................................................................................................8
2.1
GENERAL INFORMATION
2.1.1
Description of the Distributor
2.1.2
Corporate Structure
2.1.3
Audited Financial Statements
2.1.4
Compliance with Licence
2.1.5
Complete Listing of Rates and Charges
2.1.6
Summary of Application
8
8
10
12
12
12
15
CHAPTER 3 – TEST YEAR AND ADJUSTMENTS ..................................................................................16
3.0
INTRODUCTION ........................................................................................................................16
3.1
HISTORICAL TEST YEAR VERSUS FUTURE TEST YEAR
3.2
TIER 1 ADJUSTMENTS
3.2.1
Tier 1 Adjustments: Distribution Expenses
3.2.2
Tier 1 Adjustments: Rate Base
3.2.3
Non-routine/unusual Tier 1 Adjustments
3.3
TIER 2 ADJUSTMENTS
16
16
16
16
16
16
CHAPTER 4 – RATE BASE ..........................................................................................................................17
4.0
RATE BASE .................................................................................................................................17
4.0.1
Smart Meters
19
4.0.2
New distribution stations put into service in 2002, 2003 and 2004
20
4.0.3
Customer Information System (CIS)
21
4.0.4
Light Rail Transit Line (LRT)
22
4.1
AMORTIZATION RATES
22
4.2
CAPITAL INVESTMENTS
23
4.2.1
Summary
23
4.2.2
Asset Management Strategy
24
4.2.3
Facilities Asset Strategy
26
4.2.4
Capital Programs/Projects
27
4.2.4.1
Residential Subdivision ($6,939,884) ................................................................................29
4.2.4.2
Distribution Transformer Replacement ($6,601,265) ........................................................29
4.2.4.3
Distribution Enhancements ($6,522,466) ..........................................................................30
4.2.4.4
Planned Pole Replacement ($5,879,898) ...........................................................................31
4.2.4.5
New Commercial Development ($4,330,881) ...................................................................33
4.2.4.6
Station Capacity - New Cyrville Substation ($4,061,259) .................................................33
4.2.4.7
Plant Relocation and Upgrades ($2,874,076) ....................................................................35
4.2.4.8
System Expansion ($2,789,377) ........................................................................................35
4.2.4.9
End-of-life Cable Works ($2,128,956) ..............................................................................36
4.2.4.10 Station Transformer Refurbishment ($1,989,510) .............................................................39
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 3 of 118
4.2.4.11 Infill and Upgrades ($1,859,220) .......................................................................................40
4.2.4.12 Station Circuit Breaker Control Refurbishment ($1,695,999) ...........................................41
4.2.4.13 Meter Replacement and Re-verification ($1,301,511) .......................................................41
4.2.4.14 Station Switchgear Replacement ($1,101,796) ..................................................................41
4.2.4.15 Vault Rehab or Removal ($1,006,709) ..............................................................................43
4.2.4.16 Wholesale Meter Upgrade ($930,318) ...............................................................................44
4.2.4.17 Plant Failure Capital ($698,934) ........................................................................................46
4.2.4.18 Damage to Plant ($558,921) ..............................................................................................46
4.2.4.19 Elbow and Insert Replacement ($553,478) ........................................................................46
4.2.4.20 Insulator Replacement ($475,198) .....................................................................................47
4.2.4.21 Distribution Automation ($464,867) ..................................................................................47
4.2.4.22 Station Transformer PCB Removal ($422,920) .................................................................48
4.2.4.23 Station Automation ($385,921) ..........................................................................................48
4.2.4.24 Overhead Equipment - New and Rehabilitation ($278,901) ..............................................49
4.2.4.25 East End Operations Centre ($7,026,078)..........................................................................49
4.2.4.26 GIS and OMS ($4,901,719) ...............................................................................................50
4.2.4.27 SCADA and Control Room Upgrades ($3,019,289)..........................................................52
4.2.4.28 Vehicle Replacements ($2,589,689) ..................................................................................54
4.2.4.29 Bank Street Rehabilitation ($1,981,694) ............................................................................55
4.2.4.30 CIS Software Enhancements ($1,819,600) ........................................................................55
4.2.4.31 Merivale Road Additions ($1,278,083) .............................................................................56
4.2.4.32 Albion Road ($905,245) ....................................................................................................56
4.2.4.33 Carling Operations Centre Storage Building ($615,715) ...................................................56
4.2.4.34 Stations Building Rehabilitation ($572,940)......................................................................56
4.2.4.35 Upgrade to JDE Financial System ($571,651) ...................................................................57
4.2.4.36 Business Continuity Plan ($315,117) .................................................................................57
4.2.4.37 Conservation & Demand Management ($1,420,012) ........................................................57
4.3
INTEREST ON DEFERRAL ACCOUNTS AND CONSTRUCTION WORK IN PROGRESS (CWIP)
57
4.4
CAPITALIZATION POLICY
58
4.5
CONTRIBUTED CAPITAL
58
4.6
TREATMENT OF CAPITAL GAINS AND LOSSES
58
4.6.1
Assets Sold to a Non-Affiliate
58
4.6.2
Assets Sold to an Affiliate
58
CHAPTER 5 – COST OF CAPITAL.............................................................................................................59
5.0
5.1
5.2
5.3
5.4
INTRODUCTION ........................................................................................................................59
MAXIMUM ALLOWED RETURN ON EQUITY
DEBT RATE
CAPITAL STRUCTURE
WORKING CAPITAL ALLOWANCE
59
59
59
60
CHAPTER 6 – DISTRIBUTION EXPENSES ..............................................................................................61
6.0
INTRODUCTION ........................................................................................................................61
6.1
OPERATIONS, MAINTENANCE AND ADMINISTRATION
62
6.1.1
Operations and Maintenance
62
6.1.1.1
Vegetation Management ....................................................................................................63
6.1.1.2
Thermographic (IR) Scanning and CO2 Washing ..............................................................65
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 4 of 118
6.1.1.3
Insulator Washing ..............................................................................................................66
6.1.1.4
Graffiti Abatement .............................................................................................................66
6.1.2
Billing and Collection
66
6.1.3
Administration and General Expense
66
6.1.4
Community Relations
67
6.2
DETAILED REPORT FOR SPECIFIC DISTRIBUTION EXPENSES
67
6.2.1
Insurance Expense
67
6.2.2
Bad Debt Expense
67
6.2.2.1
Billed Accounts ..................................................................................................................68
6.2.2.2
Unbilled Revenue...............................................................................................................68
6.2.2.3
Meter Disputes ...................................................................................................................68
6.2.2.4
Account Write-off Practice ................................................................................................68
6.2.3
Information Technology Expenses
69
6.2.4
Advertising, Political Contributions, Employee Dues, Charitable Donations, Meals/ Travel
and Business Entertainment, Research and Development
70
6.2.4.1
Advertising .........................................................................................................................70
6.2.4.2
Political Contributions .......................................................................................................70
6.2.4.3
Employee Dues ..................................................................................................................70
6.2.4.4
Charitable Donations..........................................................................................................70
6.2.4.5
Meals/Travel and Business Entertainment .........................................................................71
6.2.4.6
Research and Development ................................................................................................71
6.2.5
Employee Total Compensation
71
6.2.6
Pensions and Post-retirement Benefits
75
6.2.7
Distribution Expenses Paid to Affiliates
76
CHAPTER 7 – TAXES/PILS ..........................................................................................................................79
7.0
INTRODUCTION ........................................................................................................................79
7.1
GENERAL METHODOLOGY
7.2
PRINCIPLES
7.2.1
Non-recoverable and disallowed expenses
7.2.2
Capital tax exemptions
7.2.3
Loss carry-forwards
7.2.4
Undepreciated capital cost (UCC) and capital cost allowance (CCA)
7.2.5
Regulatory tax treatment of Eligible Capital Expenditures (ECE)
7.2.6
Interest deduction
7.2.7
Interest capitalized for accounting, but deducted for tax purposes
7.2.8
Overlapping year-ends
7.2.9
Estimating taxable capital
7.2.10
Ontario Corporate Minimum Tax
7.2.11
Non-distribution elimination
7.2.12
Tax credits
7.2.13
Impact of CDM expenditure and Smart Meter expenditures
7.2.14
Property Taxes
7.2.15
Capital Leases
7.3
TAX PAYABLE FILINGS
7.3.1
Information to be Provided with 2006 OEB Tax Model Filings
7.3.2
Tax Information Disclosure in Future
7.3.3
Supporting Documentation
2006 EDR Application
79
79
79
79
79
80
82
82
82
82
83
83
83
83
83
83
83
84
84
84
84
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 5 of 118
CHAPTER 8 – REVENUE REQUIREMENT ..............................................................................................85
8.0
8.1
8.2
8.3
INTRODUCTION ........................................................................................................................85
SERVICE REVENUE REQUIREMENT
BASE REVENUE REQUIREMENT
CDM, SMART METER AND REGULATORY ASSET RECOVERY
85
85
87
CHAPTER 9 – COST ALLOCATION ..........................................................................................................89
9.0
9.1
9.2
9.3
INTRODUCTION ........................................................................................................................89
CUSTOMER CLASSES
89
APPROPRIATE SHARE OF THE 2006 REVENUE REQUIREMENT FOR EACH CLASS
91
APPROPRIATE SHARE OF THE 2006 CDM, SMART METER AND REGULATORY ASSET REVENUE
REQUIREMENTS
94
CHAPTER 10 – RATES AND CHARGES ...................................................................................................95
10.0
INTRODUCTION ........................................................................................................................95
10.0.1
Load Forecast
95
10.0.1.1 Model .................................................................................................................................95
10.0.1.2 Historical Data Set .............................................................................................................95
10.0.1.3 Influencing Factors ............................................................................................................95
10.0.1.4 Results ................................................................................................................................96
10.1
FIXED/VARIABLE SPLITS
97
10.2
UNMETERED SCATTERED LOADS
97
10.3
TIME OF USE DISTRIBUTION RATES
98
10.4
TRANSFORMER OWNERSHIP ALLOWANCE
98
10.5
UPDATE OF LOSS ADJUSTMENT FACTORS
99
10.6
STANDBY CHARGES
100
10.6.1
Rate Structure
100
10.6.2
Customer Classification
100
10.6.3
Contract Backup Demand
100
10.6.4
Determination of Billed Backup Demand
101
10.6.5
Backup Overrun Adjustment
101
10.6.6
Standby Monthly Service Charge
102
10.6.7
Parallel Generation Data Requirements
104
10.7
LOW VOLTAGE (LV) CHARGES
104
10.8
DEMAND DETERMINANTS
104
CHAPTER 11 – SPECIFIC SERVICE CHARGES ...................................................................................105
11.0
11.1
11.2
11.3
11.3.1
11.3.2
11.3.3
11.4
INTRODUCTION ......................................................................................................................105
METHODOLOGY
CUSTOMER ADMINISTRATION
NON-PAYMENT OF ACCOUNT
Late Payment Charge
Collection of Account Charge
Reconnection of Electricity Service Charge
SERVICE CALLS
2006 EDR Application
106
106
106
106
106
106
106
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 6 of 118
11.5
11.6
11.7
11.8
TEMPORARY ELECTRICITY SERVICE CHARGE
SPECIFIC CHARGE FOR ACCESS TO POWER POLES
OTHER SERVICES AND CHARGES
REVENUE FROM SPECIFIC SERVICE CHARGES
106
106
107
108
CHAPTER 12 – OTHER REGULATED CHARGES................................................................................110
12.0
INTRODUCTION ......................................................................................................................110
12.1
RPP (FORMERLY SSS) ADMINISTRATION CHARGE
12.2
RETAIL SERVICE CHARGES
12.2.1
Establishing Service Agreements
12.2.2
Distributor-Consolidated Billing
12.2.3
Retailer-Consolidated Billing
12.2.4
Service Transaction Requests (STR)
12.2.5
Monitoring and Cost Tracking
12.3
NON-COMPETITIVE ELECTRICITY CHARGES
12.3.1
Wholesale Market Service Rate
12.3.2
Retail Transmission Service Rates
12.3.3
Charges/Taxes Levied by the Government of Ontario
110
110
110
110
110
110
111
111
111
111
111
CHAPTER 13 – MITIGATION ...................................................................................................................112
13.0
13.1
13.2
IMPACT ANALYSIS.................................................................................................................112
MITIGATION METHODOLOGIES
RATE HARMONIZATION (AMALGAMATED OR ACQUIRED SERVICE AREAS)
112
112
CHAPTER 14 – COMPARATORS AND COHORTS ...............................................................................113
14.0
COMPARATORS AND COHORTS........................................................................................113
CHAPTER 15 – SERVICE QUALITY REGULATION ...........................................................................114
15.0
INTRODUCTION ......................................................................................................................114
EXHIBIT A.....................................................................................................................................................116
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 7 of 118
Chapter 1 – Introduction
1.0
Historical Perspective
Hydro Ottawa Limited (“Hydro Ottawa”) was created as a distributor in conjunction with the
restructuring of the former Regional Municipality of Ottawa-Carleton. The following is a description
of this process that is intended to provide a historical context for this Manager’s Summary.
The City of Ottawa Act, 1999 (the “Ottawa Act”) established the new City of Ottawa that was an
amalgamation, in effect, of the following old municipalities on January 1, 2001: Cumberland,
Gloucester, Goulbourn, Kanata, Nepean, Osgoode, Ottawa, Rideau, Rockcliffe Park, Vanier, and
West Carleton (i.e., all of the municipalities within the former regional municipality). The Ottawa Act
provided for the establishment of a “transition board,” prior to the amalgamation, as a corporation
without share capital composed of persons appointed by the Minister of Municipal Affairs and
Housing. The Ottawa Transition Board was given certain powers of the old municipalities as a
means of facilitating the transition from the old municipalities and their local boards, such as their
public utility commissions, to the new City of Ottawa.
Hydro Ottawa was incorporated on October 3, 2000 pursuant to the Business Corporations Act. The
Ottawa Transition Board transferred the electricity distribution and transmission assets, liabilities,
and employees of the following old municipalities (and/or their public utility commissions under the
following business names) to Hydro Ottawa on November 1, 2000: Gloucester (Gloucestor Hydro),
Goulbourn (Goulbourn Hydro), Kanata (Kanata Hydro), Nepean (Nepean Hydro), and Ottawa
(Ottawa Hydro). This transfer was effected by a series of transfer by-laws enacted under Part IX of
the Electricity Act, 1998 and Ontario Regulation 100/00 made under the Ottawa Act.
This transfer is frequently referred to as the “amalgamation” of the five former municipal electricity
utilities. Ottawa Hydro was also serving the old municipalities of Rockcliffe Park and Vanier, at the
time of amalgamation, and so Hydro Ottawa’s service area comprised the geographic areas of
these seven old municipalities after the amalgamation. Hydro One Networks Inc. (“Hydro One”)
continued to serve the other four (and mostly rural) old municipalities.
Hydro Ottawa acquired the assets of Casselman Hydro Inc. in April 2002. The Ontario Energy
Board (the “Board”) approved this transaction and, as a result, amended Hydro Ottawa’s distribution
licence to include the Village of Casselman in the description of Hydro Ottawa’s service area.
Hydro Ottawa is a wholly-owned subsidiary of Hydro Ottawa Holding Inc. (the “Holding Company”),
which provides strategic direction to Hydro Ottawa and its other subsidiaries through its Board of
Directors and senior management. Hydro Ottawa, including its predecessor utilities, has been an
integral part of the growth and success of the Ottawa area for almost a century.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 8 of 118
Chapter 2 – Components of the Application and Schedules
2.0
Introduction
Hydro Ottawa is filing its Application on the basis of a forward test year. Hydro Ottawa has
followed, as and when required, the methodology set out in the Board’s 2006 Electricity Distribution
Rate Handbook (the “Handbook”). Hydro Ottawa has also used the Board’s 2006 rates
spreadsheet model (the “2006 EDR Model”) as the basis for determining rates; however, the model
was adjusted to support a forward test year by substituting the years 2004, 2005 and 2006 for the
years 2002, 2003 and 2004 respectively. Hydro Ottawa is also filing those portions of the original
2006 EDR Model that provide relevant schedules for the 2002, 2003 and 2004 data.
2.1
General Information
Description of the Distributor
In 2004, Hydro Ottawa had annual energy sales exceeded 7.5 billion kilowatt-hours (kWhs) used by
a customer base of 274,040 as follows:






Residential
General Service
Large User
Street Lights
Unmetered Scattered Loads
Sentinel Lights
247,760 Customers
26,270 Customers
10 Customers
15 Accounts, 44,932 Connections
218 Accounts, 2,770 Connections
125 Connections
Schedule 2-1 provides further details about Hydro Ottawa.
Schedule 2-1: Summary description of Hydro Ottawa
Name of Distributor:
Hydro Ottawa
Current Licence Number:
ED-2002-0556
Communities Served:
City of Ottawa (most consumers)
Village of Casselman
Adjacent Distributor:
Hydro One
Characteristics of Service Area:
Hydro Ottawa owns and operates 70 distribution
substations along with over 3,040 km of overhead and
1,790 km of underground circuits. Hydro Ottawa’s
service area, including Casselman, is a mix of urban,
suburban and rural customers spread out over some
1,104 sq-km. From east to west the area is over 55 km
wide, not including Casselman.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 9 of 118
Embedded or Host Distributor:
Hydro Ottawa is a market participant, but has a number
of delivery points embedded within Hydro One’s
distribution service territory. Hydro Ottawa is not a host
distributor.
Mailing Address:
3025 Albion Rd North
PO Box 8700
Ottawa, Ontario K1G 3S4
Key Contacts:
Hydro Ottawa
Lynne Anderson
Director, Regulatory Services
Telephone: 613-738-5499 x 527
Fax: 613-738-5498
E-mail: [email protected]
Fraser Milner Casgrain LLP
Helen Newland and Jerry Farrell
Suite 3900
1 First Canadian Place
100 King Street West
Toronto, Ontario
M5X 1B2
Telephone (for Newland): (416) 863-4471
Telephone (for Farrell): (416) 863-4384
Fax (for both): (416) 863-4592
E-mail (for Newland): [email protected]
E-mail (for Farrell): [email protected]
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 10 of 118
Corporate Structure
Schedule 2-2: Corporate Structure
Corporate Organization Chart
City of Ottawa
Hydro Ottawa
Holding Inc.
Hydro Ottawa
Limited
Energy Ottawa
Inc.
Telecom Ottawa
Holding Inc.
2038455 Ontario Inc.
Telecom Ottawa Regional Limited
Telecom Ottawa
Limited
Figure 2.1 – Corporate Structure
Affiliated Businesses and Corporate Services
Hydro Ottawa is a wholly owned subsidiary of Hydro Ottawa Holding Inc. (the “Holding Company”),
which in turn is wholly owned by the City of Ottawa.
Hydro Ottawa and the City of Ottawa conduct their transactions on an arm’s length basis. The City
purchases electricity and street lighting design services from Hydro Ottawa. The Hydro Ottawa
debt to the City of Ottawa was replaced with debt from the Holding Company (as a result of an
external bond issue) during 2005; therefore Hydro Ottawa is no longer making interest payments to
the City of Ottawa. Hydro Ottawa pays property taxes, permit fees and water and sewer charges as
a business operating within the City limits.
The principal business of the Holding Company is the oversight of Hydro Ottawa and two other
subsidiaries, Energy Ottawa Inc. and Telecom Ottawa Holding Inc., which also provide services to
the residents of Ottawa.
The role of the Holding Company is to:



Assess the strategic value of the business activities of each subsidiary,
Evaluate the performance of each subsidiary,
Provide strategic direction to the subsidiaries on matters of financing, risk mitigation,
taxation, laws and regulations, public affairs, human resources, and business development,
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 11 of 118


Provide financing for subsidiary operations, and
Report to the Shareholder and Board of Directors on financial, governance, legal,
compensation and internal control matters.
The Holding Company charges Hydro Ottawa for corporate services provided by the CEO, CFO,
Corporate Counsel and Internal Audit business units. In addition, the Holding Company charges
Hydro Ottawa interest for borrowings undertaken under corporate borrowing arrangements as
follows:



Interest on the first $200 million of long-term borrowings is charged at 5.14%. This includes
administrative costs associated with maintaining this debt and the costs of issuing this debt,
Interest on the next $32 million of long-term borrowings is charged at 5.9%,
For short-term borrowing, Banker’s Acceptances are charged at 0.1% above the rate
charged by the bank to cover standby, stamping and other fees associated with maintaining
this facility.
The Holding Company pays Hydro Ottawa for:



Human Resources Services, including administration of pay and benefits, processing of
incentive bonuses, production of T-4s, OMERS year-end, reconciliation of employee health
tax, implementation of annual government-imposed rates, documentation of new employees
and regular maintenance activities,
Facilities Management Services, including operations and office services, workspace
provisioning, the procurement, maintenance and disposal of fixed assets, emergency
preparedness and special facilities projects as required,
Information Technology Services, to provide the IT infrastructure systems and services
required for the business continuance needs of the Holding Company, including IT Help
Desk, Technical Support, Network Management Services, Telecommunications Support
Services and Applications Support Services.
Energy Ottawa Inc. (“Energy Ottawa”) is a licenced generator that produces EcoLogo certified
“green power” from hydroelectric generating stations at Chaudière Falls on the Ottawa River near
Parliament Hill. Energy Ottawa charges Hydro Ottawa for power purchased at market prices.
These costs are included in the cost of purchased power and therefore are not considered when
determining Hydro Ottawa’s distribution costs.
Energy Ottawa pays Hydro Ottawa for:




Furniture rental and property taxes,
Human Resources Services, including administration of pay and benefits, processing of
incentive bonuses, production of T-4s, OMERS year end, reconciliation of employee health
tax, implementation of annual government-imposed rates, documentation of new
employees, and regular maintenance activities,
Information Technology Services including IT Help Desk, Technical Support, and
Applications Support Services,
Meter Data Services including MV90 Translation, Lodestar LPSS and Lodestar I Care, Web
Portal Data Services, Data Repository Services and PeopleSoft CIS billing services,
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 12 of 118

Planned maintenance and emergency repair services for Chaudière Generating Stations
Units 2 and 4.
Telecom Ottawa Holding Inc. (“Telecom Ottawa”) is a specialized telecommunications carrier
providing broadband services mainly to public institutions in the City and Internet services in Ottawa
and other parts of Eastern Ontario. Telecom Ottawa carries out its activities through three
operating subsidiaries: Telecom Ottawa Limited, Telecom Ottawa Regional Limited and 2038455
Ontario Inc. Telecom Ottawa provides Hydro Ottawa with the lease of dark fiber.
Telecom Ottawa pays Hydro Ottawa for:





Human Resources Services, including benefit enrolment, change requests, inquiries and
monthly billing of premiums together with associated maintenance activities and provision of
Human Resources advice upon request,
Facilities Management Services, including operations and office services, operation costs
for utilities, emergency preparedness and special facilities projects as required,
Supply Chain Services including Procurement Services; Supplier Relationship Management;
Materials Management; Surplus Material and Equipment Sales,
Pole and duct rentals,
Information technology services including financial services (JDE application), technical
support, and applications support services.
Work performed by Hydro Ottawa for the affiliated companies is done predominately on the basis of
Service Level Agreements (SLAs). Standard work orders, to recover Hydro Ottawa’s actual costs,
are used occasionally for minor work not included in SLAs.
Details with regard to pricing and dollar value of services provided to Hydro Ottawa by its affiliates
and included in its distribution costs are provided in Schedule 6-8: Distribution Expenses Paid to
Affiliate(s).
Audited Financial Statements
Included as Schedule 2-3 in Tab E of the Application Binder are financial statements for Hydro
Ottawa for 2002, 2003 and 2004.
Compliance with Licence
Hydro Ottawa is not exempted from any conditions of its licence and does not have any special
conditions in its licence.
Complete Listing of Rates and Charges
Schedule 2-4 provides a complete listing of all current regulated charges approved by the Board.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 13 of 118
Schedule 2-4: Complete Listing of Current Rates and Charges
Customer Classification
Unit Of Measure
Rate
kWh
kWh
kWh
$0.050
$0.058
$0.0057
kWh
kWh
kWh
per customer / month
kWh
$0.0050
$0.0062
$0.00694
$5.98
$0.0171
kWh
kWh
kWh
$0.050
$0.058
$0.0052
kWh
kWh
kWh
per customer / month
kWh
$0.0045
$0.0062
$0.00694
$6.78
$0.0159
kWh
kW
kW
kWh
kWh
Spot Market
$2.1218
$1.7882
$0.0062
$0.00694
per customer / month
kW
$201.63
$2.39
kWh
kW
kW
kWh
Spot Market
$2.2535
$1.9603
$0.0062
kWh
per customer / month
kW
$0.00694
$201.63
$2.39
Residential
Electricity Charge – Tier 1
– Tier 2
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
General Service less than 50 kW
Electricity Charge – Tier 1
– Tier 2
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
General Service 50 kW-1000 kW non-interval
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
General Service 50 kW-1000 kW interval
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 14 of 118
Customer Classification
Unit Of Measure
Rate
kWh
kW
Spot Market
$2.2508
kW
kWh
kWh
per customer / month
kW
$1.9763
$0.0062
$0.00694
$201.63
$2.39
kWh
kW
kW
kWh
Spot Market
$2.2508
$1.9763
$0.0062
kWh
per customer / month
kW
$0.00694
$3,087.06
$2.04
kWh
kW
kW
kWh
kWh
per customer / month
Spot Market
$2.4952
$2.2417
$0.0062
$0.00694
$11,675.71
kW
$2.39
kWh
kW
kW
kWh
Spot Market
$1.6083
$1.4113
$0.0062
kWh
per connection/month
kW
$0.00694
$1.23
$6.65
kWh
kW
Spot Market
$1.6002
kW
kWh
kWh
per connection/month
kW
$1.3824
$0.0062
$0.00694
$0.26
$2.29
General Service 1000 kW – 1500 kW
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
General Service 1500 kW – 5000 kW
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
Large Use greater than 5000 kW
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
Sentinel Lighting
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
Street Lighting
Electricity Charge
Transmission Network Charge
Transmission Connection Charge
Wholesale Market Charge
Debt Retirement Charge
Hydro Ottawa Fixed Charge
Hydro Ottawa Variable Charge
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 15 of 118
Customer Classification
Unit Of Measure
Rate
Account Set-up Charge
Arrears Certificate
Each
Each
$8.40
$10.00
Dispute Involvement Charge
Reconnection – seasonal service
Late Payment
Returned Cheque Charge
Collection of Account Charge
Special Meter Reading – successful
Each
Each
Each
Each
Each
Each
$5.00
$175.00
1.5%
$11.00
$5.00
$20.00
Special Meter Reading – unsuccessful
Reconnection during regular working hours
Reconnection after regular working hours
Temporary Service – Installation and removal
Transformer Ownership Credit < 115 kV
Transformer Ownership Credit > 115 kV
Each
Each
Each
Each
kW
kW
$10.00
$20.00
$50.00
$415.00
$0.45
$1.56
Unmetered Scattered Loads
Billed same as GS < 50 kW
Miscellaneous Charges
Dry Core Transformer Loss Charge
See Table A.4
Table 2.1 – Current Rates
Summary of Application
The following chapters provide a complete summary formatted by the chapters in the Handbook.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 16 of 118
Chapter 3 – Test Year and Adjustments
3.0
Introduction
3.1
Historical Test Year versus Future Test Year
Hydro Ottawa is filing based on Option 4, forward test year. Full documentation is included as
supporting schedules.
3.2
Tier 1 Adjustments
Since Hydro Ottawa is filing on the basis of a forward test year, no review has been completed of
items that would have been Tier 1 adjustments if the historical test year had been adopted.
Amounts forecast for 2006 are summarized under Chapters 4 and 6. Hydro Ottawa is not seeking
approval for any incremental conservation and demand management (CDM) capital or operating
expenditures in 2006 beyond the amount already approved in the RP-2004-0203 proceeding.
However, the 2006 capital additions resulting from the previously approved plan have been added
to the rate base.
Tier 1 Adjustments: Distribution Expenses
N/A
Tier 1 Adjustments: Rate Base
N/A
Non-routine/unusual Tier 1 Adjustments
N/A
3.3
Tier 2 Adjustments
N/A
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 17 of 118
Chapter 4 – Rate Base
4.0
Rate Base
Hydro Ottawa has separated its assets into Distribution Assets and Non-Distribution Assets as
required by the Board. Non-Distribution Assets include Construction-Work-in-Progress (CWIP), a
small amount of property used for other than distribution activity and a small number of Sentinel
Lights inherited from its predecessor utilities. Hydro Ottawa does not have an active Sentinel Light
program of its own.
Assets
Distribution Assets
Land and Buildings
TS Primary Above 50
Distribution Stations
Poles, Wires
Line Transformers
Services and Meters
General Plant
Equipment
IT Assets
CDM Expenditures and Recoveries
Other Distribution Assets
Contributions and Grants
Amortization
Non-Distribution Assets
2006 Ending
Balance
$13,853,124
$30,838,797
$45,308,801
$438,179,454
$132,015,054
$118,773,521
$48,381,242
$37,726,381
$68,163,793
$2,616,912
$14,442,910
($73,142,036)
($441,208,236)
$18,815,900
Table 4.1 - 2006 Asset Balances before Smart Meters
The amounts listed in Table 4.1 do not include the effects of Smart Meters. Smart Meters are
discussed later in this chapter.
Hydro Ottawa requests that the Board, in its decision on the Application, deem the stations and
associated assets listed below in Table 4.2, which are included in Account 1815 “Transformer
Station Equipment-normal primary over 50 kV”, as Distribution Assets. The Board deemed these
assets to be Distribution Assets by letter on October 3, 2000 with the exception of Hydro Ottawa’s
newest stations, Kanata MTS and Uplands MS (27.6 kV).
On September 24, 2003 the Board authorized Hydro Ottawa to record, for transformation services,
$1.50/kW in its Retail Settlement Variance Account (“RSVA”), Account 1586, for incremental load
delivered through Kanata MTS. Hydro Ottawa is proposing to end this accounting practice
coincident with the inclusion of Kanata MTS in Hydro Ottawa’s distribution rate base in 2006.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 18 of 118
Station
Description
Epworth DS
115 kV to 8kV Distribution Substation
115 kV to 8kV Distribution Substation
Merivale DS
115 kV to 8kV Distribution Substation
Manordale DS
115 kV to 8kV Distribution Substation
Centerpointe DS
115 kV to 8kV Distribution Substation
Uplands MS 8 kV
115 kV to 27.6kV Distribution Substation
Uplands MS 27.6 kV
115 kV to 27.6kV Distribution Substation
Limebank MS
115 kV to 27.6kV Distribution Substation
Moulton MS
115 kV to 27.6kV Distribution Substation
Marchwood MS
115 kV to 27.6kV Distribution Substation
Bridlewood MS
230 kV to 27.6kV Distribution Substation
Kanata MTS
Table 4.2 –Stations to be included as Distribution Assets
Hydro Ottawa’s net fixed distribution assets for inclusion in the 2006 rate base, prior to the inclusion
of Smart Meters, are $415,346,705. The working capital allowance to be included in the rate base is
$93,110,929. As a result, Hydro Ottawa’s rate base for 2006 is $508,457,634 without Smart Meters.
2006 Rate Base - without Smart Meters
Adjustment
2005 closing net asset balance
2006 capital additions (net of contributed capital)
2006 Amortization
Net Additions
Rate Base
$394,743,692
$75,392,926
($34,186,901)
$41,206,025
2006 closing net asset balance
$435,949,717
2006 Average net asset balance
$415,346,705
Working Capital Allowance
Total 2006 Rate Base
Table 4.3 –2006 Rate Base without Smart Meters
2006 EDR Application
$93,110,929
$508,457,634
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 19 of 118
Smart Meters
The details of Smart Meter implementation are not final because the Minister of Energy has not yet
responded to the Board's report to him entitled "Smart Meter Implementation Plan Report" dated
January 26, 2005. Hydro Ottawa has nevertheless used the Board's report, including the
implementation plan, as the basis for its forecast of Smart Meter costs for 2006. If the Minister
decides on a different implementation plan, however, Hydro Ottawa would need to adjust its
forecast accordingly.
As part of Hydro Ottawa’s approved CDM Plan, work is underway to deploy 200 residential Smart
Meters in the fall of 2005 and 730 commercial Smart Meters, for customers with a peak demand
greater than 200kW, by the end of first quarter of 2006. The costs of these specific conversions are
not included in Hydro Ottawa’s 2006 revenue requirement as they were previously approved as part
of Hydro Ottawa’s CDM plan.
The conversion schedule for 2006 to 2010 includes 100% of General Service customers greater
than 50 kW and 40% of residential customers by December 31, 2007. The customer data used to
arrive at the number of meters to be deployed in each customer class is from Hydro Ottawa’s 2006
customer forecast in Tab D of the Application Binder.
The residential and small commercial Smart Meter cost was taken from the Board’s Smart Meter
Implementation Plan Report, notes to Appendix C-2, Table 2. The incremental operating cost was
also based on the Board’s report, which listed a monthly operating cost of $1.42 per month less
$0.39 per month operating benefits, as stated in Appendix C-2, Table 2. The Smart Meter
expenditures that are incremental to Hydro Ottawa’s CDM Plan are as follows:
Expense
Dollars
Capital expenditures meters installed:
$
16,316,650
Less depreciation @ 15 years (with half-rate rule) $
543,888
Net increase in distribution assets:
$
15,772,762
Incremental operating costs:
Depreciation expense:
Incremental operating expense:
$
$
$
744,895
543,888
1,288,783
Table 4.4 –Smart Meter Costs
Table 4.5 summarizes Hydro Ottawa’s final proposed 2006 rate base with Smart Meters included.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 20 of 118
2006 Rate Base - with Smart Meters
Adjustment
2005 closing net asset balance
2006 capital additions (net of contributed capital)
2006 Amortization
Rate Base
$394,743,692
$91,709,576
($34,730,789)
Net Additions
$56,978,787
2006 closing net asset balance
$451,722,479
2006 Average net asset balance
$423,233,086
Working Capital Allowance
Total 2006 Rate Base
$93,222,664
$516,455,750
Table 4.5 –2006 Rate Base with Smart Meters
New distribution stations put into service in 2002, 2003 and 2004
Included in Hydro Ottawa 2004 closing asset balances are two distribution stations that were built in
2002 through to 2004.
Kanata MTS
Unprecedented load growth through the 1990’s in the former City of Kanata prompted Kanata
Hydro to commission a study of supply facilities to ensure reliable power for the future. The study,
completed October 1998, concluded that additional transformation capacity would be required prior
to the summer 2002 peak.
Kanata Hydro and Ontario Hydro conducted a joint study of supply facilities through the remainder
of 1998. The conclusions, endorsed by Hydro One in 1999, confirmed that a Kanata Hydro owned
230kV/27.6 kV municipal transformer station (MTS) was the preferred option. However, a detailed
and updated analysis of load growth concluded the in-service date for the station had advanced to
summer 2001.
Elecsar Engineering was retained for a detailed engineering design in January 2000. The
amalgamation in November 2000 and changes in the structure of Ontario Hydro (property
management approvals) delayed approval for the station land. Phase one of Kanata MTS was
constructed in 2001 – 2002 and phase two, in 2003 – 2004. The present net book value of the new
station is $6,317,579.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 21 of 118
Uplands MS
In 1998, supply planning began at Gloucester Hydro for the proposed Ottawa International Airport,
and the redevelopment of the Uplands Military base. Key issues included high reliability for the
airport, additional capacity for projected redevelopment of the Uplands base, voltage conversion,
and the ultimate retirement of the existing 115kV/8 kV station.
With amalgamation the added benefits including:



The establishment of a reliable 27.6 kV supply to service new commercial customers in the
former Ottawa Hydro territory,
Future off-loading of some large existing 13 kV customers, and
The creation of a tie between the Gloucester Hydro and Nepean Hydro circuits across the
Rideau River to support significant load growth in the south.
Uplands MS was commissioned in July 2003. The present net book value of the new station is
$2,979,925.
Customer Information System (CIS)
Since its formation on November 2000, Hydro Ottawa has faced and resolved a series of issues
related to the provision of customer care services to its customers. In particular, timelines for the
opening of the new electricity market forced the implementation of an interim CIS solution in order
to meet the “market opening date” and the new Market Rules. Subsequently, Hydro Ottawa
deemed it reasonable to select and install a different and more effective CIS in order to offset the
instability, performance issues, and operating costs of the interim solution. This has significantly
improved customer service and avoided the high operating cost of continuing an unstable customer
care environment.
Throughout this process, Hydro Ottawa has closely controlled both capital costs and annual
operating costs per customer, as shown in Table 4.6. Hydro Ottawa believes these costs are very
reasonable given the circumstances in which they were incurred. A full CIS review is included in
Tab C of the Application Binder.
Item
Former (AUS) CIS
Implementation
New (PeopleSoft) CIS
Implementation
Total
Table 4.6 – CIS Expenditures
Capital
($ Millions)
Annual Operating
Cost/ Customer ($)
$7.3
$60.36
$20.8
$54.14
$28.1
Hydro Ottawa has already fully amortized the capital costs of the AUS CIS implementation. Its 2006
rate base therefore does not include any amounts for this system. Hydro Ottawa has included the
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 22 of 118
full capital cost of the PeopleSoft implementation, amounting to $20.8 million, together with
accumulated amortization. Hydro Ottawa believes that this treatment of the new CIS is very
reasonable under the circumstances.
Light Rail Transit Line (LRT)
The City of Ottawa is proposing an expansion of its rapid transit network with the construction of a
north – south transit line from the downtown core to the south Nepean sector and the MacdonaldCartier Airport, and an east-west transit line from the Kanata sector to Orléans. The environmental
assessment for both lines is currently underway. The City has targeted summer 2006 for start of
construction on the north-south line, with completion by the Fall of 2009. The environmental
assessment for the east-west line is scheduled to be completed by the Fall of 2006, with
construction to follow. The City has initiated preliminary discussions with Hydro Ottawa on
requirements for the relocation of existing distribution plant. Since the impact on Hydro Ottawa of
this project is still being assessed, no capital or operating expenses resulting from the LRT project
have been included in the Application. However, the impact of this project on Hydro Ottawa could
be extensive, and Hydro Ottawa will evaluate the financial and other implications once project
definition is finalized.
4.0
Amortization Rates
Hydro Ottawa has adopted the amortization rates as set out in the Appendix B of the Handbook.
The rates set out in Appendix B have an asset type for Account 1920 described as Computer
Equipment: Hardware, which depreciates over five years. There is no asset type included for
Computer Equipment: Software. Since no guidance was provided in the Accounting Procedures
Handbook or the 2000 Electricity Distribution Rate Handbook on the amortization of computer
software, Hydro Ottawa conducted its own review.
For smaller software items, Hydro Ottawa has adopted five years as a reasonable estimate for the
life of most software. However, given the September 2004 implementation of a new CIS, Hydro
Ottawa felt it prudent to complete a review to determine an appropriate amortization rate consistent
with General Accepted Accounting Principles (GAAP) for this specific asset, which is distinct in
nature. As a result of this review, Hydro Ottawa is currently amortizing its CIS over 10 years. This
approach was reviewed by Hydro Ottawa’s external auditors and was considered appropriate for
GAAP in accordance with industry standards.
Table 4.7 summarizes the expected capital depreciation expense for assets that are expected to
exist at the end of 2006. This amount is made up of actual amounts incurred as at the 2004-year
end and capital additions included in the Application.
Amortization
on 2004
Assets
2006
$28,548,706
Amortization
Table 4.7 – Amortization
2006 EDR Application
Amortization on
2005 Asset
Additions
$ 3,503,375
Amortization on
2006 Asset
Additions
$ 2,134,821
Total
$ 34,186,901
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 23 of 118
4.1
Capital Investments
Summary
Hydro Ottawa is submitting its Application on the basis of a forward test year. The Hydro Ottawa
capital budget is divided into three categories; demand capital, sustainment capital and general
plant capital (as per the Board’s definition). The distinction between the first two categories is based
on the following definitions:
Demand Capital - Activity done to address external requests for connection to, or relocation of,
Hydro Ottawa’s distribution system plant, or to repair equipment damaged by external parties.
These activities result in a repair, relocation, change or expansion of the Hydro Ottawa distribution
system. External parties may be a regulator, a road authority, a developer or individual customers.
Hydro Ottawa is required to provide timely service for these activities.
Sustainment Capital - Activity done to enhance, strengthen or support, the Hydro Ottawa
distribution system so it may continue to function as intended. Activities include installation,
reinforcement, betterment, extension, relocation, or replacement of Hydro Ottawa owned electrical
distribution plant mainly driven by recurring or imminent system failures, capacity constraints, or
general growth. These activities are driven by an internal asset management strategy and not by
external parties.
The following table summarizes Hydro Ottawa’s actual and planned distribution capital additions for
2004 to 2006.
2004
Land and Buildings
TS Primary Above 50
DS
Poles, Wires
Line Transformers
Services and Meters
General Plant
Equipment
IT Assets
CDM Expenditures and Recoveries
Other Distribution Assets
Contributions and Grants
Capital Additions Net of Contributed
Capital
($5,818)
6,929,865
(291,413)
23,245,014
7,317,881
8,858,886
6,024,280
2,476,729
32,550,202
153,653
(32,693)
(7,535,965)
2005
$1,394,251
1,858,539
2,406,403
25,728,063
7,283,222
13,760,814
11,505,521
4,360,784
7,711,868
1,043,247
941,151
(13,084,000)
2006
$1,145,880
2,779,332
5,862,095
25,961,938
9,584,541
9,098,665
5,448,440
4,911,907
11,644,926
1,420,012
4,316,725
(6,781,536)
$79,690,620
$64,909,863
$75,392,926
Table 4.8 – Capital Additions
Note – negative values in 2004 relate to year over year changes in construction work-in-progress (CWIP)
The numbers in Table 4.8 do not include the Smart Meter impact. Smart Meters are discussed
separately in section 4.0.1
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 24 of 118
All of Hydro Ottawa’s capital forecasts have been prepared in accordance with the minimum
grouping of accounts from Appendix A of the Handbook. However, Hydro Ottawa internally
organizes its capital program as shown in the following table.
Category
Distribution Demand
Capital Class
Commercial
Infill & Upgrade
Metering
Plant Relocation
Residential
Stations Embedded
Generation
System Expansion
Distribution Sustainment
Distribution Asset
Distribution Automation
Distribution Enhancement
Damage To Plant
Station Sustainment
Stations Asset
Stations Automation
Stations Capacity
Stations Enhancement
General Plant
GIS/OMS Project
CIS Project
Control Room
Modernization
Buildings - Facilities
Fleet Replacement
IT Infrastructure
Tool Replacement
Program
PC/Software/Servers
SCADA
Misc.
Table 4.9 – Capital Program Structure
Asset Management Strategy
The following describes in general the process used to develop the asset plans for each asset
class. This single-asset plan is referred to as an intermediate program. The intermediate program
for each asset class addresses the following major objectives:

Identify a desired level of service and customer costs,

Develop a long-term, sustainable plan for asset replacement,
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 25 of 118

Provide inputs to the final asset management optimization process, including a cost-benefit
analysis consistent with all other assets.
Hydro Ottawa’s asset management process uses relevant information about the asset such as
condition, criticality, and cost, along with important drivers from Hydro Ottawa, such as level of
service, corporate values, and regulatory requirements, in a quantitative way to develop a program
for each asset class. Figure 4.1 below illustrates process.
Asset Evaluations
Consequence
Cost
Asset Condition
•
•
Risk
Matrix
Equipment
Class Risk-Cost
Asset
Demographics
Condition/Failure
Correlation
Consequence
Costs
Functional
Issues
H ig h
•
INCREASING
RISK-COST
Me d
•
Lo w
G oo d
F air
Po or
C o n d itIndex
io n In d ex
Health
Risk & Economic
Evaluation
Evaluation of
other drivers
•
•
•
DRIVERS
Corporate Values
Economic/Financial
Constraints
Environmental and
Safety
Resource
Capabilities
Regulatory
Requirements
Superseding
Programs
Benchmarking
Intermediate Program
Figure 4.1 – Asset Management Process
The existing utility data was maximized by thoroughly considering existing input data, by
supplementing the data with engineering estimates where needed, and by benchmarking to industry
standards and practices.
The application of this asset management process for each asset class will be instrumental for
ensuring desired performance at minimum cost over the long term. It is understood that some
assets must be addressed each year in order to minimize life-cycle cost and maintain the value and
performance of the entire asset class. The asset management process helps to determine the
optimum intervention strategy and provides justification for it.
Each asset program explicitly considers risk in a quantitative way, based on the condition of the
assets in the class and the consequences of their failure. Consequences include not only the costs
to Hydro Ottawa for repair, but also estimates of the costs to Hydro Ottawa’s customers in the form
of outages and safety and environmental effects. The program is based on a least-cost method of
optimizing replacement rate.
Inputs related to condition, failure rate, and consequences of failure will continue to be developed.
Additional data will produce more precise programs in terms of the optimal intervention strategy as
well as the costs of delaying intervention. The process will be significantly enhanced and expanded
with the completion of the new Geographic Information System (GIS) scheduled for final completion
in 2006.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 26 of 118
Plan Results for Selected Programs
The above described process was applied to four of Hydro Ottawa’s major asset classes; namely
Wood Poles, Underground Cables, Station Transformers, Station Switchgear. (It was also applied
to Vegetation Management; see Chapter 6.) These results are described in detail in subsequent
sections. Figure 4.2 below shows the collective optimized 20-year funding needs for these asset
classes based on their recommended programs.
Optimized Asset Program
45
40
35
Vegetation
St. Swgr
St. Xfmr
Cables
Wood Poles
$M
30
25
20
15
10
5
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
0
Year of Spending
Figure 4.2 – Optimized Funding Needs for Selected Asset Programs
Conclusions
Indications are that a large volume of the Hydro Ottawa distribution assets are nearing end-of-life
requiring increasing amounts of capital replacement/refurbishment expenditures over the next
twenty years. The Hydro Ottawa Sustainment Budget will contain these capital programs.
The proposed spending in these asset classes for 2006 totals approximately $14.0 million. Hydro
Ottawa’s proposed capital additions are lower than those supported by the results of the asset
management process. Hydro Ottawa has chosen a conservative approach for 2006; however, it will
continue to evaluate its asset plans to ensure these asset programs are sufficiently funded to
reduce the impact of large expenditures projected.
Facilities Asset Strategy
Following the amalgamation of the five predecessor utilities in 2000, Hydro Ottawa began to
develop a realty plan that would support its new strategic direction and organizational structure. A
decision was made within Hydro Ottawa to establish various satellite work centers throughout its
service territory. This has improved customer response times and overall workforce productivity by
reducing vehicle travel time. This strategy is a direct result of the large size of Hydro Ottawa’s
service territory and its diverse urban/rural mix. With over 55 km from east to west, travel time to
work sites by field crews from a central facility would have been excessive.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 27 of 118
This realty strategy included the need for consolidation of supply chain warehousing, emergency
control centers, vehicle repair facilities and the construction and renovation of new and existing
work centers. Rationalization of these properties was accompanied by reductions in inventory,
standardization of materials and improved dispatching of resources.
There are five main work centers occupied by Hydro Ottawa, which are located at Albion Road,
Merivale Road, Bank Street, Maple Grove Road and Carling Avenue. There have been renovations
made to the Merivale Road, Maple Grove Road and Carling Avenue facilities as part of the overall
plan to redistribute the workforce throughout Hydro Ottawa’s service territory. This has resulted in a
significant reduction of field staff operating from the Albion Road work center. The disposal of this
property in favour of a smaller, less costly administrative facility is being considered for 2007. The
construction of the east-end operations work center to replicate the Maple Grove Road work center
in Ottawa west will begin in 2006.
Capital Programs/Projects
Schedule 4-1 provides a list of 2006 programs and projects exceeding the materiality threshold.
Detailed descriptions of these projects are provided following Schedule 4-1.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 28 of 118
Schedule 4-1: Capital Expenditures
Projects Over Materiality of $300,000
Residential Subdivision
Dist. Transformer Replacement
Distribution Enhancements
Planned Pole Replacement
New Commercial Development
New Cyrville Substation
Plant Relocation & Upgrade
System Expansion
EOL Cable Works
Station TXF Refurbishment
Infill & Upgrade
Station Circuit Breaker Control Refurbishment
Meter Replacement and Re-verification
Stations Switchgear Replacement
Vault Rehab or Removal
Wholesale Meter Upgrade
Plant Failure Capital
Damage to Plant
Elbow and Insert Replacement
Insulator Replacement Program
Distribution Automation
Station Transformer PCB Removal
Substation Automation
O/H Equipment New and Rehab
East End Operation Centre
GIS & OMS Systems
SCADA & Control Room Upgrades
Vehicle Replacements
Bank Street Office Rehabilitation
CIS Software Enhancements
Merivale Road Office Additions
Albion Road Office
Carling Operations Centre Storage Building
Station Building Rehabilitation
Upgrade of JDE Financial System
Business Continuity Plan
Conservation & Demand Management
Class
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
Distribution Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
General Plant
CDM Capital
2006 $
In-Service
Amount
Date
$6,939,884
2006
$6,601,265
2006
$6,522,466
2006
$5,879,898
2006
$4,330,881
2006
$4,061,259 2008*
$2,874,076
2006
$2,789,377
2006
$2,128,956
2006
$1,989,510
2006
$1,859,220
2006
$1,695,999
2006
$1,301,511
2006
$1,101,796
2006
$1,006,709
2006
$930,318
2006
$698,934
2006
$558,921
2006
$553,478
2006
$475,198
2006
$464,867
2006
$422,920
2006
$385,921
2006
$278,901
2006
$7,026,078 2007*
$4,901,719
2006
$3,019,289
2006
$2,589,689
2006
$1,981,694
2006
$1,819,600
2006
$1,278,083
2006
$905,245
2006
$615,715
2006
$572,940
2006
$571,651
2006
$315,117
2006
$1,420,012
2006
Table 4.10 – Capital Projects
* In-service dates beyond 2006 indicate cost will be Construction-Work-in-Progress (CWIP) in 2006 (except
land).
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 29 of 118
4.1.1.1 Residential Subdivision ($6,939,884)
Description
Residential developments are new residential subdivisions requested by owners/developers, which
Hydro Ottawa is obligated to connect. It does not include secondary “in-fill” type services. The
capital expenditures of $6,939,884 are partially funded by developers through contributions in aid of
construction, as determined by the requirements of the Distribution System Code. Only the net
between the capital expenditures and the contributions are included in Hydro Ottawa’s rate base.
Demographics
The majority of the residential work is in the west, south and east suburbs of Ottawa. Growth since
2000 has been high.
The Strategy
Residential development is primarily dependent on the local economy. The City of Ottawa is
projecting an average growth rate of 3% over the next year. However, the City’s 2004 actual was
1.6%, 1.4% below projection. Hydro Ottawa is conservatively budgeting for a 1.7% growth rate in
2006, and approximately 3800 new homes.
The Plan
The expected cost of new residential development is based on historical levels, projected growth
rate, 2005 project carry-over, and potential 2006 project inquiries.
4.1.1.2 Distribution Transformer Replacement ($6,601,265)
Description
Distribution transformers are used to reduce higher distribution voltages to low voltages used in
commercial and residential buildings. Distribution transformers that contain PCBs, show visible
signs of leaking, or are known to pose a safety risk are scheduled for replacement with newer and
safer units. Typically, each distribution transformer services approximately 12 residential customers,
fewer if used for commercial applications.
Demographics
Hydro Ottawa has an estimated 36,000 distribution transformers in both overhead and underground
applications.
The Strategy
The strategy for 2006 is to replace transformers that contain mineral oil with PCBs, have visible
signs of oil leakage, or are of a pad-mounted “live-front” design. A distribution transformer survey
for levels of PCBs will commence in 2005 and be completed in 2006. It is estimated (based on
historical figures) that 6% of the distribution transformers inspected will contain low-level PCBs. As
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 30 of 118
well, some will show visible signs of leakage and hence, pose a safety and/or environmental
concern. Overall it is estimated that 540 units per year will require replacement over the next five
years.
The Plan
The plan is to replace the identified transformers on a scheduled program over the next four years
(2006-2009) with any remainder being completed in 2010. The replacement of distribution
transformers is evaluated in conjunction with other project such as cable replacement to ensure
coordination between plans.
4.1.1.3 Distribution Enhancements ($6,522,466)
Description
Per the Board’s definition, “Distribution Enhancements” represent projects that modify an existing
distribution system for the purpose of improving system-operating characteristics such as reliability
or power quality or for relieving system capacity constraints that could result from general load
growth.
Demographics
Hydro Ottawa’s service area now comprises approximately 800 overhead and underground feeders
emanating from approximately 70 substations. Distribution voltages range from 44kV down to 4kV.
The Strategy
Projects are identified through two means:
 Joint reviews with Hydro One regarding bulk supply issues such as station capacity,
 Internal studies of distribution system supply reliability; future load growth, feeder loading,
and station loading.
The Plan
Distribution Enhancements for 2006 include the following program categories:
 Cyrville-Orleans overhead trunk tie,
 Minor line extensions (overhead or underground),
 Fallowfield-Greenbank 44kV tie,
 South Urban trunk extension,
 Circuit load balancing,
 Kanata Eagleson south 27.6kV trunk tie,
 Trunk ties between stations or feeders for contingency and load relief,
 New egress feeders from stations,
 Vault space easements,
 Additions or extensions of System Neutral wires,
 Voltage Conversion,
 Animal guards on the distribution network.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 31 of 118
4.1.1.4 Planned Pole Replacement ($5,879,898)
Description
Wood poles are used by Hydro Ottawa for most of its overhead electrical distribution system. They
are used to support the distribution conductors, pole-top transformers, and other equipment related
to the distribution system.
Demographics
Demographic information comes from two sources: a survey from 1996 of the poles within the
former City of Ottawa, and a more recent 2004 survey of the poles in the surrounding areas. For
each pole, these surveys note the pole’s GPS coordinates, number and type of circuits attached to
each pole, condition based on a visual inspection, and the other attachments such as guy wires,
communication cables, and transformers.
Pole condition is scored from 1 (very good) to 5 (very poor) based on criteria established by Hydro
Ottawa. Figure 4.3 below shows the distribution of poles by condition.
The results show a very large concentration of poles in the middle (3) condition range, more
towards the good end (1) than the poor (5). This reflects that most of Hydro Ottawa’s poles show
slight deterioration and are between 20 and 35 years old. Typically these poles would have about
15 to 30 years remaining of their useful lifetime.
Wood Poles
Summary of Condition
30,000
Number of Poles
25,000
20,000
1996 Survey
GIS Survey
15,000
10,000
5,000
0
1
2
3
4
5
Condition Category
Figure 4.3 – Wood Poles Condition Distribution
The Strategy
The strategy for the asset management intermediate program for the wood poles includes the
following major objectives:
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 32 of 118

Develop a long-term, sustainable plan for wood pole replacement,

Identify the desired level of service and customer costs,

Optimize plan on the formal asset management process with a cost-benefit analysis
consistent with all other assets.
The asset management process is used to determine the optimum rate of replacement for wood
poles and provides consistent justification.
This program explicitly considers risk in a quantitative way, based on the condition of the asset and
the consequences of its failure. Consequences include not only the costs to Hydro Ottawa for
repair, but also estimates of the costs to Hydro Ottawa’s customers in the form of outages, safety
and environmental impacts. The program is based on a least-cost method of optimizing
replacement rate.
The Plan
The asset management process results in an economically optimized plan for each group of poles
in the risk matrix. This optimal schedule is then adjusted to create a cost effective and sustainable
replacement program. The program is shown in Figure 4.4 below.
Figure 4.4 – Wood Poles Replacement Program
The figure shows that the optimal replacement rate in the future, starting in about year 2015,
increases significantly. This increase is caused by the concentration of poles in the middle range of
the condition distribution shown above. There is some uncertainty around projections of end-of-life
this far into the future, but prudence suggests that the levelized program today should take into
account the expectation that a large number of poles will require replacement within the planning
horizon (20 years).
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 33 of 118
This plan is based on managing risk, rather than on avoiding it. As such, there still exists in this
program some residual risk. In general, these risks can be managed in at least two ways: a) by
tracking the cost of the program and verifying its benefits over time; and b) by re-evaluating the
program periodically with updated information and adjusting it as needed.
The rate shown above for 2006, about 450 poles per year, is higher than the historical rate of pole
replacement at Hydro Ottawa. The peak replacement needed in 2016 is within the planning
horizon, which means that the long-term sustainable plan must take into account the need for very
high pole replacement rates in the future.
4.1.1.5 New Commercial Development ($4,330,881)
Description
Commercial developments are new, or upgraded, primary services. These services are at the
request of owners/developers, which Hydro Ottawa is obligated to connect.
Demographics
The majority of the commercial work is in the west, south and east suburbs of Ottawa. Growth since
2000 has been high.
The Strategy
Commercial development is primarily dependent on the local economy. The City of Ottawa is
projecting an average growth rate of 3% over the next year. However, their 2004 actual was 1.4%
below projection. Hydro Ottawa is conservatively budgeting for a 1.7% growth rate in 2006.
The Plan
The expected expenditures by Hydro Ottawa for new commercial development in 2006 is based on
historical levels, projected growth rate, 2005 project carry-over, and potential 2006 project inquiries.
4.1.1.6 Station Capacity - New Cyrville Substation ($4,061,259)
Description
Station Capacity is the program to install new station facilities, which are required to supply growth
in electrical demand. This could involve the installation of an additional transformer at an existing
station, the upgrading of existing transformers to larger ones, or the construction of a new
substation, complete with one or more new transformers. The options available to increase
capacity are subject to several factors, including the available space at existing stations, the
proximity of existing stations to the areas of load growth, equipment limitations at existing stations,
and the availability of suitable land for installing a new station.
Hydro Ottawa does not own all of the substations and related power transformers that supply Hydro
Ottawa load. Hydro One owns many of the larger transformer stations and terminal stations in
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 34 of 118
Ottawa. As a result, when load growth occurs in certain parts of the city, Hydro Ottawa must
consider the option of having Hydro One upgrade their facilities; sometimes this is the only practical
option. If Hydro One is requested to add more transformation to supply a particular area, then it
must perform an economic evaluation of future revenues that it will derive from the Transformation
Tariff that it collects at each of the stations under its ownership. If the present value of this revenue
exceeds the cost of the capacity installation, then Hydro Ottawa is not required to provide a
monetary contribution to the project.
Demographics
Significant growth in demand is possible throughout most of the core, urban and suburban areas of
the City of Ottawa. This is a result of two initiatives of the city government. One is to promote new
residential development, or redevelopment, within the core area of Ottawa. The second is to
encourage commercial and industrial development in the vicinity of the suburban areas. Clear
evidence exists that the first of these initiatives is taking hold with the development community.
Many new high-rise condominium developments have been undertaken in the last few years, and
more are in the planning or construction phase. Infill development also continues in much of the
downtown core.
In the major suburban communities of Kanata/Stittsville, South Nepean, South Gloucester, and
Orleans, single and multi-unit residential development has been strong over the last five years, with
an average of about 5,000 such dwellings being built each year. In these suburban areas,
commercial development remains strong, however major industrial growth in these areas has
generally been slow. A recovery of the high-tech sector could change this situation quickly
however.
The Strategy
The planning staffs of Hydro One and Hydro Ottawa have jointly undertaken a study of the available
capacity at the major supply stations, which provide power to our customers. It has shown that
there currently are loading concerns in the following areas:



Ottawa Core 13 kV Area
Ottawa South East 13 kV Area
Cyrville-Orleans 28 kV Area
The Plan
For the Ottawa Core and Ottawa South East areas, a comprehensive expansion plan will be
developed by the end of 2005. There is a two to three year lead-time for design and approval for
station construction.
In 2006 and 2007 Hydro Ottawa plans to build a new 115 kV to 27.6 kV substation in the Cyrville
area. The 27.6 kV supply area of Cyrville-Orleans is currently fed from two stations, Bilberry TS,
which is owned by Hydro One, and Moulton MTS, which is owned by Hydro Ottawa. Two feeders
at Bilberry TS also supply about 30 MW of Hydro One retail load. The load in this area currently
exceeds the defined planning criteria. As such an additional source of capacity is required. Several
options were examined as part of the joint study. The recommended solution is for a new station to
be built in the Cyrville area. Negotiations are presently underway with the City of Ottawa for land to
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 35 of 118
build this facility. The anticipated in-service date for this new station is 2008, with the acquisition of
the land forecast in 2006.
4.1.1.7 Plant Relocation and Upgrades ($2,874,076)
Description
Plant relocation is largely driven by the City of Ottawa road works program. There typically is some
capital contribution as per the Public Service Works on Highway Act. It does not include work for
others (i.e., where the infrastructure involved is not Hydro Ottawa owned). This work is done at the
request of owners/developers.
Demographics
The work can be all across Hydro Ottawa’s service area depending on the City of Ottawa roadwork
plan.
The Strategy
Plant relocation is primarily dependent on the local economy and on various levels of government
funding. The City of Ottawa has established a road works program for 2006.
The Plan
The expected financial impact on Hydro Ottawa of plant relocation is based on historical levels,
projected growth rate, 2005 project carry-over, and potential 2006 project inquiries.
4.1.1.8 System Expansion ($2,789,377)
Description
Per the Board’s definition, “System Expansion” represents an addition to a distribution system in
response to a request for additional customer connections that otherwise could not be made; for
example, by increasing the length of the distribution system.
Development in areas with no current infrastructure requires expansion to service commercial or
residential development.
Demographics
Activity follows growth and government infrastructure investment patterns.
The Strategy
These projects are largely unpredictable in timing as they are dependent on needs or requests of
external parties.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 36 of 118
The Plan
2006 projects include expansion for the supply of Valour Drive Business Park, Terminal Lands
commercial development, and addressing long-term load transfers. The program proposed is
consistent with past annual programs.
4.1.1.9 End-of-life Cable Works ($2,128,956)
Description
Hydro Ottawa’s underground cable asset class consists of underground cables, splices/joints,
elbows, potheads and terminations at voltage levels of 44 kV and below. This asset class includes
sections of underground cable running from distribution stations to overhead lines and from
overhead lines to transformers and switches. Underground cables are used mainly in residential
areas, and in urban areas where it is either impossible or extremely difficult to build overhead lines
due to aesthetic, legal, environmental or safety reasons. The configuration of the underground
system is mainly loop.
Hydro Ottawa currently manages a system of underground cables with a total length of about 3,100
km operating at voltages of 44 kV and lower. The system consists of approximately 72.5%
residential distribution plastic cables, 9% trunk plastic cables (XLPE), 18.5% lead cables (PILC) and
a very small percentage of butyl rubber cables (EPR).
Demographics
Demographic information for the underground cables has been collected from various sources
included in Hydro Ottawa’s existing condition assessment and maintenance programs. Cable age
and length information is shown in Table 4.10 below.
Materials
Installation
Lead (PILC)
1930s – present
Trunk Plastic (XLPE)
1970s – present
Distribution Plastic
1970s – present
Table 4.10 – Underground Cable Demographics
Total
735 km
310 km
2,250 km
The plastic cable population is composed of older, non-tree-retardant1 plastic cables installed prior
to 1989 and tree-retardant cables installed in 1989 and later. The non-tree-retardant cables are
considered to have a much lower useful life or about 25 years on average while the tree-retardant
cables can be expected to last about 40 years. A summary of the Health Indices for non-treeretardant distribution plastic cables is shown in Figure 4.5. A summary of Health Indices for treeretardant distribution plastic cables is shown in Figure 4.6. The age demographics (based on
identified segments of cable installed) of both types of these plastic cables are shown in Figure 4.7.
Water molecules and other contaminants can cause “water trees”, electrically weak areas in a cable’s
insulation, which can ultimately lead to cable failures. “Tree retardant” refers to cables that resist these water
trees.
1
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 37 of 118
Number of Segments
Non-Tree-Retardant Plastic Cable - Sample
Survey
40
35
30
25
20
15
10
5
0
37
22
Poor
22
Fair
Good
Condition
Figure 4.5 – Plastic Type Underground Cables Condition Distribution (installed before 1989)
# of Segments
Tree-Retardant Plastic Cable - Sample Survey
20
18
16
14
12
10
8
6
4
2
0
19
1
Poor
2
Fair
Good
Condition
Figure 4.6 – Plastic Type Underground Cables Condition Distribution (installed since 1989)
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 38 of 118
Distribution Plastic Cables
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
km of Cable
200
180
160
140
120
100
80
60
40
20
0
Year Installed
Figure 4.7 – Plastic Type Distribution Underground Cable Demographics
The Plan
The asset management process results in economically optimal replacement timing for each cable
type in the risk matrix. This optimal schedule is then adjusted to create a reasonable and
sustainable replacement program. The program for the three cable types is shown in Figure 4.8
below. Plastic cable installed since 1989 does not require replacement within the presently defined
planning horizon (20 years).
Underground Cable Replacement Program
$12,000,000
$10,000,000
Cost
$8,000,000
Distribution Plastic (Type C)
Trunk Plastic (Type B)
$6,000,000
Lead Cable (Type A)
$4,000,000
$2,000,000
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
$0
Year
Figure 4.8 – Levelized Underground Cables Replacement Program (all non-TR plastic and
lead cables)
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 39 of 118
The replacement rates shown in Figure 4.8 are based on optimizing the trade-off between the
increasing risk of failure as the cables age and the benefit of delaying expenditures as long as
possible. As the cables reach their average end-of-life, the rate of failure increases. The optimum
strategy is to replace close to the average end-of-life. This is the strategy for the non-tree-retardant
cable. The last of this cable is to be replaced between 2016 and 2020. The PILC cable has a much
longer life, and the strategy is generally not to replace until failure (the cost shown for PILC in
Figure 4.8 is un-planned replacement).
4.1.1.10
Station Transformer Refurbishment ($1,989,510)
Description
Station transformers are used for stepping the voltage of incoming electric power down from higher
transmission or sub-transmission voltages to lower distribution voltages. The main components of
a station transformer are the bushings where the incoming and outgoing conductors are attached,
the high and low-voltage coils, and the tank that houses the coils and contains the oil used for
insulating and cooling the entire unit.
Demographics
Demographic information for the station transformers has been collected from various sources
included in Hydro Ottawa’s existing condition assessment and maintenance programs. Age and
voltage information are shown in Table 4.11 below.
High
Voltage
13 kV
44 kV
115 kV
230 kV
Total
%
0-10yrs
1
1
4
2
8
4.5%
Age Group
10-20yrs 20-30yrs 30-40yrs 40-50yrs
0
4
107
3
11
11
16
0
10
2
0
4
0
0
0
0
21
11.9%
17
9.7%
123
69.9%
7
4.0%
>50yrs
0
0
0
0
0
0.0%
Total
115
39
20
2
176
100.0%
Table 4.11 – Age and Voltage Demographics
Condition demographics were developed as part of the asset management process. A summary of
Health Indices for the station transformers is shown in Figure 4.9.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 40 of 118
The figure shows that nine of the transformers are assessed to be in poor condition and are
approaching the end of their useful life.
Station Transformer Health Index
Number of Units
(Transformer and Tapchanger)
120
100
80
60
40
20
0
111
52
0
Very Poor
0-30
9
4
Poor
30-50
Fair
50-70
Good
70-85
Very Good
85-100
Health Index Group
Figure 4.9 – Station Transformers Condition Distribution
The Plan
The asset management process results in an economically optimal timing of intervention for each
transformer. The intervention modelled depended on the type of transformer. For high voltage
transformers (>50kV), Hydro Ottawa anticipates replacing them when they reach their economic
end-of-life. For station transformers (<50kV), Hydro Ottawa plans a major rehabilitation including a
rewind rather than full replacement. The optimal schedule of intervention is adjusted to create a
cost-efficient and sustainable replacement program.
The optimal intervention rate is three transformers per year for the next 10 years. Starting in about
year 2017, the number begins to increase. This increase is caused by the concentration of
transformers in the 30-40 year age range shown in Table 4.11.
4.1.1.11
Infill and Upgrades ($1,859,220)
Infill and upgrades are demand-based activities that include new residential and commercial
secondary services not located in new subdivisions or new business parks. This is a demand-based
activity. All costs in the category are customer dependant and estimates are based on historical
levels.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 41 of 118
4.1.1.12
Station Circuit Breaker Control Refurbishment ($1,695,999)
This program consists of upgrading and refurbishing circuit breaker control circuits typically 35
years of age or over. The program includes the installation of new control components and the
upgrading of several features to take advantage of newer more efficient and reliable technology.
The key elements of the program consist of enhancements such as remote controlled recloseblocking schemes to allow for the application of work protection. This will result in improvements in
efficiency for day-to-day operations.
4.1.1.13
Meter Replacement and Re-verification ($1,301,511)
This program covers capital additions for distribution meters for the following:



Replacing meters for service upgrades
Replacing damaged meters as a result of storms, vandalism or fire
Replacing meters during the meter re-verification program.
These capital items are based on historical trends.
4.1.1.14
Station Switchgear Replacement ($1,101,796)
Description
Hydro Ottawa’s Station Switchgear asset class consists of breakers, switches, bus insulation,
support structures, protection and control systems, arrestors, control wiring, ventilation and fuses.
The base unit of this asset class is a switchgear assembly, which includes buswork, feeder
breakers and appurtenances.
Demographics
Hydro Ottawa currently manages approximately 200 switchgear assemblies containing a total of
889 breakers, 66 reclosers and 1,079 switches.
Demographic information for the station switchgear has been collected from various sources
included in Hydro Ottawa’s existing condition assessment and maintenance programs. Switchgear
assembly information is shown in Figure 4.10 below. The figure shows that about 30% of the
devices are over 40 years old, which is generally considered by the industry as the useful length of
life for this equipment.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 42 of 118
Number of Devices
Station Switchgear Age Profile
200
180
160
140
120
100
80
60
40
20
0
196
140
125
120
91
53
52
36
5
46-50 41-45 36-40 31-35 26-30 21-25 16-20 11-15 6-10
12
0-5
Age
Figure 4.10 – Switchgear Demographics
A summary of the Health Indices for station switchgear by assembly is shown in Figure 4.9. This
graph shows that less than 10% of the assemblies are in poor or very poor condition. Given the age
profile of the equipment it would be expected that more assemblies would be in poor condition,
however, positive results are attributable to an effective maintenance and refurbishment program.
Switchgear Health Index
100
Number of Assemblies
100
80
60
42
40
28
20
10
2
0
Very Poor
0-30
Poor
30-50
Fair
50-70
Health Index Category
Figure 4.11 – Station Switchgear Assembly Health Index
2006 EDR Application
Good
70-85
Very Good
85-100
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 43 of 118
The Plan
The asset management process results in economically optimal replacement for the switchgear
assemblies. This optimal schedule is then adjusted to create a reasonable and sustainable riskbased replacement program.
In addition, there are some assemblies facing short circuit levels higher than their rating, which
means the breakers may fail if they are required to open on a fault. These breakers should be
replaced with assemblies with higher ratings.
Two assemblies will be replaced in 2006. Increased switchgear replacement will be required in
future years.
4.1.1.15
Vault Rehab or Removal ($1,006,709)
Description
A vault is an enclosed space containing essentially (one or more) distribution transformers,
switching units, and cable work. It is the point of connection from the high voltage distribution
network to the customers’ electrical distribution system.
This program involves refurbishment of underground vaults in Hydro Ottawa’s service area due to
the age or condition of the assets.
Demographics
Sidewalk Vaults: There were 30 sidewalk vaults (under the road right-of-way) in the downtown core
area (designated area bound by the Ottawa River, Rideau River, Rideau Street, and King Edward
Avenue) with a total of 43 submersible transformers in them. The transformers are at their end-oflife and are rusting.
Other Vaults: There are approximately 1644 indoor vaults in Hydro Ottawa’s service territory. The
vaults may be customer owned, shared, or Hydro Ottawa owned. Approximately 90% of the 8kV
and 28kV vaults contain Hydro Ottawa owned equipment. Refurbishment or replacement of vault
components may include jack bus, moles, circulating fans, switchgear, or transformers.
Vault Type
Total # Vaults
13 kV
950
4kV
530
16kV / 8 kV
144
44 kV Customers
20
Total
1644
Table 4.12 – Vault Types
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 44 of 118
The Strategy
Public safety, and finding cost effective alternatives or solutions are key drivers. The goal is to
improve the reliability, cost and safety to the public who walk over the vaults. The high profile of the
Ottawa downtown can be negatively impacted when outages occur.
Sidewalk Vaults



Retire the sidewalk vaults by moving electrical equipment into customer vaults on a 50 year
vault lease agreement, and replace the double-doors on the vault with standard cable
chamber collars and lids
Refurbish sidewalk vaults with solid dielectric transformers, improved civil work, and other
upgrades
Find alternative supplies, such as customer vaults, consolidate sidewalk vaults or use a
nearby padmount transformer
Benefits include increased reliability, reduced environmental liability, equipment standardization and
system utilization.
Other Vaults:



Retire Slater Station supplied 4kV vaults
Replace jack bus arrangements
Replace open-air wall mounted switchgear
The Plan
In 2006 the plan is to replace six sidewalk vaults and one underground switching centre.
4.1.1.16
Wholesale Meter Upgrade ($930,318)
Description
Primary wholesale metering installations at supply points, presently owned by Hydro One, must be
replaced with new Independent Electricity System Operator (the “IESO”) approved meters, as per
the Market Rules. The cost of these upgrades is the responsibility of the market participant, who is
also required to take over ownership.
Demographics
Presently, there are 27 Hydro Ottawa substations that have been identified as requiring meter
registration with the IESO.
The Strategy
Hydro Ottawa as a Meter Service Provider (“MSP”) will register and commission all existing and
new registered wholesale metering (“RWM”) installations complying with all requirements as set
forth under the Market Rules. Meter point registration as required in the Market Rules include:
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 45 of 118








Design and construction of the RWM installations,
Review of conceptual drawing and the submission of single line diagram to the IESO,
Review of the alternative metering installation standard checklist or declaration of
compliance of metering installation,
Complete required calculations for the registered meter point,
Create and submit the required totalization files to the IESO,
Create and submit the required files to the IESO,
Complete the required IESO forms and documents for IESO system access,
Provide a detailed emergency restoration plan.
Meter point commissioning as required in the Market Rules includes:



Perform the required on-site end to end testing,
Confirmation of the engineering units report,
Totalization table sign-off.
In addition to the registration and commissioning of the wholesale meter points, as MSP, Hydro
Ottawa will be responsible for maintenance and conformance monitoring as required in the Market
Rules as follows:










Monitor and respond to all issued Meter Trouble Reports (MTR) via the IESO workflow,
Perform required on-site diagnostic and maintenance of the RWM for an issued MTR from
the IESO,
Daily MV90 remote interrogation of each RWM,
Maintain the Validating, Estimating and Editing (VEE) and MTR relationship required for the
IESO meter data,
Perform required remote diagnostic and maintenance of the RWM,
Notify the IESO of planned and emergency switching,
Annual review of documentation and tracking meter seal expiry,
Dispute Resolution,
Perform required trouble shooting and testing,
Assist in IESO audits.
The Plan
Hydro Ottawa, as a MSP, will register and commission the wholesale meter points as the seals
expire on the existing meter installations. Several of the meter installations are past the seal expiry
date. Most utilities share a resource limitation with Hydro One in coordinating work within shared
and solely owned Hydro One facilities. The IESO has worked closely with the market participants
over recent years to achieve satisfactory completion of this registration work. Hydro Ottawa is
moving to compliance by furthering its registrations and arranging work with Hydro One on its own
installations.
This work will also be required on future metered substation installations connected to the IESO
controlled grid.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 46 of 118
4.1.1.17
Plant Failure Capital ($698,934)
This program covers the unplanned replacement of failed assets. These failures must be attended
to during the same outage response visit. This could include failed insulators, transformers or any
other distribution asset. The cost for this program is based on historical levels.
4.1.1.18
Damage to Plant ($558,921)
The program covers assets damaged by others (such as poles hit during car accidents or cable
failures due to dig-ins), where there is loss of functional use, and the asset must be replaced. An
attempt to recover 100% of the cost is made whenever possible. However, in many cases, the
persons at fault are unknown, and cost recovery is not possible. The estimated cost of this program
is based on historical levels.
4.1.1.19
Elbow and Insert Replacement ($553,478)
Description
Padmount transformers and switchgear units have conical bushings, called an insert, that accepts
an elbow, a form of a plug that is connected to the incoming and outgoing cables. On the 27.6kV
system, the elbow design has led to flashes as the field crew separates the elbow from the bushing
when energized. This program involves replacement of elbows and inserts that cannot be
separated safely under certain conditions while the circuit is energized. The flash is a safety risk to
employees and usually causes an outage. This is a safety driven program, with a positive impact
on reliability improvement.
Demographics
It is estimated there are 2,139 single and three-phase transformer units left with elbows and/or
inserts to replace.
The Strategy
The strategy is to replace the insert and/or the elbow. This work will be coordinated with other padmounted transformer work (either maintenance or cable replacement) to optimize costs and reduce
outage time. Targeted completion of this program is in 2010.
The Plan
The plan is to replace all bushing inserts with the vented Elastimold Loadbreak 2000 or re-terminate
the cable with the Cooper Posi-Break elbow within the next five years. Some will be replaced when
cables or transformers are replaced.
The schedule is as follows:
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 47 of 118





4.1.1.20
2006 - 300 in Bridlewood & 200 in Gloucester
2007 - 400 in Gloucester & 100 in Stittsville
2008 - 400 in Gloucester & 100 in Stittsville
2009 - 400 in Gloucester & 100 in Stittsville
2010 - 139 in Gloucester
Insulator Replacement ($475,198)
Description
Overhead insulators are devices that support electric wires and prevent an undesired flow of
electricity. They are usually manufactured from glass, porcelain or polymeric material and provide
electrical insulation and mechanical support on overhead lines. Certain horizontal post insulators
manufactured from porcelain have developed cracks and are a breakage hazard problem. The
failure of these insulators could cause overhead conductors to come into contact with each other
resulting in damage to equipment and a subsequent outage. Further, they pose a safety risk to staff
working on the overhead pole.
Demographics
Hydro Ottawa has an estimated 240,000 insulators installed on its overhead network, of which
approximately 7,000 are porcelain horizontal post insulators.
The Strategy
Hydro Ottawa has identified the circuits containing suspect insulators that are deemed a critical
hazard and outlined the requirements for work on poles containing these insulators. The work
procedure states that the insulators must be replaced prior to any work within a 3-meter proximity of
any circuit employing the device. The current practice is to, at minimum, change all insulators on
the pole the crew is working on (3-9 insulators) as well as the insulators on the poles directly
adjacent to the work area.
The Plan
Hydro Ottawa has selected a polymeric insulator for new installations and for replacement of old
units. An insulator replacement program has been introduced to deal with the replacement of
insulators on these affected circuits. The ongoing insulator replacement program deals with the
replacing of insulators on a circuit. Circuits are selected based on their inherent risk and associated
history.
4.1.1.21
Distribution Automation ($464,867)
Distribution Automation (DA) is an ongoing capital program to facilitate the quick transfer of circuit
open points with the objective of restoring the highest number of customers in the shortest amount
of time during an outage. In the past few years a large portion of these capital funds were devoted
to the Kanata sector, which was experiencing higher than average system outages.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 48 of 118
In 2006, the plan is to automate existing pad-mounted gear in the Kanata and the Gloucester
sectors. Six remote-operated overhead switches are also planned. These will be remotely operated
from Hydro Ottawa’s control room.
4.1.1.22
Station Transformer PCB Removal ($422,920)
This program consists of replacing the oil in station transformers that contain PCB mineral oil with
new non-PCB oil. The main drivers behind this program are changes to the Canadian
Environmental Assessment Act, and are part of Hydro Ottawa's Environmental Management
Program. The retrofilling of power transformers has the added advantage of extending the useful
life beyond the economic life expectancy. The station transformer PCB removal program will target
all station transformers with oil PCB concentrations greater than 500 parts-per-million (ppm) by the
end of 2009.
4.1.1.23
Station Automation ($385,921)
Description
Station Automation (SA) is the program to install new protection and control equipment or data
collection equipment. Specifically, installation of new relays for the purpose of enhancing the
protection of equipment, and/or the installation of a data highway in the substation for retrieving
operational and non-operational data.
Demographics
Hydro Ottawa has 74 substations in which there are approximately 200 switchgear assemblies, 900
circuit breaker/switchers, 173 power transformers, and 80 battery banks.
The technology used in these stations range from basic electro-mechanical devices (1950’s
technology) to state of the art microprocessor based devices. The older equipment has been
reliable, but is limited in its ability to provide information on activities that occur on the distribution
system. Typically replacement/improvements in these assets has been done in conjunction with the
switchgear arc-proofing retrofit program.
The Strategy
The approach is to install new relays during switchgear replacements or in some cases, when the
switchgear is retrofitted to meet arc-proof requirements. In all cases, installation of new relays will
be done in conjunction with either the Station Assets programs or the Station Enhancements
programs.
Data collection, separate from the protection and control, will help modernize the collection and
analysis of station data. This data will be used to determine asset condition enabling improved
investment decisions.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 49 of 118
The Plan
Asset condition needs to be monitored with both dynamic and static information with the information
integrated into the data pool in the asset management plan. The objective is to connect modern
microprocessor relays via a substation data highway.
4.1.1.24
Overhead Equipment - New and Rehabilitation ($278,901)
Description
Overhead equipment includes overhead conductors, switches and protective devices such as
lightning arrestors and cut-outs. It excludes insulators, potheads, transformers, and distribution
automation equipment, which are covered in individual programs.
This equipment typically fails due to operating and weather deterioration, flawed design, and/or
end-of-life. Some of the switches (e.g. SMD20) may fail upon operation causing both a hazard to
the employee, and a circuit outage.
Demographics
Over half of the distribution system is overhead plant. It is estimated that there are 48,000 lightning
arrestors, 47,000 fused and non-fused switches, and approximately 300 km of residential open-bus
secondary voltage conductor.
SMD20 switches in the 27.6kV system experience problems with porcelain breakage resulting in a
safety concern. There are approximately 8,000 single-phase and three-phase units in service.
The Strategy
The failed or suspect equipment will be replaced to new specifications. To enhance the operability,
reliability, or safety of the network some equipment may also be added.
For SMD20 switches, the plan is to replace switches that are frequently used (dip poles) with
improved units and to develop procedures to reduce the hazard when operating these switches.
The Plan
Estimated replacement of 800 switches on dip poles has been spread over three years.
These assets shall be replaced or added in planned and unplanned instances to ensure the
integrity of the distribution network for the safety of both employees and the public.
4.1.1.25
East End Operations Centre ($7,026,078)
In 2006, Hydro Ottawa will construct the final work center required to better serve those customers
located in the east end of Ottawa. Plans include a 13 bay truck garage and operations office facility
to accommodate 30 field staff along with a separate warehouse facility to store underground cable
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 50 of 118
material. This facility will replicate the Maple Grove Road work center located in Ottawa west, which
is scheduled to open in late August 2005.
The project is dependant on land availability and the in-service date is not scheduled until 2007.
The only portion of this project being capitalized in 2006 is the land at $1.1 million. The remainder of
the cost will be construction-work-in-progress (CWIP) at the end of 2006.
4.1.1.26
GIS and OMS ($4,901,719)
Description
The Geographic Information System (GIS) and the Outage Management System (OMS) are parallel
projects to install first time technology. Included is data conversion to assist in automation. With
their implementation Hydro Ottawa will achieve significant efficiencies associated with mapping,
mapping products, and processes that use maps and their background data.
OMS is the primary database and tool for tracking /responding to system outages.
GIS will be the backbone of Hydro Ottawa’s distribution plant asset records management.
Chronology
At the amalgamation in November 2000, the operational, distribution system asset, and technical
information from each of Hydro Ottawa’s five predecessor utilities was in varying and inconsistent
forms. Approximately 85% of the system maps were in paper form with different presentation
metrics and information. The smaller utilities in Goulbourn (a predecessor utility) and Casselman
(acquired in April 2002) had no system mapping. Some technical information was tracked in
separate paper files, databases, and spreadsheets. System operation was slow and uncertain while
outage times increased. Formal methods for asset management and subsequent budgeting for the
electrical system sustainment programs were difficult and person dependent. Additional formal
systems were required to track new regulatory (reliability, response, system efficiency, safety,
environmental), operational, and financial information.
Demographics
Each of Hydro Ottawa’s six predecessor utilities had its own records and mapping systems. Asset
management was very person dependent, relying heavily on individual experience and knowledge.
Hydro Ottawa’s skilled workforce (knowledge base) is aging. Few people have knowledge of Hydro
Ottawa’s entire territory. Staff requires timely direction from Dispatch in outage situations. The OMS
is providing this. Also, staff is being moved into unfamiliar neighbourhoods where easy access to
updated information for safe efficient system operation is required. The GIS will provide this.
The Strategy
Starting in 2002, assessment of the technical, operational, and mapping requirements and
challenges began. A business case was developed, and a competition was held to select an
industry standard off-the-shelf solution. Next steps are to develop common standards, correct
and/or gather key system information, and implement over several years.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 51 of 118
The Plan
The initial rollout of the OMS provided basic outage management control in the operational centre
without system mapping. Once the OMS was in place, the GIS configuration began. The Hydro
Ottawa electrical distribution system maps are overlaid onto base maps provided by provincial and
federal agencies. As digital map sections become available, the electrical distribution system is to
be transferred into the outage management system to assist operational staff in monitoring,
controlling, and restoring the electrical system. Since this project is being implemented over several
years, controls to ensure overall project risk mitigation were put into place with routine executive
review and external review.
System Functionality
The initial phase of the OMS has been in live operation since December 2003. Current functionality
consists of an automated system to log distribution system events as they occur and a
computerized map to display accurately the location of where events are occurring within the
system.
The mapping permits staff at the utility to have up to date and consistent information on what is
happening on the distribution system at any given time. The process involves Call Centre staff
inputting customer power outage calls directly into the outage mapping application to notify the
System Control office dispatching staff of where problems are happening. The display of the call
locations on a map results in faster trouble diagnosis and dispatching of crews and a reduction in
internal phone, fax, e-mail, and paper communications.
The event data is then communicated from dispatchers to field staff utilizing mobile computer
technology where crews receive assignments on a laptop installed in the vehicle. As a result, all
dispatch, response, and job completion times are logged in a central database. This information is
further used to generate reports regarding Hydro Ottawa response times. To date, reductions in
time to receive, diagnose, and respond to outage calls is the primary benefit.
Further expansion of the OMS throughout the utility in 2005 and 2006 will include using the tool to
capitalize on mobile communications to streamline current fieldwork.
Also scheduled for 2006 is the incorporation of the GIS electrical system data with the OMS to
facilitate a more efficient process to identify equipment failure and enable faster restoration times.
From 2003 until now, the GIS has been undergoing considerable development. Included in these
efforts has been the standardization of mapping, creation of facility databases, and adoption of best
practices acquired from each of the former utilities.
An intranet based GIS mapping application has also been released to enable users who require
information on transformers, poles, and streetlights to view and run inquiries on the data. Upon
completion of data conversion in 2006, users will have the ability to view information on all
distribution equipment within GIS.
The GIS data conversion stage of the project is presently at the pilot-testing phase with full
production data conversion scheduled to commence during the summer of 2005.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 52 of 118
Financial
The majority of the capital project costs have been and will be, incurred between 2003 and 2006.
Both the GIS and the OMS systems require computer hardware, application software, data
conversion, consultant implementation, in-house staffing resources, and staff training. Overall, the
OMS will cost approximately $6.0 million. The GIS will cost approximately $11.0 million of which
$4.0 million is directly related to the paper map conversion. The planned spending of $4.9 million in
2006 will complete the program.
Key efficiencies supporting the financial business case were:
















Reduce distribution, operating map and key database updates from the many regularly
updated sources into one centrally available repository by 10%,
Provide a system to improve expenditure with maintenance and replacement activities and
optimize distribution network investments up to 10% in targeted program activities,
Provide planning tools for system growth and reinforcement optimization,
Enable timely electronic mapping exchange with external entities,
New designs and changes prepared online thereby eliminating repetitive manual sketch
transactions between internal groups,
Provide additional functionality to track new and ongoing regulatory system information such
as reliability, response, system efficiency, safety, and environmental,
Eliminate the need to pin paper wall maps and provide online switching orders for system
operation thus reducing the risk of switching errors that could lead to accidents,
All outage information recorded digitally for analysis and follow up,
Reduce outage time for system trouble calls by 5%,
Analyze outages in the OMS to determine probable cause and identify better equipment
isolation solutions for system restoration activities,
Provide system mapping in the field for restoration and construction crews,
Quickly identify medical and other critical customers with their electrical and geographic
information,
Immediate online notification of outage events to all inside and outside staff,
Dispatching and crew management during system access and problems,
Backup recovery system for system operation with IT and facility disasters,
Eliminate the requirement to hire additional staff necessary to maintain manual systems.
4.1.1.27
SCADA and Control Room Upgrades ($3,019,289)
Description
The Supervisory Control and Data Acquisition (SCADA) system is used to monitor and control
station and distribution system equipment and is comprised of three main components:



Master Station equipment – real time and historical databases, communication servers,
Operator interface,
Communication equipment – fibre, leased copper land-line, wireless (data radio & cellular),
Remote equipment – remote terminal units (RTU’s), intelligent end devices (IED’s – relays,
meters, etc.).
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 53 of 118
Demographics
We are currently operating three distinct systems:



Ottawa ‘Telvent’ Master 1998 vintage – 56 Station & 15 Switch RTU’s,
Nepean ‘Quindar’ Master 1996 vintage – 16 Station & 15 Switch RTU’s,
Gloucester ‘Quindar – Worldview’ Master 1994 vintage – 8 Station & 42 Switch RTU’s.
The oldest RTUs are approximately 15 years old and are from different manufacturers.
The Strategy
Migrate three SCADA systems to a single Telvent platform to reduce administration costs
(licensing, maintenance, upgrades, knowledgebase, etc.). Single platform will allow single source
for real-time data like peak system load and single source for historical SCADA data.
Develop the SCADA system to monitor the entire distribution system. Currently there is limited or no
monitoring at several stations.
Known Issues
Since amalgamation, all new SCADA development and Bow Networks protocol translation has
occurred on the Telvent platform. With the added stations and data, the real-time historical servers
and databases are being stressed and system performance is degrading.
The existing Quindar systems utilize QUICS IV protocol for Master-RTU communication. This is a
proprietary protocol and cannot easily be integrated into the ‘open’ architecture Telvent system.
SCADA Communication is currently a mix of fibre, leased Bell lines, and wireless. Planned new
distribution automation will require wireless communication. Existing wireless communication in the
Gloucester sector has been unreliable. An overall wireless strategy is required to migrate existing
switch RTU’s in the Nepean and Gloucester sectors onto the Telvent system.
Future Direction
The existing Telvent SCADA system cannot accommodate additional SCADA development,
migration of existing Quindar systems, and new SCADA requirements (distribution automation, new
substations, new RTU’s to monitor entire distribution system). A Master Station upgrade is required.
Telvent is no longer developing the system currently in use, but an upgrade path is available with
the newer architecture. The majority of the Hydro Ottawa SCADA system is operating off the
Telvent system. Upgrade and database conversion will be implemented within the Telvent ‘family’
of SCADA products.
The Plan
Hydro Ottawa is developing specification and functional requirements for a SCADA system upgrade
and request a proposal from our existing provider.
Investigation and testing of various wireless SCADA communication solutions has begun.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 54 of 118
Hydro Ottawa is upgrading a number of RTUs with up-to-date models to improve reliability. These
upgrades are inexpensive since a complete RTU replacement is not required and the existing wiring
can remain in place.









Master Station upgrade (2006). This project includes replacement of the existing Telvent
system with the latest generation hardware and software.
Upgrade existing Quindar station RTU’s to allow Master-RTU DNP protocol communication.
Upgrade/replace existing Quindar switch/recloser RTU’s.
RTU refurbishment/replacement. Currently, there are approximately 150 RTU’s on the
SCADA system ranging in age from new to 15 years old. An annual expenditure of $50,000
is planned to upgrade/refurbish/replace older RTU’s.
Extend SCADA to unmonitored parts of the distribution system. This program involves the
installation of new or upgrading existing supervisory equipment at wholesale supply points
embedded within Hydro One owned distribution circuits or facilities.
SCADA wireless communication. A new wireless data radio infrastructure is planned to
accommodate the existing RTU migration as well as any new distribution automation
devices proposed for these areas.
SCADA fibre communication. This project involves upgrading the existing SCADA fibre
communication system.
Develop real-time and historical SCADA data reporting tools.
SCADA integration of Distribution Automation devices. Approximately $25,000 per device is
required for SCADA integration to allow remote operation and monitoring.
4.1.1.28
Vehicle Replacements ($2,589,689)
The following guiding principles govern the replacement of fleet vehicles. They define when new
acquisitions are required or when replacements are needed. They are based on a multi-year capital
plan.











Provision of safe, reliable and efficient vehicles & equipment to meet the operational
requirement of the corporation,
Cost effectiveness (Life Cycle Management),
Compliant with accepted industry norms & practices – replacement criteria consider age,
accumulated km/hour, general condition and when exceeding one-time repair limits,
Standardization of equipment specifications,
Alignment of funding with corporate objectives,
Environmental consideration – fuel economy, exhaust emissions,
Optimization of size of fleet (kept to minimum critical level, elimination of redundancy),
Purchasing options: new, used, refurbishment,
Tendering and bulk buys,
On-going consultation with the user community through the fleet council,
Disposal through recognized and reputable commercial vehicle & equipment resellers.
The current status of Hydro Ottawa’s fleet is that most vehicles are beyond the normal retirement
age based on accepted industry standard lifecycles. Additional investment is required to ensure the
fleet meets the needs of the workforce. The plan for 2006 is to replace eight large vehicles (boom
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 55 of 118
trucks and bucket trucks), 14 midsize vehicles (vans and pickup trucks) and three cars. A critical
component for quick outage restoration is well-maintained and operational vehicles. The
degradation of the fleet may jeopardize outage response capability if it is allowed to continue.
Figure 4.12 shows that the actual average age of Hydro Ottawa vehicles in all categories (except
for pole trailers) exceeds the target lifecycle average age. The target lifecycle average age is the
theoretical average age for vehicles in a category, if accepted industry standard lifecycles are
followed. The planned 2006 vehicle replacements bring Hydro Ottawa closer to, but still over, the
target lifecycle average age.
Fleet Replacem ent Program - Curent Status vs Target Lifecycle
Avg Years of Age
20
15
10
5
0
Cars
Bucket
St ake /
Radial Boom
Knuckle
Compact
Full Size
Full Size
Trucks
Flat bed
Derricks
Boom Trucks
Pick-Up
Pick-Up
Cargo Vans
Trucks
Trucks
Trucks
Target Lifecycle
Current Status
Compact Vans St ep / Cube
Vans
Tension
Trailers - Pole
Machines
Status After 2006
Figure 4.12 – Fleet Demographics
4.1.1.29
Bank Street Rehabilitation ($1,981,694)
This 52,000 square-foot facility was partially renovated in 2004-2005 to accommodate the
relocation of the Fleet Vehicle Service Center from the Albion Road facility. This move was made in
part due to community safety concerns with the growing amount of urban in-fill around the Albion
Road facility and the high volume of large fleet vehicle traffic through the surrounding community.
Bank Street offered a more industrial location for our fleet repair facilities while utilizing an existing
property more effectively. Renovations in 2006 will include upgrades to the sanitary sewer system,
PCB storage facilities, fire suppression system and minor office interior repairs.
4.1.1.30
CIS Software Enhancements ($1,819,600)
Changing standards and external requirements in 2005 have lead to changes in CIS requirements.
The CIS development is expected to be active in 2006 in response to continued evolving regulatory
requirements and increasing emphasis on improving business efficiencies. Although particular
items may shift based on evolving business priorities, the following are some items that will be
undertaken:


Rate changes for Regulated Price Plan (RPP),
Completion of RPP Smart Meter price implementation,
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 56 of 118





Refinements to bill presentment to satisfy customer requests and regulatory needs,
Streamlining field orders to a non paper-based alternative,
Leveraging workflow to automate repetitive actions currently triggered by users,
Streamlining of work-list assignment to users,
Development of further queries and reports for data intelligence gathering.
These will improve customer service, and internal efficiency.
4.1.1.31
Merivale Road Additions ($1,278,083)
This 50,000 square-foot property received an extensive upgrade in 2003 to accommodate the
relocation of a significant portion of the Operations and Engineering Design groups along with
construction of a 10 bay fleet garage and consolidated supply chain warehouse facility. As the final
step in the movement of the Operations Department from Albion to Merivale, renovations are
underway to relocate the Asset Management group and System Control room functions to Merivale
Road. Once completed in late 2006, the Merivale facility will be fully occupied.
4.1.1.32
Albion Road ($905,245)
As discussed in the Facilities Strategic Plan overview, the decentralizing of Operations personnel to
various satellite work centers throughout the Hydro Ottawa service territory will trigger the potential
disposal of Albion Road in favour of a smaller and less costly facility targeted for 2007. The 200,000
square-feet of office space on 21 acres of land is now in the middle of a highly concentrated urban
community. As well, the facility has become increasingly inadequate to support the organizational
structure or the long-term strategic direction of Hydro Ottawa.
The capital expenditures associated with Albion Road for 2006 are specifically directed at those
costs solely required to address environmental and legislative requirements in advance of property
disposal along with critical maintenance system repairs that must be completed to sustain
occupancy through to the end of 2007.
4.1.1.33
Carling Operations Centre Storage Building ($615,715)
This 15,000 square-foot facility received extensive upgrading in 2003 to serve as a central
Operations work center. Given its ideal geographic location within the City of Ottawa (central and
near the free-way), additional Operations construction personnel have been relocated to this site
resulting in the need for further investment in inventory and vehicle storage facilities.
4.1.1.34
Stations Building Rehabilitation ($572,940)
In concert with the rehabilitation of the electrical side of substations, this program addresses the
need to ensure station buildings are able to meet the needs for years to come. Roof, door and
window replacements at various stations, as required, are all included in the project.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 57 of 118
4.1.1.35
Upgrade to JDE Financial System ($571,651)
In 2003, Hydro Ottawa adopted JD Edwards as its financial management system. With the
necessary business processes and policy and procedures now documented within this system,
further upgrades are now necessary to retain vendor-managed warranties and support. Hydro
Ottawa had delayed such upgrades to the software system until the Oracle and JD Edwards merger
was finalized in early 2005, to ensure the systems would be secure.
4.1.1.36
Business Continuity Plan ($315,117)
Hydro Ottawa has an on-going effort to maintain appropriate system security, redundancy and lifecycle management. Capital investment for this program will focus on the increased acquisition of
software and hardware related to Internet security, virus protection and network redundancy in
2006. Replacement of network servers, aging desktop computers and enhancements to the
telephony system are all part of this overall business continuity plan.
4.1.1.37
Conservation & Demand Management ($1,420,012)
This is part of Hydro Ottawa’s CDM plan approved by the Board in December 2004. Hydro Ottawa’s
spending for CDM continues as targeted.
4.2
Interest on Deferral Accounts and Construction Work in Progress (CWIP)
For 2005 and 2006, based on the Handbook, Hydro Ottawa has used its weighted average cost of
capital as the rate for the allowance for funds used during construction (AFUDC). For 2004 and
earlier, the rate used for AFUDC was the deemed long-term debt rate. The rates for 2005 and 2006
are calculated as follows:
2005
Deemed Debt rate: 6.9%
Deemed Return on Equity: 9.88%
Tax Rate: 36.12%
Deemed Debt / Equity: 60/40
After-tax weighted average cost of capital = 6.9% x 60% (1-36.12%) + 9.88% x 40% = 6.6%
2006
Average Long-Term Debt rate: 5.25%
Deemed Return on Equity: 9.0%
Tax Rate: 36.12%
Deemed Debt / Equity: 60%/40%
After-tax weighted average cost of capital = 5.25% x 60% (1-36.12%) + 9.0% x 40% = 5.6%
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 58 of 118
4.3
Capitalization Policy
Included in Tab C of the Application Binder is a copy of Hydro Ottawa’s capitalization policy. This
policy is based on capitalization of fully allocated costs.
4.4
Contributed Capital
Contributed capital collected prior to January 1, 2000 is included in rate base. From January 1,
2000 onwards, contributed capital has been netted out of net fixed assets and therefore, out of rate
base.
4.5
Treatment of Capital Gains and Losses
Assets Sold to a Non-Affiliate
Hydro Ottawa has no plans to sell non-depreciable assets to a non-affiliate in 2006.
Assets Sold to an Affiliate
Hydro Ottawa has no plans to sell non-depreciable assets to an affiliate in 2006.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 59 of 118
Chapter 5 – Cost of Capital
5.0
Introduction
5.1
Maximum Allowed Return on Equity
Hydro Ottawa has elected to use the maximum rate of return on equity of 9.00%.
5.2
Debt Rate
The weighted average debt rate proposed by Hydro Ottawa is 5.25%. Details of the calculation are
provided in Schedule 5-1.
Schedule 5-1: Weighted Debt Cost
(1)
(2)
No. Description
1
2
(3)
Debt
Holder
Hydro
Ottawa
Holding Inc
Hydro
Promissory
Ottawa
Note
Holding Inc
Promissory
Note
(4)
Is Debt
Holder
Affiliated?
(Y/N)
(5)
(6)
Date of
Issuance
Principal
(7)
(8)
Term Actual
(Years) Rate
Y
July 1, 2005 $200 million > 1 year 5.14%
Y
July 1, 2005
Total:
$32.185
million
$232.185
million
> 1 year 5.90%
(9)
Debt rate used
for weighted
debt rate cost
4.43%
0.82%
5.25%
Table 5.1 – Weighted Debt Cost
5.3
Capital Structure
Hydro Ottawa’s deemed debt/equity structure is 60/40. The 2004 capital structure for Hydro Ottawa
is summarized in Schedule 5-2. The actual debt/equity is well within ten percentage points of the
deemed structure. For 2006, Hydro Ottawa continues to set 60/40 as its target debt/equity structure.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 60 of 118
Schedule 5-2: Actual Capital Structure of the Distributor
This Schedule is incorporated into the 2006 EDR Model under Tab 3-3 Capital Structure.
Line
($000)
(%)
Deemed
Structure
(1)
(2)
(3)
Long Term Debt
Unfunded Short Term Debt
Total Debt
(3) = (1) + (2)
232,185
64,575
296,760
47%
13%
60%
60%
(4)
(5)
(6)
Preferred Shares
Common Equity
Total Equity (6) = (4) + (5)
N/A
197,631
197,631
N/A
40%
40%
N/A
40%
40%
(7)
Total
494,391
100%
(7) = (3) + (6)
Cost
Rate
5.25%
Variable%
N/A
9.0%
9.0%
Table 5.2 – Capital Structure
5.4
Working Capital Allowance
Hydro Ottawa has complied with the Boards treatment of Working Capital Allowance. The cost of
power used to calculate the Working Capital Allowance is $575,112,014 from Hydro Ottawa’s 2006
Load Forecast in Tab D of the Application Binder. The commodity rate was taken from the report
entitled “Summer 2005 Ontario Wholesale Power Market Assessment” authored by Navigant
Consulting dated May 2005. All other rates used in the cost of power calculation are from 2005
actuals.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 61 of 118
Chapter 6 – Distribution Expenses
6.0
Introduction
Among the most important events in 2004 for Hydro Ottawa was the implementation of a new CIS.
This new system enables Hydro Ottawa to meet the needs of its customers and other electricity
industry stakeholders. To accommodate this major project some operational activities were scaled
back to ensure adequate funding and resources were available for its successful completion.
A new collective bargaining agreement was signed in 2004 after Hydro Ottawa experienced its
longest work stoppage in more then 10 years (including predecessor utilities). The new collective
agreement includes wage increases of 3% each year for the 3-year term of the agreement.
Moderate weather in 2004 translated into lower costs for outages and system repairs. This weather
impact reduced the amount of power purchases in 2004 compared to other years. A comparison of
2004 to 2006 requires this unusually moderate weather experienced in 2004 to be taken into
account.
Regulation will continue to be a focus in 2006 because there is stronger hazardous substance
legislation and tighter handling restrictions, as well as increased regulation by the Electrical Safety
Authority. Hydro Ottawa achieved ISO 14000 certification for environmental stewardship in 2004
and will continue to take a leadership role in this area.
The following table summarizes Hydro Ottawa’s distribution expenses based on the Board’s
grouped accounts.
Operations, Maintenance and
Administration (OM & A)
Operation
Maintenance
Billing and Collection
Community Relations
Community Relations - CDM
Administrative and General Expenses
Insurance Expense
Bad Debt Expense
Advertising Expenses
Charitable Contributions
Other Distribution Expenses
Table 6.1 – OM & A Expenses
2006 EDR Application
2003
$19,866,853
5,813,689
8,606,249
2,286,906
0
1,388,432
371,044
4,179,485
17,139
60,589
4,016,619
2004
$12,897,834
5,609,524
8,336,519
3,247,063
0
3,616,767
253,431
1,110,205
38,701
86,130
4,631,169
2005
$13,698,000
5,878,000
8,724,000
3,143,000
0
2,037,000
270,000
1,175,000
0
99,000
3,311,000
2006
$17,796,032
4,031,435
9,257,432
3,595,624
0
6,443,241
210,000
900,000
62,000
100,000
3,331,751
TOTAL $46,607,003
$39,827,343
$38,335,000
$45,727,516
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 62 of 118
6.1
Operations, Maintenance and Administration
Operations and Maintenance
Hydro Ottawa’s Operations department continues to balance the needs of customers with the need
for fiscal responsibility. This department is the cornerstone of the commitment to deliver safe and
reliable service to the City of Ottawa. It is critical to have flexible programs that can adapt in an
ever-changing environment. Some of the challenges faced by staff are issues such as regulatory
compliance, collective agreements and an aging workforce.
Hydro Ottawa’s corporate structure combines the operations and maintenance function into a single
unit. Some allocations between these two functions have changed between 2004 and 2006.
Therefore, for comparison purposes, operations and maintenance expenses should be considered
in their totality.
The re-instatement of a trades apprenticeship program will attempt to correct a looming problem of
depletion of skilled labour within Hydro Ottawa. Hydro Ottawa expects to hire 20 new apprentices
by the end of 2006 at a cost of $1.5 million for labour and training. These apprentices are
anticipated to be fully qualified in four years. Figure 6.1 below indicates the staff issue faced by
Hydro Ottawa based solely on normal retirements. Hydro Ottawa must start its apprentice program
now to ensure adequate staffing levels in the future. This constitutes the first apprentice hires by
Hydro Ottawa and its predecessor utilities since the mid 1990’s. It is forecasted to hire 10
apprentices each year for the foreseeable future.
Operations and Maintenance Staff
Number of Employees
120
100
80
60
40
20
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
0
Year
Current Staff
Figure 6.1 – Apprentice Program
2006 EDR Application
Apprentice Graduates
Total Qualified Staff
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 63 of 118
In addition to the apprentice program, compensation expenses will also increase by approximately
$2.0 million as a result of the new collective bargaining agreement and positions to be filled in 2006.
Hydro Ottawa will increase expenditures to deal with provincial legislation governing hazardous
materials, including PCBs and asbestos, and to maintain the historical 3-year vegetation
management program. The following provides a more detailed description of some of the programs.
6.1.1.1
Vegetation Management
Description
Hydro Ottawa’s Vegetation Management involves managing the distribution corridors within its
service area. A corridor is defined as the area adjacent to overhead lines. Hydro Ottawa has rights
to construct, operate and maintain electric utility distribution lines (i.e., distribution feeders) as a
licensed local distribution company (LDC) in the City of Ottawa. Corridors provide the land base for
constructing and installing lines at voltage levels of 44 kV and below. These corridors provide a
secure means for the safe and reliable distribution of electricity.
Demographics
Demographic information for corridors has been collected from various sources included in Hydro
Ottawa’s existing condition assessment and vegetation management programs. Hydro Ottawa
manages about 4,830 km of lines that require tree clearance work. Those lines occupy corridors
that must be maintained regularly to ensure the safe and reliable supply of electricity to Hydro
Ottawa’s customers.
Condition demographics were developed as part of the asset management process. A summary of
the condition assessment for corridors is shown in Figure 6.2. This is based on an initial survey of
12 areas scheduled for a full trim this year. The chart below shows that immediately leading up to a
trim, corridors are generally in Poor and Very Poor condition. The condition assessment of
corridors just prior to a trim indicates, that the trim rate should be no longer than the current 3-year
cycle. With increased cutback distances (e.g. greater than 10 feet), the cycle could be extended,
however increased trimming is limited by practical reasons such as National Capital Commission
(NCC) guidelines, the City of Ottawa, customer expectations and general aesthetics.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 64 of 118
Vegetation Condition Assessment
Before Trimming
Fair
8%
Poor
58%
Very Poor
34%
Very Good
0%
Good
0%
Figure 6.2 – Vegetation Condition Assessment (pre-trim)
The Plan
The asset management process compares the costs and benefits of a faster tree-trimming program.
Figure 6.3 shows the number of tree-related failure events for each year after a full trim. This
illustrates the direct correlation between power outages and the elapsed time since trees have been
trimmed.
Tree-Related Failure Events
120
Number of Failure Events
100
80
60
40
20
0
0
1
Years Since Last Trim
Figure 6.3 – Tree Related Failures in Relation to Last Tree-Trim
2006 EDR Application
2
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 65 of 118
Figure 6.4 shows tree-trimming program costs. The annual cost of trimming (green curve) is based
on Hydro Ottawa’s most recent contract amount of $1.7 million per year, to trim one-third of the total
system (i.e. the present 3-year trim cycle). Based on this, the annual cost of a one-year or a twoyear trimming cycle was estimated.
The Total Cost curve shows there may be an advantage to a faster tree-trimming program.
However, for 2006, the historic three-year cycle has been maintained.
Total Cost of Trimming Program
250
Cost in Points
200
$10
$8
150
Total Cost
Average Annual Cost of Failures
100
$6
Annual Cost of Trimming
$4
50
$2
0
Cost of Trimming (millions)
$12
$0
1
2
3
Period of Trimming Program
Figure 6.4 – Tree Trimming Costs
6.1.1.2
Thermographic (IR) Scanning and CO2 Washing
Hydro Ottawa uses infrared (IR) scanning, a heat detection technology, as an early detection
preventative maintenance method to find possible plant failure. The program results in an increase
in system reliability and safety, and extends the useful life of the assets in the distribution system.
The program involves Hydro Ottawa’s entire distribution system consisting of substations, poles,
transformers, overhead conductor, underground cable and pad-mounted switchgear. The CO2
wash program is based on the scanning program report for pad-mounted switchgear. The CO2
method has allowed switchgear to be maintained in an efficient and cost effective manner. The
process involves cleaning energized switchgear using dry ice. Compared to washing with water,
this affords flexibility to schedule switchgear maintenance throughout the year while decreasing
maintenance costs, eliminating interruptions, avoiding switching thereby removing the associated
safety concerns, and freeing up manpower.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 66 of 118
6.1.1.3
Insulator Washing
The insulators in the Hydro Ottawa system become contaminated by road salt, vehicle exhaust, and
smoke stack emissions. The City of Ottawa uses more salt during the winter than many other
Ontario municipalities. In damp weather, these insulators can flashover, cause pole fires, and
jeopardize system’s reliability. To avoid this, Hydro Ottawa has adopted an extensive insulatorwashing program along the major roadways where contamination builds normally; full washing of
these critical, 44kV, 27.6kV and 13.2 kV circuits is done in early spring (around mid-February), and
selective washing in the fall (around mid-October) each year. The program also involves washing
all under-build of 8 kV or more. Washing of polymer insulators on dead-ends and 44 kV switches is
also part of this program.
6.1.1.4
Graffiti Abatement
The purpose of the graffiti abatement is to remove and/or prevent inappropriate messages and
statements, graphical or text, on Hydro Ottawa’s assets (e.g., buildings, pad-mounted transformers
or switchgear), from general public visibility. The requirement for this service is established under
Hydro Ottawa’s commitment to the Ottawa Utility Coordinating Committee (UCC). Assets to be
addressed are identified by the City by-law enforcers, the police and the public at large.
The program typically involves provision of standard or anti-graffiti coating on Hydro Ottawa’s padmounted equipment. The standard paint coating is a quick-dry gloss enamel type, while the antigraffiti is an epoxy base or aliphatic clear finish. Normally, Hydro Ottawa’s field representative
assesses the type of coating needed. The program also includes the re-instatement of the area
around the equipment, and re-labelling of the equipment using the approved materials and label
placement specifications.
Billing and Collection
Hydro Ottawa bills its residential and small commercial customers every two months. Commercial
customers above 50 kW are billed monthly. Manual meter reading services are linked to these
billing cycles and are out-sourced to an external provider. Hydro Ottawa’s Meter Data Service
(MDS) group is responsible for reading interval meters on a daily basis. Details of Hydro Ottawa’s
CIS and associated billing costs are discussed in a report in Tab C of the Application Binder.
Administration and General Expense
The 2006 expenses in the Administration and General Expense category have increased from
2005. As per the Board’s letter dated December 20, 2004, OEB Cost Assessments are recorded in
a deferral account (sub-account of Account 1508) for a portion of 2004 and for all of 2005.
Furthermore, as per the Board’s February 15, 2005 letter, Hydro Ottawa records its 2005 OMERS
pension contributions in a deferral account (sub-account of Account 1508). For 2006, these
amounts will no longer be recorded in deferral accounts, and therefore, become administrative
expenses.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 67 of 118
Hydro One will be re-instating its Low Voltage (“LV”) charges in 2006. This amount has been placed
in Account 5665 as per the 2006 EDR Model sheet ADJ 5. The estimate for these charges is based
on Hydro One’s current rates. If Hydro One receives approval from the Board for different rates,
Hydro Ottawa proposes to track the difference in a variance account.
Community Relations
Included in the cost for Community Relations are Hydro Ottawa’s Call Centre activities (both
internal and outsourced). Cost increases are primarily due to the added call volumes received by
the outsourced Call Centre.
6.2
Detailed Report for Specific Distribution Expenses
Insurance Expense
Hydro Ottawa's liability, automobile and property insurance policies are underwritten by MEARIE,
the Municipal Electric Association Reciprocal Insurance Exchange, a reciprocal insurance
exchange created in 1987 to address the insurance needs of municipal electricity utilities. Crime
insurance (Great American Insurance) policies are provided through MEARIE commercial
underwriter partners. Hydro Ottawa’s broker, Marsh Canada, provides insurance policies using
commercial insurers like Chubb for travel insurance.
Comprehensive general liability (CGL) is based on corporate revenue. As revenue increases, so do
premiums. Property insurance increased dramatically in 2003 due to the 9/11 attack in New York
City. Hydro Ottawa changed its insurance carrier in 2004, which resulted in a property insurance
rate reduction of more than 40%.
Schedule 6-1: Insurance Expense
Type of Insurance
CGL
Auto
Property
Crime
Travel
2002
$511,767
44,513
125,452
7,560
3,000
$692,292
2003
$536,835
49,056
327,198
9,251
2,836
$925,176
2004
$574,564
58,223
181,920
9,754
2,836
$827,297
2005
$611,515
58,568
199,422
8,720
2,623
$880,848
2006
$658,848
60,925
209,291
7,635
2,570
$939,269
Table 6.2 – Insurance Expense
Bad Debt Expense
The allowance for doubtful accounts is developed based on an assessment of the following
components:
 Billed accounts receivable - active vs. finalled accounts,
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 68 of 118


Unbilled revenue - active vs. finalled accounts,
Meter disputes.
The methodology used to estimate the allowance for doubtful accounts in 2006 is consistent with
that used in prior years.
6.2.1.1 Billed Accounts
Billed accounts include accounts for Standard Supply Service (SSS) customers and retailerenrolled customers. In addition, some SSS customers are on payment plans.
In order to remain on the budget billing payment plan option, customers must keep their payments
current. Customers unable to do so are taken off the payment plan stream. Balances for payment
plan accounts are therefore not provided for.
Balances due from retailers are also considered 100% collectible as settlement is occurring in an
accurate and timely fashion.
The remaining active accounts are provided for at the rate of 10% of balances outstanding over 90
days. Finalled accounts are provided for at the rate of 95% of balances older than 90 days. The
approach is consistent with Hydro Ottawa’s collection experience with these accounts.
6.2.1.2 Unbilled Revenue
Unbilled items are evaluated on a basis similar to that used for billed accounts except for balances
greater than $25,000, which are typically excluded. Accounts with amounts greater than $25,000
are with larger organizations with a good payment history and therefore are expected to be fully
recovered.
6.2.1.3 Meter Disputes
These items are excluded from the groupings above and a provision is set based on each account’s
specific circumstances.
6.2.1.4 Account Write-off Practice
The current practice is to write-off all finalled accounts over 120 days after the reminder notices are
sent and internal reviews completed. These accounts are written off and sent to one of the three
collection agencies, which were selected through a request for proposal (RFP) process.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 69 of 118
Schedule 6-2: Bad Debt Expense
2002
Residential
GS<50 kW
GS>50 kW
GSTOU (1500 to 5000 kW)
Large Use
Street Lighting
Sentinel Lights
$1,470,319
263,903
61,039
0
0
0
0
$1,795,261
2003
$3,255,819
580,948
338,538
4,179
0
0
0
$4,179,485
2004
$751,609
234,253
83,265
41,078
0
0
0
$1,110,205
2005
$795,475
247,925
88,125
43,475
0
0
0
$1,175,000
2006
$609,300
189,900
67,500
33,300
0
0
0
$900,000
Table 6.3 – Bad Debt Expense
There were no individual bad debt occurrences in 2004 that surpassed the materiality threshold of
0.2% of Distribution Expense.
Information Technology Expenses
Hydro Ottawa manages information technology (IT) through a federated IT structure as compared
to a centralized or decentralized model. A federated IT structure supports a common business
structure, driving financial efficiencies and optimizing processes, while providing agility within
individual lines of business within Hydro Ottawa.
Core IT infrastructure, corporate applications, voice and data services, are managed and operated
by the Information Services and Technology group. The SCADA system, the OMS application and
the GIS application (presently in implementation stage), are managed by groups within the
Operations department. Hydro Ottawa’s CIS (Customer Information System) transitioned from
implementation phase to system start-up in 2004 and is managed by Customer Care’s Business
Services component. Through a services management and hosting contract, IBM assists
Customer Care with operating and maintaining the CIS application.
Hydro Ottawa’s IT governance process provides for alignment of information technology strategy
with corporate objectives and goals. Dedicated project teams are formed for large IT projects with
oversight and guidance provided through cross-functional Steering Committees. Similar project
management principles are applied to smaller projects but management and oversight are provided
within each department. As applications and systems evolve and become more integrated, the
day-to-day operation and management of these systems is usually transferred from the
implementing department to the Information Services and Technology group.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 70 of 118
Advertising, Political Contributions, Employee Dues, Charitable Donations, Meals/ Travel
and Business Entertainment, Research and Development
6.2.1.5 Advertising
The advertising budget is spent primarily on educating customers about pending industry changes
and upcoming service affecting events such as rate changes, changes to bill layout, outages and
many others. It is important that all customers are made aware of these pending changes.
Newspaper advertisements are often used to inform customers of planned service outages to
repair, install or upgrade equipment. In addition, there is a follow-up with a customer letter to each
household.
Hydro Ottawa will not have any "branding" or corporate image advertising expenses in 2006.
6.2.1.6 Political Contributions
Political contributions are prohibited by Hydro Ottawa’s code of conduct. Consequently none are
included for 2006.
6.2.1.7 Employee Dues
There were minimal amounts of employee dues for social and recreational activities in 2004,
however, they will not be continued in 2006 and are therefore not included in this Application.
6.2.1.8 Charitable Donations
Hydro Ottawa is not applying for the recovery of any of its charitable donations. Therefore, it has not
provided a comprehensive list.
Schedule 6-3: Charitable Donations
2002
Various Donations
Ottawa Safe Community
United Way Matching
Dollars for Doers
Table 6.4 – Charitable Donation
2006 EDR Application
2003
2004
2005
2006
0
0
0
0
0
34,736
25,843
0
86,130
0
0
0
8,000
40,000
40,000
10,000
10,000
40,000
40,000
10,000
0
$60,589
$86,130
$98,000
$100,000
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 71 of 118
6.2.1.9 Meals/Travel and Business Entertainment
Hydro Ottawa has included in Tab C its corporate Travel and Entertainment Policy outlining how
reimbursements for travel expenses are allowed and providing guidelines for travel expenses.
6.2.1.10
Research and Development
Hydro Ottawa has not included any Research and Development expenses in 2006, or in prior years.
Employee Total Compensation
In 2003, Hydro Ottawa reorganized by moving 100 employees in Corporate Services and Finance
from the Holding Company to Hydro Ottawa. There was no overall impact on cost as all employees
were dedicated to Hydro Ottawa activity. As well, 30 employees took advantage of the OMERS
early retirement incentive prior to December 31, 2003.
Hydro Ottawa experienced a work stoppage in 2004 where more then 350 unionized employees
were absent for seven weeks, representing almost 75% of its workforce. The effect was to reduce
the average base salary and overtime paid to unionized workers. During the same time period
Management was paid overtime to ensure adequate coverage for outages and customer support.
Hydro Ottawa will be filling a number of positions across the company in both 2005 and 2006, to
replace employees that have recently retired or to fill new positions required for functions such as
Environment and Emergency Preparedness, changes in regulatory requirements as well as the new
apprenticeship program.
The largest percentage of new employees, 33 employees, will reside in the Operations department.
The apprentice program, described in section 6.0.1, will have 20 new apprentice trades personnel
added by the end of 2006. Within System Operations (Control Room and 24/7 response) there are
a total of six employees, including additional shift supervisory staff both in the System Office and in
the field. This is part of Hydro Ottawa’s plan to introduce management supervision for after-hours
response. The balance is made up of additional technical and administrative staff. The Stations
group will be filling three positions in 2006. The Construction group will be hiring two supervisors
into positions currently staffed with acting supervisors.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 72 of 118
Schedule 6-4: Employee Compensation
Number of Employees (Full-time equivalents (FTEs)):
2002
Executive
Management
Non-unionized
Unionized
2003
2004
2005
2006
3
69
0
387
5
65
31
359
10
78
31
353
10
83
37
361
10
84
39
390
459
443*
472
491
523
Table 6.5 – Number of Employees
*Effective January 1, 2004 the actual FTE count was 513. This was a result of transferring 100 FTEs from the
Holding Company to Hydro Ottawa and the retirement of 30 FTE’s. The net result is an increase of 70 FTE’s
for Hydro Ottawa on January 1, 2004. With the introduction of Hydro Ottawa’s new CIS in September 2004,
Customer Care staff levels were reduced, resulting in the lower year-end number for 2004.
Compensation – Average Yearly Base Wage ($):
2002
Executive
Management
Non-unionized
Unionized
130,000
71,290
0
50,304
2003
130,405
67,879
49,591
51,352
2004
117,579
71,586
57,825
47,158
2005
119,875
75,459
61,461
56,175
2006
125,280
78,706
67,776
59,459
Table 6.6 – Base Wage
Compensation – Average Yearly Overtime ($):
2002
Executive
Management
Non-unionized
Unionized
0
0
0
5,325
2003
0
0
0
4,931
20041
11,666
15,748
9,027
4,331
2005
0
0
0
5,879
2006
0
0
0
4,456
Table 6.7 - Overtime
1
Management and non-union staff typically do not earn overtime. Overtime in 2004 was the result
of the 7-week strike by the unionized staff.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 73 of 118
Compensation – Average Yearly Incentive ($):
2002
Executive
Management
Non-unionized
Unionized
2003
29,943
9,110
0
0
2004
31,452
10,394
4,941
0
2005
42,895
14,723
7,653
0
29,868
12,584
6,146
0
2006
31,058
12,392
6,118
0
Table 6.8 - Incentive
Compensation – Average Yearly Benefits ($):
2002
Executive
Management
Non-unionized
Unionized
14,677
3,877
0
3,877
2003
10,430
3,470
2,861
3,228
Table 6.9 – Benefits
Included in Benefits are:
2004
Basic Insurance:
Dental Single:
Dental Family:
Health Single:
Health Family:
Long Term Disability
Car Allowances
2005
2006
9,486
9,769
9,018
3,496
4,649
4,698*
3,016
3,911
3,151
4,226
4,799
* This number reflects the average for both
management and non-unionized
Employer Share
Employer Share
Employer Share
Employer Responsibility
Employer Responsibility
The numbers in Table 6.9 do not include OMERS Pension and Post-retirement benefits costs,
which are shown in Table 6.13 and Table 6.14.
2006 Incentive Plan
Hydro Ottawa’s 2006 Incentive Plan is designed to reward the achievement of goals related to
organizational efficiency and customer service. It is comprised of two types of goals: Corporate, or
company related, and Individual. Corporate goals are divided into two categories: Financial and
Customer Service.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 74 of 118
The Financial goals are as follows:
Weight
40%
Goal
Controllable
Costs
Targets
Reduction of Operating,
Maintenance and
Administration Costs
Benefit
Ratepayer
10%
General
Capital
Achieve budgeted spend,
or less, per capital project
(identified fall 2005)
Ratepayer
10%
Sustainment
Capital
Achieve budgeted spend,
or less, per reliability
enhancing project, and
meet project completion
dates (identified fall 2005)
Table 6.10 - Incentive Program Financial goals
Ratepayer
Explanation of Benefit
 Reduces organizational
costs
 Increases efficiency
 Focuses organization on
appropriate goals
 Ensures appropriate dollars
spent on sustaining &
improving the business
 Safeguards long term
effectiveness of organization
 Ensures appropriate spend
on equipment and programs
directly related to servicing
customers
The Customer Service goals are to be determined following the roll out of the 2006 business
strategy, but will be based on the following:
Weight Goal
25%
OEB
Performance
Standards
15%
Operational
Efficiency
Targets
Benefit
Meeting Board prescribed
Ratepayer
distribution service quality
standards
Completion of major
Ratepayer
endeavours related to
improving safety, reliability
and quality of service
Table 6.11- Incentive Program Customer Service goals
Explanation of Benefit
 Monitors service levels to
customers
 Increase well being of public
and staff
 Increase operational
efficiency
Individual goals will reflect individual contributions to Corporate goal achievement, and will therefore
all be of benefit to the ratepayer.
Total value of the 2006 Incentive Plan is estimated to be $1.6 million if all goals are achieved at the
target level.
Program affordability is safeguarded through the following measures:

IF: Hydro Ottawa’s financial performance (OM&A and Capital goals) is between threshold
(0.5) and target (1.0):
– Individual performance scores are multiplied by the Hydro Ottawa financial score (not
total Hydro Ottawa score) for all eligible employees
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 75 of 118

IF: Hydro Ottawa Financial performance is less than threshold:
–
No Incentive Plan payout for all levels
Pensions and Post-retirement Benefits
Hydro Ottawa is a member of OMERS. The OMERS premium holiday ended in 2002 with a partial
reinstatement in 2003 and full reinstatement in 2004.
The 2005 and 2006 amounts of post-retirement benefit expense include amortization of an actuarial
loss prepared by an external consultant.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 76 of 118
Schedule 6-6: OMERS Pension Expense and Post-Retirement Benefits
2002
Pension premiums
Adjustments
Less: amount capitalized
Amount expensed in each
year
2003
2004
2005
2006
N/A
657,776
1,964,699
2,385,069
2,743,217
N/A
368,354
1,100,231
1,335,638
1,536,201
$289,422
$864,468
$1,049,431
$1,207,016
Table 6.13 - Pension
2002
Post-Retirement Benefits
Cost
Adjustment
Less: Amount capitalized
Amount expensed in each
year
2003
2004
2005
2006
300,346
314,947
490,250
582,100
600,000
168,193
176,370
274,540
325,976
336,000
$132,153
$138,577
$215,710
$256,124
$264,000
Table 6.14 - Post-retirement Benefits Expense
Distribution Expenses Paid to Affiliates
Schedule 6-8: Distribution Expenses Paid to Affiliate(s)
2002
Affiliate Names
Activity
Interest expense
City of Ottawa
Holding Company
Telecom Ottawa
2006 EDR Application
Property Taxes
Water and sewer charges, fuel
and other miscellaneous city
services
Administration and Corporate
Services expense including
interest charged on a
temporary loan
Broadband data services and
dark fibre rental
Value
$16,021,000
$1,622,000
Basis Pricing
Pricing based on deemed rate
of 6.9% by the Distribution
Rate Handbook upon market
opening
Market-based pricing as per
municipal assessment
$257,927
Market-based pricing as per
municipal rate calculations
$14,795,000
Cost-based pricing of 80% of
costs.
$1,069,000
Market-based pricing based on
same determinants for external
customers including length of
contract, number of strands,etc
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 77 of 118
2003
Affiliate Names
City of Ottawa
Holding Company
Telecom Ottawa
Activity
Value
Interest expense
$16,021,000
Property Taxes
$1,597,000
Water and sewer charges, fuel
and other miscellaneous city
services
Administration and Corporate
Services expense including
interest charged on a
temporary loan
Basis Pricing
Pricing based on deemed rate
of 6.9% by the Distribution
Rate Handbook upon market
opening
Market-based pricing as per
municipal assessment
$294,261
Market-based pricing as per
municipal rate calculations
$15,071,000
Cost-based pricing of 80% of
costs.
Broadband data services and
dark fibre rental
$1,236,000
Market-based pricing based on
same determinants for external
customers including length of
contract, number of strands,
etc.
Activity
Value
Basis Pricing
2004
Affiliate Names
City of Ottawa
Interest expense
$16,021,000
Property Taxes
$1,644,000
Water and sewer charges, fuel
and other miscellaneous city
services
$221,128
Holding Company
Administration and Corporate
Services expense including
interest charged on a
temporary loan
$2,483,000*
Telecom Ottawa
Broadband data services and
dark fibre rental
$1,574,000
Pricing based on deemed rate
of 6.9% by the Distribution
Rate Handbook upon market
opening
Market-based pricing as per
municipal assessment
Market-based pricing as per
municipal rate calculations
Cost-based pricing of 80% of
costs, excluding some specific
shareholder costs absorbed by
the Holding Company. Interest
on short term borrowing was
charged at the bank rate
Market-based pricing based on
same determinants for external
customers including length of
contract, number of strands,etc
* The Holding Company contained 100 Finance and Corporate Services employees (whose activities were 100%
devoted to Hydro Ottawa) in 2002 and 2003. These employees were transferred into Hydro Ottawa on December
31, 2003.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 78 of 118
2006 - Forecast
Affiliate Names
Activity
Property Taxes
City of Ottawa
Water and sewer charges, fuel
and other miscellaneous city
services
Value
$1,800,000
$288,500
Interest expense (long-term
and short-term)
$13,623,915
Administration and Corporate
Services expense
$1,488,000
Broadband data services and
dark fibre rental
$1,285,200
Holding Company
Telecom Ottawa
Table 6.15 – Expenses Paid to Affiliates
2006 EDR Application
Basis Pricing
Market-based pricing as per
expected municipal
assessment
Market-based pricing as per
expected municipal rate
calculations
Market-based pricing based on
external debt held by the
Holding Company inclusive of
debt issuance costs and
administration. Interest on
short-term borrowing to be
charged at the bank rate.
Cost-based pricing of 80% of
costs, excluding some specific
shareholder costs absorbed by
the Holding Company
Market-based pricing based on
same determinants for external
customers including length of
contract, number of strands,etc
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 79 of 118
Chapter 7 – Taxes/PILS
7.0
Introduction
Hydro Ottawa is filing on the basis of a forward test year and will be using the 2006 OEB Tax Model
(“Tax Model”). Any assumptions made to accommodate the forward test year information have
been documented in Tab I of the Application Binder. The Tax Model requires disclosure of all
dividends paid and their tax treatment. In 2002 Hydro Ottawa paid a $2.2 million dividend to the
Holding Company. As these companies are associated they flow through with no tax implications.
7.1
General Methodology
Hydro Ottawa, while filing on the basis of a forward test year, has followed the principles,
methodology, and provided the details as required by the Handbook and the Tax Model.
7.2
Principles
Non-recoverable and disallowed expenses
All disallowed and non-recoverable expenses have been identified and recorded in the regulatory
tax calculations.
Capital tax exemptions
Hydro Ottawa is claiming the full amount of both the Federal Large Corporation Tax Exemption and
the Ontario Capital Tax Exemption.
Loss carry-forwards
Schedule 7-1 shows a loss carry forward as of December 31, 2004 of $14,039,274. This loss carry
forward is expected to be fully utilized in 2005; therefore, no loss carry forward is available for 2006.
Schedule 7-1: Sharing Loss Carry-Forwards
A. Loss carry-forwards as at December 31, 2004:
Distribution
Non-distribution
Total from the 2004 tax return
$14,039,274
________ 0
$14,039,274
B. Estimated loss carry-forwards as at December 31, 2005:
Distribution
Non-distribution
Total
0
________ 0
________ 0
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 80 of 118
A – B: Loss carry-forwards available for use in 2005:
Distribution
Non-distribution
Total
$14,039,274
________ 0
$14,039,274
Undepreciated capital cost (UCC) and capital cost allowance (CCA)
Hydro Ottawa is taking the full CCA for 2006 and includes in this amount the effects of the 2001
Fair Market Value (FMV) bump.
Schedule 7-2: October 2001 FMV Adjustment
UCC
Beginning
$
2001
Class 1
Class 2
Class 3
Class 8
Class 10
Class 12
Class 42
Totals
2006 EDR Application
N/A
N/A
Rate
4%
6%
5%
20%
30%
100%
12%
68,271,297
N/A
4%
6%
5%
20%
30%
100%
12%
64,743,298
N/A
33,312,666
18,070,916
8,370,709
(3,124)
1,407,600
61,158,768
CCA
$
UCC
Ending
$
1,445,862
1,227,088
463,751
(976)
861,796
(469,522)
34,700,694
19,224,379
8,811,273
(3,905)
2,010,857
3,527,999
64,743,298
1,388,028
1,153,463
440,564
(781)
603,257
33,312,666
18,070,916
8,370,709
(3,124)
1,407,600
3,584,530
61,158,768
1,332,507
1,084,255
418,535
(625)
422,280
31,980,159
16,986,661
7,952,174
(2,499)
985,320
3,256,952
57,901,815
N/A
34,700,694
19,224,379
8,811,273
(3,905)
2,010,857
2003
Class 1
Class 2
Class 3
Class 8
Class 10
Class 12
Class 42
Totals
1/2 of
Additions
$
36,146,556
20,451,467
9,275,024
(4,881)
2,872,653
(469,522)
2002
Class 1
Class 2
Class 3
Class 8
Class 10
Class 12
Class 42
Totals
Additions
$
N/A
4%
6%
5%
20%
30%
100%
12%
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 81 of 118
UCC
Beginning
$
2004
Class 1
Class 2
Class 3
Class 8
Class 10
Class 12
Class 42
Totals
N/A
N/A
Rate
4%
6%
5%
20%
30%
100%
12%
57,901,815
N/A
4%
6%
5%
20%
30%
100%
12%
54,910,704
N/A
29,472,915
15,009,414
7,176,837
(1,599)
482,807
52,140,373
CCA
$
UCC
Ending
$
1,279,206
1,019,200
397,609
(500)
295,596
30,700,953
15,967,462
7,554,565
(1,999)
689,724
2,991,111
54,910,704
1,228,038
958,048
377,728
(400)
206,917
29,472,915
15,009,414
7,176,837
(1,599)
482,807
2,770,331
52,140,373
1,178,917
900,565
358,842
(320)
144,842
28,293,998
14,108,849
6,817,995
(1,280)
337,965
2,582,845
49,557,527
N/A
30,700,953
15,967,462
7,554,565
(1,999)
689,724
2006
Class 1
Class 2
Class 3
Class 8
Class 10
Class 12
Class 42
Totals
1/2 of
Additions
$
31,980,159
16,986,661
7,952,174
(2,499)
985,320
2005
Class 1
Class 2
Class 3
Class 8
Class 10
Class 12
Class 42
Totals
Additions
$
N/A
4%
6%
5%
20%
30%
100%
12%
The FMV amount in tax differs from the accounting value by the full amount as a FMV bump
pursuant to Ontario Regulation 162/01 was recorded for tax purposes only.
The negative amounts in Schedule 7.2 only pertain to the FMV bump and the overall UCC pools are
in a positive position.
Please note the following on Schedule 7-2: The FMV bump for Class 2 ($20,451,467) and Class 3
($9,275,024) have been entered as one line item. The total of these two classes ($29,766,491) has
been removed from Class 1 assets in Account 2050. The totals for Class 1 and 8 differ by
$491,331 from the amount shown in the Tax Model, Tab 2001 Schedule 7-2 FMV. The FMV bump
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 82 of 118
for Accounts 1970, 1975 and 1980 was included with Class 1 assets on Schedule 8 of the forecast
tax filing rather than Class 8 assets as shown in the Tax Model.
Regulatory tax treatment of Eligible Capital Expenditures (ECE)
Hydro Ottawa is taking the full ECE allowed for 2006. This account does not have any FMV
adjustments from the FMV bump and only includes costs for land rights.
Interest deduction
Hydro Ottawa has deducted the deemed interest in the Tax Model as it is higher than the
forecasted actual interest expense. Schedule 7-3 provides the required information.
Schedule 7-3: Interest Expense
1)
Deemed 2006 interest expense in 2006 EDR Model
=
$16,253,946
2)
2006 interest expense
Plus 2006 capitalized interest
2006 actual interest
+
=
$12,841,451
$__ 782,464
$13,623,915
3)
4)
Plus any interest forecast for Tier 1 or 2 adjustments +
$____N/A_
Total interest
$13,623,915
=
Additional Interest Expense for 2006 OEB Tax Model =
$2,630,031
Hydro Ottawa intends to elect to capitalize interest incurred on Construction-Work-InProgress (CWIP) for tax purposes in 2006 and has elected to capitalize interest incurred on
CWIP for tax purposes for 2004 and prior years.
Interest capitalized for accounting, but deducted for tax purposes
Hydro Ottawa capitalized interest as per the capitalization policy. The amount in 2006 of $782,464
has been reflected in the Tax Model as well as Schedule 7-3.
Overlapping year-ends
Hydro Ottawa has assumed the rate year (May 1, 2006 to April 30, 2007) is the same as the tax
year (calendar 2006) in its calculations.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 83 of 118
Estimating taxable capital
Hydro Ottawa has chosen to estimate its capital base for Capital Tax calculations. Balance sheet
assumptions have been provided to support these numbers. See Tab I of the Application Binder.
The balance sheet has been prepared based on the assumption that the accounts have not
changed from the 2005 forecast except for the adjustments for capital additions and the additional
borrowing requirements.
Ontario Corporate Minimum Tax
Hydro Ottawa has not included any Ontario Corporate Minimum Tax in its calculations as this will
not apply.
Non-distribution elimination
Hydro Ottawa has excluded all non-distribution costs and revenues.
Tax credits
Hydro Ottawa has not claimed any tax credits in the Tax Model.
Impact of CDM expenditure and Smart Meter expenditures
Smart Meters amounts are included in the revenue requirement for 2006 and as such, no special
tax treatment is required.
Property Taxes
The Tax Model only addresses corporate income and capital taxes. Property tax is included in a
grouped account for distribution – other expenses.
Capital Leases
Hydro Ottawa does not have any capital leases now and does not expect to have any in 2006.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 84 of 118
7.3
Tax Payable Filings
Information to be Provided with 2006 OEB Tax Model Filings
Hydro Ottawa is providing the requested information in Tab I of the Application Binder. The variance
from 2004 to 2006 is fully explained by the utilization of the loss carry forward in 2005 so that no
loss carry forward remains for 2006.
Tax Information Disclosure in Future
Hydro Ottawa acknowledges the future information requirement of this section.
Supporting Documentation
Hydro Ottawa is providing supporting documentation in Tab I of the Application Binder.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 85 of 118
Chapter 8 – Revenue Requirement
8.0
Introduction
Hydro Ottawa has defined its revenue requirement for 2006 and has forecasted its annual costs
and revenues for 2006 in such a way as to avoid double recovery of any cost element in its rates,
regulated charges, and other incidental sources of revenue.
8.1
Service Revenue Requirement
The 2006 service revenue requirement is based on forecasted costs for 2006, including rate base
and distribution expenses, as detailed in previous chapters of this Manager’s Summary.
With Smart Meters
Service Revenue Requirement = (Rate Base X Cost of Capital) + Distribution Expenses + PILs






Rate Base = $516,455,750 as per Chapter 4
Cost of Capital = (Debt ratio) x (Debt rate) + (1- Debt ratio) x Return on Equity
Cost of Capital = 60% x 5.25% + 40% x 9% as per Chapter 5
Cost of Capital = 9.75%
Distribution Expenses = $81,103,199 as per Chapter 6
PILS = $12,700,788 as per Chapter 7
Service Revenue Requirement = $128,650,340
8.2
Base Revenue Requirement
In order to determine the base revenue requirement, the following amounts were removed from the
service revenue requirement:




The revenue determined in Schedule 11-3, Specific Service Charge Revenue, including
Late Payment Charges, and
The revenue received by the application of Other Board Approved Charges, (i.e.
administration of the RPP (formerly SSS) Administration Charge (Account 4080b), Retail
Services Revenue (Account 4082) and Service Transaction Requests (STR) Revenues
(Account 4804)).
Charges for retail services in Accounts 4082 ($283,953) and 4084 ($780) have been
forecasted based on 8 months actuals from October 2004 to May 2005. The amounts have
been annualized for 12 months.
Details are provided in Schedule 8-1.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 86 of 118
Schedule 8-1: Derivation of Base Revenue Requirement
With Smart Meters
Row
Revenue Requirement
1
Service Revenue Requirement
2
Less: Revenue from Specific Service
Charges and Late Payment Charges
3
Less: Revenue from other Boardapproved charges
4
Less: Revenue from sources other than
Board-approved rates and charges
5
Base Revenue Requirement
$
Source/Comments
$128,650,340
$2,834,012
$938,506
$0
$124,877,822
(Rate Base X Cost of Capital)
+ Distribution Expenses +
PILS
Schedule 11-3
Details provided below
Row 6 from Schedule 8-2
Row 1 – 2 – 3 - 4
Table 8.1 - Base Revenue Requirement
SSS Administration Charge, Account 4080(b):
$653,773
Wheeling revenue:
N/A
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 87 of 118
Schedule 8-2: Revenue from Sources Other Than Board-Approved
Rates and Charges
Row
Description of Revenue
2006 Revenue
Offset
Comments
1
Other Operating Revenues
$2,834,012
Accounts 4205 – 4245
2
Less: Revenue from Late Payment
Charges and Specific Service
Charges
$2,834,012
Accounts 4225, 4235
3
Net “Other Operating Revenues”
$0
Row 1 – Row 2
4
Other Income / Deductions
$0
Accounts 4305 – 4398
(not including 4375, 4380 and
4385, as per Notes to EDR 2006
Model version 2.1 issued July 20,
2005)
5
Investment Income
$0
Accounts 4405 - 4415
6
Total Revenue Offset # 2
$0
Rows 3 + 4 + 5
Transferred to Row 4 of Schedule
8-1
Table 8.2 – Other Revenue
8.3
CDM, Smart Meter and Regulatory Asset Recovery
Hydro Ottawa is not seeking approval for any incremental CDM expenditures in 2006 beyond the
amount already approved in the RP-2004-0203 proceeding.
Hydro Ottawa is applying for final recovery of regulatory assets under a separate application.
Schedule 8-3 provides the proposed rate riders.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 88 of 118
Schedule 8-3: Regulatory Asset Recovery
Class
2005 Rate Rider *
$ / kWh
Residential
General < 50 kW
Scattered Load
2006 Rate Rider **
$ / kWh
$0.0013
$0.0010
$0.0008
$/kW, or specify if other
General Service >50 kW <
1500 kW
General Service > 1500 kW
< 5000 kW
Large User
Street Lighting
Sentinel Lighting
$kW
$0.6098
($0.3146)
($0.4299)
($0.3882)
($0.6224)
Table 8.3 Regulatory Asset Recovery
*
2005 rate riders are a component of the volumetric distribution rate; no entry is necessary in this
column.
** Hydro Ottawa is applying for these rate riders effective May 1, 2006 in a separate application.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 89 of 118
Chapter 9 – Cost Allocation
9.0
Introduction
As directed by the Handbook, Hydro Ottawa is maintaining the respective class distribution
revenues at approximately the same proportions as are currently the case.
9.1
Customer Classes
Hydro Ottawa is proposing to maintain its existing customer classes and sub-classes as currently
approved. Hydro Ottawa is seeking approval to add Standby Charges for embedded generators for
the classes shown below.
Schedule 9-1: Customer Classification
Customer Classification
Current
Proposed
√
√
< 50 kW
√
√
> 50 kW non TOU (< 1500 kW)
√
√
> 50 kW TOU (>1500kW < 5000 kW)
√
√
Large Users
√
√
Unmetered Scattered Load
√
√
Street Lights
√
√
Sentinel Lights
√
√
Residential
Regular
General Service
Lighting
Back-up/Standby Power
> 50 kW non TOU (< 1500 kW)
√*
> 50 kW TOU (>1500kW < 5000 kW)
√*
Large Users
√*
Table 9.1 – Customer Classification
* See section 10.6 for a detailed explanation of Standby Charges.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 90 of 118
Schedule 9-2: Customer Eligibility Criteria
Hydro Ottawa has completed the applicable sections of this Schedule to indicate the eligibility
criteria that it uses to determine a specific customer's rate classification.
Customer Classification
Residential
Regular: This classification refers to an account taking electricity at 120/240 volts single phase
where the electricity is used exclusively in a separately metered living accommodation. Customers
shall be residing in single-dwelling units that consist of a detached house or one unit of a semidetached, duplex, triplex or quadruplex house, with a residential zoning. Separately metered
dwellings within a town house complex or apartment building also qualify as residential customers.
General Service
Less than 50 kW: This classification refers to a non residential account taking electricity at 750
volts or less whose monthly average peak demand is less than, or is forecast to be less than, 50
kW.
Greater than 50 kW non TOU (< 1500 kW): This classification refers to a non residential account
whose monthly average peak demand is greater than, or is forecast to be greater than, 50 kW but
less than 1,500 kW.
Greater than 50 kW TOU (>1500 kW < 5000 kW): This classification refers to a non residential
account whose monthly average peak demand is greater than, or is forecast to be greater than,
1500 kW but less than 5000 kW.
Large Use: This classification refers to an account whose monthly average peak demand is greater
than, or is forecast to be greater than 5,000 kW.
Unmetered Scattered Load: This classification refers to an account taking electricity at 120/240
volts single phase whose monthly average peak demand is less than, or is forecast to be less than,
50 kW and the consumption is unmetered. Such connections include cable TV power packs, bus
shelters, telephone booths, traffic lights, railway crossings, etc. The customer will provide detailed
manufacturer information/ documentation with regard to electrical demand/consumption of the
proposed unmetered load. Qualification for this classification is at the discretion of Hydro Ottawa as
defined its Conditions of Service.
Back-up/Standby Power: This classification refers to an account using local generation greater
than or equal to 500 kW to reduce monthly consumption normally provided by the distribution
system. The generation is used for load displacement only. The rate applies when the generation is
operational. Please refer to section 10.6 for complete details on the proposed rate structure.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 91 of 118
Lighting
Street Lights: This classification refers to an account for roadway lighting with a Municipality,
Regional Municipality, Ministry of Transportation and private roadway lighting operation, controlled
by photo cells.
Sentinel Lights: This classification refers to an account for privately owned non-roadway lighting
controlled by photocells. Hydro Ottawa currently owns a few sentinel lights installed by its
predecessor utilities.
9.2
Appropriate Share of the 2006 Revenue Requirement for Each Class
Hydro Ottawa has completed Schedule 9-3 to provide the 2002, 2003 and 2004 statistical data for
information purposes only. Hydro Ottawa has allocated the revenue requirement to each class
based on allocation factors determined by applying current distribution rates to Hydro Ottawa’s
2006 forecast of kilowatts and kilowatt-hours by class.
Schedule 9-3: Allocation Factors to Customer Classifications
For 2002 Year End
Customers
Total KWh or kW
Per Customer
237,755
2,255,231,727 kWh
9,485 kWh
23,104
677,030,307 kWh
29,304 kWh
3,175,108,855 kWh
883,201 kWh
8,161,952 kW
2,270 kW
642,553,663 kWh
11,682,794 kWh
1,303,349 kW
23,697 kW
664,970,205 kWh
60,451,837 kWh
1,229,882 kW
111,807 kW
17,668,066 kWh
6,488 kWh
37,901,227 kWh
870 kWh
98,838 kW
2.268 kW
93,986 kWh
723 kWh
Residential
Regular
General Service
Less than 50 kW
50 – 1500 kW
3595
1500 – 5000 kW TOU
55
Large Users
11
Unmetered Scattered Load
2723
Lighting
Street Lights
43,580
Sentinel Lights
130
Back-up/Standby Power
N/A
7,470,558,036 kWh
Totals
10,794,021 kW
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 92 of 118
For 2003 Year End
Customers
Total KWh or kW
Per Customer
242,369
2,241,354,543 kWh
9,248 kWh
23,844
802,608,939 kWh
33,661 kWh
2,949,993,636 kWh
1,015,488 kWh
6,964,189 kW
2,397 kW
784,559,822 kWh
12,861,636 kWh
1,696,853 kW
27,817 kW
651,227,427 kWh
59,202,493 kWh
1,164,450 kW
105,859 kW
17,320,782 kWh
6,255 kWh
36,129,185 kWh
824 kWh
95,675 kW
2.183 kW
93,986 kWh
723 kWh
Residential
Regular
General Service
Less than 50 kW
50 – 1500 kW
2905
1500 – 5000 kW TOU
61
Large Users
11
Unmetered Scattered Load
2769
Lighting
Street Lights
43,834
Sentinel Lights
130
Back-up/Standby Power
N/A
7,483,288,320 kWh
Totals
For 2004 Year End
9,921,167 kW
Customers
KWh or kW
Per Customer
247,760
2,266,659,492 kWh
9,147 kWh
23,205
791,471,654 kWh
34,208 kWh
2,989,300,526 kWh
987,546 kWh
6,897,682 kW
2,279 kW
791,670,830 kWh
12,978,210 kWh
1,705,538 kW
27,960 kW
621,338,901 kWh
62,133,890 kWh
1,117,842 kW
111,784 kW
17,067,540 kWh
6,161 kWh
Residential
Regular
General Service
Less than 50 kW
50 – 1500 kW
1500 – 5000 kW TOU
Large Users
Unmetered Scattered Load
2006 EDR Application
3004
61
10
2770
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 93 of 118
For 2004 Year End
Customers
KWh or kW
Per Customer
37,334,619 kWh
831 kWh
103,732 kW
2.3 kW
90,794 kWh
726 kWh
Lighting
Street Lights
44,932
Sentinel Lights
125
Back-up/Standby Power
N/A
Totals
7,514,934,356 kWh
9,824,794 kW
Table 9.2 – Class Statistics
Average 2002 to 2004
Per Customer
Residential
Regular
9,293 kWh
General Service
Less than 50 kW
50 – 1500 kW
1500 – 5000 kW TOU
Large Users
Unmetered Scattered Load
32,391 kWh
962,078 kWh
2,315 kW
12,507,547 kWh
26,491 kW
60,596,073 kWh
109,817 kW
6,301 kWh
Lighting
Street Lights
Sentinel Lights
Back-up/Standby Power
Table 9.3 – Class Averages
2006 EDR Application
842 kWh
2.25 kW
724 kWh
N/A
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 94 of 118
9.3
Appropriate Share of the 2006 CDM, Smart Meter and Regulatory Asset
Revenue Requirements
Hydro Ottawa is not seeking approval for any incremental CDM expenditures in 2006 beyond the
amount already approved in the RP-2004-0203 proceeding.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 95 of 118
Chapter 10 – Rates and Charges
10.0 Introduction
Load Forecast
10.0.1.1
Model
Hydro Ottawa’s forecasting model is based primarily on historical load data. The loading information
is comprised of two sets of data; one set prior to the amalgamation in November 2000 and one set
after. The kWh and kW demand data is entered into a forecasting model using a Holt-Winters
seasonal algorithm to manage data in which there are both trends and seasonal variations of known
periods. The algorithm also allows for the linear model to be weighted towards the most recent data
set to take into account more recent economic and social trends.
10.0.1.2
Historical Data Set
The first data set is comprised of loads from the five predecessor utilities and spans the period of
January 1997 to December 2000. Although the kWh total is accurate, the peak kW may or may not
be coincidental. The second data set is wholly from Hydro Ottawa and includes coincidental peak
demand and total kWh from January 2001 to June 2005.
10.0.1.3
Influencing Factors
There are a number of factors that can influence the accuracy of load forecasts. The percentage of
residential customers to commercial customers influences the stability of the forecast. Residential
loads are easier to forecast then larger loads. If one residential customer does something
unexpected, it has virtually no impact. However, a downturn in the economy, or the unexpected
closure of a large customer could have a significant impact on future loads. The loss of many high
tech companies in 2000 contributed to lower kWh sales during the last few years. The most recent
survey by Royal Lepage has the office vacancy in the Kanata sector at 19%, down from an all-time
high of 28.8% in 2004.
The weather is the single most important factor affecting a forecast. Unfortunately, weather is not
easy to predict. By using a reliable data model with a long enough period, weather variations are
less likely to skew the results.
Individual events, such as the blackout of August 14, 2003 and load reduction appeals, can
influence how customers will consume electricity in the future. Air-conditioning loads may decrease
as customers heed the warnings about possible brownouts or worse.
Most, if not all, new housing starts in Ottawa are heating with natural gas. The impact new housing
starts have on the overall load profile is less significant then it would have been years ago.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 96 of 118
10.0.1.4
Results
Figure 10.1 indicates the expected future kWh usage for the period 2006 to 2010. The expected
load increase in 2006 is 0.4% with annual increases of 0.9% to 1.0% into 2010.
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Forecast
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
20
20
02
Historical
01
MWh
Load Forecast
Figure 10.1 – Load Forecast
Customer Growth
310000
300000
290000
280000
Actual
Forecast
270000
260000
250000
240000
Actual
2002
2003
2004
2005
2006
2007
2008
2009
2010
264520 269191 274040
Forecast
Figure 10.2 – Customer Growth
2006 EDR Application
280323 284465 288607 292750 296893 301038
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 97 of 118
Figure 10.2 shows Hydro Ottawa’s 2006 customer forecast for revenue allocation and rate design
purposes. A slightly lower customer count was used for determining projected capital expenditures
for residential subdivisions. Overall, Hydro Ottawa is forecasting modest growth over the next 5
years due to the changing aspects of loads including economic trends, customer conservation
initiatives and a preference for natural gas in the residential sector.
10.1
Fixed/Variable Splits
Hydro Ottawa is not proposing any changes to the Fixed/Variable splits as calculated by the model.
10.2
Unmetered Scattered Loads
Hydro Ottawa currently bills its unmetered scattered loads with the same rates as for the General
Service < 50 kW class. For 2006, Hydro Ottawa is setting the monthly fixed service charge at 50%
of the monthly fixed service charge of the General Service < 50 kW class rate, as directed by the
Board. The rates will continue to apply on a per-connection basis. Hydro Ottawa does not propose
to reallocate the resultant revenue shortfall because the addition of a Standby Charge substantively
offsets any lost revenue.
Schedule 10-2: Unmetered Scattered Loads
1) Currently, the monthly service charge for unmetered scattered load customers, having multiple
unmetered connection points, is on a per customer and not a per connection point basis and the
level of the charge is equal to or less than the General Service <50 kW monthly service charge per
customer.
Yes ____ No __X__
2) Currently, there is a unique level of monthly service charge(s) payable by unmetered
scattered loads.
Yes ____ No __X__
Hydro Ottawa accordingly provides Table 10.1.
Connections
kWh
2002 Unmetered Scattered Load
2723
17,668,066
2003 Unmetered Scattered Load
2769
17,320,782
2004 Unmetered Scattered Load
2770
17,067,540
2754
17,352,129
Average Unmetered Scattered Load
Table 10.1 – Unmetered Scattered Loads
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 98 of 118
10.3
Time of Use Distribution Rates
Hydro Ottawa has a sub-class of General Service which is listed on Hydro Ottawa’s current rate
schedule (for rates effective April 1, 2005) as General Service > 50 kW Time of Use. For Hydro
Ottawa, the General Service > 50 kW (Time of Use) class was defined as “those customers with an
average annual demand greater than 1500 kW” when the class was first created in November
2000. This was specified in Hydro Ottawa’s rate application dated August 15, 2000; a copy is
provided in Tab E of the Application Binder. Only those customers with demand in excess of 1500
kW fall within the General Service >50 kW (Time of Use) class. All of these customers have interval
meters as required by the Distribution System Code and therefore would be considered Time of
Use.
The definition of this General Service > 50 kW Time of Use sub-class for Hydro Ottawa is different
than for most other LDC’s. Hydro Ottawa accordingly proposes that this class be renamed as
General Service > 1500 kW < 5000 kW to avoid confusion.
10.4
Transformer Ownership Allowance
Hydro Ottawa is proposing to drop its Transformer Ownership Allowance for services greater than
115 kV since any customers connected at greater than 115 kV became market participants in May
2002 and are no longer Hydro Ottawa customers. The Transformer Ownership Allowance for
services less than 115 kV will remain unchanged for 2006.
Schedule 10-4: Transformer Ownership Allowance
2002
kW
$
General Service > 50 kW non TOU (<1500 kW)
631,571
$
284,206.95
General Service > 50 kW TOU (>1500 kW)
912,947
$
410,826.15
Large Users
909,500
$
409,274.90
Total
2,454,018
$ 1,104,308.10
2003
kW
$
General Service > 50 kW non TOU (<1500 kW)
612,102
$
275,445.90
General Service > 50 kW TOU (>1500 kW)
883,042
$
397,368.90
Large Users
908,761
$
408,942.45
Total
2006 EDR Application
2,403,905
$ 1,081,757.25
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 99 of 118
2004
kW
$
General Service > 50 kW non TOU (<1500 kW)
633,860
$
285,237.00
General Service > 50 kW TOU (>1500 kW)
886,223
$
398,800.35
Large Users
959,518
$
431,783.10
Total
2,479,601
$ 1,115,820.45
Table 10.2 – Transformer Ownership Allowance
10.5
Update of Loss Adjustment Factors
Hydro Ottawa’s current loss adjustment factor is 1.0364. The calculation in Table 10.3 represents a
reduction of 0.19%. The resultant loss adjustment factor is acceptable to Hydro Ottawa and is
below the 5% threshold. Hydro Ottawa is not proposing any changes to the loss adjustment factor
for the Large Use customer class.
Schedule 10-5: Determination of Loss Adjustment Factors
2002
2003
2004
7,751,077,843
7,755,187,001
7,702,017,686
676,274,698
662,298,293
631,901,662
A
“Wholesale” kWh (IMO)
B
“Wholesale” kWh for Large Use Customer(s)
(IMO)
C
Net “Wholesale” kWh (A) –(B)
7,074,803,144
7,092,888,708
7,070,116,024
D
“Retail” kWh (Distributor)
7,470,558,035
7,483,288,326
7,514,934,346
E
“Retail” kWh for Large Use Customer(s) (1%
loss)
664,970,205
651,227,427
621,338,901
F
Net “Retail” kWh (D)-(E)
6,805,587,830
6,832,060,899
6,893,595,445
G
Loss Factor [(C)/(F)]
1.0396
1.0382
1.0256
H
I
Secondary Distribution Loss Adjustment
Factor (3 year average)
Primary Distribution Loss Adjustment Factor
(SDLA Factor x 0.99)
Table 10.3 – Loss Adjustment Factor
2006 EDR Application
1.0344
1.0240
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 100 of 118
10.6
Standby Charges
Hydro Ottawa is proposing to introduce a Standby Charge as part of its Application. The Standby
Charge will apply to all customers with load displacement generators with a total combined
nameplate rating greater than or equal to 500 kVA. The purpose of the Standby Charge is to
recover the cost of providing reserved capacity to these customers and to eliminate crosssubsidization by other customers. Hydro Ottawa’s distribution rates are designed based on the
principle of continuous use. When customers displace load with generation, the expected revenue
to recover capital, operating, maintenance and administration costs are not realized and the burden
falls on other customers to subsidize those revenue shortfalls.
Due to the nature of Hydro Ottawa’s distribution system and its embedded generators, site-specific
Standby Charges are not practical. Generators are installed in very dense urban environments and
determining what specific assets are related to each site is simply too difficult to assess. Hydro
Ottawa is proposing to use class-specific charges instead.
Rate Structure
The Standby Charge is composed of a standby monthly service charge for administration and a
standby distribution volumetric rate based on the Contract Backup Demand as determined by the
methodology outlined in section 10.6.4.
Standby Monthly Service Charge – A monthly fixed charge applied to cover the incremental cost of
monitoring, billing and administration related to providing standby facilities.
Standby Distribution Volumetric Rate – A rate per kW (or kVA; see section 10.8) of Billed Backup
Demand. The Billed Backup Demand quantity will be equal to or less than the Contract Backup
Demand depending on whether the reserved capacity was required during the billing period. The
standby distribution volumetric rate would be equal to the class-specific distribution volumetric rate.
Customer Classification
The rate classification of customers with load displacement generators will be net of the connected
generation. The 12-month average demand used to determine customer classifications will be the
demand based on meter readings.
Contract Backup Demand
The Contract Backup Demand can be determined by using the full nameplate value of the
generating plant or a lesser amount as agreed to by the customer and Hydro Ottawa. The customer
can elect to contract for a lesser amount if it intends to shed load when the generation is not
available. This will reduce the customer’s monthly cost but may expose them to the Backup
Overrun Adjustment if the contracted amount is exceeded. If a customer determines that no backup
capacity is required, it must still sign a Standby Facilities Contract indicating that it has elected not
to contract for backup capacity. Backup Overrun Adjustments will be applied if the customer is
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 101 of 118
forced to use standby capacity for which it has not contracted. Hydro Ottawa reserves the right to
impose a Contract Backup Demand if a customer fails to meet its obligations.
Determination of Billed Backup Demand
The Contract Backup Demand establishes a ceiling for Billed Backup Demand (excluding Backup
Overrun Adjustments). The following three examples illustrate how the volumetric component of the
Standby Charge is determined. The examples that follow assume that the regular distribution
volumetric charges apply to the metered peak demand. The Standby Charge is intended to
supplement demand shortfalls introduced by the generation.
Example 1 – Generation ON for entire period
In this case the Billed Backup Demand would be equal to the Contract Backup Demand. The
Contract Backup Demand replaces demand that would have been captured by Hydro Ottawa’s
interval metering had the generation been off.
Example 2 – Generation OFF for entire period
In this case the Billed Backup Demand would be zero. The customer is billed based on the peak
demand registered on Hydro Ottawa’s interval meters.
Example 3 – Generation ON and OFF during period (No Backup Overruns)
In this example the Billed Backup Demand is:
Contract Demand – (Metered Peak generator OFF – Metered Peak generator ON)
This assumes that the difference between the generator OFF peak and the generator ON peak is
less then the contracted amount; if not, the customer is subject to a Backup Overrun Adjustment.
Backup Overrun Adjustment
The Backup Overrun Adjustment is to ensure customers contract for the appropriate amount of
standby capacity. Customers must meet contract requirements by shedding load if they have
contracted for an amount less then the nameplate rating. The Backup Overrun Adjustment is
calculated as follows:
(Generator OFF Peak – Generator ON Peak) – Contract Backup Demand
If the Contract Backup Demand is less than the difference between the two peaks, a charge will
apply.
Backup Overrun Adjustments are determined by reviewing interval data prior to and immediately
after a generator change-of-status. The instantaneous demand difference with the generator on and
off is determinative of the standby capacity used and any overrun used. The Backup Overrun
Adjustments never exceed the nameplate rating of the generating plant; consequently, the Backup
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 102 of 118
Overrun Adjustment only applies to customers that have contracted for Backup Demand less then
the generator nameplate rating.
Contract Backup Demand is reviewed on a quarterly basis. If a customer has exceeded the
Contract Backup Demand (Backup Overrun Adjustment) in any of the three preceding billing
periods, the Contract Backup Demand will be increased to the highest monthly level of utilization
that occurred in those three months.
The Backup Overrun Adjustment is assessed at the same rate as the Billed Backup Demand.
Standby Monthly Service Charge
The Standby Monthly Service Charge is intended to cover the cost to determine, bill and monitor
Billed Backup Demands and Backup Overrun Adjustments. The charge is based on time and
material as shown on the following schedule.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-00381
Tab B
Filed 2005-08-02
Page 103 of 118
Specific Service Charges: Embedded Generation –Standby Monthly Service Charge
Specific Service Charge Description:
$95 Standby Monthly Service Charge
Used For:
Standby Monthly Service Charge
L
A
B
O
U
R
Direct Labour (inside staff) Straight Time
Direct Labour (inside staff) Overtime
Direct Labour (field staff) Straight Time
Direct Labour (field staff) Overtime
Other Labour (Specify)
Payroll Burden %
Total Labour Cost
O Small Vehicle Time
T Large Vehicle Time
H Other:
Material
E
Contract
R
Other
Total Other
Total Cost
Specific Service Charge Value Requested - Round to nearest $5



Reading Generator Meter Data and analyzing peaks
Producing Shadow report
Producing Annual Statistical report
Table 10.4 – Standby Monthly Service Charge
2006 EDR Application
Rate/Amount
95.00
Hours/Units
1.0
O/T Factor
Calculated
Cost
$95.00
Included
$95.00
$95.00
$95.00
Hydro Ottawa Limited
RP-2005-0020
EB-2005-00381
Tab B
Filed 2005-08-02
Page 104 of 118
Parallel Generation Data Requirements
Customers will be required to provide generator operating and load information pertaining to parallel
generation with nameplate ratings greater than or equal to 500 kVA. All new generators will be
metered to allow comparison to Hydro Ottawa’s supply point load profile for determining billing
demands. For existing generators, the Billed Backup Demand will be determined from the
customer’s generator load data and operating logs.
10.7
Low Voltage (LV) Charges
Hydro Ottawa does not provide LV and related services to any embedded distributors and does not
expect to do so in 2006. Hydro Ottawa has included in its 2006 expenses an estimate for Hydro
One’s LV charges based on current rates (as published on Hydro One’s web site). The estimate is
based on historical data and forecasted loads for 2005 and 2006.
Location
2002
Total
2003
2004
Shared DS in kW
235,227 228,541 224,693
Shared Lines in km
223
223
223
3-year
Average
229,487
223
Forecasted
2005
2006
235,148
191
2006
Expense
Rate
239,400
96
Total Expense
1.87 $
465 $
447,677.56
44,528.40
$
492,205.96
Table 10.5 – Low Voltage Charges
It is Hydro Ottawa’s understanding that the difference between Hydro One’s LV charges calculated
with current rates and Hydro One’s actual LV charges will be tracked in a variance account for
future disposition.
10.8
Demand Determinants
Hydro Ottawa bills demand customers based on 100% of the kilowatts (kW) or 90% of the kilovoltamps (kVA). This practice will continue in 2006.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 105 of 118
Chapter 11 – Specific Service Charges
11.0 Introduction
Hydro Ottawa intends to use the Board’s standard amounts as indicated in Schedule 11-1.
Schedule 11-1: Specific Service Charges: Standard Amounts
Rate
Code
Standard Name
Calculation Method – Check Box
Std Amt
Standard
Formula
Rate
1
Arrears Certificate
$15.00
2
3
Statement of Account
Pulling post dated checks
$15.00
$15.00
4
Duplicate invoice for previous billing
$15.00
5
Request for other billing information
$15.00
6
7
8
9
Easement letter
Income tax letter
Notification charge
Account history
Credit reference/credit check (plus credit agency
cost)
$15.00
$15.00
$15.00
$15.00
11
Returned cheque charge (plus bank charges)
$15.00
12
13
$15.00
$15.00
15
Charge to certify cheque
Legal letter charge
Account set up charge/change of occupancy charge
(plus credit agency cost if applicable)
Special meter reads
16
Collection of account charge – no disconnection
$30.00
10
14
17
18
19
Collection of account charge – no disconnection –
after regular hours
Disconnect/Reconnect at meter – during regular
hours
Install/Remove load control device – during regular
hours
$15.00
$30.00
$30.00
$65.00







$65.00
Disconnect/Reconnect at meter – after regular hours
$185.00
21
Install/Remove load control device – after regular
hours
$185.00
22
Disconnect/Reconnect at pole – during regular hours
$185.00
23
Disconnect/Reconnect at pole – after regular hours
$415.00
Meter dispute charge plus Measurement Canada
fees (if meter found correct)
25
Service call – customer-owned equipment
26
Service call – after regular hours
Temporary service install & remove – overhead – no
27
transformer
Temporary service install & remove – underground –
28
no transformer
Temporary service install & remove – overhead –
29
with transformer
Specific Charge for Access to the Power Poles
30
$/pole/year
Additional Charges – Please be Specific – NONE

$165.00
20
24
Other
Formula



$30.00
$30.00
$165.00
$500.00

$300.00
$1000.00
$22.35

Regular Hours of Operation: Weekdays (excluding statutory holidays) from 8:00 am to 4:00 pm
Table 11.1 - Specific Service Charges - Summary
2006 EDR Application
Time &
Materials
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 106 of 118
11.1
Methodology
Hydro Ottawa is proposing to use the Board’s standard amounts for activities that are over
and above its standard level of service.
11.2
Customer Administration
Hydro Ottawa understands and will comply with this section.
11.3
Non-Payment of Account
Late Payment Charge
Hydro Ottawa proposes to continue charging 1.5% per month (19.56% per annum) for late
payments.
Collection of Account Charge
Hydro Ottawa understands and will comply with this section.
Reconnection of Electricity Service Charge
Hydro Ottawa understands and will comply with this section.
11.4
Service Calls
Hydro Ottawa understands and will comply with this section.
11.5
Temporary Electricity Service Charge
Hydro Ottawa is proposing to use the Board’s basic Temporary Service Installation Charge
for all temporary services not requiring transformers or pole replacement. The service must
be installed during regular working hours. All other temporary services will be provided on a
cost recovery basis.
11.6
Specific Charge for Access to Power Poles
Hydro Ottawa is proposing to use the Board’s pole attachment charge of $22.35 per pole,
per attacher, per year when applicable in 2006. Hydro Ottawa may in the future decide to
apply for a revised rate.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 107 of 118
11.7
Other Services and Charges
Hydro Ottawa currently has Board approval for the recovery of losses from the installation of
customer owned dry core transformers. Dry core transformers are installed up-stream from
Hydro Ottawa’s revenue meters and therefore any lost energy and demand is not charged.
The dry core transformer charge is intended to recover this lost energy and demand.
The proposed dry core transformer charges are based on specific transformer sizes that are
common in Hydro Ottawa’s service territory and have now been separated into cost-ofpower (commodity, wholesale market and transmission) and distribution charges. The
distribution portion has been included as other revenue to reduce the base revenue
requirement. The cost-of-power portion will be part of Hydro Ottawa’s retail settlement
variance accounts (RSVA).
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 108 of 118
11.8
Revenue from Specific Service Charges
Hydro Ottawa has completed Schedule 11-3 and has included revenue from Specific Service Charges in its Application.
Schedule 11-3: Specific Service Charges: Revenue
Rate Code
Description
Hydro Ottawa – Historical
Std Amt
Hydro Ottawa - Forecast
2002
2003
2004
3-Year
2005
2006
Amount
Volume
Volume
Volume
Average
Volume
Volume
1
Arrears Certificate
$15.00
2937
2180
2000
2372.33
2100
2400
$
32,000
2
Statement of Account
$15.00
3
Pulling post dated checks
$15.00
4
Duplicate invoice for previous billing
$15.00
4000
4000
4000
$
40,000
5
Request for other billing information
$15.00
3000
3000
3000
$
30,000
6
Easement letter
$15.00
7
Income tax letter
$15.00
8
Notification charge
$15.00
9
Account history
$15.00
10
Credit reference/credit check (plus credit agency cost)
$15.00
11
Returned cheque charge (plus bank charges)
$15.00
12
Charge to certify cheque
$15.00
13
Legal letter charge
$15.00
14
Account set up charge/change of occupancy charge (plus
credit agency cost if applicable)
$30.00
15
Special meter reads
$30.00
16
Collection of account charge – no disconnection
$30.00
17
Collection of account charge – no disconnection – after regular
hours
$165.00
18
Disconnect/Reconnect at meter – during regular hours
$65.00
19
Install/Remove load control device – during regular hours
$65.00
20
Disconnect/Reconnect at meter – after regular hours
$185.00
21
Install/Remove load control device – after regular hours
$185.00
2006 EDR Application
Revenue
1200
1200
$
18,000
3853
3574
3404
3610.33
4000
4000
$
54,667
49523
44281
56485
50096.33
53200
54000
$ 1,231,200
$
-
2019
1141
1103
1421.00
1400
1400
$
30,333
1891
2893
2878
2554.00
1400
1400
$
70,000
130
$
18,200
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 109 of 118
Rate Code
Description
Hydro Ottawa – Historical
Std Amt
Amount
Hydro Ottawa - Forecast
2002
2003
2004
3-Year
2005
2006
Volume
Volume
Volume
Average
Volume
Volume
Revenue
22
Disconnect/Reconnect at pole – during regular hours
$185.00
10
$
2,016
23
Disconnect/Reconnect at pole – after regular hours
$415.00
2
$
710
24
Meter dispute charge plus Measurement Canada fees (if meter
found correct)
$30.00
25
Service call – customer-owned equipment
$30.00
26
Service call – after regular hours
$165.00
27
Temporary service install & remove – overhead – no
transformer
$500.00
2
$
1,000
28
Temporary service install & remove – underground – no
transformer
$300.00
29
Temporary service install & remove – overhead – with
transformer
30
Specific Charge for Access to the Power Poles $/pole/year
$1,000.00
$22.35
20435
20435
20435
Rate
Schedule
5397 kW
5397 kW
5397 kW
$ 491,802
Additional Charges – Please be Specific
31
Drycore Transformer Distribution Charge
$ 14,084
32
33
34
Note:
2006 Revenue is pro-rated for 8 months at new rate
4 months at old rate
Total SSC Revenue
Revenue From Late Payment Charges
Total Revenue
Table 11.2 - Specific Service Charges - Detail
2006 EDR Application
$2,034,012
$800,000
$2,834,012
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 110 of 118
Chapter 12 – Other Regulated Charges
12.0 Introduction
Hydro Ottawa currently applies the Board-approved charges for the administration of the retail
market. The revenue is included in Other Regulated Charges for 2006.
12.1
RPP (formerly SSS) Administration Charge
Hydro Ottawa currently uses the Board-approved $0.25 per month administration charge to each
RPP customer. This charge will remain unchanged for 2006.
12.2
Retail Service Charges
Establishing Service Agreements
Hydro Ottawa currently uses the Board-approved charges for all retailer service agreements as
follows:



$100 one-time charge per agreement per retailer
$20 per month per retailer to recover the cost of contract administration and
monitoring of prudential requirements
$0.50 per month per customer to recover the cost of general accounting,
administration services and other customer care services.
All of these charges will remain unchanged for 2006.
Distributor-Consolidated Billing
Hydro Ottawa currently charges the Board-approved charge of $0.30 per month per customer to
recover costs associated with producing distributor-consolidated bill-ready services. This charge will
remain unchanged for 2006.
Retailer-Consolidated Billing
Hydro Ottawa currently credits retailers providing billing services an avoided cost of $0.30 per
month per customer. This credit will remain unchanged for 2006.
Service Transaction Requests (STR)
Hydro Ottawa currently charges the Board-approved fees for the processing of STR requests as
follows:
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 111 of 118



$0.25 for initial STR screening,
$0.50 for STR processing,
$2.00 for STR exceeding two per year.
All of these fees will remain unchanged for 2006.
Monitoring and Cost Tracking
Hydro Ottawa has established and maintains the appropriate Retail Services Costs Variance
Accounts (RCVA). This practice will continue in 2006.
12.3
Non-Competitive Electricity Charges
Wholesale Market Service Rate
Hydro Ottawa currently uses the Board-approved rate of $0.0052/kWh. This rate will remain the
same for 2006. Hydro Ottawa combines this rate with the Rural and Remote Protection charge of
$0.001/kWh when billing its customers. This practice will continue in 2006.
Retail Transmission Service Rates
Hydro Ottawa is applying separately for an adjustment to its Retail Transmission Service (RTS)
rates. The Board authorized such an application in its letter dated July 5, 2005. The RTS
connection rates would decrease while the RTS network rates would be revenue neutral if the
Board approves the proposed RTS rates.
Charges/Taxes Levied by the Government of Ontario
Hydro Ottawa will continue to use its current RRRP and Debt Retirement Charges in 2006 unless
authorized by the provincial government to make a change.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 112 of 118
Chapter 13 – Mitigation
13.0 Impact Analysis
Hydro Ottawa has identified a number of inconsistencies with the calculation of rate impacts in the
2006 EDR Rate Model. These calculations have been modified to ensure accurate impact
calculations. The calculations are provided in Tab H of the Application Binder.
Hydro Ottawa is choosing to mitigate the rate impact of its Standby Charge by reducing the
volumetric rate by 50%, until such time as a cost allocation study is completed and the rates can be
reviewed. Although the rate affects only a few customers, Hydro Ottawa is aware that the added
charges are significant and customers must be allowed time to factor these cost into their operating
expenses.
Although the rate increase for Sentinel Lights was not above the 10% threshold set by the Board,
Hydro Ottawa has chosen to cap the increase to mirror the average residential customer increase
of 4%, since these lights are predominately rural residential. Since the number of lights is very
small, Hydro Ottawa is not proposing to reallocate the lost revenue.
13.1
Mitigation Methodologies
Other than the mitigation of the Standby Charge and Sentinel Lights, Hydro Ottawa has maintained
rate increases below the prescribed threshold. No mitigation plan is required.
13.2
Rate Harmonization (Amalgamated or Acquired Service Areas)
Hydro Ottawa’s distribution rates are fully harmonized.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 113 of 118
Chapter 14 – Comparators and Cohorts
14.0 Comparators and Cohorts
Hydro Ottawa is awaiting the release of the Board’s Comparators and Cohorts analysis later this
summer and will respond as required.
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 114 of 118
Chapter 15 – Service Quality Regulation
15.0 Introduction
Hydro Ottawa provides its Service Quality Indicator results in Schedule 15-1. Please note that the
2003 results are exclusive of the August 14th blackout.
Schedule 15-1: Service Quality and Reliability Performance 2002 to 2004
Service Quality Indicators
1a
Connection of New Services – Low Voltage
Standard: 90% or better
2002
96.36%
1b
2003
2004
100%
100%
2003
2004
92.61%
90.70%
Appointments Met
Standard: 90% or better
2002
98.15%
4
90.70%
Underground Cable Locates
Standard: 90% or better
2002
92.68%
3
2004
95.08%
Connection of New Services – High Voltage
Standard: 90% or better
2002
100%
2
2003
2003
2004
99.91%
98.30%
Telephone Accessibility (Telephone Service Factor)
Standard: 65% or better
2002
76.00%
2006 EDR Application
2003
2004
70.14%
72.20%
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 115 of 118
5
Written Responses to Enquiries
Standard: 80% or better
2002
91.36%
6a
2004
95.14%
90.70%
Emergency Response - Urban
Standard: 80% or better
2002
98.9%
6b
2003
2003
2004
99.09%
98.10%
Emergency Response - Rural
Standard: 80% or better
2002
2003
100%*
* In 2003, all areas are considered urban
2004
N/A
N/A
Reliability Indicators
7
SAIDI (System Average Interruption Duration Index)
Standard: Within the range of performance over the previous 3 years
2002
2003
2004
1.321
1.440
0.7611
8
SAIFI (System Average Interruption Frequency Index)
9
Standard: Within the range of performance over the previous 3 years
2002
2003
2004
1.390
1.460
0.6616
CAIDI (Customer Average Interruption Duration Index)
Standard: Within the range of performance over the previous 3 years
2002
2003
2004
0.951
0.980
1.1504
Table 15.1 – Performance Indicators
2006 EDR Application
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 116 of 118
Exhibit A
Proposed Schedule of Distribution Rates and Charges
Effective May 1, 2006
APPLICATION
Application of rates and charges shall be in accordance with the Electricity Distribution Rate
handbook and amendments thereto or any other Codes or Guidelines, including the Standard
Application of Rates as approved by the former Ontario Hydro, which may be applicable to the
administration of this rate schedule as approved by the Board.
MONTHLY RATES AND CHARGES
RESIDENTIAL SERVICE:
Monthly Service Charge
Variable Distribution Charge
(per customer)
(per kWh)
$7.78
$0.0189
(per customer)
(per kWh)
$8.86
$0.0186
(per customer)
(per kW)
$256.49
$2.6357
Standby Monthly Service Charge
(per customer)
Standby Distribution Volumetric Rate (per kW)
$95.00
$1.3179
GENERAL SERVICE < 50 kW:
Monthly Service Charge
Distribution Volumetric Rate
GENERAL SERVICE > 50 kW < 1500 kW:
Monthly Service Charge
Distribution Volumetric Rate
GENERAL SERVICE > 1500 kW < 5000 kW:
Monthly Service Charge
Distribution Volumetric Rate
(per customer)
(per kW)
Standby Monthly Service Charge
(per customer)
Standby Distribution Volumetric Rate (per kW)
$4,124.11
$2.4172
$95.00
$1.2086
LARGE USE:
Monthly Service Charge
Distribution Volumetric Rate
(per customer)
(per kW)
Standby Monthly Service Charge
(per customer)
Standby Distribution Volumetric Rate (per kW)
2006 EDR Application
$14,978.28
$2.6822
$95.00
$1.3411
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 117 of 118
SENTINEL LIGHTING
Monthly Service Charge
Distribution Volumetric Rate
(per connection)
(per kW)
$1.74
$6.3700
(per connection)
(per kW)
$0.34
$2.5529
(per customer)
(per kWh)
$4.43
$0.0198
STREET LIGHTING
Monthly Service Charge
Distribution Volumetric Rate
UN-METERED SCATTERED LOADS
Monthly Service Charge
Distribution Volumetric Rate
Specific Service Charges
Amount
Arrears Certificate
Duplicate Invoice
Request for Other Billing Information
Credit Reference/Credit Check
$15.00
$15.00
$15.00
$15.00
Return Cheque Charge (plus bank charges)
Account Setup Charge/Change of Occupancy
Collection of Account Charge
Disconnect/Reconnect at Meter – Regular Hours
Disconnect/Reconnect at Meter – After Hours
Disconnect/Reconnect at Pole – Regular Hours
$15.00
$30.00
$30.00
$65.00
$185.00
$185.00
Disconnect/Reconnect at Pole – After Hours
Temporary Service Install/Remove – No Transformer
Pole Attachments - $/pole/attacher/year
$415.00
$500.00
$22.35
Table A.1 – Specific Services Charges New
Other Service Charges
Late Payment – per month
Late Payment – per annum
Dry core Transformer Losses
Amount
1.5%
19.56%
As per Schedule
Table A.2 – Other Services Charges New
Service Allowances
Transformer Ownership < 115 kW – per kW of Billed
Demand
Table A.3 – Service Allowance New
2006 EDR Application
Amount
$0.45
Hydro Ottawa Limited
RP-2005-0020
EB-2005-0381
Tab B
Filed 2005-08-02
Page 118 of 118
Dry Core Transformer Losses
Transformers
No Load
Loss
(W)
Load
Loss
(W)
Rates
25 KVA 1 PH
37.5 KVA 1 PH
50 KVA 1 PH
75 KVA 1 PH
100 KVA 1 PH
150 KVA 1 PH
167 KVA 1 PH
200 KVA 1 PH
225 KVA 1 PH
250 KVA 1 PH
150
200
250
350
400
525
650
696
748
800
900
1200
1600
1900
2600
3500
4400
4700
5050
5400
0.113
0.150
0.188
0.263
0.300
0.394
0.488
0.522
0.561
0.600
82
110
137
192
219
287
356
381
410
438
0.480
0.064
0.086
0.102
0.139
0.187
0.236
0.252
0.270
0.289
9
12
16
18
25
34
43
46
49
53
0.161
0.214
0.273
0.364
0.439
0.581
0.723
0.774
0.831
0.889
91
121
152
210
244
321
399
427
459
491
$2.60
$0.42
$0.56
$0.71
$0.95
$1.15
$1.52
$1.89
$2.02
$2.17
$2.32
Cost of
Energy and
Wholesale
Market per
kWh
$.0642
$5.84
$7.77
$9.76
$13.48
$15.66
$20.61
$25.62
$27.41
$29.47
$31.52
*15 KVA 3 PH
125
*45 KVA 3 PH
300
400
*75 KVA 3 PH
*112.5 KVA 3 PH 600
*150 KVA 3 PH
700
900
*225 KVA 3 PH
*300 KVA 3 PH
1100
*500 KVA 3 PH
1500
2100
*750 KVA 3 PH
650
1800
2400
3400
4500
5300
6300
9700
12000
0.094
0.225
0.300
0.450
0.525
0.675
0.825
1.125
1.575
68
164
219
329
383
493
602
821
1150
0.035
0.096
0.129
0.182
0.241
0.284
0.337
0.519
0.643
6
8
23
33
44
52
61
94
117
0.129
0.321
0.429
0.632
0.766
0.959
1.162
1.644
2.218
75
182
242
362
427
544
664
916
1267
$0.34
$0.84
$1.12
$1.65
$2.00
$2.50
$3.03
$4.29
$5.79
$4.82
$11.68
$15.54
$23.24
$27.41
$34.92
$42.63
$58.81
$81.34
Monthly
Monthly No
No Load
Load Loss
Loss
(kW)
(kWH)
Monthly Monthly Monthly
No Load No Load
Total
Loss
Loss
Loss
(kW)
(kWH)
(kW)
Monthly
Total
Loss
(kWH)
Cost of
Transmission
per kW
No Load and load losses from CSA standard C802-94: Maximum losses for distribution, power and dry-type transformers commercial use
Average load factor = 0.46 average loss factor = 0.2489
*For non-preferred KVA ratings no load and load losses are interpolated as per CSA standard
Table A.4 – Dry Core Transformer Charges
2006 EDR Application
Total
Monthly
cost of
power
Cost of
Distribution
per kW
na
$6.26
$8.33
$10.47
$14.43
$16.81
$22.12
$27.50
$29.43
$31.64
$33.84
$2.61
$0.42
$0.56
$0.71
$0.95
$1.15
$1.52
$1.89
$2.02
$2.17
$2.32
$5.15
$12.52
$16.66
$24.89
$29.41
$37.43
$45.66
$63.10
$87.13
$0.34
$0.84
$1.12
$1.65
$2.00
$2.50
$3.03
$4.29
$5.79