Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
1.
Ref:
Exhibit 1 / Tab 1 / Schedule 10
The Application states “All of the power that Veridian distributes is acquired from Hydro
One’s system. Some supply points are located at Hydro One Transformer Stations and
others at the distribution voltage level. Due to Veridian’s diverse and non-contiguous
service areas there are a large number and variety of supply points, however, the bulk of
the power is received at 44 kV.”
Request
(a) Please confirm that all of the contiguous and non-contiguous service areas of
Veridian Connections Inc. (Veridian) receive supply from Hydro One
Distribution) for 2010
(b) If not please indicate which service areas are supplied directly from hydro one
transmission
(c) Please provide details of all the supply arrangements.
Response:
(a) Veridian confirms that all service areas are supplied from Hydro One Distribution for
2010.
(b) N/A.
(c) Exh. 1/Tab 1/Sch 1/Att 1 provides a schematic of how each service area is connected
and at what voltages.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
2.
Ref:
Exhibit 1 / Tab 2 / Schedule 1 / Page 16
The Application States “Veridian proposes that the 2010 base revenue requirement be
assigned to the two rate zones in the same proportions used to establish its 2006 Board
approved distribution rates. The allocations used at that time were 94.04% to
Veridian_Main and 5.96% to Veridian Gravenhurst. For the 2010 test year, the resulting
apportionment of base revenue requirement is:
Veridian Main - $45,059,625
Veridian Gravenhurst - $2,855,757
Request
(a) Provide a continuity schedule that shows starting in 2006, the components of and
total base distribution revenue requirement for Main and Gravenhurst
(b) Calculate the % of the DRR for each service area and compare this to the Board
Approved percentages and proposed 2010 allocations of Main - $45,059,625 and
Gravenhurst - $2,855,757
Response:
(a) The information required to provide a continuity schedule that starts in 2006 showing
the components of and total base distribution revenue requirement for Main and
Gravenhurst is not available. Please see Exhibit 6, Tab 2, Schedule 1 for further
details.
(b) Please see the response to Board Staff interrogatory #38.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
3.
Ref:
Exhibit 1 / Tab 2 / Schedule 4
Exhibit 1 / Tab 2 / Schedule 5
Request
(a) Please provide an electronic copy of Exhibit.1 Tab 2 Schedules 4 and 5 -Revenue
Requirement Work Form Model.
(b) Why was the model not run for the Main and Gravenhurst Service areas
separately based on the inputs (ratebase etc) approved by the Board in 2006 as
updated?
(c) What is the plan to harmonize rates for Main and Gravenhurst in terms of timing?
(d) Explain why separate accounting and determination of the Revenue Requirements
for Main and Gravenhurst areas should not be maintained during the transition?
Response:
Exhibit 1, Tab 2, Schedules 4 and 5-Revenue Requirement Work Form Model have
been revised as a result of Veridian’s Application Update. This interrogatory has
been answered on the basis of the updated values.
(a) An updated electronic version of the Revenue Requirement Work Form Model has
been filed as part of Veridian’s Application Update.
(b) Veridian ran the model for the 2010 Test Year only based on its interpretation of the
Minimum Filing Requirements.
(c) Veridian’s plan for harmonization of the Main and Gravenhurst rate zones has not yet
been determined.
(d) Please see Exhibit 6, Tab2, Schedule 1.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
4.
Ref:
Exhibit 1 / Tab 1 / Schedule 10
Exhibit 2 / Tab 1 / Schedule 2
Request
Does Veridian or Hydro One Networks own the transformer stations that step
down the power supplied down from 230 kW & 115 kW to primary distribution
voltage in the 12 service areas?
Response:
Veridian does not own any Transformer Stations (TS). All such stations involved in the
supply to Veridian are owned by Hydro One.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
5.
Ref:
Exhibit 2 / Tab 10 / Schedule 1 / Page 1 / Table 1
Request
(a) What is the source of the $0.0672 per kWh, value used for the Cost of Power?
(b) Are any of Veridian’s retail customers registered as Market Participants and billed
directly for commodity costs by the IESO?
(c) If the response to part (b) is yes, what is their forecast use for 2009 and 2010 and
has it been excluded from the calculation of the commodity cost used to
determine the working capital allowance?
(d) Please confirm that over 50% of Veridian’s sales are non – RPP customers
• Estimate an average commodity cost for all sales based on the weighted
average of the RPP and non-RPP costs.
• Re-estimate the Total Commodity cost for 2009 and 2010.
Response:
(a) Please see Exhibit 2, Tab 10, Schedule 2, page 1, lines 18-21.
(b) No.
(c) Not applicable.
(d) In response to Energy Probe interrogatory #10, Veridian has calculated that in the
VCI_Main rate zone in 2008, the non RPP kWh as a percentage of total kWh was
50.06%. In the VCI_Gravenhurst rate zone in 2008, the non RPP kWh as a
percentage of total kWh was 35.7%.
Using the RPP pricing and non RPP pricing proxies provided by Energy Probe in
their interrogatory #10, Veridian calculates an average commodity cost for all sales
based on the weighted average of the RPP and non-RPP costs as follows:
VCI_Main ($0.05820*0.5006) + ($0.06215*0.494) = $.060151
VCI_Gravenhurst ($0.05820*0.357) + ($0.06215*0.643) = $0.06074
The re-estimated total commodity costs for 2009 and 2010 are as follows:
Rate Zone
VCI_Main
VCI_Gravenhurst
Total
2009
149,496,225
5,986,996
155,483,221
2010
150,103,755
5,993,841
156,097,596
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
6.
Ref:
Exhibit 2 / Tab 2 / Schedule 3 / Table 1
Request
(a) Please provide a schedule that provides details of the total capital additions in
each year 2006-2010 using the same major spending categories as set out in
Exhibit 2, Tab 2, Schedule 3 Table 1, but indicate the main asset categories- poles
transformers etc and the US of A accounts associated with each category.
(b) Provide an explanation of the increase in development capital in 2010.
(c) Explain the reduction in sustainment capital in 2010 relative to the need to
upgrade the networks.
Response:
(a) The information requested is contained in the tables on the following pages.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
VECC IR #6 (a)
2006-2010 Capital Additions by Spending Category by Asset Group by G/L Account No. –
Pg. 1/4
Note: The amount of Veridian’s forecast capital expenditures for the 2010 Test Year has changed as a
result of Veridian’s application update. This interrogatory has been answered on the basis of the updated
values.
Type of Spending
Asset Group
OEB#
2006
Development
DS
1820
Line Transformers
1850
Poles, Wires
2007
2008
2009
2010
$15,794,541
$9,141,477
$13,813,529
$8,156,500
$14,575,500
$497,377
$43,415
$1,860,534
$0
$5,025,000
$497,377
$43,415
$1,860,534
-
$5,025,000
$2,985,708
$1,319,086
$2,440,163
$1,340,800
$1,548,000
$2,985,708
$1,319,086
$2,440,163
$1,340,800
$1,548,000
$7,488,025
$5,147,499
$10,132,723
$5,594,300
$6,904,500
1830
$789,293
$944,305
$1,858,843
$1,324,700
$3,277,500
1835
$955,723
$1,018,921
$1,907,027
$1,303,400
$1,770,000
1840
$1,678,747
$1,130,096
$2,959,180
$1,057,300
$635,000
1845
$4,064,262
$2,054,178
$3,407,674
$1,908,900
$1,222,000
Services and Meters
$4,517,500
$2,577,022
-$1,487,812
$1,221,400
$1,098,000
1855
$3,449,909
$2,198,151
$1,992,288
$865,400
$548,000
1860
$1,067,590
$378,871
-$3,480,101
$356,000
$509,000
1940
-
-
-
-
$41,000
Smart Meters
$260,370
$21,882
$867,353
$0
$0
1555
-
-
$864,371
-
-
1860
$260,370
$21,882
$918
-
-
1861
-
-
$2,063
-
-
$45,561
$32,572
$568
$0
$0
$45,561
$32,572
$568
-
-
TS Primary >50
1815
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
VECC IR #6 (a)
2006-2010 Capital Additions by Spending Category by Asset Group by G/L Account No. –
Pg. 2/4
Type of Spending
Asset Group
OEB#
2006
Sustainment
DS
1820
Line Transformers
1850
Other Distribution Assets
1980
Poles, Wires
2007
2008
2009
2010
$4,929,012
$6,938,481
$6,086,451
$6,713,000
$5,082,000
$652,068
$216,405
$533,003
$2,030,000
$345,000
$652,068
$216,405
$533,003
$2,030,000
$345,000
$973,287
$2,960,760
$1,519,570
$272,000
$580,000
$973,287
$2,960,760
$1,519,570
$272,000
$580,000
$82,878
$251,707
$249,484
$545,000
$345,000
$82,878
$251,707
$249,484
$545,000
$345,000
$3,208,571
$3,047,737
$3,227,000
$3,703,000
$3,507,000
1830
$837,801
$1,380,244
$877,695
$688,000
$1,220,000
1835
$1,739,021
$1,290,171
$1,580,884
$2,328,000
$1,225,000
1840
$57,682
$64,350
$9,230
$175,000
$75,000
1845
$574,067
$312,972
$759,191
$512,000
$987,000
$12,207
$461,871
$557,394
$145,000
$305,000
1855
$12,090
$461,871
$557,394
$145,000
$305,000
1860
$117
-
-
-
-
$0
$0
$0
$18,000
$0
-
-
-
$18,000
-
Services and Meters
Land and Buildings
1800
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
VECC IR #6 (a)
2006-2010 Capital Additions by Spending Category by Asset Group by G/L Account No. –
Pg. 3/4
Type of Spending
Asset Group
OEB#
2006
Fleet
2007
2008
2009
2010
$664,561
$1,602,221
$828,037
$1,310,000
$1,770,000
$664,561
$1,602,221
$828,037
$1,310,000
$1,770,000
$664,561
$1,602,221
$828,037
$1,310,000
$1,770,000
$50,889
$616,431
$528,504
$1,140,500
$6,150,000
$15,620
$197,122
$183,691
$170,000
$790,518
$15,620
$197,122
$183,691
$170,000
$790,518
$8,372
$404,825
$341,800
$970,500
$5,359,482
1908
$5,184
$404,825
$329,785
$703,500
$5,289,482
1910
$3,188
-
$12,016
$267,000
$70,000
$26,897
$0
$3,013
$0
$0
$26,897
-
$3,013
-
-
$0
$14,484
$0
$0
$0
-
$14,484
-
-
-
Equipment
1930
Facilities
Equipment
1915
General Plant
Services and
Meters
1865
Land and
Buildings
1905
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
VECC IR #6 (a)
2006-2010 Capital Additions by Spending Category by Asset Group by G/L Account No. –
Pg. 4/4
Type of Spending
Asset Group
OEB#
2006
IT
Equipment
2008
2009
2010
$770,836
$2,283,637
$2,431,948
$2,453,800
$1,598,100
$15,143
$14,941
$120,594
$0
$0
1915
-
$14,941
$120,594
-
-
1955
$15,143
-
-
-
-
$749,194
$2,254,659
$2,310,835
$2,218,800
$1,398,100
IT Assets
1920
$23,939
$321,395
$311,815
$901,000
$563,100
1925
$725,254
$1,933,264
$1,999,019
$1,317,800
$835,000
$6,499
$776
$0
$235,000
$200,000
$6,499
-
-
-
-
Other Distribution Assets
1960
1990
-
$776
-
$235,000
$200,000
$0
$13,262
$519
$0
$0
1920
-
$4,340
$519
-
-
1925
-
$8,922
-
-
-
$237,302
$337,923
$245,612
$102,900
$95,000
Smart Meters
Miscellaneous/Tools
Equipment
$95,543
$56,833
$117,939
$102,900
$95,000
1935
$409
-
-
-
-
1940
$85,901
$56,833
$117,355
$102,900
$95,000
1945
$7,397
-
$584
-
-
1955
$1,836
-
-
-
-
$78,589
$84,946
$127,673
$0
$0
1960
-
$24,177
$8,693
-
-
1990
$78,589
$60,769
$118,980
-
-
$63,170
$196,144
$0
$0
$0
$63,170
$196,144
-
-
-
$22,447,141
$20,920,171
$23,934,081
$19,876,700
$29,270,600
Other Distribution Assets
Services and Meters
1865
Grand Total
2007
.
(b) Development capital covers all spending associated directly or indirectly with the
addition of new customers to the system, the physical extension of the grid, and the
enhancement of the grid’s capacity to serve load. This category is very dependent on
new customer activity, however spending is not directly proportional to new customer
activity in any given year, since new grid assets are not sized only for the moment. It
is noted that the terms Development and Sustainment are only terms applied after
projects are placed into the capital program as a way of grouping expenditures, and to
some extent can be arbitrary. For example, an aged substation being reconstructed for
improved performance as well as increased capacity to supply load satisfies the
concept of sustainment (“the re-investment in existing assets to maintain their
ongoing usefulness, safety, and necessary length of life for the proper functioning of
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
the grid”) and also development (“the enhancement of the grid’s capacity to serve
load”).
As discussed in Ex. 2/2/2, rapid customer growth in recent years has created a built up
demand within Veridian’s system for increased capacity and reliability based spending.
This spending is often costly since it involves the purchase of major pieces of equipment
such as large power transformers and high voltage substation switchgear. For example,
in 2010 Veridian has three large projects for substation improvement and capacity
increases (Applecroft, First Street, and Liberty North) which alone account for some $5M
in spending. Veridian expects this type of spending to continue for several years. In
2010 there is also an abnormally large line relocation project (Highway 7, Brock Rd x
Lakeridge Road, Pickering) at $2.4M. This type of project would typically be classed as
sustainment, however in this case it has been grouped among the development projects
since the new relocated line will have significantly greater capacity than the existing line,
dictated by system needs. There were no such projects in 2009.
(c) As noted above, the reduction in the number and total cost of projects grouped under
the term sustainment does not indicate a reduction in spending on upgrading the
network. Much of the so called development spending will result in the replacement
of an existing older asset with a larger better new one. This is perhaps a somewhat
unique feature of Veridian’s service areas and grid – in many cases assets in need of
sustainment spending will not be simply replaced like for like but will in fact be
rebuilt to significantly greater specifications due to ongoing growth, and will be
called development. This is in part due to the fact that much of Veridian’s service
area cannot be considered fully mature, in the sense that Veridian can reasonably
expect to see further long customer term growth within many existing community
areas due to in-fill and re-development activity.
Please refer also to the response to VECC Interrogatory #8.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
7.
Ref:
Exhibit 2 / Tab 3 / Schedule 1 / Page 6
Exhibit 2 / Tab 5 / Schedule 1
The Application States :
”Veridian’s knowledge of the overall general condition of its assets, and of the condition
of any specific asset, is based on the cumulative information collected from the routine
and iterative inspection and testing programs which have been and continue to be
conducted. With the increasing rigour and diligence being assigned to these inspection
and testing activities in the bridge and coming years, and with the greatly enhanced
ability to mine the data being collected as a result of the maturing of the GIS, the new
features of the OMS, and the plans to develop an AMP, Veridian is confident of its ability
to effectively manage its assets. Veridian considered the merits and costs of engaging an
independent assessment of its asset condition to provide a base from which to build new
management programs with an AMP. This step was viewed as not being cost effective,
[Emphasis added]
Request
(a) Since Veridian retained Hatch Acres to prepare a 10 Year Planning Study for the
Ajax/Pickering Areas what additional ACAs and Capital Plans have been
prepared? Provide the latest reports.
(b) In lieu of an external Asset Condition/Management Review what does Veridian
use to provide direction to priorities for its Sustaining capital program? Please
discuss.
(c) Provide a copy of any internal management reports that provide an overview of
asset condition and required asset replacement investments over the current and
forward rate years.
(d) For regulatory purposes the “gold standard” is an external ACA. Explain why
Veridian apparently rejects this approach?
Response:
(a) Veridian has developed two projects in response to the Hatch Acres 10 Year Planning
Study for Whitby TS and the Applecroft conversion. Details concerning those
projects can be found in Ex 2, Tab 5, Sch 1 on pages 1,16,19,21 for the Whitby TS
related projects and Ex 2 Tab 5, Sch 1 page 24 for the project details related to the
Applecroft Substation Conversion. Longer term capital spending requirements
related to the Hatch Acres study have been discussed for key capital investments
within the planning horizon as described in Exhibit 2 Tab 5 Sch 6 page 3. No
additional Capital Plans or ACA plans have been prepared at this time.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(b) Rather than incurring the additional expense of having an external party review all of
its operating assets, Veridian focuses its resources on plant that needs attention and on
areas of known concern in order to sustain the efficiency and reliability of its
distribution system cost effectively. Feeder analysis, testing programs, service
disruption tracking and routine and iterative inspections are used to identify areas that
require closer scrutiny, remedial maintenance or replacement.
(c) Veridian does not prepare asset overview reports as plant in need of maintenance or
replacement is reported on an individual basis as part of the annual inspection
processes. Any malfunctioning or poorly performing assets are dealt with
individually within the annual budgeting process either as an immediate concern in
the current budget or as a future expenditure in a subsequent budget. Once Veridian’s
GIS system is fully populated, overall asset condition and life cycle analysis will be
more readily available at minimal effort and cost.
(d) As stated in the referenced evidence, Veridian’s approach to asset management is to
enhance its inspection processes, data management approach, and asset condition
records, and then focus on systems and processes to mine that data in the most
efficient and effective way. This approach of using system knowledge and enhancing
that with the increased use of the GIS and related analysis systems will ensure higher
quality service without the added and duplicate cost of an external ACA. Veridian
considers the current system to be working efficiently, and has not experienced
worker or public safety related issues, nor has it experienced customer or area
reliability concerns that have not been dealt with efficiently and cost effectively.
Therefore, Veridian believes it cannot justify the costs of an external ACA.
Veridian’s view is that such costs may be appropriate when a utility has neither the
skills, resources, nor the immediate or near future time to properly understand its own
system, which is not the case. Veridian believes it would be imprudent to conduct
such an independent assessment when in-house capital and OM&A costs have
already been established or forecast for the same purpose, and when there is no
evidence that current processes are materially inadequate. While an external ACA
would provide a second opinion, Veridian sees no compelling issue to suggest that
such is necessary.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
8.
Ref:
Exhibit 2 / Tab 3 / Schedule 1 / Page 11
Reliability: Outage information is currently manually recorded, at all levels of the system
using existing recording devices. By late 2009 Veridian’s new Operations Management
System will replace the manual system with an automated software application which
will improve the accuracy and efficiency of this function. Both processes are capable of
generating reliability indices and outage reports for the whole system and eventually for
any point in the system down to customer level. The new system will help Veridian
operational staff to identify and correct incidences of poor operating performance.
Request
(a) Provide Reliability data CAIDI, SAIDI, SAIFI from 2006 actual to 2010 forecast,
if possible by service area.
(b) Discuss trends in reliability indices and relate these to the sustaining capital
investment programs.
Response:
(a) The chart below is for 2006 to 2009 (to November 30) reliability statistics that
include: Veridian total, Veridian without Gravenhurst, and Gravenhurst. Gravenhurst
is the only area that is separated in our reporting process.
VERIDIAN INCL GRAVENHURST
SAIFI
2006
2.76
2007
1.81
2008
2.41
2009
2.45
SAIDI
2.54
1.93
2.36
4.04
CAIDI
0.94
1.07
0.98
1.65
VERIDIAN W/O GRAVENHURST
SAIFI
2006
2.72
2007
1.84
2008
2.18
2009
2.27
SAIDI
1.9
1.5
1.68
2.5
CAIDI
0.7
0.82
0.77
1.1
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
GRAVENHURST
SAIFI
2006
2.12
2007
1.36
2008
6.45
2009
5.05
SAIDI
10.3
9.43
14.11
30.74
CAIDI
4.85
6.95
2.19
6.09
An accurate forecast of reliability is not possible given the number and complexity of
events that affect a distribution system’s reliability statistics.
(b) Please refer to the discussion on reliability in our response to Board Staff
Interrogatory #12. As shown in the graphs in part f) of this referenced response,
while the average system outage frequency shows a relatively flat trend over the past
5 years, the average outage duration shows a negative rising trend. At an overview
level, this correlates with Veridian’s experience that while there are not more outages
occurring, outages in recent years have become larger (involving more asset damage
and more customers at one time) and more time consuming to restore.
Veridian has noted an increase in the amount and severity of inclement weather in the last
years, and this is a factor that has contributed most significantly to the average outage
duration. Overhead and underground plant continues to age, and in certain areas where
the average age proceeds beyond 60-75% of rated life, the plant, while continuing to
perform safely and adequately, can reasonably be expected to begin to contribute more to
outages as a result of natural failures in minor components and a general greater
susceptibility to adverse conditions.
Given this background, the capital plans for 2010 and forward reflect a general slowing
in development-based (non-discretionary work being done to address customer needs)
construction, and a general increase in asset management based construction (work being
committed to address plant needs). Much of Veridian’s capital investment in past years
has not contributed to a reduction in potential outage causes, since it has resulted in plant
extensions and additions. In contrast, Veridian’s plans now will result in an increase in
the relative amount of capital investment that directly reduces potential outage causes,
through rebuilding, renewal, and betterment of line and substation assets. This activity is
not confined to Sustainment work. For example many of the projects in the Development
category, listed there because they primarily produce an asset that adds a new main
supply feature or that is of a larger capacity, do however significantly and directly result
in newer and better performing assets than those they replace. This will reduce or
eliminate contributors to outages, and strengthen the system’s ability to withstand
disturbances.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
9.
Ref:
Exhibit 2 / Tab 5 / Schedule 1 / Pages 1-39
Exhibit 2 / Tab 2 / Schedule 3 / Pages 1-5
Request
(a) Identify any new/changed charges included in the Conditions of Service and
provide Explain the rationale for the changes.
(b) Provide more information on forecast revenues recovered from these charges
in the 2010 test year compared to 2009 bridge year.
Response:
(a) Veridian’s Conditions of Service document was last updated with an effective date of
October 1, 2007.
Please see the response to Board Staff interrogatory number 7 for a summary of all
rates and charges referenced in Veridian’s current Conditions of Service. The only
new charge introduced as part of the October 2007 update was for the reconnection of
services that had previously been disconnected at a property owner or operator’s
request due to a change in tenancy or occupancy. This charge is referenced under
section 2.1.7 of the Conditions of Service.
When a tenant vacates a property, Veridian’s practice is to transfer the account to the
landlord until such time that a new tenant contracts for service. The change to the
Conditions of Service that provides for a charge for reconnection of services
following a change in tenancy was introduced to give landlords the option of service
disconnection between tenancies.
Charges for service reconnections following changes in tenancy have not been
applied to date. Veridian has proposed a specific service charge for this service as
part of its 2010 rate application. Details are provided at Exhibit 3/Tab 8/Schedule
2/pages 1 & 2.
(b) See response to Board Staff interrogatory number 7.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
10.
Ref:
Exhibit 2 / Tab 5 / Schedule 2 / Pages 39-40
Veridian has approximately 28,000 wood poles within its distribution system. Detailed
pole inspections have not been performed since 2003 due to the very high number of
false negative inspection and test reports. Since that time only a routine visual check has
been performed on a three year cycle.
Request
(a) Provide a schedule that shows the history and projection of # wood pole
replacements 2006-2015 and associated costs. Provide the Percentage of poles
replaced in each year.
(b) Provide data on the # pole failures 2006-2009
(c) Please explain the reason for increase in the Pole Replacement spending from
2009 ($378,000) to 2010 ($500,000). Relate the spending to #defective poles as a
result of visual inspections.
(d) Does Veridian have a plan to visually inspect its poles starting with the oldest? If
not why not.
Response:
(a) The table below is an update and expansion to the table shown in Ex. 2/5/2/pg. 40 and
reflects actual 2009 information. The significant increase in the number of
distribution pole replacements in 2009 (over the planned number previously filed) is a
result of extensive pole damage experienced during high wind and tornado events of
August 2009, details and costs of which were unknown at the time of filing. The
unusually high cost of 2006 44 kV pole replacements is an anomaly and is due to the
associated extensive work performed on attachments during the replacement work.
Veridian is unable to estimate with any accuracy the pole replacement numbers
beyond 2011, and 2011 is a rule of thumb projection only.
2006
Poles
Amount
2007
Poles
Amount
2008
Poles
Amount
44kV Pole Replacements
2
$115,000
12
$158,100
14
$120,500
Distribution Pole Replacements
71
$490,300
103
$524,400
93
$695,300
73
$605,300
115
$682,500
107
$815,800
TOTALS
% of Total Poles Replaced
(28,000 poles total)
0.26%
0.41%
0.38%
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
2009
Poles
Amount
44kV Pole Replacements
Distribution Pole Replacements
2011 proposed
Poles
Amount
10
192,400
18
$150,000.00
18
$150,000.00
121
585,300
84
$350,000.00
84
$350,000.00
102
$500,000.00
102
$500,000.00
131
TOTALS
% of Total Poles Replaced
(28,000 poles total)
2010 proposed
Poles
Amount
$777,800
0.47%
0.36%
0.36%
(b) Veridian has not experienced any pole failures due to inherent or internal defect. All
poles that have broken have failed due to external influences – predominantly violent
wind and related conductor/guy damage, falling trees, or vehicular accident. 2007
through 2009 replacements are almost all due to wind and trees. The numbers listed
here are pole replacements not related to an inspect/test activity:
2006 2007 2008 2009
Quantity of Broken Poles
24
95
62
94
(c) As set out in the response to (a) above, the pole replacement cost in 2009 was
$777,800. Therefore, pole-replacement spending is expected to decrease by $277,800
in 2010.
(d) Veridian’s inspection plans are based on area maps that divide all parts of the service
area into 3 year cycles. All poles in an identified map area are inspected in each
cycle. This is in part due to the fact that pole age data has not been available in a
ready geographic format, but more significantly this ensures a full inspection of poles
and related assets along a line or road, at a frequency and in a manner in keeping with
good utility practice. This is also the most time and resource efficient method. Pole
deterioration is also not necessarily related to age, but includes other factors such as
ground conditions, environment, and amount and size of attachments.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
11.
Ref:
Exhibit 2 / Tab 5 / Schedule 2 / Page 43
For 2010 there is $400,000 spending associated with the elimination of Long Term Load
Transfers.
Request
(a) Given the date for elimination of LT Load transfers is 2014 Provide a projection of
planned expenditures for 2009-2014.
(b) Please describe the projects involved and why the approach selected (i.e. choice of
(c) What is the year to date spending for 2009 and the projected total for 2009?
(d) What are number of new customers connected in 2008, 2009 and 2010 and what is
the associated capital spending? Where is this included in each year’s reported
spending?
Response:
(a) Even though the required date to complete the elimination of LT Load transfers
(LTLTs) is 2014, Veridian has planned to start meeting its obligation to the
requirement prior to that year to take early advantage of system expansion and system
loop benefits resulting from line extensions that are associated with this work.
Currently, conservative projections for 2011 and 2013 are $300,000 and $200,000.
(b) The 2010 work planned for this objective is described in Ex. 2/5/2/Pg. 43-44. More
specifically, the 4 sub-projects to completed in 2010 are:
i.
Lakeridge Road Line Extension – Phase 2, extend 1-ph 16.0 kV line for
approximately 0.8 km north Conc. 10, Pickering, $75,000 - to meet load
growth in the area and connect 4 customers.
ii. Lakeshore Boulevard/Riley Road, Newcastle – extend 3-ph 27.6 kV line 0.7
km to interconnect existing radial line sections, $149,000 - to establish a loop
supply connection for improved reliability and for planned voltage conversion
work and connect 8 customers.
iii. Metcalf/Riley/Farrow Road, Newcastle – extend 3-ph 27.6 kV line across
Hwy 401and interconnect existing radial line sections, $100,000 - for loop
supply and for planned area voltage conversion program and connect 7
customers.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
iv. Conc. Road 10 & Brock Road, Pickering - extend low voltage overhead line,
0.1 km, $1,000 – to establish consistency in ownership and maintenance
responsibility of a service and connect 1 customer.
(c) One LTLT elimination project was completed in 2009 and minor engineering work
(approx. $7,000) has been undertaken on some others. A project “Lakeridge Road
Line Extension - Phase 1, Conc. 9 x Conc. 10, 0.8 km 1-phase 16.0 kV, $68,000”,
was advanced from 2010 into 2009 in order to economize construction costs enabled
by related work by Bell Canada.
(d) Veridian’s interpretation of this question is that the request is for the number of new
customers connected in 2008, 2009 and 2010 which are associated with LTLTs.
There were 0 in 2008, 1 in 2009, and will be 20 in 2010 with the completion of the 4
projects. The associated spending for 2009 is $75,000, and for 2010 is $325,000.
This yearly spend is included in the GL accounts for line transformers (1850), and
poles and wires (1830, 1835 and 1840, 1845).
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
12.
Ref:
Exhibit 2 / Tab 5 / Schedule 2 / Page 45
This project involves replacing approximately 0.5 km of backyard (rear lot) primary
overhead pole lines in the Bay Ridges area of the City of Pickering to front lot primary
underground lines.
Request
(a) Why is the Bay Ridges area unique in requiring replacement of overhead with
underground service?
(b) What is the condition of the BR overhead and when would it be scheduled for
replacement/ upgrade?
(c) Has Veridian experienced higher than usual customer complaints about the BR
overhead service and its maintenance. Please provide details.
(d) What is the specific cost/benefit of this type of project?
(e) If applied to the rest of the franchise what would be the likely cost of similar
conversions.
Response:
(a) The Bay Ridges community in Pickering is a residential area built using rear-lot
overhead distribution methods typical of the 1960’s and 1970’s. Veridian has several
communities similar to this in its service areas with the largest areas being in
Pickering, Ajax, and Belleville. Veridian has not yet assembled its system condition
knowledge into an overall “rear-lot” service area assessment plan, but the Bay Ridges
area specifically was identified since some period of time as problematic due to tree
interference, outages, public safety concerns, and access difficulties. The plant was
deemed in need of replacement and beyond simple maintenance. The existing
construction could be replaced in a like-for like approach as would be the norm for
and-of-life overhead. However the same identified problems of tree interference,
routine and emergent equipment replacement access, trouble call response, trouble
shooting, and public safety concerns associated overhead lines in mature residential
backyards would continue to recur. It was deemed prudent to consider eliminating, or
at least mitigating, these recurring issues when it was time to replace this type of
construction. Conversion of rear-lot overhead to “on street” underground is a
common utility practice. Public opposition precludes the installation of new overhead
lines on the street in such areas. Bay Ridges is the first area selected to complete this
type of conversion.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(b) The rear-lot wood poles, transformers, and conductors in the Bay Ridges area is of
1960’s construction. The back yards are now heavily treed and tree trimming that
would be considered adequate by normal line clearing standards is not possible due to
public opposition. Thus much of the plant is at constant risk of tree induced outages.
This equipment is mostly original save for specific items that have been replaced over
the years due to upgrade or failure. For the most part, the plant is at or near normal
end-of-life. Poles appear aged, overhead conductor insulation is degraded and in
some cases quite unsightly since it is coming off, and many transformers appear
rusted. Failures and outages are occurring due to conductor to conductor contact, as
well as tree interference. The condition of the plant is such that failures and resultant
outages are expected to increase as the equipment deteriorates further.
(c) Customer complaints have been received concerning the outages encountered and the
reliability of the supply in this area, as well as about the condition of the wires.
Maintenance and operational difficulties are routinely encountered during routine
maintenance activities and trouble call responses. Detailed information on these
complaints has not been collected.
(d) A detailed cost/benefit analysis has not been prepared as this work is considered to be
the only viable option. The overall benefit is a reliable long term solution with
increased service reliability for customers, reduced maintenance costs for tree
trimming, and reduced operating costs for trouble call responses. Capital costs will
be lower when future replacements or upgrades are required. Currently, all backyard
work must be completed manually as there is no vehicle access, causing higher labour
costs. Converting the backyard overhead supply to front yard underground supply
eliminates the public safety issue as much as possible.
(e) An initial conservative estimate would be between $5M and $10M. As noted above a
complete survey and report on this issue has not been prepared. Areas nominated for
remedial re-servicing will be generated through the normal site specific problem and
needs process discussed in Ex. 2/3/1. At the moment, it is expected that spending on
such activities would be managed at under $500k in any year, if and when identified.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
13.
Ref:
Exhibit 2 / Tab 5 / Schedule 2 / Page 49
The Application States:
The results of the PCB testing will identify exactly which units must be replaced and
result in transformer replacement costs in 2010. The capital estimate for this project is
based on Veridian replacing 1% of the transformers being sampled, or 24 units in total.
Request
(a) Please describe the testing program and results to date.
(b)Describe how this project relates to the proposed Z-Factor Accounting Treatment
of 2009 PCB Testing Costs.
(c) Provide a summary of the testing and remediation program 2009-2010 and
beyond.
Response:
(a) In order to comply with recent PCB regulations changes, Veridian entered into a
contract to survey and sample oil as necessary in select pad mounted and vault style
transformers. The contractor was directed to transformers manufactured in 1985 or
earlier. 2400 transformers were identified, and all have been inspected, oil samples
drawn when appropriate, and are laboratory analysis continues. To date 5
transformers have been identified as meeting the requirements for immediate
attention, and a further 33 appear suspect and results are being further analyzed.
Veridian anticipates that the 2010 capital allowance for this work will be sufficient to
meet obligations.
(b) This project represents the second phase of Veridian’s multi-year PCB compliance
initiative. The first phase was completed in 2009 and focused on the identification
and remediation of pad mount and vault style transformers with PCB concentrations
of greater than 500 ppm, as required by federal government regulations. The second
phase will commence with this project in 2010 and will shift the focus to PCB testing
and remediation work for transformers with PCB concentrations of greater than 50
ppm.
Please see the response to Board Staff interrogatory number 52 for an explanation of
the rationale for handling PCB compliance costs in the manner proposed.
(c) The 2009 program is described in a) above. In 2010, Veridian will enter into the next
phase of transformer oil sampling and test overhead transformers. 2010 activity will
provide the information necessary to identify which pole-mount transformers require
replacement due PCB concentrations greater than 50 ppm. It is projected that 50% of
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
the pole-mount transformers requiring replacement will be completed in 2011 and the
final 50% in 2012. The pole-mount transformer testing and replacement program will
be handled similar to the pad mount and vault transformer program in 2009/2010,
whereby the sampling/testing costs will be treated as an operational expense and the
replacement transformer costs as a capital expense. These costs have been built into
the appropriate budgets for 2010-12.
Also in 2010, Veridian will commence remediation work related to pad mount and
vault transformers having PCB concentrations of 50 ppm or higher. The survey and
analysis work completed to date has identified no more than 33 pad mount and vault
transformers requiring replacement as part of this second phase of Veridian’s PCB
compliance initiative. It is projected that replacement activity for all PCB
contaminated pad mount and vault transformers will be complete by the end of 2012.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
14.
Ref:
Exhibit 2 / Tab 5 / Schedule 6 / Pages 2-3
Exhibit 9 / Tab 4 / Schedule 6
The Application States:
Within this Application and in accordance with the Board’s Smart Meter Funding and
Cost Recovery Guideline (G-2008-0002), Veridian is proposing disposition of the Smart
Meter Variance Account 1555 for amounts recorded to December 31, 2008. Through the
disposition of the variance account, smart meter related capital investments would be
transferred to rate base as of January 1st, 2010, resulting in a net increase to rate base of
$6.679M.
Request
(a) Does the amount to be closed to ratebase include carrying costs?
(b) Has here been an independent review of the amounts to be charged to ratepayers?
(c) Provide details of the average unit meter costs (procurement and installation) for
each of the residential and GS<50 kw classes. Compare to the aggregate cost of
$260.00 shown in Exhibit 9 Tab 4, Schedule 6 Attachment 1.
(d) Has Veridian tracked the AMCD costs separately for Residential and GS<50 kw
classes. If so provide a copy of the costs for each class that are to be disposed of
in this application. If not explain.
(e) Has Veridian tracked the other Capital and Operating costs by class? If so provide
a copy of the costs for each class that are to be disposed of in this application. If
not explain.
Response:
(a) No amounts to be closed to rate base include carrying costs.
(b) The amounts recorded to variance accounts 1555 and 1556 and the calculation of the
revenue requirement resulting from Veridian’s smart metering activities have been
reviewed by Veridian’s external auditors.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(c) In preparing the response for this interrogatory, some errors were found in Exhibit 9
Tab 4 Schedule 6 Attachment 1, smart meter funding adder calculation. An updated
version of the calculation is attached.
The corrected calculation of the “Per Meter Cost Split” is provided below.
Per Meter Cost Split:
Smart meter including installation
Computer Hardware Costs
Computer Software Costs
Tools & Equipment
Other Equipment
Smart meter incremental operating
expenses
Total Smart Meter Costs per meter
$
$
$
$
$
$
$
Per Meter
137.63
3.09
16.66
157.38
Installed
36,392
107,261
107,261
107,261
107,261
107,261
$
$
$
$
$
Investment
5,008,678
331,934
-
% of Invest
70%
5%
0%
0%
0%
$
$
1,786,556
7,127,168
25%
100%
Note on per meter cost calculations:
1) Smart meter including installation - 2009 & 2010 estimated costs for total of 2009 & 2010
forecast installs
2) All other costs - calculated as 2009 & 2010 estimated costs for total of all units installed as they
support all meters not just the forecast 2009 & 2010 meters installed
As well, a revised version of Appendix 2-S – Smart Meters is attached.
Veridian understands the request to be to compare the average unit meter costs
(procurement and installation) as calculated from the amounts to be transferred to rate
base through the smart meter variance account disposition (totalling $6.679M on a
NBV basis) to the average unit meter costs forecast in 2009 and 2010, restated in the
table above.
Firstly, it should be noted, that incremental operating expenses of $16.66 per meter
are included in the calculation above and should be deducted for the purposes of
comparing average unit meter costs for procurement and installation. On this basis,
the forecast average unit meter cost for procurement and installation, including capital
costs for hardware and software, is $140.72.
The following table values are extracted from Appendix 2-S and provide the
calculation of the average unit meter capital costs for procurement and installation of
smart meters and related hardware and software for the amounts to be transferred to
rate base.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Meters Insta l l ed
2006
2007
2008
Capi tal Costs
34,609
36,260
70,869
Average Unit Meter Cost
46,179
4,604,472
3,168,497
7,819,148
$
110.33
Veridian is unable to provide an average per unit meter cost by rate class as not all capital
costs were tracked separately by rate class.
Higher forecasted average per meter unit costs in 2009 and 2010 are expected as Veridian
will begin its installation of smart metering within the Gravenhurst service area in 2010.
The Gravenhurst service area presents unique challenges due to the topography and
geography and higher unit costs are expected as a result.
(d) Veridian has not tracked the AMCD costs separately for residential and GS < 50 kW
classes. Veridian is not aware of any Board issued accounting guidelines or
directions requiring separate tracking of AMCD costs by rate class.
(e) Veridian has not tracked the other Capital and Operating costs by class. Veridian is
not aware of any Board issued accounting guidelines or directions requiring separate
tracking of these costs by rate class.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
15.
Ref:
Exhibit 2 / Tab 12 / Schedule 1
Exhibit 2 / Tab 12 / Schedule 2
The application states:
In 2006 Veridian took on the Gravenhurst system, a low density high exposure
distribution system located in a well forested and difficult access area. Frequent summer
and winter storms were experienced each year thereafter, creating large and lengthy
outages. The result has been a significant drop in Veridian’s overall reliability
performance.
Request
(a) Please expand the SAIDI, SAIFI and CAIDI elements of the table in Schedule
1, for 2009 YTD and forecast 2010
(b) Breakdown the reliability indices (SAIDI, SAIFI, CAIDI) 2006-2009 and
forecast 2010 between Main and Gravenhurst.
(c) Provide more detail on the plan to improve reliability values for both Main
and Gravenhurst.
Response:
(a) and (b)
Please refer to the response to VECC Interrogatory #8.
(c)
Veridian does not have a stand-alone reliability improvement plan. Rather, Veridian’s
reliability improvement goals are embedded in the routine and annual activities around
Capital and O & M. Both Veridian’s Capital plans and ongoing Maintenance plans
include significant considerations for reliability improvement.
One of the five drivers of capital investments cited in Ex 2/3/1/Pg 6-7 is Performance,
which includes among others projects geared specifically at improving reliability. A
Capital Plan without attention to this driver is deemed incomplete.
Veridian relies on an analysis of outage information Ex 2/3/1/Pg 10 to identify parts of
the delivery system that are performing below expectations as well as aid in identifying
other specific problem issues that could be targeted by an investment in new or
refurbished plant. This type of analysis will be enhanced through the Outage
Management System now underway.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
The current Capital Investment Selection Criteria Ex 2/11/1/Pg. 6-7 includes a reliability
test “Reliability – to what extent does the project impact the power system reliability and
customer service?” and this assigns increased weighting to potential projects that will
generate improvements.
The Operations programs Ex 4/4/2 include a number of cases where inspection activity
has been increased from previous levels, in order to among other things reduce the
chances of equipment failure due to undetected incipient problems.
The Maintenance programs Ex 4/4/3 include a number of cases where cost increase have
been reflected due to additional work or more detailed scope of work standards, again
aimed at preventing equipment failures. In addition vegetation management cost
increases are noted due to additional and more thorough tree trimming activity being
undertaken and planned.
In part to support a greater emphasis on reliability improvement, there are staff additions
in Planning, Maintenance Management, and Supervision Ex 4/4/3 etc. that are included in
2009 and in 2010 plans, to add another degree of focus and thoroughness.
Please refer to Board Staff Interrogatory #12 for specific Capital projects, in the 2009
activity and in the 2010 plan, which feature reliability improvement as a feature or main
purpose.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
16.
Ref:
Exhibit 3 / Tab 2 / Schedule 1 / Attachment 1
Exhibit 3 / Tab 2 / Schedule 1 / Attachment 2
Request
(a) For 2010 please provide a schedule setting out the revenue by class for Veridian Main – where for each class the rates are net of the LV charge/adder and the
revenues are reported both before and after the transformer allowance.
(b) For 2010 please provide a schedule setting out the revenue by class for Veridian Gravenhurst – where for each class the rates are net of the LV charge/adder and
the revenues are reported both before and after the transformer allowance.
(c) Please reconcile the results for parts (a) and (b) with the revenues by class
reported at Exhibit 7/Tab 3/Schedule 2, Attachment 1.
Response:
Veridian’s 2010 projected distribution revenues have changed as a result of
Veridian’s application update.
The values in Appendix 2-P (Exhibit 7, Tab 3, Schedule 2, Attachment 1) have also
changed and an updated Appendix 2-P is provided as Attachment 1.
This interrogatory has been answered on the basis of the updated values.
(a) , (b) and (c) Please see Attachment 2 for the requested schedules and the
reconciliation.
Revised Appendix 2-P - Veridian_Gravenhurst
Cost Allocation
Revenue to Cost Ratio (%)
Customer Class
Revised
Transformer
Ownership
Allowance
From Cost Allocation
Model
Residential - Urban
Residential - Suburban
Residential - Seasonal
GS < 50 kW
GS > 50 kW
Sentinel Lighting
Street Lighting
106.22%
61.10%
84.67%
138.93%
185.12%
14.25%
81.17%
Proposed for Test
Year
106.80%
61.52%
85.37%
139.35%
179.05%
14.37%
81.29%
106.80%
61.96%
87.34%
139.07%
186.65%
15.57%
82.42%
Test Year Revenue Impacts
Customer Class
Test Year
Test Year
Revenue
Revenue
Assuming Current
Assuming
Test Year Revenue at Revenue to Cost
Proposed
Existing Rates
Ratios
Revenue to Cost
Residential - Urban
Residential - Suburban
Residential - Seasonal
GS < 50 kW
GS > 50 kW
Sentinel Lighting
Street Lighting
$
$
$
$
$
$
$
787,288
281,336
733,445
338,924
313,682
513
4,962
$
$
$
$
$
$
$
908,798
324,758
846,645
391,233
362,095
592
5,728
$
$
$
$
$
$
$
908,798
332,262
846,645
388,349
356,685
1,420
5,728
Total
$
2,460,150
$
2,839,849
$
2,839,887
Note: Differences due to rounding
Board Target
Range
85-115
85-115
85-115
80-120
80-180
70-120
70-120
Revised Appendix 2-P - Veridian_Main
Cost Allocation
Revenue to Cost Ratio (%)
Customer Class
From Cost Allocation
Model
Residential
GS < 50 kW
GS > 50 kW
Intermediate
Large Use
Sentinel Lighting
Street Lighting
Unmetered Scattered Load
97.73
110.53
105.22
83.12
81.74
38.93
68.48
86.91
Revised
Transformer
Ownership
Allowance
Proposed for
Test Year
99.90
113.83
99.01
61.52
62.81
40.39
71.70
88.02
98.50
114.78
99.22
81.41
87.73
72.68
74.96
97.42
Test Year Revenue Impacts
Test Year
Revenue
Assuming
Current
Revenue to
Cost Ratios
Test Year
Revenue
Assuming
Proposed
Revenue to Cost
Ratios
Customer Class
Test Year Revenue at
Existing Rates
Residential
GS < 50 kW
GS > 50 kW
Intermediate
Large Use
Sentinel Lighting
Street Lighting
Unmetered Scattered Load
$
$
$
$
$
$
$
$
25,856,142
6,170,920
7,951,573
175,570
709,883
162,541
30,435
365,470
$ 27,969,756
$ 6,675,363
$ 8,601,575
$
189,922
$
767,912
$
175,828
$
32,922
$
395,346
$
$
$
$
$
$
$
$
28,078,876
6,430,037
8,601,575
203,879
842,402
183,715
47,049
421,201
Total
$
41,422,533
$ 44,808,623
$
44,808,736
Note: Differences due to rounding
Board Target
Range
85-115
85-115
85-115
80-120
80-180
70-120
70-120
80-120
Veridian_VECC IRR_16 Part a and b
VCI_Main ‐ 2010 Projected Distribution Revenue
Customer Class Name
Residential
General Service Less Than 50 kW
General Service 50 to 2,999 kW
General Service 3,000 to 4,999 kW
Large Use
Unmetered Scattered Load
Sentinel Lighting
Street Lighting
Rate
Fixed Charge
Volume
$11.38
$14.08
$138.20
$5,333.07
$8,011.37
$7.68
$2.92
$0.67
1,156,440
93,096
12,456
24
60
10,500
8,760
324,540
TOTAL
1,605,876
Revenue
13,160,287
1,310,792
1,721,419
127,994
480,682
80,640
25,579
217,442
Rate
$0.0161
$0.0174
$3.1015
$1.4789
$1.7581
$0.0190
$9.1086
$3.7366
17,124,835
Variable Charge
Volume
927,385,803
294,966,007
2,408,247
86,111
311,685
5,413,534
2,353
54,601
1,230,628,341
Revenues by Class from Revised Appendix 2‐P
Revenue
14,930,911
5,132,409
7,469,178
127,350
547,973
102,857
21,433
204,022
28,536,133
Total Revenue
28,091,199
6,443,200
9,190,597
255,343
1,028,656
183,497
47,012
421,464
45,660,968
Transf. Allow
0
0
(589,045)
(51,461)
(186,266)
0
0
0
(826,772)
Net Revenues
28,091,199
6,443,200
8,601,552
203,882
842,390
183,497
47,012
421,464
44,834,196
Difference
Differences due to rounding
28,078,876
6,430,037
8,601,575
203,879
842,402
183,715
47,049
421,201
44,808,736
(25,461)
VCI_Gravenhurst ‐ 2010 Projected Distribution Revenue
Customer Class Name
Rate
Residential Urban Year‐Round
Residential Suburban Year‐Round
Residential Suburban Seasonal
General Service Less Than 50 kW
General Service 50 to 4,999 kW
Sentinel Lighting
Street Lighting
$10.22
$14.96
$27.19
$11.78
$110.62
$1.62
$0.44
TOTAL
Fixed Charge
Volume
35,820
9,084
19,104
8,724
600
636
11,364
85,332
Revenue
366,080
135,897
519,438
102,769
66,372
1,030
5,000
1,196,586
Rate
$0.0198
$0.0208
$0.0336
$0.0201
$4.2266
$3.0873
$0.4330
Variable Charge
Volume
27,397,075
9,458,013
9,730,721
14,769,007
68,687
127
1,664
61,425,294
Revenues by Class from Revised Appendix 2‐P
Revenue
Total Revenue
Transf. Allow
Net Revenues
542,462
196,727
326,952
296,857
290,312
392
721
908,542
332,623
846,390
399,626
356,684
1,422
5,721
0
0
0
(11,457)
0
0
0
908,542
332,623
846,390
388,169
356,684
1,422
5,721
908,798
332,262
846,645
388,349
356,685
1,420
5,728
1,654,423
2,851,009
(11,457)
2,839,552
2,839,887
Difference
Differences due to rounding
335
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
17.
Ref:
Exhibit 3 / Tab 4 / Schedule 3 / Page 2
Request
(a) Please update Table 1 to include the four month period Jul 09-Oct 09.
(b) What is the basis for the kWh/kW forecast provided for the Large User and
Intermediate classes for 2009 and 2010?
Response:
(a) Please see response to Board Staff Interrogatory #15, part (a).
(b) Please see Exhibit 3, Tab 7, Schedule 3 pages 10 and 11 – entitled Non-Weather
Sensitive Classes and Customer Connection Forecast.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
18.
Ref:
Exhibit 3 / Tab 6 / Schedule 1
Request
(a) Please provide a schedule setting out the actual customer count, by class,
for the most recent month in 2009 that data is available.
(b) Given that the growth in GS>50 customers has exceed that for the GS<50
class in recent years (i.e., 2007 and 2008), why is it reasonable to assume
no growth in the GS>50 customer count for 2009 or 2010?
Response:
(a) Please see the response to Board Staff Interrogatory #19.
(b) While the growth in GS > 50 customer has exceeded that for the GS < 50 class in
2007 and 2008 on a percentage basis, it has not exceeded it in actual average number
of connections. The table below uses values from Exhibit 3, Tab 6, Schedule 1, Table
6 to calculate the increase in average connections over the period referenced for the
referenced classes.
2006
2007
2008
GS < 50 kW
7,565
7,604
39
7,655
51 Increase in Average
GS > 50 kW
1,012
1,020
8
1,038
18 Increase in Average
While some number of new connections of GS > 50 kW customers is expected within
the bridge and test years, the number of accounts reclassified from GS > 50 kW to GS
< 50 kW due to Veridian’s annual customer classification review is expected to offset
the number of new connections and result in flat customer counts for this class.
In response to Board Staff interrogatory #19, Veridian provides the 2009 YTD (as of
Nov 30th, 2009) customer counts by rate class. A decline can be seen in counts for the
GS > 50 kW in the Main rate zone. The annual average (Dec 3008 to Nov 2009) was
1,022 and the actual customer count as of November 30th, 2009 was 1,003. This
decrease was due to a number of GS > 50 kW customers being reclassified as GS <
50 kW customers during Veridian’s annual classification review. In this review, the
past 12 months of demand billings are reviewed for all GS > 50 kW accounts to
determine if the monthly kW demand values are sufficiently high to continue to meet
the criteria of GS > 50 kW classification. In July 2009, 61 accounts were reclassified
from GS > 50 kW to GS < 50 kW. This is due to overestimation of projected demand
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
by newly established customers and from falling demand of existing customers, likely
due to reduced production volumes attributable to the poor economic conditions.
Veridian forecasts this trend to continue in 2010.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
19.
Ref:
Exhibit 3 / Tab 6 / Schedule 2
Request
(a) Is the recent negative growth in Residential-Seasonal accounts the result of
accounts in this class being transferred the Residential class? If so, are the
transfers generally to the Residential-Suburban class?
(b) Please confirm that the expected sales to the two new customer have been grossed
up for losses for purposes of Table 6. What loss factor value was used?
Response:
(a) Veridian does not have sufficient detailed information on the recent negative growth
in Residential-Seasonal accounts to confirm that this is due to accounts being
transferred to the Residential class or the Residential-Suburban. Veridian does
confirm that this could be a possibility should those customers in the ResidentialSeasonal class change their residence status to designating their once seasonal
premise to be their principal residence and as such qualify for designation as a
Residential-Year Round customer.
(b) Veridian has attempted to interpret the question given the provided reference but has
not been successful. The evidence reference does not contain a Table 6. Table 6 is
within Exhibit 3, Tab 6, Schedule 1, but Veridian is unable to interpret the reference
to ‘two new customer’ or ‘sales’ as Table 6 provides information on average annual
customer connections for VCI_Main, not sales.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
20.
Ref:
Exhibit 3 / Tab 7 / Schedule 1
Exhibit 3 / Tab 7 / Schedule 2
Request
Please explain how the weather normalized use per customer values were
determined for the Veridian_Main and Verdian_Gravenhurst service areas for the
weather sensitive customer classes.
Response:
Weather normalized use per customer is derived by dividing annual weather normalized
use by annual number of customers.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
21.
Ref:
Exhibit 3 / Tab 7 / Schedule 3
Request
(a) With respect to Section 2.1, is Pearson Airport the closest weather station for
which Environment Canada publishes monthly data? If not, why was Pearson
airport used?
(b) With respect to Section 2.2, please provide the employment outlook from the
Ontario Ministry of Finance’s Fall Outlook and update the forecast for 2009 and
2010.
(c) With respect to Section 2.3, please confirm that the methodology used by ERA to
determine weather normal use by customer class will require that the actual loads
for non-weather sensitive classes also be adjusted in order that the sum of the
weather normalized load by class equal the total weather normalized load. I
(d) With respect to Section 2.3, please recalculate the weather normalized use for the
Residential, GS<50 and GS>50 classes for 2003 to 2008 using an approach where
the total predicted weather normal purchases net of purchases required for nonweather sensitive classes is used and the shares based only on the relative
proportion of load attributable to each weather sensitive class? Using these
results, please also re-do Table 14.
(e) With respect to Section 2.3, please confirm whether the 2009 and 2010 forecast
values for each class are based on: i) the 2008 percentages shown times the total
forecast reported in Table 7 and discrepancies will be due to rounding error or
ii).the 2008 percentages shown times the forecast total reported in Table 7 and
then reduced by losses. If the later, what loss factor was used for each class?
(f) Given the material change in the unemployment forecasts for 2009 and 2010,
relative to history (Table 2), why is it reasonable to assume that the share of sales
to residential will be the same in 2009 and 2010 as it was in 2008 as opposed to
being somewhat higher (as commercial/industrial use falls off reflecting the lower
employment levels)?
(g) With respect to Table 12 in Section 2.3, 2008 normalized retail use is 1.74%
higher than actual. However, per Table 7, weather normalized wholesale kWh are
1.94% higher than actual. Please reconcile.
(h) With respect to Table 14, Section 2.4, please comment on the reasonableness of
the resulting 2009 and 2010 “normalized” average use values for Residential,
GS<50 and GS>50 classes given the values for the preceding years.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(i) Please prepare an alternative forecast for 2009 and 2010 for the Veridian_Main
Residential class where average use per customer in each year reflects the
observed trend in average use over the 2003-2008 period as shown in Table 14.
(j) Please provide a schedule that sets out the average weather normal use per
customer for each Veridian_Main customer class as determined by Hydro One
Networks for the OEB’s CAIF.
(k) With respect to Section 3.3, please provide Sheet I6 from Gravenhurst’s 2006
CAIF and reconcile any differences between the loss factors reported here by
customer class with those used in Table 20.
(l) Please repeat part (d) for Veridian_Gravenhurst and, using the results, provide a
revised version of Table 26.
(m)Please provide a schedule that sets out the average weather normal use per
customer for each Veridian_Gravenhurst customer class as determined by Hydro
One Networks for the OEB’s CAIF.
(n) Given that the customer count for the various Veridian_Gravenhurst customer
classes is forecast to grow at different rates in 2009 and 2010, why is it reasonable
to use the 2008 shares to determine the sales by class in 209 and 2010?
(o) With respect to Table 26, Section 3.5, please comment on the reasonableness of
the resulting 2009 and 2010 “normalized” average use values for Residential,
GS<50 and GS>50 classes given the values for the preceding years.
Response:
(a) Veridian observes that in order to calculate degree days, daily weather data must be
available. It is possible that there is an Environment Canada weather station that is
closer than Pearson Airport. However, it is likely that the prevailing weather would
be materially different from that observed at Pearson. For Belleville, Trenton would
be closer than Pearson and has daily observations and history. However, on a
population weighted basis, Pearson is closer to the larger number of customers in the
Veridian Main service area. Pearson Airport has decades of daily weather
observations with very few missing observations and is widely used to describe
weather observations for the GTA and environs. Many smaller Environment Canada
weather stations have limited historical data or significant missing observations. For
these reasons, Pearson Airport was chosen. Veridian also notes that Hydro One used
Toronto Pearson as the weather station used for the OEB’s CAIF.
(b) The Ontario Ministry of Finance Fall Outlook projects employment to decline by -2.6
per cent in 2009 and grow by 0.6 per cent in 2010. This is virtually identical to
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
forecast used in Veridian’s application (-2.6 per cent and 0.4 per cent, respectively).
This is not a material difference, so Veridian has not updated the forecast. Attached
are the relevant schedules from the Ontario Ministry of Finance Fall Outlook.
(c) No, the methodology used by ERA to determine weather normal use by customer
class does not require that the actual loads for non-weather sensitive classes also be
adjusted.
(d) To comply with this request, Veridian has developed a monthly data series called
“weather sensitive wholesale load” or “WSL”. WSL is defined as monthly wholesale
purchases less monthly intermediate, large user, street light, sentinel light and USL
kWh. Intermediate and large user customers are interval metered and therefore their
monthly kWh reflects monthly consumption. For the purpose of answering this
interrogatory, Veridian has assumed that monthly street lighting, sentinel lighting and
USL kWh is one-twelfth of the annual consumption in the relevant year. All class
specific kWh is exclusive of distribution losses.
Using monthly WSL as defined above and the identical explanatory variables and
time period as the regression equation displayed in Table 3 of Section 2.3, the
following regression equation results:
Model 1:
OLS
using observations 2002:05-2008:12 (T = 80)"
Dependent variable: WSLkWh
const
HDD
CDD
Peakdays
FTE_Ont
coefficient
-102,226,386.0
81,465.7
321,299.8
1,454,946.2
41,871.6
t-ratio
-5.47
28.42
23.43
2.84
14.65
p-value
5.69E-07
6.71E-42
3.04E-36
0.005809
1.05E-23
R-squared
F(4, 75)
rho
0.92555496
233.1136581
0.02106627
Adjusted R-squared
P-value(F)
Durbin-Watson
0.921585
1.76E-41
1.936056
This results in the following weather normalized consumption (historical and
forecast) using the identical assumptions for economic growth.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Actual Annual Consumption
Year
WSL
2003
2,084,630,307
%chg
Residential
2004
2,116,244,270
1.5%
831,017,028
2005
2,237,132,134
5.7%
2006
2,251,019,752
2007
2008
%chg
share
GS<50
39.7%
276,521,722
share
GS>50
13.3%
964,152,305
0.5%
39.3%
281,226,049
1.7%
13.3%
942,013,909
-2.3%
906,779,281
9.1%
40.5%
44.5%
283,135,116
0.7%
12.7%
1,005,862,450
6.8%
0.6%
883,724,953
-2.5%
45.0%
39.3%
294,123,554
3.9%
13.1%
983,029,977
-2.3%
2,284,454,160
1.5%
915,566,674
43.7%
3.6%
40.1%
291,605,781
-0.9%
12.8%
966,922,043
-1.6%
2,274,172,944
-0.5%
42.3%
931,097,742
1.7%
40.9%
296,146,633
1.6%
13.0%
931,775,076
-3.6%
41.0%
Residential
%chg
share
GS<50
%chg
share
GS>50
%chg
share
39.7%
278,448,566
13.3%
970,870,659
827,059,131
%chg
%chg
share
46.3%
Weather Normal Consumption
Year
WSL
2003
2,099,156,317
%chg
2004
2,159,459,553
2.9%
847,987,015
1.8%
39.3%
286,968,894
3.1%
13.3%
961,250,535
-1.0%
44.5%
2005
2,188,258,992
1.3%
886,969,476
4.6%
40.5%
276,949,651
-3.5%
12.7%
983,888,040
2.4%
45.0%
2006
2,241,795,965
2.4%
880,103,799
-0.8%
39.3%
292,918,352
5.8%
13.1%
979,001,910
-0.5%
43.7%
2007
2,274,778,010
1.5%
911,688,653
3.6%
40.1%
290,370,641
-0.9%
12.8%
962,826,499
-1.7%
42.3%
2008
2,297,750,931
1.0%
940,751,102
3.2%
40.9%
299,216,998
3.0%
13.0%
941,435,458
-2.2%
41.0%
2009
2,225,156,199
-3.2%
911,029,180
-3.2%
40.9%
289,763,590
-3.2%
13.0%
911,691,915
-3.2%
41.0%
2010
2,235,808,341
0.5%
915,390,407
0.5%
40.9%
291,150,730
0.5%
13.0%
916,056,315
0.5%
41.0%
832,822,200
46.3%
From the above results, Table 14 from Section 2.4 is restated for the weather sensitive
classes (residential, GS<50 kW, GS>50 kW).
Average Use Per Customer
Actual
Year
2003
2004
2005
2006
2007
2008
Residential
10,016
9,990
10,451
9,763
9,864
9,854
GS<50
38,080
39,275
38,005
38,882
38,349
38,687
GS>50
1,002,672
968,237
1,009,902
971,854
947,885
897,520
Normalized & Forecast Use Per Customer
Year
2003
2004
2005
2006
2007
2008
2009
2010
Residential
10,086
10,194
10,222
9,723
9,823
9,956
9,533
9,499
GS<50
38,345
40,077
37,174
38,723
38,186
39,088
37,602
37,531
GS>50
1,009,658
988,009
987,839
967,871
943,870
906,825
878,175
882,379
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(e) The 2009 and 2010 forecast values are based on 2008 class shares, as indicated in
Section 2.3. The percentages shown in Table 8, rounded to 3 digits, are presented for
information only in order to provide the reader with a snapshot of the relative
importance of each class and the trend over time. For calculation purposes, the actual
class share should be used. For example, in 2008 the residential class share would be
the actual residential throughput in 2008 divided by the actual wholesale throughput
in 2008. Calculated in this way, there is no discrepancy. No loss factor adjustment is
made as no distribution losses are included in the class throughput. See response to
Board Staff IR 14 for a detailed example.
(f) The year 2008 was chosen as it was the most recent year available. At the time the
load forecast was prepared, only the first quarter of residential class kWh billing was
available. It was Veridian’s view that choosing an alternative value for the class share
that was not based on historical performance would be perceived as arbitrary by the
Board and intervenors. As the load forecast report indicates, it would be preferable to
develop class specific weather normalized forecast equations. However, the quarterly
billing cycle in Veridian Main precluded this approach.
(g) Table 12 in Section 2.3 refers to average annual customer connections for VCI Main.
Veridian assumes VECC is referring to Table 13. Please reference the table below.
Veridian calculates that on both a retail and wholesale basis, normalized consumption
is 1.94% higher than actual in 2008. Veridian suspects that VECC inadvertently
included non-normalized retail classes in its examination of retail kWh.
From Table 13
Normalized
Actual
2008 Residential
2008 GS<50
2008 GS>50
949,155,692
301,890,178
949,846,163
2008 Normalized Retail
2,200,892,033
2008 Residential
2008 GS<50
2008 GS>50
931,097,742
296,146,633
931,775,076
2008 Actual Retail
2,159,019,451
Normalized vs Actual
1.0194
From Table 7
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Normalized
2008 Wholesale
2,575,788,571
Actual
2008 Wholesale
2,526,783,479
Normalized vs Actual
1.0194
(h) Please see response to Energy Probe IR 15.
(i) As requested, Veridian has calculated average use per customer for 2009 and 2010 for
the Veridian Main residential class based on the observed trend in average use over
the 2003-2008 period as shown in Table 14. Using these data points, the following
linear trend function is fitted: y = -52.029x + 10176. We have then used the forecast
number of customers as displayed in Table 12 to calculate the forecast class volumes
for 2009 and 2010. Results are displayed in the table below.
T
1
2
3
4
5
6
7
8
Year
2003
2004
2005
2006
2007
2008
2009
2010
From Table 14
Residential Normalized Use Per Cust
10,075
10,208
10,175
9,626
9,834
10,045
trend
10,124
10,072
10,020
9,968
9,916
9,864
9,812
9,760
Residential Forecast for VCI Main, 2009 & 2010
Based on above trending of NAC methodology
Year
2009
2010
Cust #s
95,570
96,370
kWh
937,707,355
940,542,748
Veridian would like to note that the above methodology ignores any forward looking
economic trends. Therefore, forecast future economic fluctuations (downwards or
upwards) are not reflected in this forecast methodology.
(j) The following table sets out weather normalized average use per customer as
calculated from Hydro One Networks analysis for the OEB’s CAIF.
Monthly kWh by class (with actual weather)
1 Residential class
2 Street lighting
3 Sentinel lighting
4 General service <50kW
5 General service >50kW
TOTAL1
905,108,916
17,342,522
216,478
321,940,535
956,396,447
2004 Retail2
831,017,028
13,636,431
825,096
281,226,049
942,013,909
Implied Loss
1.089
1.272
0.262
1.145
1.015
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
6 Intermediate Use
7 Large Use
8 USL
Monthly kWh by class (with normalized weather)
1 Residential class
2 Street lighting
3 Sentinel lighting
4 General service <50kW
5 General service >50kW
6 Intermediate Use
7 Large Use
8 USL
20,551,009
222,045,561
6,376,103
19,667,919
184,659,451
4,887,715
1.045
1.202
1.305
TOTAL1
911,101,396
17,342,522
216,478
325,285,928
965,985,090
20,551,009
222,045,561
6,376,103
2004 Retail3
836,518,966
13,636,431
825,096
284,148,363
951,458,356
19,667,919
184,659,451
4,887,715
2004 Avg Cust
83,188
22,599
784
7,160
973
2
5
747
1
per Hydro One analysis
retail kWh by class for VCI Main
3
calculated using impled loss factor
2
(k) Sheet I6 from Gravenhurst’s 2006 CAIF is provided as an attachment. The loss factor
reported in sheet I6 (1.0835) is derived from the 2006 EDR which is a three year
average (2002, 2003, and 2004) as can be seen from “Schedule 10-5: Determination
of Loss Adjustment Factors” from Gravenhurst Hydro Inc.’s 2006 Distribution Rate
Application (also provided as an attachment). Table 20 provides “implied loss
factors” by class calculated by dividing the 2004 weather actual class kWh
consumption reported by Hydro One by the 2004 retail kWh class sales as recorded
by the utility.
(l) The only non-weather sensitive load in Gravenhurst is street lighting and sentinel
lighting. The consumption of these classes accounts for approximately 0.6% of total
wholesale purchases (0.636% in 2008), which is less than the random error of the
OLS regression model. Recalculating consumption as requested will not result in any
material difference; therefore, Veridian has not recalculated on this basis.
(m) This appears in Table 20 of Exhibit 3, Tab 7, Schedule 3.
(n) Please see response to part (f).
(o) Please see response to response to Energy Probe IR 16.
retail "NAC"
10,056
603
1,052
39,686
977,861
9,833,960
36,931,890
6,543
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
22.
Ref:
Exhibit 3 / Tab 8 / Schedule 1 / Page 1
Exhibit 3 / Tab 8 / Schedule 3 / Page 3
Request
Please provide a more detailed breakdown regarding the sources of Other Income
and Deductions for the years 2007-2010 such that the reasons for the year over
year changes are more readily apparent.
Response:
Please see the response to Board Staff Interrogatory #20.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
23.
Ref:
Exhibit 3 / Tab 8 / Schedule 2 / Page 1
Request
Is Veridian proposing to introduce any new service charge or change the “rate”
for any existing service charges? If so, please identify and provide the supporting
rationale, including cost analysis.
Response:
As set out at Exhibit 3, Tab 8, Schedule 2, page 1, Veridian proposes that its menu of
specific service charges be augmented by the addition of two charges under the category
of ‘Customer Administration’. The two charges are for Disconnect/Reconnect at meter –
during regular hours and for Disconnect/Reconnect at meter – after regular hours.
Veridian’s current menu of specific service charges includes these two charges under the
category of ‘Non-Payment of Account’.
The supporting rationale for the new charges is provided at Exhibit 3, Tab 8, Schedule 2,
pages 1 and 2.
Veridian is proposing the standard amount for these specific service charges as stipulated
in the Board’s 2006 Electricity Distribution Rate Handbook.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
24.
Ref:
Exhibit 3 / Tab 8 / Other Revenues
Exhibit 3 / Tab 8 / Appendix D
The reference states:
Shared services to Veridian Corporation will continue and the associated revenue is
forecast at $229,000. Full details of corporate cost allocation methodologies are outlined
at Exhibit 4, Tab 6, Schedule 5.
Request
(a) Indicate which line(s) of Appendix D include the outbound services to Veridian
Corporation.
(b) Confirm the services are provided at Veridian Connections fully allocated cost.
(c) Provide a sample of the calculation of the fully allocated cost for a service
provided to Veridian Corporation.
Response:
(a) The outbound services to Veridian Corporation are included in the line “Other
Income and Expenses”.
(b) Confirmed.
(c) Please see the response to Energy Probe Interrogatory #32.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
25.
Ref:
Exhibit 4 / Tab 2 / Schedule 1 / Page 4 / Table 2
Request
(a) Provide a version of Table 2 that incorporates the Cost per kilowatt hour
distributed
(b) Benchmark the OM&A costs shown in Table 2 as amended, to the Data shown
on the Boards Web site http://www.oeb.gov.on.ca/OEB/_Documents/EB-20060268/Comparison_of_Distributors_with_2007_data.xls
(c) Update the data for 2008.
(d) Discuss Veridian’s trends and Position in the Cohort.
Response:
(a)
2006 Board
Approved
Total OM&A
Expenses ('000s)
Customer Count
Kilowatt Hours
Distributed ('000s)
OM&A
Cost/Customer
OM&A Cost/
Customer %
Change
OM&A Cost/kWh
OM&A Cost/ kWh
% Change
$
$
2006
Actual
2007
Actual
2008
Actual
2009
Forecast
2010
Forecast
19,734
101,865
$ 19,413
107,231
$ 17,629
109,225
$ 19,589
110,861
$ 20,029
112,042
$ 22,399
113,216
2,419,475
2,532,414
2,547,644
2,501,314
2,455,988 2,465,704
193.73
$ 181.04
$ 161.40
$ 176.70
$ 178.76
$ 197.84
0.00816
-6.5%
0.00767
-10.8%
0.00692
9.5%
0.00783
1.2%
0.00816
10.7%
0.00908
-6.0%
-9.7%
13.2%
4.1%
11.4%
OM&A Cost/Customer % change-2006 Board Approved to 2010 Forecast
Annual Increase in Costs per Customer-2006 Board Approved to
2010
OM&A / kWh % change-2006 Board Approved to 2010 Forecast
Annual Increase in Costs per kWh -2006 Board Approved to 2010
(Note: Based on 6 years as 2006 Board Approved is 2004 Actuals)
2.1%
0.35%
11.4%
1.90%
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(b) Veridian has added its actual 2008 and forecast 2009/2010 costs to the spreadsheet at
the web-link provided, and has calculated three year average cost data using these
new data. A copy of the modified table is provided as Attachment 1.
(c) Data for 2008 have been included in Attachment 1, per the response to (b) above.
(d) Veridian’s projected OM&A costs of $198 per customer in the test year compares
favourably to the 2005-07 group average cost of $214 per customer. This favourable
comparison is understated as the costs of other cohort members have been trending
up, and the group average cost is likely to increase as the comparison is updated with
more recent cost data.
The following table provides a comparison of recent cost trends for distributors
within Veridian’s peer group, using data from the Board’s website. The general
upward trend in Veridian’s costs appears consistent with those of peer group
members.
Comparison of Ontario Electricity Distributors Costs (EB-2006-0268)
Peer Groups per PEG Report
Total OM&A per Customer
Average
2008-2010
LDC
Small Northern Low Undergrounding
West Nipissing Energy Services Ltd.
Renfrew Hydro Inc.
Fort Frances Power Corporation
Espanola Regional Hydro Distribution Corporation
Northern Ontario Wires Inc.
Parry Sound Power Corporation
Sioux Lookout Hydro Inc.
Atikokan Hydro Inc.
Chapleau Public Utilities Corporation
Great Lakes Power Limited
Average
2007-2009
Average
2006-2008
Average
2005-2007
$135
$204
$276
$280
$282
$306
$389
$399
$415
$693
Group Average
Small Northern Medium Undergrounding
Ottawa River Power Corporation
Kenora Hydro Electric Corporation Ltd.
Hearst Power Distribution Company Limited
Lakeland Power Distribution Ltd.
Mid-Size Northern
North Bay Hydro Distribution Limited
PUC Distribution Inc
Inc.
Thunder Bay Hydro Electricity Distribution Inc.
Greater Sudbury Hydro Inc.
2008
2007
2006
2005
$160
$231
$296
$300
$302
$306
$414
$444
$482
$714
$184
$209
$269
$302
$282
$311
$381
$379
$373
$690
$63
$171
$261
$237
$262
$302
$373
$373
$389
$674
$226
$248
$240
$226
$200
$214
$233
$253
$188
$209
$214
$215
$219
$239
$241
$365
$249
$210
$219
$213
$196
$216
$210
$210
$222
$221
$222
$223
$263
Group Average
Forecast
2009
$338
$205
$224
$229
$231
Group Average
Forecast
2010
$232
Large Northern
Hydro One Networks Inc.
$357
$413
$351
$309
Small Southern Low & Medium Undergrounding
Hydro Hawkesbury Inc.
Lakefront Utilities Inc.
Hydro 2000 Inc.
Rideau St. Lawrence Distribution Inc.
Dutton Hydro Limited
Clinton Power Corporation
Wellington North Power Inc.
Brant County Power Inc.
Grand Valley Energy Inc.
Eastern Ontario Power (CNP)
Port Colborne (CNP)
$141
$204
$212
$233
$250
$284
$287
$293
$325
$380
$462
$144
$212
$201
$239
N/A
$333
$289
$173
$323
$371
$490
$134
$206
$192
$230
$233
$296
$295
$365
$356
$415
$452
$144
$193
$243
$231
$266
$224
$276
$342
$295
$356
$443
$202
$246
$262
$299
$263
$306
$208
$246
N/A
$251
$272
$374
$226
$217
$213
$215
$249
$371
Group Average
Small Southern Medium-High Undergrounding
Middlesex Power Distribution Corporation
Tillsonburg Hydro Inc.
West Perth Power Inc.
Newbury Power Inc.
Midland Power Utility Corporation
West Coast Huron Energy Inc.
$279
$212
$236
$237
$255
$261
$350
Comparison of Ontario Electricity Distributors Costs (EB-2006-0268)
Peer Groups per PEG Report
Total OM&A per Customer
Average
2008-2010
LDC
Average
2007-2009
Average
2006-2008
Group Average
Average
2005-2007
Forecast
2010
Forecast
2009
2008
Small Southern Medium-High Undergrounding with Rapid Growth
Grimsby Power Incorporated
Orangeville Hydro Limited
Cooperative Hydro Embrun Inc.
Niagara-on-the-Lake Hydro Inc.
Centre Wellington Hydro Ltd.
$162
$181
$202
$207
$239
Group Average
$211
$229
$260
$271
$293
$297
Group Average
$155
$157
$162
$181
$182
$183
$189
$203
$211
$216
$221
$223
$247
$261
$329
Group Average
$173
$175
$150
$174
$236
$294
$154
$174
$197
$205
$238
$162
$175
$199
$189
$238
$225
$255
$203
$281
$346
$323
$210
$217
$276
$262
$273
$298
$198
$215
$301
$270
$260
$269
$182
$159
$164
$192
$
$185
$209
$182
$196
$225
$214
$206
$228
$255
$256
$356
$171
$159
$161
$186
$
$189
$162
$181
$205
$220
$229
$222
$223
$245
$270
$308
$113
$152
$162
$166
$
$171
$178
$204
$206
$187
$205
$236
$218
$240
$258
$324
$198
$179
$177
$155
$163
$247
$359
$161
$185
$228
$263
$135
$176
$233
$259
$129
$165
$175
$182
$249
$136
$147
$168
$169
$235
$127
$170
$156
$190
$229
$214
$130
$161
$166
$180
$237
Group Average
$169
$192
$210
$227
$242
$208
$184
Large City Southern High Undergrounding
Hydro One Brampton Networks Inc.
Horizon Utilities Corporation
London Hydro Inc.
PowerStream Inc.
Enersource Hydro Mississauga Inc.
2005
$260
Mid-Size Southern Medium-High Undergrounding
E.L.K. Energy Inc.
Wasaga Distribution Inc.
Chatham-Kent Hydro Inc.
Peterborough Distribution Incorporated
Festival Hydro Inc.
Welland Hydro-Electric System Corp.
Kingston Electricity Distribution Limited
Westario Power Inc.
COLLUS Power Corp.
St. Thomas Energy Inc.
Essex Powerlines Corporation
Woodstock Hydro Services Inc.
Niagara Falls Hydro Inc.
Bluewater Power Distribution Corporation
Erie Thames Powerlines Corporation
Group Average
2006
$198
Mid-Size Southern Low & Medium Undergrounding
Innisfil Hydro Distribution Systems Limited
Norfolk Power Distribution Inc.
Peninsula West Utilities Limited
Orillia Power Distribution Corporation
Haldimand County Hydro Inc.
Fort Erie (CNP)
Large City Southern Medium-High Undergrounding
Hydro Ottawa Limited
Veridian Connections Inc.
Toronto Hydro-Electric System Limited
ENWIN Powerlines Ltd.
2007
$259
$175
Comparison of Ontario Electricity Distributors Costs (EB-2006-0268)
Peer Groups per PEG Report
Total OM&A per Customer
Average
2008-2010
LDC
Mid-Size GTA Medium-High Undergrounding
Barrie Hydro Distribution Inc.
Kitchener-Wilmot Hydro Inc.
Cambridge and North Dumfries Hydro Inc.
Oshawa PUC Networks Inc.
Guelph Hydro Electric Systems Inc.
Waterloo North Hydro Inc.
Newmarket - Tay Power Distribution Ltd.
Oakville Hydro Electricity Distribution Inc.
Burlington Hydro Inc.
Brantford Power Inc.
Milton Hydro Distribution Inc.
Whitby Hydro Electric Corporation
Halton Hills Hydro Inc.
Average
2007-2009
Average
2006-2008
Average
2005-2007
$121
$145
$158
$163
$172
$179
$189
$196
$196
$197
$201
$206
$220
Group Average
$180
Total Average
$237
Forecast
2010
Forecast
2009
2008
2007
2006
2005
$124
$149
$172
$172
$213
$179
$186
$189
$206
$217
$198
$214
$220
$124
$148
$148
$159
$149
$182
$189
$202
$199
$175
$198
$205
$241
$115
$139
$154
$158
$154
$177
$192
$198
$185
$199
$208
$200
$198
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
26.
Ref:
Exhibit 4 / Tab 2 / Schedule 1 / Table 3
Request
(a) With respect to the cost driver Table 3, please breakdown the Employee Costs
contribution for each year as between: (i) staff increases (headcount and FTEs)
and (ii) inflation .and increases in costs per employee.
(b) what were the annual contracted costs for tree trimming service in 2006-2008
along with the projected costs for 2009 and 2010.
(c) Please provide a schedule that compares the tree trimming cost for 2007 and 2010
and explain the variance in terms of inflation, scope of work performed, etc.
(d) Do Veridian’s residential customers have an option of equal monthly (i.e. budget)
billing? If not, why not?
Response:
(a) Employee Costs related to (i) staff increases are in the row identified as “Increased
Staffing Requirements” within Table 3. Employee costs related to (ii) inflation and
increases and in costs per employee are in the row identified as “Inflation, Wage
Adjustments and Other” within Table 3.
(b) Awarded or Projected Contract costs for cyclical tree trimming as follows:
Year
Contract
costs
2006
$287,119
2007
$287,379
2008
$295,000
2009 proj
$535,700
2010 proj
$595,900
This table includes only the planned or cyclical line clearing programs in Veridian’s
districts. Reactive spending due to trouble calls or customer calls are not included in the
above table.
(c) As is readily seen from the table in Part (b), costs are substantially different from
2007 costs to projected 2010 costs. For the areas in the Ajax, Brock, Belleville and
Clarington Districts scheduled for line clearing activities in 2010, there is some
increase in the scope of the work since the areas due for trimming have a greater
amount of line exposed to trees and/or are more heavily treed (larger and thicker
vegetation). All work is/will be done by contract, and all work is awarded via an RFP
process. The current RFP included three bidders, and the lowest bid was accepted for
each district. The average contract labour rate increased from $107.29 per hour in
2007 to $150.00 per hour for 2010. The contract rate alone represents approximately
40% of the total increase for the work to be performed in these three districts. For the
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Gravenhurst District, contracted work for 2007 was only based on a preliminary and
limited restart of tree trimming in this area. Veridian was hampered in setting out a
vegetation management plan by a lack of area information, compounded by the
considerable variation in terrain and working conditions which made estimating by
deemed average costs impossible. The 2007 contract was used to set some base line
cost determinants. There had been little to no regular vegetation management done in
previous years, and it was clear that there is a need to accelerate the pace of line
clearing efforts in this area to achieve improved reliability and minimize storm
damage. 2007 contract costs for Gravenhurst were approximately $54,600, and due
solely to scope of work this is being increased to $180,000 in 2010 and forward in a
continuing effort to re-establish proper and safe vegetation clearances. Veridian
anticipates this level of spending through the IRM period.
(d) Veridian customers have the option of participating in a monthly equal payment plan.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
27.
Ref:
Exhibit 4 / Tab 4 / Schedule 4
Request
(a) Please confirm that Veridian’s application includes provisions for LEAP contributions
and staffing costs.
(b) Provide details of these costs.
(c) Given the Board’s September 28, 2009 update regarding the Low Income Energy
Assistance Program initiative, are the budgeted LEAP amounts required for 2010? If yes,
then explain why?
Response:
(a) Confirmed.
(b) Details regarding provisions for “LEAP Emergency Financial Assistance for Bill Payment”
in the test year are provided in the response to Board Staff interrogatory number 33.
The increased staffing levels required to accommodate LEAP and related proposed changes
to customer service standards are explained at Exhibit 4/Tab 5/Schedule 4/Page 9. An
increase of 2.5 FTEEs is required. The test year costs will be $160k.
(c) Yes, the proposed amounts are still required for 2010.
While the Board’s September 28th 2009 letter announced that it would not proceed to
implement new support programs for low-income energy consumers in advance of a
ministerial decision, it also explains that it will proceed with the process of amending codes
to bring into force new customer service rules that will benefit all customers, including lowincome customers. Details of the proposed changes in customer service rules are laid out in
the “Board’s Notice of Revised Proposal to Amend Codes” as issued under proceeding EB2007-07223 on October 1st 2009.
The proposed changes contemplated by the Board’s notice are comprehensive and will have
significant impacts on Veridian’s business operations. Veridian has summarized the changes
in the table appended as Attachment 1. The table also identifies the areas of Veridian’s
business operations that will be affected by the changes.
Summary and Impacts of Proposed Code Amendments
Customer Service, Customer Reclassification and Management of Customer Commodity Non-Payment Risk
EB-2007-0722
Revision Impact
Impact
On-going/One time
Code Amendt
Details
DSC Sect 2.4.20A
Security Deposit
LDC must permit a Residential customer to pay security deposit in equal installments over a period of 6 months
where a new security deposit is required due to LDC applying the existing deposit against amounts owing.
LDC shall conduct a review of the customer's security deposit in the calendar year in which the anniversary of
the 1st instalment occurs and thereafter as otherwise required by the Code.
For purposes of Section 2.4.23, where a Residential customer has paid a security deposit in instalments, the
customer shall not be entitled to request a review of the deposit until 12 months after the first instalment was paid.
Despite Section 2.4.25 where a Residential electricity customer is required to adjust the security deposit upwards
LDC shall permit the customer to pay the adjustment amount in equal instalment over a period of at least 6 months.
LDC shall not issue a disconnection notice to a Residential customer for non payment unless the LDC has first
2.4.22A
2.4.23A
2.4.25A
2.4.26A
Billing
Credit
Call Centre
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Finance
Reg
CIS Vendor
Bill Print
Provider
√
On-going
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On-going
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On-going
√
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applied any security deposit held on account for the customer against any amounts owing at the time and the
security deposit was insufficient to cover the total amount owing.
2.4.26B
On-going
Where LDC applies all or part of security deposit to offset amounts owing by a Residential customer to offset
amounts owing under Sec. 2.4.26A, the LDC may request that the customer repay the amount of the security
deposit that was applied. LDC shall allow customer to repay security deposit over at least 6 months.
Code Amendt
Details
DSC Sect 2.6
2.6.1
2.6.2
Bill Issuance and Payment
LDC must include the date bill printed on each bill issued to customer
Except as otherwise permitted by the DSC, LDC shall not treat a bill as issued to a customer
as unpaid and shall not impose any ODI or other charges associated with non-payment
until the applicable minimum payment period set out in Section 2.6.3 has elapsed.
For the purposes of Section 2.6.2, the minimum payment period shall be 16 days from the date
on which the bill was issued to the customer. (LDC may provide a longer payment period,
however, must be documented in Conditions of Service)
For the purposed of Section 2.6.3, a bill will be deemed to have been issued to a customer:
if sent by mail, on the 3rd day after the date on which the bill was printed by LDC
if made available over the internet, on the date on which the e-mail was sent to customer notifying
bill is available for viewing over the internet
if sent by e-mail, on the date on which the e-mail is sent, or
if sent by more than one of the methods above, on whichever date of deemed issuance occurs last.
LDC shall apply the following rules for the purposes of determining the date on which payment of a bill
has been received from a customer:
if paid by mail, 3 days prior to the date on which the LDC receives the payment
if paid at a financial institution or electronically, on the date on which the payment is acknowledged
Details
2.6.3
2.6.4
(a)
(b)
(c)
(d)
2.6.5
(a)
(b)
Code Amendt
DSC Sect 2.6
2.6.6
2.6.7
2.6.7.1
2.6.7.2
2.6.7.3
2.6.8
Bill Issuance and Payment (cont'd)
or recorded by the customer's financial institution.
Where the LDC has issued a disconnection notice to a Residential customer for non payment, the
LDC shall permit the customer to pay all amounts that are overdue for payment by Credit Card issued
by a financial institution.
Where a bill issued to a Residential customer includes charges for goods or services other than
electricity charges, the LDC shall allocate any payment made, first to the electricity charges and then,
apply remaining fund to the charges for other goods or services.
Section 2.6.7 does not apply to existing joint billing agreements until the renewal date of the agreement,
or 2 years, whichever comes earlier, and thereafter the provisions of Section 2.6.7 are deemed applicable.
Where payment of a bill referred to in Sections 2.6.7/2.6.7.1 is sufficient to cover the electricity charges
LDC shall not apply ODI charges, issue a disconnection notice or disconnect electricity supply.
For the purposes of this section, "Electricity charges" are:
(a) charges that appear under the sub-headings "Electricity, Delivery, Regulatory Charges and Debt
Retirement" as described in Ontario Regulation 275/04 (Information on Invoices to Low-Volume Consumers
of Electricity) made under the Act, and all applicable taxes on these charges
(b) where applicable, charges labeled "Provincial Benefit" as described in Ontario Regulation 429/04
(Adj Under Sect 25:33 of the Act) made under the Electricity Act and all applicable taxes on these charges
(c) Board approved ODI fees, specific service charges and such other charges and applicable taxes associated
with the consumption of electricity as may be required by law to be included on the bill issued to the customer
or as may be designated by the Board for the purposes of this section but not including security deposit.
For the purposed of Section 2.6, LDC shall apply the following rules relating to computation of time:
On-going
On-going
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√
√
√
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One time
√
One time
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√
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On-going
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√
√
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√
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On-going
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One time
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Summary and Impacts of Proposed Code Amendments
Customer Service, Customer Reclassification and Management of Customer Commodity Non-Payment Risk
EB-2007-0722
Revision Impact
Impact
(a) where there is reference to a number of days between 2 events the days shall be counted by excluding
the day on which the 1st event happens, and including the day on which the 2nd event happens
(b) where the time for doing an act expires on a day that is not a business day, the act may be done on the
next business day
(c) where an act other than payment by a customer occurs on a day that is not a business day, it shall be
deemed to have occurred on the next business day
(d) where the act, other than payment by a customer occurs after 5:00 p.m. it shall be deemed to have occurred
on the next business day
(e) receipt of payment by a customer is effective on the date that the payment is made, including payments
made after 5:00 p.m.
Details
Code Amendt
DSC Sect 2.7
2.7.1
Arrears Management Programs
LDC shall make available to any Residential electricity customer who is unable to pay their electricity
charges, as defined in Section 2.6.7.3 the opportunity to enter into an Arrears Payment Agreement with
the LDC. The Arrears Payment Agreement shall include, at a minimum, the terms and conditions below:
2.7.1.1 Before entering into an Arrears Payment Agreement under Section 2.7, LDC shall apply any security deposit
Code Amendt
Details
DSC Sect 2.7
2.7.1.2
2.7.2
(a)
(b)
2.7.3
2.7.4
2.7.4.1
2.7.4.2
Code Amendt
DSC Sect 2.8
2.8.1
2.8.1.1
2.8.2
Code Amendt
DSC Sect 2.8
2.83
Arrears Management Programs(cont'd)
against any electricity charges owing at the time.
As part of the Arrears Payment Agreement, LDC may require that the customer pay down up to 15% of the
electricity charge arrears accumulated, inclusive of any applicable ODI, but excluding other service charges
when entering into the Arrears Management Program.
The Arrears Payment Agreement referred to in Section 2.7.1 shall allow the Residential Electricity Customer
to pay all remaining electricity charges that are then overdue for payment after applying the down payment
referred to in Section 2.7.1.1 including all electricity-related service charges that have accrued to the date of
the agreement, over the following periods:
A period of at least 5 months, where the total amount of the electricity charges remaining overdue for payment
is less that twice the customer's average monthly bill amount
A period of at least 10 months, where the total amount of the electricity charges remaining overdue for payment
is equal to or exceeds the customer's average monthly billing amount.
For the purposes of Section 2.7.2. the customer's average monthly billing amount shall be calculated by taking
the aggregate of the total electricity charges billed to the customer in the preceding 12 months and dividing
that value by 12. If the customer has less than 12 months, the average monthly billing amount shall be a
reasonable estimate made by the LDC. "Electricity Charges" has the same meaning as in Section 2.6.7.3.
Where the customer defaults on more than one occasion in making a payment in accordance with an Arrears
Payment Agreement or on a current electricity charge billing, the LDC may cancel the Arrears Payment
Agreement
If LDC cancels an Arrears Payment Agreement pursuant to Section 2.7.4, LDC must give written notice of
cancellation to the customer and to any 3rd party designated by the customer under Section 4.2.2.2 at least
10 days before the effective date of the cancellation.
If customer makes payment of all amounts due pursuant to the Arrears Payment Agreement as of the cancellation
date referred to in Section 2.7.4.1 and makes payment on or before the cancellation date, the LDC shall reinstate
the Arrears Payment Agreement.
Details
Opening and Closing of Accounts
When LDC opens an account in the name of a person at the request of a 3rd party, LDC shall within 15 days
of opening the account send a letter to the person advising of the opening of the account and requesting that the
person agrees to be the named customer. If LDC does not receive confirmation within 15 days of the letter, the
LDC shall advise the 3rd party that the account will not be set up as requested.
The LDC is not required to send a letter advising of the opening of the account where the request to open
the account is made in writing by the person's solicitor or person in possession of a valid Power of Attorney for
the person.
When LDC opens an account in the name of a person at the request of a 3rd party the LDC shall not hold the
3rd party responsible for any charges unless the person has agreed in writing to being the customer of LCD
in relation to the property.
Details
Opening and Closing of Accounts (cont'd)
Despite any other provision of this Code with exception of the parties mentioned in Section 2.8.1.1 where a
LDC receives a request to close or transfer an account in relation to a rental unit in a Residential Complex as
On-going/One time
On-going
Credit
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Call Centre
Finance
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Summary and Impacts of Proposed Code Amendments
Customer Service, Customer Reclassification and Management of Customer Commodity Non-Payment Risk
EB-2007-0722
Revision Impact
Impact
On-going/One time
Code Amendt
DSC Sect 4.2.2
(a)
(b)
(c)
(d)
(e)
(f)
(g)
4.2.2.2
(a)
(b)
4.2.2.4
Code Amendt
DSC Sect 4.2.2
4.2.2.5
4.2.2.6
4.2.2.7
4.2.3
Credit
defined in the Residential Tenancies Act, 2006 or another residential property, the LDC shall not seek to
recover any charges for the service provided to that rental unit or residential property after closure of the account
from any person, including the landlord for the residential complex or a new owner unless the person has
agreed in writing to assume responsibility for those charges.
For the purposes of Section 2.8 the requirement for agreement in writing includes agreements in electronic
form in accordance with the Electronic Commerce Act, 2000.
Details
2.8.4
4.2.2.3
Billing
Disconnection for Non-payment
LDC that intends to disconnect pursuant to Section 31 of the Electricity Act 1998, the property for non payment
shall send or deliver a disconnection notice to the customer that contains, at minimum the following information
the amount that is overdue including ODI and other charges associated with non payment
the earliest and latest dates on which disconnection may occur
amount of any reconnection charges that may apply is disconnection occurs including where more than one
charge has been approved by the Board and the circumstances in which each charge is payable
any action that the customer may take to avoid disconnection and the deadline for taking such action
if a local Vital Service By-law is in effect that applies to the customer's property, whether the LDC has provided
the required notification to the municipality
that a Board prescribed Arrears Management Program is available to all Residential customer, and that other
voluntary bill payment, disconnection and financial assistance may be available, and contact information for the
LDC where the customer can obtain further information about available financial assistance.
the date on which the disconnection notice was printed by the distributor
LDC shall at the written request of a Residential customer, send a copy of any disconnection notice issued to
the customer for non-payment to a 3rd party designated by the customer for that purpose provided that the
request is made no later than the last day of the applicable minimum notice period set out in Section 4.2.3
In such a case:
LDC must notify 3rd party that the 3rd party is not unless otherwise agreed with the LDC, responsible for the
payment of any charges for the provision of electricity service in relation to the customer's property, and
Rules set out in Sections 2.6.4 and 2.6.8 shall apply, with such modification as the context may require for
the purposes of determine the date of receipt of the disconnection notice by the 3rd party.
A disconnection notice issued for non-payment shall expire on the date that is 11 days from the last day of
the applicable minimum notice period referred to in Section 4.2.3, determined in accordance with the rules set
out in Section 2.6.8. LDC may not thereafter disconnect the property of the customer for non-payment unless
the LDC issued a new disconnection notice in accordance with Section 4.2.2.
LDC must make reasonable efforts to contact, in person, or by telephone, a customer to whom the LDC has
issued a disconnection notice for non-payment prior to the earliest date on which disconnection for non-payment
Details
Disconnection for Non-payment (cont'd)
may occur as set out in the disconnection notice.
In multi-unit bulk metered Residential building, LDC must post copy of the disconnection notice in a conspicuous
place on or in the building promptly after issuance of the notice.
LDC must suspend disconnection for a period of 21 days, from the date of notification by a Registered Charity,
Government Agency, or Social Services Agency, that may be assessing a Residential Customer for determining
eligibility to receive bill payment assistance provided such notification is made 14 days form the date on which
the disconnection notice is received by the customer. Where a Residential customer has requested prior to the
issuance of the disconnection notice that the LDC also provide a copy of any disconnection notice to a 3rd party
the LDC shall suspend any disconnection action for a period 21 days from the date of notification by the 3rd party
that they are attempting to arrange assistance with the bill payment, provided that such notification is made
within 14 days for the date on which the disconnection notice is received by the customer.
Upon notification by a registered charity, government agency or social service agency that a customer is not
eligible to receive bill payment assistance, or if another 3rd party who was considering the provision of bill
assistance decides not to proceed, the LDC may disconnect the customer in accordance with Section 4.2.2.3
and 4.2.3.
An LDC shall not disconnect a customer for non payment until the following minimum notice periods have
elapsed:
(a) 60 days from the date on which the disconnection notice is received by the customer, in the case of a Residential
customer that has provided the LDC with documentation from a physician confirming that disconnection poses a
risk of significant effects on the physical health of the customer or any dependant family member residing with
the customer.
(b) 14 days from the date on which the disconnection notice is received by a Residential customer or
(c) 10 days from the date on which the disconnection notice is received by the customer in all other cases
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Summary and Impacts of Proposed Code Amendments
Customer Service, Customer Reclassification and Management of Customer Commodity Non-Payment Risk
EB-2007-0722
Revision Impact
Impact
On-going/One time
4.2.3.1
Code Amendt
For the purposes of Section 4.2.3:
(a) Where a disconnection notice is sent by mail, the disconnection notice shall be deemed to have been received
by the customer on the 3rd business day after the date on which the notice was printed by the LDC
(b) Where the disconnection notice is delivered by personal service, the disconnection notice shall be deemed to have
been received by the date of delivery
(c) Where a disconnect notice is delivered by being posted on the customer's property, the disconnection notice
shall be deemed to have been received by the customer on the date of such posting
(d) "Spouse" has the meaning given to it in Section 29 of the Family Law Act.
(e) "Dependant family member" means a "dependant" as defined in Section 29 of the Family Law Act, and also
includes a grandparent who, based on need, is financially dependant on the customer and,
(f) The LDC shall apply the rules relating to the computation of time set out in Section 2.6.8.
Details
DSC Sect 6.1.2.1
Management of Customer Accounts
Nothing in Section 6.1.2 shall be construed as permitting an LDC to recover or to seek to recover charges for
a service provided to a property from any person other than a person that has agreed in writing to being the
customer of the LDC in relation to the property or that has greed in writing to assume responsibility for those
charges.
For the purposes of Section 6.1.2.1, the requirement for agreement in writing includes agreements in electronic
form in accordance with the Electronic Commerce Act, 2000.
Section 6.1.2.1 applies to all agreements entered into after the effective date of these amendments, and is not
intended to void or cancel any binding agreements for service existing as of the effective date of these amendments
Details
6.1.2.2
6.1.2.3
Code Amendt
DSC Sect 7.10
7.10.1
7.10.2
Code Amendt
Reconnection Standards
Where an LDC has disconnected the property for non-payment, the LDC shall reconnect the service within
2 business days, as defined in Section 2.6.8 of the date on which the customer:
(a) Makes payment in full of the amount overdue for payment as specified in the disconnection notice or
(b) Enters into an Arrears Payment Agreement with the LDC as referred to in Section 2.7
This service quality requirement must be met 85% of the time on a yearly basis
Details
7.2.5 (RSC)
2.6.2(SSSC)
(a)
(b)
(c)
(d)
(e)
Code Amendt
7.2.5 (RSC)
Billing
Equal Payment Plans
An LCD that provides distributor consolidated billing for a Residential customer shall bill the customer on the
basis of an equal monthly payment plan if so requested by the customer or the retailer. The equal monthly
payment plan shall comply with the requirements set out in the Standard Supply Service Code.
If the LDC offers an equal payment or billing plan to a class of non-residential customer, the LDC shall when
providing distributor consolidated billing for a non residential customer within that class, bill the non residential
customer on the basis of that equal payment or billing plan if so requested by the customer or retailer.
LDC shall offer an equal monthly payment plan option to all Residential customer receiving SS service. The equal
monthly payment plan option shall meet the following minimum requirements:
LDC may refuse to provide an Equal Monthly Payment Plan option to a customer that is in arrears on payment to the
LDC for electricity charges, as defined in the DSC and that has not entered into an Arrears Payment Agreement with
the LDC as referred to in DSC.
LDC may require a Residential Customer on Equal Monthly Payment Plan to agree to pre-authorized automatic
monthly payment withdrawals from the customer's bank account if the billing cycle of the LDC is less than monthly.
Despite any other provisions of this Code or of any other code issued by OEB, the equal payment plan option is
offered to Residential electricity customer shall provide for the customer to make equalized payments on a monthly
basis and shall make provision for the customer to select from at least two dates for the automated withdrawal from
the customer's bank account.
LDC may issue its bill to a Residential customer on a monthly equal payment plan on a monthly, bi-monthly or
quarterly basis.
Subject to paragraph (f), the equal monthly payment plan shall provide for annual reconciliation of the plan as follows:
Details
Equal Payment Plans
i) Customer may join the equal payment plan at any time during the calendar year, LDC is only required to reconcile all
of its EPP customers once during the calendar year and not on the 12th month anniversary of joining the plan.
ii) In the first year of EPP where a customer has been on the plan for less than 12 months reconciliation may be earlier
than 12th month anniversary, as a result of Subsection i)
iii) LDC only required to reconcile EPP customers on an annual basis, must review EPP quarterly, or semi-annually and
adjust the EPP amount in the event of changes in the customers consumption.
iv) Where annual reconciliation indicates that funds are owing to the customer in an amount less than the customer's
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Summary and Impacts of Proposed Code Amendments
Customer Service, Customer Reclassification and Management of Customer Commodity Non-Payment Risk
EB-2007-0722
Revision Impact
Impact
On-going/One time
average monthly billed amount, LDC shall credit the amount to the customer's account.
v) Where annual reconciliation indicates that funds are owing to the customer in an amount that is equal to or exceeds
the customer's average monthly billing, the LDC shall credit the amount to the customer's account and advise the
customer that the customer may contact LDC within 10 days of the date of bill to request refund of the overpayment
by cheque instead and the LDC shall make payment within 11 days of the customers request.
vi) Where annual reconciliation demonstrates that funds are owing by the customer in an amount that is less than the
customer's average monthly billing, the LDC may collect the full amount owed by a corresponding charge on the bill
issued to the customer in the 12th month of EPP plan, and
vii) Where annual reconciliation demonstrates that funds are owing by the customer in an amount that is equal to or
exceeds the customer's average monthly billing, the LDC shall roll over the balance due to the following year's EPP
and recover the balance over the first 11 months of the following years EPP and,
(f) Where customer leaves the EPP for any reason, the LDC shall conduct a reconciliation and shall include any funds
owing by or to the customer as a charge or credit on the next regularly scheduled bill issued to the customer.
2.6.2A
(a) Customer's average monthly billing amount shall be calculated by taking the aggregate of the total electricity charges
billed to the customer in the preceding 12 months and dividing that value by 12. If the customer have been receiving
service from LDC for less than 12 months, the customer's average monthly billing amount shall be based on a
reasonable estimate by LDC. For the purposes of this Section, "Electricity Charges" has the same meaning as in
Section 2.6.7.3 of the DSC, and
(b) Where a Residential customer requests EPP, the EPP monthly payment amount all include all "Electricity Charges"
as defined in Section 2.6.7.3 of DSC
Code Amendt
Details
7.7.1 (RSC)
Code Amendt
7.7.1 (RSC)
7.7.2
7.7.3
7.7.4
7.7.5
7.7.6
7.7.7
7.7.8
7.7.9
7.7.10
7.7.11
Correction of Billing Errors
The following rules apply to billing errors in which Measurement Canada has not become involved in the dispute:
Where an LDC has overbilled a customer or retailer by an amount that is equal to or exceeds the customer's or
retailer's average monthly billing amount (determined in accordance with Section 7.7.5) the LDC shall within
10 days of discovery of the error, notify the customer/retailer of the over billing and advise that customer/retailer
may elect to have the full credit applied to the account, or repaid in full by cheque within 11 days of requesting
payment by cheque. Where no cheque has been requested by customer/retailer within 10 days of notification
of the error by LDC the LDC may credit the full amount to the account.
Details
Correction of Billing Errors (cont'd)
Where an LDC has over billed a customer/retailer by an amount that is less than the customer/retailer's average
monthly billing amount, determined in accordance with Section 7.7.5 the LDC shall credit the account in the
next regularly scheduled bill issued to customer/retailer.
If there are outstanding arrears on the customers/retailer's account, the LDC is not required to repay the
over-billed amount but may apply it to the arrears on the customer/retailer's account and credit or repay
the remaining balance.
Where LDC have under billed a customer who in not responsible for the error, the LDC shall allow the customer
to pay the under billed amount in equal installments over a period equal to the duration of the billing error.
For the purposes of Sections 7.7.1 and 7.7.2 the customer/retailers average monthly billing amount shall be
calculated by taking the aggregate of the total electricity charges billed to customer/retailer in the preceding
12 months and dividing that value by 12. If the customer has been receiving service for less than 12 months, the
amount shall be calculated on a reasonable estimate. For the purposes of this section "Electricity Charges" has
the same meaning as in Section 2.6.7.3 of the DSC.
Where LDC has under billed a customer/retailer who is responsible for the error, whether by way of tampering,
willful damage, unauthorized energy use or other unlawful action the LDC may require payment of the full amount
under billed by means of a corresponding charge on the next regular scheduled bill issued to customer/retailer.
Where LDC has under billed a customer/retailer the maximum period of under billing of which the LDC is
entitled to be paid is 2 years. Where LDC have over billed customer/retailer, the maximum period of over billing
for which customer/retailer is entitled to be repaid is 2 years.
LDC may charge interest on under billed amounts only where the customer/retailer was responsible for the error.
Such interest shall be equal to the prime rate charges by the LDC's bank.
LDC that has over billed a customer/retailer and the billing error is not the result of LDC's standard documented
billing practices, shall pay interest on the amount credited or repaid to the customer/retailer equal to prime rate
charges by the LDC's bank.
The entity billing a customer, whether LDC or retailer is responsible for advising the customer of any meter
error and of his/her rights and obligations under the Electricity and Gas Inspection Act(Canada). The billing
party is also responsible for subsequently settling actual payment differences with the customer as described above.
The provisions of Section 7.7 do not apply where the LDC has over billed or under billed a customer/retailer but
Billing
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Summary and Impacts of Proposed Code Amendments
Customer Service, Customer Reclassification and Management of Customer Commodity Non-Payment Risk
EB-2007-0722
Revision Impact
Impact
On-going/One time
issues a corrected bill prior to the due date of the original erroneous bill.
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Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
28.
Ref:
Exhibit 4 / Tab 5 / Schedule 1 / Page 1
Request
(a) Please confirm the increase in total headcount from 2006 to 2008 is
approximately 6.6% per year and from 2008 to 2010 is approximately 13.1%
per year.
(b) Please explain the key changes in the Applicant’s operations that have driven
these changes.
(c) Benchmark the Employees (FTE) and total Compensation to the number of
customers and the load distributed from 2006-2010(forecast).
Response:
(a) Veridian confirms that the increase in total headcount from 2006 to 2008 is
approximately 6.6% per year and from 2008 to 2010 is 13.1% per year, both
calculated on non-compounded basis.
(b) Veridian identifies key changes that explain the growth in employee headcount at
Exhibit 4 Tab 5 Schedule 2, page 1 through 12.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(c) The Benchmark table of Employees (FTE), total compensation, and load distributed
from 2006 to 2010 (forecast) follows:
.
2006 VCI +
Affiliates
2007
2008 (Actual)
2009
(Projected)
2010
(Forecast)
Number of Employees (FTEs including PartTime)
Total
Total Compensation (Salary, Wages &
Benefits)
164.7
174.5
186.5
205.2
235.5
$14,413,923
$15,008,693
$17,032,754
$18,429,263
$21,330,886
107,231
109,225
110,861
112,043
112,937
2,419,475
2,532,414
2,501,314
2,455,988
2,465,704
651
626
594
546
480
14,690,194
14,512,401
13,411,871
11,968,752
10,470,081
Compensation per Customer
$134
$137
$154
$164
$189
Compensation per Mwh
$5.96
$5.93
$6.81
$7.50
$8.65
Total *
Customers
Total
Load Distributed (MWh)
Total
Employee Index
Customers per Employee
kwh per Employee
Compensation Index
* 2008 Compensation amended for error detected in pre-filed evidence. See response to Board Staff
interrogatory 25 c)
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
29.
Ref:
Exhibit 4 / Tab 5 / Schedule 8 / Page 1 / Table 1
Request
(a) Update the Employee hiring Schedule for 2009 Actuals and 2010 forecast. Show
the new numbers and totals alongside the original plan.
(b) Estimate the change in total compensation from the original plan to the actual
2009 and forecast 2010.
Response:
(a) See appended schedule that compares the Bridge and Test Year Hiring Schedule as
filed at Exhibit 4/Tab 5/Schedule 8/Page 1/Table 1 with Veridian’s estimate forecast
hiring schedule for 2010.
(b) Actual 2009 compensation is estimated to be $656,000 less than the 2009 plan.
Forecast 2010 total compensation as at January 6, 2010 is $79,000 less than the
forecast 2010 total compensation as filed within the pre-filed evidence.
Table 1: Bridge and Test Year Hiring Schedule:
(as filed in pre‐filed evidence)
(as revised January 6, 2010)
No. of Hires by Hire
Date
Planned 2009 Hires
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Planned No. of Hires by Hire Date
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Planned No. of Hires by Hire Date
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Position
Accounting Analyst
1
1
1
1
Accounting
Associate
Administration
Clerk
Adminitrative
Assistant
AMI Settlement
Data Supervisor
1
1
1
1
1
1
1
1
-1
-1
No. of
Hires
Actual 2009 Hires
Q2 2009
Q3 2009
No. of
Hires
Q1 2009
-1
Q4 2009
-1
1
1
1
Apprentice
Lineperson
Corporate Planning
Analyst
Corporate Plng
Supervisor
Corporate Secretary
4
Customer Care
Associate FT
Customer Care
Associate PT
Customer Care
Associate PT
Customer Care Rep.
(Full time)
Customer Care Rep.
(Part time)
Engineering
Supervisor
Engineering
Technician
Executive Assistant
1
1
-0.4
-1
1
1
1
1
1
2
4
1
1
1
1
1
1
1
6
0.6
1
1
3
1
1
1
Field Supervisor
2
Financial Analyst
1
Financial Reporting
Analyst
1
1
1
1
1
1
-0.4
-1
1
1
2
2
IFRS Contract
0
1
-1
1
4
1
1
2
5
3
1
1
2
1
1
1
1
1
GIS Technician
1
1.8
2
1
0.6
1.8
1
3
2
1
5
1.8
1
1
1
1.8
5
1
1
1
2
2
0
1
-1
Table 1: Bridge and Test Year Hiring Schedule:
(as filed in pre‐filed evidence)
Position
No. of
Hires
(as revised January 6, 2010)
No. of Hires by Hire
Date
Planned 2009 Hires
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Planned No. of Hires by Hire Date
Q1 2010
Q2 2010
Q3 2010
Q4 2010
No. of
Hires
Actual 2009 Hires
Q2 2009
Q3 2009
Q1 2009
Q4 2009
Planned No. of Hires by Hire Date
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Inspector
1
1
1
1
IT Analyst
1
1
1
1
Key Accounts
Representative
Lineperson
1
1
1
3
2
Manager, Grid
Operations
Manager, Northern
District
Manager, Planning
& Maintenance
1
1
1
-1
1
3
1
1
-1
-1
1
1
-1
1
1
1
Meter Technician
2
Meter Technician
Apprentice
Metering Clerk
1
Operations
Supervisor
Project Engineer
1
Public Relations
Representative
Settlements Analyst
2
1
1
1
1
Substation
Technician
System Operations
Technician
1
1
1
1
1
1
1
1
System Operator
Apprentice
Co-op Line
Apprentices
2
2
2
Total Hires
1
2
1
2
1
1
1
1
1
1
0
2
1
1
1
1
-1
1
0
2
1
-1
2
1
2
3
50.4
5
3
22.6
5.8
8
0
6
0
1
3
53.4
5
-3
6
5
3.6
20.8
3
5
7
0
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
30.
Ref:
Exhibit 4 / Tab 6 / Schedule 4 / Page 1
The Application States:
With the 2009 elimination of shared services with its energy services affiliate and the
establishment of a new lease for office and storage space at 5 Mill Street, Port Hope,
shared services in the 2010 test year will be restricted to:
The provision of executive management, financial and property management services to
Veridian Corporation, and;
The sublease of office and storage space from Veridian Corporation at the following
locations:
a. 459 Sidney Street, Belleville
b. 1465 Pickering Parkway, Pickering
Request
(a) Please provide a copy of the 2010 Affiliate Services Agreement(s) between
Veridian Networks and Veridian Corporation.
(b) What happens to costs and cost allocation if the separation of Veridian Energy
Services is not accomplished by the beginning of the 2010 rate year?
(c) Provide a Copy (or Summary of the results) of the 2009 Time study that is the
basis of 2010 allocations between Veridian Networks and Veridian Corporation.
Response:
(a) Veridian has not yet executed 2010 Affiliate Service Agreements.
(b) For the reasons explained in response to SEC Interrogatory number 3, Veridian plans
to renew its Transitional Services Agreement with Veridian Energy Inc. for the first
three months of 2010. Veridian submits that due to the transitional nature of these
cost transfers, they should not be taken into consideration for the purpose of
establishing its test year distribution revenue requirement.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(c) The following table shows summary results for the staff that completed the 2009 time
study. The time study was not completed for the President & CEO. The study results
for the Executive Assistant to the President & CEO were used as a proxy. The time
study was also not completed for the position of Executive Assistant to the Executive
Vice President & CFO, Corporate Services. The study results for the Executive VicePresident and CFO, Corporate Services were used as a proxy for this allocation, with
an added 5% to reflect additional work volumes related to services to the Board of
Veridian Corporation.
Summary Results of Time Study
%age of Time
Allocated to VC
Executive Assistant to
President & CEO
Executive VicePresident and CFO,
Corporate Services
Financial Supervisor
Accounting Analyst
Accounting Clerk
Facilities Administrator
Facilities Assistant
10.60%
4.48%
7.29%
7.00%
8.90%
20.24%
8.61%
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
31.
Ref:
Exhibit 4 / Tab 6 / Schedule 5 / Attachment 1 / Appendix 2M
The Appendix indicates the following affiliate transactions in 2010:
2010 Veridian Connections to Veridian Corporation Governance, Financial and Facilities
Services Fully allocated Cost $228,838 Range of 5 - 25% of various FTEs as per Service
Agreement
2010 Veridian Corporation to Veridian Connections Leased Office & Storage Space
Fully allocated Cost $374,376 By square footage of each rented premise
Request
Confirm that these are the only Services and reconcile the costs to Schedule A of
the Service Level Agreements for 2010 (requested in previous IR)
Response:
Veridian confirms that these are the only services planned for exchange with Veridian
Corporation during 2010. As explained in the response to VECC interrogatory 30:
· additional services will be provided to Veridian Energy Inc. on a transitional
basis; and,
· the 2010 Affiliate Service Agreements have not yet been executed
Copies of the draft transfer pricing schedules for the 2010 Affiliate Service Agreements
with Veridian Corporation are attached.
The total monthly charge from Veridian Corporation to Veridian Connections Inc. for the
sublease of office and storage space will be $31,197.90 ($2,500 + $24,066.67 +
$4,631.25) for an annual cost of $374,375.
The total monthly charge by Veridian Connections Inc. to Veridian Corporation for
shared corporate services will be $17,151 for an annual cost of $205,812. The $228,838
amount referenced in Exhibit 4/Tab 6/Schedule 5/Attachment 1/Appendix 2M is in error,
as it reflected a full year of shared costs related to the new Corporate Secretary and the
Executive Assistant to the Corporate Secretary. These positions are scheduled to be filled
mid-year 2010.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Attachments:
Veridian Connections Veridian Corporation
to Veridian Corporation
to Services_2010
Veridian Connections Services_2010
Schedule “A”
DESCRIPTION OF SERVICES AND PRICES
Veridian Connections Inc. services to Veridian Corporation
January 1st to December 31st 2010
Transfer pricing:
Description
Governance services, financial services related
to the assessment of investment opportunities,
preparation of financial statements, accounts
payable administration, and general
bookkeeping, and;
Property management and facilities maintenance
services related to Veridian Corporation’s leased
property located at 1465 Pickering Parkway,
Pickering.
Price
Flat Fee of $17,151 monthly, based on fully allocated labour
costs related to the following full-time equivalent (FTE) time
allocations:
Position
Allocation
(FTE)
.10
.10
Annualized
Charge
$48,418
19,469
.05
18,598
.10
15,652
.10
.10
15,200
7,826
.10
.10
.10
.25
.25
17,067
11,243
9,785
37,777
4,777
$205,812
President & CEO
Executive Assistant to
President & CEO
Executive Vice President
& CFO, Corporate
Services
Executive Assistant to
Executive Vice President
& CFO, Corporate
Services
Corporate Secretary *
Executive Assistant to
Corporate Secretary *
Financial Supervisor
Accounting Analyst
Accounting Clerk
Facilities Administrator
Facilities Assistant
Total Annual Charges:
*Annualized charges reflect the planned mid-year hire of the
Corporate Secretary and the Executive Assistant to the
Corporate Secretary
Schedule “A”
DESCRIPTION OF SERVICES AND PRICES
Veridian Corporation services to Veridian Connections Inc.
January 1st to December 31st 2010
Transfer pricing:
Description
Sublease of office and storage space at:
§ 459 Sidney Street, Belleville
§ 1465 Pickering Parkway, Pickering (Suite
200), and:
§ 1465 Pickering Parkway, Pickering (Suite
102)
Notes:
1) The sublease of space in Belleville is on a
‘net’ basis. The sub-tenant is directly
responsible for operating expenses,
insurance and real estate taxes as
applicable.
2) The sublease rate for the space in Pickering
is comprised of $14.75 per square foot base
rent and $9.00 per square foot additional
rent. The additional rent amount covering
operating expenses, insurance and real
estate taxes will be reconciled to actual
costs once annually.
Price
Location
459 Sidney St., Belleville
1465 Pickering Parkway,
Pickering (Suite 200)
1465 Pickering Parkway,
Pickering (Suite 102)
Rentable
Area
(ft2)
12,160
Annual
Lease
Rate
per ft2
$23.75
Monthly
Charge
$2,500
$24,066.67
2,340
$23.75
$4,631.25
All sublease costs are based on the pass through of
Veridian Corporation actual head lease costs, with no
margin or mark-up.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
32.
Ref:
Exhibit 5 / Tab 2 / Schedule 1 / Page 2
Veridian requires an additional $21,000,000 of long-term debt to finance capital projects.
This additional debt will be provided by parent company, Veridian Corporation. The
$21,000,000 debt instrument will be filed with the Board upon approval and execution by
the parties. It will have a term of ten years. Similar to the notes payable to its municipal
shareholders, the Veridian Corporation debt is proposed to have a variable interest rate
that will match Ontario Energy Board’s deemed long-term debt rate each year during the
term of the instrument.
Request
Has Veridian contacted Infrastructure Ontario to determine if any or all of the $21
million can be borrowed on more favorable terms? If Not why not. If yes provide
details of the discussions.
Response:
(a) Please see the Veridian Financing Strategy appended to the response to Energy Probe
Interrogatory #39 for a description of the process involved with renewing the Second
Amended and Restated Promissory notes.
33.
Ref:
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Exhibit 5 / Tab 2 / Schedule 1 / Page 3 / Table 1
In accordance with the Cost of Capital Report’s treatment of “new” and “variable” debt,
Veridian expects that its cost of debt for rate-making purposes will be based on the
Board’s 2010 deemed long-term debt rate. Veridian has used the 2009 deemed long-term
debt rate of 7.62% as a placeholder in this pre-filed evidence. However, Veridian
understands that this rate will be replaced by the 2010 deemed long-term debt rate and
that the Board is currently reviewing the cost of capital.
Request
(a) Has Veridian assessed the impact of the Boards New Cost Of Capital Report on
its Debt Costs for 2010? Provide an update to Table 1 that shows the projected
changes in the cost of Debt
(b) Reconcile the amount owed under promissory note-- is it 21,322,000 as the
evidence indicates or 31,000,000 as the note indicates?
(c) If Veridian wanted to pay off the $21,322,000 promissory note, is it able to do so
without the agreement of shareholder? If no, what agreements are required and
why?
(d) Are there any impediments to Veridian borrowing from a third party such as
Infrastructure Ontario or a commercial bank? For example, would it require the
“guarantee” or “permission” of its shareholders to undertake such borrowing?
(e) If the response to part (c) is yes, is there any reason to expect these impediments
would prevent it from undertaking 3rd party borrowing? For example, if a
“guarantee” was required from the shareholders, is there any reason to expect
such a guarantee could not/would not be provided?
Response:
(a) Veridian believes that its proposed use of the deemed debt rate is consistent with the
Board’s new cost of capital report.
(b) The $30 million Term Promissory Note issued on June 1, 2007 and owing to parent
company Veridian Corporation provides for quarterly blended principal and interest
payments. The principal outstanding on the loan as at December 31, 2009, after
deducting principal payments made since 2007, will be $21.322 million.
(c) Veridian is unable to pay off the $21,322,000 promissory note without the agreement
of the noteholder and shareholder, Veridian Corporation. An agreement would need
to be reached with Veridian Corporation to repay the note as the note does not contain
a provision for early repayment.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(d) Please see the Veridian Financing Strategy appended to the response to Energy Probe
interrogatory #39.
(e) Not applicable. The answer to (c) is no.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
34.
Ref:
Exhibit 5 / Tab 2 / Schedule 2 / Page 1
The Application states:
Veridian has used the latest S.T. debt value, 1.33% as established by the Board for May
1, 2009 implementation dates. Veridian understands that this rate will be replaced with
the 2010 rate approved by the Board.
Request
Provide an update to the cost of capital based on the Boards change in the ST
interest rate in the latest Cost of Capital Report.
Response:
Veridian is unable to estimate the cost of capital based on the Boards changes in the latest
Cost of Capital Report. Veridian understands that the short-term rate will be established
by the Board by averaging short-term debt issuances over 3-month Bankers’ Acceptance
rates. Veridian does not track or keep data on average Bankers’ Acceptance rates.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
35.
Ref:
Exhibit 5 / Tab 2 / Schedule 3 / Page 1 / Attachment 1
The application states:
Veridian Connections Inc. proposes that the Return on Equity rate should be the value as
established by the Ontario Energy Board for Cost of Service Applications. This
application uses the latest value, 8.01% as established by the Board for May 1, 2009
implementation dates. Veridian understands that this rate will be replaced with the 2010
rate.
Request
(a) Provide an update to Exhibit 5 Tab 2 Schedule 3 Attachment 1 Page 2 that reflects
the projected changes to Cost of Capital arising from The Board’s latest Cost of
Capital Report.
(b) Provide an estimate of the revised Return on rate base and impact on the as filed
2010 Distribution Revenue Requirement and Revenue Deficiency.
Response:
The amount of Veridian’s 2010 rate base and revenue requirement for the 2010 Test
Year has changed as a result of Veridian’s Application Update. This interrogatory
has been answered on the basis of the updated values.
(a) Veridian provides as Attachment 1, an update to Exhibit 5 Tab 2, Schedule 3,
Attachment 1, page 2 that reflects the projected changes to Cost of Capital arising
from the Board’s latest Cost of Capital Report. Veridian has used the most recent
information available for calculation of all components of the cost of capital as
follows;
·
·
ROE – 9.75% - As per the value published in the referenced report.
Deemed Debt Rate – 7.62 % - Veridian has not updated its proposed cost of
debt from that originally filed. No value for the deemed debt rate was
published in the referenced report and Veridian is unable to calculate an
estimate of an updated debt rate as it does not have access to the referenced
sources of information.
Veridian notes that the any changes in total cost of capital provided in this response
are not representative of the total changes or impacts anticipated by the Board’s
referenced report as Veridian’s proposed long term debt rate was based on the
Board’s deemed debt rate. Veridian used the 2009 deemed debt rate of 7.62% as a
placeholder, however Veridian expects that the 2010 deemed debt rate will be lower
than 7.62%.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(b) Please see responses to Schools Energy Coalition Interrogatories 8 and 34.
Update to Exhibit 5, Tab 2, Schedule 3, Attachment 1, Page 2
Based on ROE of 9.75%
Capitalization and Cost of Capital
Bridge Year
2009
Test Year
2010
Capitalization Ratio Cost Rate Return
(%)
($000)
(%)
($000)
Capitalization Ratio Cost Rate Return
(%)
($000)
(%)
($000)
2008
Particulars
Long Term Debt
Veridian Main
Veridian Gravenhurst
Total Long Term Debt
Short Term Debt
Veridian Main
Veridian Gravenhurst
Total Short Term Debt
Total Debt
Capitalization Ratio Cost Rate Return
(%)
($000)
(%)
($000)
53.5%
88,541
6.83%
6,046
56.0%
98,394
7.06%
6,949
56.0%
105,098
7.11%
7,471
53.5%
88,541
6.83%
6,046
56.0%
98,394
7.06%
6,949
56.0%
105,098
7.11%
7,471
4.0%
6,620
4.47%
296
4.0%
7,028
1.33%
93
4.0%
7,507
1.33%
100
4.0%
57.5%
6,620
95,161
4.47%
6.66%
296
6,342
4.0%
60.0%
7,028
105,422
1.33%
6.68%
93
7,042
4.0%
60.0%
7,507
112,605
1.33%
6.72%
100
7,571
0.0%
-
Preferred
P
f
d Sh
Shares
Veridian Main
Veridian Gravenhurst
Total Preferred Shares
Common Equity
Veridian Main
Veridian Gravenhurst
Total Common Equity
Total Equity
42.5%
70,336
8.57%
6,028
40.0%
70,281
8.01%
5,630
40.0%
75,070
9.75%
7,319
42.5%
42.5%
70,336
70,336
8.57%
8.57%
6,028
6,028
40.0%
40.0%
70,281
70,281
8.01%
8.01%
5,630
5,630
40.0%
40.0%
75,070
75,070
9.75%
9.75%
7,319
7,319
Total Debt and Equity
100%
165,497
7.47%
12,370
100.0%
175,704
7.21%
12,672
100.0%
187,676
7.93%
14,890
-
-
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
36.
Ref:
Exhibit 6 / Tab 1 / Schedule 1 / Table 3
Exhibit 6 / Tab 1 / Schedule 2 / Page 1 / Table 1
Request
(a) Update Table 3 to reflect the current projections for cost of capital in 2010
(b) Update Table 1 in the second reference to reflect updated cost of capital
(c) Provide a schedule that sets out the derivation of 2010 Revenues at 2009 Rates by
customer class (per Reference (ii)). Please provide the rates and volumes used and
confirm that the rates are net of transformer ownership allowances (where
applicable), smart meter adders and SSS Administration charges.
Response:
(a) Please see the response to School Energy Coalition interrogatory #34.
(b) Veridian’s interpretation of the reference is Exhibit 6, Tab 1, Schedule 2, Page 1,
Table 1 – 2010 Distribution Revenue at Current Rates. Based on this interpretation,
Veridian believes the values in this table would be unchanged by current projections
for cost of capital in 2010 as the calculation uses 2010 forecasted volumes and
customer counts and 2009 rates – all of which are unaffected by 2010 cost of capital
values.
(c) For VCI_Main, please see Exhibit 10, Tab 1, Schedule 1, Attachment 3, page 40. For
VCI_Gravenhurst, please see Exhibit 10, Tab 1, Schedule 1, Attachment 4, page 40.
All volumes and rates are provided in the above references. Veridian confirms that
the rates are net of transformer ownership allowances, smart meter adders and SSS
Administration charges.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
37.
Ref:
Exhibit 6 / Tab 2 / Schedule 2 / Page 2 / Table 1
The Application States:
Veridian proposes that the 2010 Base Revenue Requirement be apportioned to the two
5 rate zones in the same proportion as the 2006 Approved Base Revenue Requirement for
6 the rate zones.
Request
(a) Provide a version of Table 1 for the 2010 test year.
(b) Compare the % of 2010 Revenue requirement allocated to Main and Gravenhurst
to that provided in response to VECC IR#2 b).
(c) Explain any material differences between the calculated and proposed revenue
requirement allocations.
Response:
Veridian’s 2010 Service Revenue Requirement and 2010 Revenue Offsets have changed
as a result of Veridian’s application update. This interrogatory has been answered on the
basis of the updated values.
(a) Veridian would like to note that the statement above is incorrect. The correct
statement is “Veridian proposes that the 2010 Base Revenue Requirement be
apportioned to the two rate zones in the same proportion as the 2006 Approved Base
Revenue Requirement for the rate zones.”
As explained in Exhibit 6, Tab 2, Schedule 1 and Schedule 2, the 2010 Service
Revenue Requirement and Revenue Offsets have not been apportioned to the rate
zones as the various components of these amounts are available only a single entity
basis.
On this basis, Veridian has attempted to complete a version of Table 1 for the 2010
Test Year. Rate zone specific information such as LV charges and transformer
allowances has been provided. The calculation of Total ‘2010 Base Revenue
Requirement’ using this methodology has then been apportioned to the rate zones
using the proposed ratio of 94.04% for VCI_Main and 5.96% for VCI_Gravenhurst,
rather than percentages being calculated. No other percentages can be calculated as
the 2010 Service Revenue Requirement and Revenue Offsets are not apportioned, but
rather calculated on a single entity basis.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
2010 Service
Revenue
Requirement
Less: Revenue
Offsets
Less: LV Charges
Add: Transformer
Allowance
2010 Base
Revenue
Requirement
%age of Total
Total
$51,866,572
VCI_Main
Not Available
VCI_Gravenhurst
Not Available
$4,218,100
Not Available
Not Available
$1,664,268
$838,229
$1,422,560
$826,772
$241,708
$11,457
46,822,433
$44,031,816
$2,790,617
94.04%
5.96%
It should be noted that 2010 Base Revenue Requirement calculated on this basis will
be lower than Veridian’s proposed 2010 Base Revenue Requirement as this
methodology incorrectly deducts LV charges which are not included in the 2010
Service Revenue Requirement as was the case in the 2006 Revenue Requirement
calculation.
(b) No calculation was performed in response to VECC IR#2 b), rather a reference to the
response to the Board Staff interrogatory 38 was provided.
(c) As no percentages have been calculated in the 2010 version of Table 1, no
comparison between calculated and proposed revenue requirement allocations can be
made. Please see response to Board Staff interrogatory 38 where the results between
an alternative methodology considered by Veridian and the proposed revenue
requirement apportionment methodology are compared.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
38.
Ref:
Exhibit 7 / Tab 2 / Schedule 1 / Table 1
Request
(a) Please provide full electronic copies of the Cost Allocation Models VM-2010 and
VG-2010.
(b) Please confirm whether Models VM-2010 and VG-2010 also included the
Adjustment #1 (correction for transformer ownership allowance) and Adjustment
#2 (as applicable for 2010).
(c) If the response to part (b) is that Adjustments #1 and #2 were not included in the
2010 Models, please provide revised 2010 runs for both the Main and
Gravenhurst service areas with these two adjustments included.
Response:
(a) Full electronic copies of the Cost Allocation Models VM-2010 and VG-2010 are
attached.
(b) Confirmed.
(c) Not Applicable.
Attachments
1 and 2
(Note: These attachments are being e-mailed to you
– the files are too large be to included here)
DOCSTOR: 1842591\1
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
39.
Ref:
Exhibit 7 / Tab 2 / Schedule 2
Request
(a) With respect to Attachment 3, page 14 (lines 13-16) – please confirm whether it
was the Total Revenue or the Distribution Revenue by class that was scaled up. If
it was the Total Revenue by class, please recalculate the revenue to cost ratios
based on an approach that scales the Distribution Revenue by class.
(b) With respect to Attachment 1 (page 2) and Attachment 3 (page 14), please
confirm that for Veridian-Main the revenues based on 2006 rates and 2010 load
were scaled down (as opposed to up as suggested by the text) in order to produce a
total revenue to cost ratio of 100%.
(c) Please provide the full electronic copies of Cost Allocation Runs VM-2006C2 and
VG-2006C.
Response:
(a) - It was Total Revenue by class that was scaled.
Customer Class
Residential
GS < 50 kW
GS > 50 kW
Intermediate
Large Use
Sentinel
Lighting
Street Lighting
USL
VM-2006C2
VM-2010
99.33
117.56
98.79
61.53
62.84
40.1
98.04
120.71
98.47
74.21
80.65
42.74
VM-2010
re-calculated
98.11
120.50
98.39
74.08
80.49
42.81
71.29
87.42
72.54
96.97
72.41
97.10
Board Target
Range
85-115
85-115
85-115
80-120
80-180
70-120
70-120
80-120
(b) - Given that the unique circumstances around Veridian's integration of Gravenhurst,
expenses are based on 2004 costs, and revenues are based on projected 2010 loads.
This has resulted in a scaling down in order to produce a total revenue to cost ratio of
100%.
(c) Full electronic copies are provided in Attachment 1.
Attachments
1 and 2
(Note: These attachments are being e-mailed to you
– the files are too large be to included here)
DOCSTOR: 1842587\1
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
40.
Ref:
Exhibit 7 / Tab 3 / Schedule 1
Request
(a) Given the inability of Veridian to do a Cost Allocation by service areas based
on 2010 costs and the fact that 2010 costs are not tracked by service area but
rather apportioned based on the 2006 approved revenue requirement for each,
does Veridian consider its cost allocation results for 2010 to be as robust and
accurate as those prepared for 2006.
· If yes, please explain why.
· If no, please comment as to why the target ranges established by the Board
for revenue to ratios based on the 2006 CA filings should apply to Veridian
in 2010.
(b) For Veridian-Main, the Applicant is proposing to increase the revenue to cost
ratio for the residential class even though the current ratio is well within the
Board’s target range. The Applicant is also proposing to increase the ratios for
the Large Use and Intermediate classes to values above the lower boundary of
the Board’s target range for each class. Please explain why such changes are
considered to be consistent with the Board’s Report per EB-2007-0667 and the
Board’s finding in other cost of service Applications where the ratios were
adjusted only as required to more each customer class to the boundary of the
Board’s ranges.
(c) Please explain why for Veridian-Main the Application includes specific
proposals for 2011 revenue to cost ratio adjustments (page 2); while for
Veridian-Gravenhurst no approval is sought for the 2011 revenue to cost ratios
(page 4).
Response:
(a) No. The 2010 Veridian Cost Allocation Model utilizes a proxy method that provides
the most appropriate assessment of the 2010 revenue to cost ratios given available
data. Veridian does not consider it to be appropriate to deviate from the Boardapproved target ranges for revenue to cost ratios. The existing ranges explicitly
recognize the high degree of imprecision inherent in the revenue to cost calculations
of Ontario LDCs in general. There is no reason to believe that Veridian’s cost
allocation results are not consistent with the accuracy of other Ontario LDCs’ cost
allocation results, given the myriad of factors affecting the accuracy of calculated
revenue to cost ratios.
(b) Veridian has proposed rates that it considers to be just and reasonable. The changes in
the revenue to cost ratios are consistent with all Board directives. Changes in revenue
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
to cost ratios that increase equity by moving class revenue to cost ratios toward 100%
without causing rate shock are consistent with all Board directives.
(c) Veridian is not seeking approval for any 2011 revenue to cost ratio adjustments
within its 2010 Cost of Service rate application. The 2011-2013 adjustments
proposed for both rate zones is indicative only and Veridian will seek approval of
these adjustments in future applications.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
41.
Ref:
Exhibit 6 / Tab 1 / Schedule 2 / Page 1
Exhibit 7 / Tab 3 / Schedule 2 / Attachment 1 / Page 1
Exhibit 10 / Tab 1 / Schedule 1 / Attachment 3 / Page 40
Exhibit 10 / Tab 1 / Schedule 1 / Attachment 4 / Page 40
Request
(a) The first two references report different 2010 revenues for Veridian-Main based
on existing rates. Please reconcile.
(b) Please re-do the schedule in the third reference so that the revenues (at existing
rates) reported for each customer class are net of the LV rate adder and the
transformer ownership allowance.
(c) Please reconcile any differences between the result (by customer class)
presented in response to part (b) and those set out in Reference (ii) – page 1.
(d) Please re-do the schedule in the fourth reference so that the revenues (at existing
rates) reported for each customer class are net of the LV rate adder and the
transformer ownership allowance.
(e) Please reconcile any differences between the result (by customer class)
presented in response to part (d) and those set out in Reference (ii) – page 2.
Response:
(a) The calculation of and values for the Test Year Revenue at Existing Rates in Exhibit
7, Tab 3, Schedule 2, Attachment 1, page 1 of $41,422,533 can be found at Exhibit
10, Tab 1, Schedule 1, Attachment 3, page 43.
The amount in Exhibit 6, Tab 1, Schedule 2, Page 1, Table 1 of $41,430,742 is
incorrect and is overstated by $8,209. The calculation of and values for this amount
can be found at Exhibit 10, Tab 1, Schedule 1, Attachment 3, page 40. The difference
is due to the incorrect use of the 2009 value of the LV charges embedded in 2009
distribution rates in this calculation.
(b) Please see Exhibit 10, Tab1, Schedule 1, Attachment 3, page 43.
(c) Please see the response to part (a).
(d) Please see Exhibit 10, Tab 1, Schedule 1, Attachment 4, page 43.
(e) There are no differences.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
42.
Ref:
Exhibit 6 / Tab 2 / Schedule 2 / Pages 2-3
Exhibit 7 / Tab 3 / Schedule 2 / Attachment 1
Exhibit 8 / Tab 1 / Schedule 1
Request
(a) Please confirm whether the 2010 revenue requirement apportioned to VeridianMain and Veridian-Gravenhurst in Reference (i) includes an adjustment for the
transformer ownership allowance.
(b) If the response to part (a) is yes, please explain why when the May 2009 Filing
Guidelines directed that it be excluded.
(c) If the response to part (a) is no, please explain why the percentages used to
determine the split between the two service area (Reference (i)) were based on the
2006 revenue requirement for each service area adjusted to include the
transformer ownership allowance as a cost.
Response:
(a) Veridian’s 2010 Revenue Requirement has changed as a result of Veridian’s
application update. The details of the application update have been filed concurrent
with interrogatory responses. This interrogatory has been answered on the basis of
the updated value of Veridian’s 2010 Revenue Requirement. The methodology for
apportionment of the 2010 revenue requirement has not been changed as a result of
the application update.
The 2010 revenue requirement apportioned to Veridian_Main and
Veridian_Gravenhurst in Reference (i) does not include an adjustment for the
transformer ownership allowance.
(b) Not applicable.
(c) Veridian did not consider the difference in methodologies between the calculation
and allocation of the 2006 Base Revenue Requirement as per the Board issued 2006
EDR Model and the direction provided in the May 2009 Filing Guidelines as it relates
to the required revision to the cost allocation model for treatment of the transformer
allowance. Veridian proposes that the direction within the May 2009 Filing
Guidelines is specific to allocation to classes and is not applicable to Veridian’s
allocation of revenue requirements to rate zones, for which the May 2009 Filing
Guidelines provide no direction. Veridian has followed the May 2009 Filing
Guidelines specific treatment of transformer allowance as it relates to the cost
allocation model.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
43.
Ref:
Exhibit 8 / Tab 2 / Schedule 1 / Veridian_Main
Request
(a) Did the variable rates used to determine the fixed/variable percentages set out in
Table 1 exclude the LV rate adder and allow for the transformer discount where
appropriate?
(b) Please provide a schedule that sets out the 2010 fixed and variable revenues by
customer class based on existing rates and the resulting fixed/variable percentages
where the variable rates used exclude the LV rate adder and variable revenues are
reduced by the transformer allowance as applicable.
(c) Please confirm that the Board’s EB-2007-0667 Guideline (page 12) sets the upper
limit for the MSC at 120% of avoided costs plus the allocated customer costs (i.e.,
Minimum System plus PLCC Adjustment). Based on this definition, if VeridianMain’s fixed charges were set so as to maintain the fixed/variable percentages
determined in part (b) would any of the resulting monthly service charges exceed
the Board’s upper limit?
Response:
(a) No variable rate was used to determine the fixed/variable percentages set out in Table
1. The methodology for determining the fixed/variable percentages was to set the
fixed rate with the primary purpose of maintaining existing fixed/variable revenue
splits by customer class while setting the absolute value of the fixed rate at no higher
than the Monthly Service charge ceiling as calculated in the 2010 Main Cost
Allocation Model (VM-2010).
(b) The requested schedule is attached.
(c) In the Report of the Board on Application of Cost Allocation for Electricity
Distributors (EB-2007-0667), it is stated that “The Methodology set a ceiling for the
MSC based on the avoided costs plus the allocated customer costs. The Discussion
Paper proposed that the ceiling for the MSC be 120% of this level.” It goes on to say,
“The Board considers it to be inappropriate to make significant changes to the ceiling
for the MSC at this time, given the number of issues that remain to be examined.”
And also states “In the interim, the Board does not expect distributors to make
changes to the MSC that result in a charge that is greater than the ceiling as defined in
the Methodology for the MSC. Distributors that are currently above this value are not
required to make changes to their current MSC to bring it to or below this level at this
time.” Veridian does not interpret the above statements in the Report of the Board to
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
be a guideline which “sets the upper limit for the MSC at 120% of avoided costs plus
the allocated customer costs (i.e., Minimum System plus PLCC Adjustment).
Yes, the resulting monthly service charges would exceed the ceiling as defined in the
Methodology for the MSC for the GS > 50 kW, Intermediate and Large Use classes.
Veridian Connections Inc.- VCI Main (ED-2002-0503)
2010 PROJECTED DISTRIBUTION REVENUE AT EXISTING RATES
Customer Class Name
Residential
General Service Less Than 50 kW
General Service 50 to 2,999 kW
General Service 3,000 to 4,999 kW
Large Use
Unmetered Scattered Load
Sentinel Lighting
Street Lighting
Gross Revenue
$
$
$
$
$
$
$
$
$
Total
Less: LV Pass-thru
26,598,051 $
(741,909)
6,406,893 $
(235,973)
9,416,510 $
(876,843)
266,718 $
(39,482)
1,020,726 $
(123,832)
166,872 $
(4,331)
30,965 $
(531)
379,099 $
(13,628)
44,285,833 $
(2,036,528)
Less: Trans Allow Adjusted Total
$
25,856,142
$
6,170,920
$
(588,094) $
7,951,573
$
(51,667) $
175,570
$
(187,011) $
709,883
$
162,541
$
30,435
$
365,470
$
(826,772) $
41,422,533
$
$
$
$
$
$
$
$
$
Fixed
12,223,571
1,274,484
1,656,897
127,976
480,638
72,135
16,732
191,479
16,043,912
Fixed %
47.28%
20.65%
20.84%
72.89%
67.71%
44.38%
54.98%
52.39%
Adjusted Variable
$
13,632,571
$
4,896,436
$
6,294,676
$
47,594
$
229,244
$
90,406
$
13,703
$
173,992
$
25,378,621
Variable %
52.72%
79.35%
79.16%
27.11%
32.29%
55.62%
45.02%
47.61%
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
44.
Ref:
Exhibit 8 / Tab 2 / Schedule 2 / Veridian_Gravenhurst
Request
(a) Did the variable rates used to determine the fixed/variable percentages set out in
Table 1 exclude the LV rate adder and allow for the transformer discount where
appropriate?
(b) Please provide a schedule that sets out the 2010 fixed and variable revenues by
customer class based on existing rates and the resulting fixed/variable percentages
where the variable rates used exclude the LV rate adder and variable revenues are
reduced by the transformer allowance as applicable.
(c) Please confirm that the Board’s EB-2007-0667 Guideline (page 12) sets the upper
limit for the MSC at 120% of avoided costs plus the allocated customer costs (i.e.,
Minimum System plus PLCC Adjustment). Based on this definition, if VeridianGravenhurst’s fixed charges were set so as to maintain the fixed/variable
percentages determined in part (b) would any of the resulting monthly service
charges exceed the Board’s upper limit?
(d) Why is it appropriate to increase the monthly service charge for GS>50 to the
maximum of the Board’s range as opposed to just moving to the lower bound of
the range?
Response:
(a) No variable rate was used to determine the fixed/variable percentages set out in Table
1. The methodology for determining the fixed/variable percentages was to set the
fixed rate with the primary purpose of maintaining existing fixed/variable revenue
splits by customer class while setting the absolute value of the fixed rate at no higher
than the Monthly Service charge ceiling as calculated in the 2010 Gravenhurst Cost
Allocation Model (VG-2010) and addressing any significant anomalies within the
existing revenue splits.
(b) The requested schedule is attached.
(c) Please see the response to VECC Interrogatory #43 part c). No, none of the resulting
monthly service charges would exceed the ceiling as defined in the Methodology for
the MSC.
(d) Moving the monthly service charge for the GS> 50 kW class just to the lower bound
of the range i.e. $67.34, would set the fixed/variable percentages at 9.53% fixed and
90.47% variable. Veridian proposes that these levels would vary materially from the
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
average fixed/variable split of the rest of the rate classes in the VCI_Main rate zone.
The average fixed percentage for the balance of the rate classes is 49.58%.
Even moving the monthly service charge to $110.62 still sets the fixed percentage
(15.67%) at a rate much lower than the average, but does not conform to the
Methodology as described in the Report of the Board.
Veridian Connections - Response to VECC Interrogatory # 44 - Part b
Veridian Connections Inc.- VCI Gravenhurst (ED-2002-0503)
2010 PROJECTED DISTRIBUTION REVENUE AT EXISTING RATES
Customer Class Name
Residential Urban Year-Round
Residential Suburban Year-Round
Residential Suburban Seasonal
General Service Less Than 50 kW
General Service 50 to 4,999 kW
Sentinel Lighting
Street Lighting
Gross Revenue
$
$
$
$
$
$
$
$
Total
Less: LV Pass-thru Less: Trans Allow
861,260 $
(73,972)
306,873 $
(25,537)
758,745 $
(25,300)
374,369 $
(35,446)
390,309 $
(65,170) $
(11,457)
609 $
(96)
6,150 $
(1,187)
2,698,316 $
(226,708) $
(11,457)
Adjusted Total
$
787,288
$
281,336
$
733,445
$
338,924
$
313,682
$
513
$
4,962
$
2,460,150
$
Fixed
318,798
115,821
450,281
87,851
13,602
413
4,432
991,198
Fixed %
Adjusted Variable
40.49%
468,490
41.17%
165,515
61.39%
283,164
25.92%
251,073
4.34%
300,080
80.57%
100
89.31%
530
$
1,468,952
Variable %
59.51%
58.83%
38.61%
74.08%
95.66%
19.43%
10.69%
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
45.
Ref:
Exhibit 8 / Tab 1 / Schedule 1 / Page 1
Exhibit 8 / Tab 3 / Schedule 1
Exhibit 8 / Tab 3 / Schedule 2
Request
Please confirm that the differences between the revenue requirements by
customer class (for both Veridian-Main and Veridian-Gravenhurst) reported in
the two references are due to the cost of the transformer allowance being
included in the class revenue requirements in Reference (ii).
Response:
Confirmed.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
46.
Ref:
Exhibit 8 / Tab 5 / Schedule 2
Request
What is the basis for Veridian’s assumption that the LV rates adders will not be
revised/updated during the IRM period?
Response:
Veridian has made no assumption that LV rates adders would not be revised/updated
during the IRM period, rather it has attempted to calculate a rate to be effective May 1st,
2010 so that it would not be necessary to revise or adjust the LV rates adders during the
IRM period, thus providing stability in the LV rate.
Prior to 2010, LV charges were recovered as a component of base distribution rates,
rather than a separately calculated rate adder. No formal processes under 2nd Generation
IRM existed for adjusting the recovery of LV charges through base distribution rates.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
47.
Ref:
Exhibit 8 / Tab 7 / Schedule 2
Request
(a) For Veridian-Main (Attachment 1), please provide the bill impacts for a
Residential customer using:
· 500 kWh per month
· 250 kWh per month
· 100 kWh per month
(b) For Veridian Gravenhurst (Attachment 2), please provide the bill impacts for a
Residential Urban customer using::
· 500 kWh per month
· 250 kWh per month
· 100 kWh per month
(c) For Veridian Gravenhurst (Attachment 2), please provide the bill impacts for a
Residential Suburban customer using::
· 500 kWh per month
· 250 kWh per month
· 100 kWh per month
(d) For Veridian Gravenhurst (Attachment 2), please provide the bill impacts for a
Residential Suburban Season customer using::
· 500 kWh per month
· 250 kWh per month
· 100 kWh per month
(e) Based on the most recent 12 months billing data, please provide a schedule that
includes the following information regarding Veridian-Gravenhurst’s Residential
Urban customers:
· Total number of customers using less than 100 kWh per month
· Total number of customers using between 100 and 250 kWh per month.
· Total number of customers using between 250 and 500 kWh per month
· Overall total number of customers.
(f) Based on the most recent 12 months billing data, please provide a schedule that
includes the following information regarding Veridian-Gravenhurst’s Residential
Suburban customers:
· Total number of customers using less than 100 kWh per month
· Total number of customers using between 100 and 250 kWh per month.
· Total number of customers using between 250 and 500 kWh per month
· Overall total number of customers.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
(g) Based on the most recent 12 months billing data, please provide a schedule that
includes the following information regarding Veridian-Gravenhurst’s Residential
Suburban Seasonal customers:
· Total number of customers using less than 100 kWh per month
· Total number of customers using between 100 and 250 kWh per month.
· Total number of customers using between 250 and 500 kWh per month
· Overall total number of customers.
Response:
Veridian’s proposed Tariff of Rates and Charges has changed as a result of Veridian’s
Application Update. This interrogatory has been answered on the basis of the
updated rates and bill impacts.
(a) The bill impact summary provided at Exhibit 8, Tab 7, Schedule 2, Attachment 1 has
been updated to reflect the changes due to Veridian’s application update and includes
the requested bill impacts for a Residential customer using 500 kWh, 250 and 100
kWh per month. It is provided as Attachment 1.
(b) (c) and (d) The bill impact summary provided at Exhibit 8, Tab 7, Schedule 2,
Attachment 2 has been updated to reflect the changes due to Veridian’s application
update and includes the requested bill impacts for Residential Urban, Residential
Suburban and Residential Seasonal customers using 500 kWh, 250 and 100 kWh per
month. It is provided as Attachment 2.
(e), (f) and (g)
The table below provides the information requested in parts e, f and g.
Residential
Urban
Less than 100 kWh per mo
Between 100 - 250 kWh per mo
Between 250 - 500 kWh per mo
Overall Total Number
As of November 30th, 2009
Residential
Suburban
Residential
Seasonal
121
181
659
31
30
87
264
444
370
3,023
751
1603
Veriidan_VECC_IRR 47‐Attachment 1
Updated Bill Impact Summary ‐ Veridian Main
Volume
Customer Class Name
kWh
Residential
General Service Less Than 50 kW
Generall Service Genera
Service 50 to 2,999 kW
General Service 3,000 to 4,999 kW
Large Use
Unmetered Scattered Load
Sentinel Lighting
Street Lighting
800
1,000
1,500
2,000
5,000
800
500
250
100
1,000
2,000
10,000
35,000
25,000
2,000
25,000
435 000
435,000
100,000
40,000
1,750,000
4,200,000
800
180
180
kW
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,480
500
100
4,000
6,800
0
1
1
RPP
Rate
Class
Summer
Summer
Summer
Summer
Summer
n/a
Summer
Summer
Summer
Non‐res.
Non‐res.
Non‐res.
Non‐res.
Non‐res.
Non‐res.
n/a
n/a
n/a
n/a
n/a
n/a
Non‐res.
Non‐res.
Non‐res.
Distribution Charges
Delivery Sub-total
$ change
$ change
$2.65
$2.89
$3.49
$4.09
$7.69
$2.65
$2.29
$1.99
$1.81
$1.77
$2.27
$6.27
$18.77
$13.77
$2.27
$13.77
$191.95
$68.86
$18.62
$556.01
$2,016.45
$2.49
$2.62
$0.31
% change
11.2%
10.8%
10.1%
9.7%
8.7%
11.2%
12.0%
13.1%
14.1%
5.6%
4.6%
3.3%
3.0%
3.1%
4.6%
3.1%
3 9%
3.9%
3.9%
4.1%
4.7%
10.2%
11.9%
53.0%
13.5%
Note: RPP Rate Class of "n/a" indicates Non-RPP customers subject to the Global Adjustment Rate Rider
($0.95)
($1.61)
($3.26)
($4.91)
($14.81)
$0.57
$0.04
$0.86
$1.36
($2.83)
($6.93)
($39.73)
($142.23)
($101.23)
($6.93)
($53.73)
($1,655.76)
76)
($644.59)
($86.07)
($3,182.19)
($7,227.27)
($1.11)
$1.78
($0.50)
% change
(3.1%)
(4.6%)
(6.9%)
(8.3%)
(11.3%)
1.9%
0.2%
5.0%
9.9%
(7.2%)
(10.7%)
(15.0%)
(16.0%)
(15.8%)
(10.7%)
(8.4%)
(16.3%)
(18.4%)
(10.6%)
(11.7%)
(15.7%)
(4.1%)
29.4%
(14.4%)
Total Bill
$ change
($0.95)
($1.61)
($3.27)
($4.91)
($14.82)
$0.57
$0.04
$0.86
$1.36
($2.83)
($6.93)
($39.73)
($142.25)
($101.26)
($6.93)
($53.76)
($1,656.06)
($644.66)
($86.09)
($3,183.36)
($4,404.03)
($1.11)
$1.78
($0.50)
% change
(1.0%)
(1.4%)
(2.0%)
(2.2%)
(2.7%)
0.6%
0.1%
0.1%
0.1%
(2.4%)
(3.1%)
(3.7%)
(3.8%)
(3.7%)
(3.1%)
(2.1%)
(3.8%)
(5.7%)
(2.2%)
(2.0%)
(1.2%)
(1.3%)
9.2%
(3.0%)
Veridian_VECC IRR_47 ‐ Attachment 2 Application Update ‐ Revised VCI_Gravenhurst Bill Impact Summary
Volume
RPP
Rate
Class
Customer Class Name
kWh
Residential Urban Year‐Round
Residential Suburban Year‐
Round
R id ti l S b b S
Residential Suburban Seasonal
l
General Service Less Than 50 General Service 50 to 4,999 kW
Sentinel Lighting
Street Lighting
kW
Distribution Charges
$ change
% change
Delivery Sub-total
$ change
% change
Total Bill
$ change
% change
800
1,000
1,500
2,000
5,000
800
500
250
100
0
0
0
0
0
0
0
0
0
Summer
Summer
Summer
Summer
Summer
n/a
Summer
Summer
Summer
$4.52
$5.10
$6.55
$8.00
$16.70
$4.52
$3.65
$2.93
$2.49
17.7%
17.3%
16.7%
16.3%
15.4%
17.7%
18.7%
20.1%
21.4%
$7.02
$8.24
$11.24
$14.26
$32.36
$7.28
$5.21
$3.71
$2.79
20.4%
20.3%
20.0%
19.9%
19.7%
21.1%
20.7%
21.3%
21.9%
$7.77
$9.18
$12.64
$16.12
$37.02
$7.97
$5.62
$3.92
$2.87
7.9%
7.6%
7.0%
6.8%
6.3%
8.1%
8.9%
10.8%
14.1%
800
1,000
1,500
2,000
5,000
800
500
250
100
0
0
0
0
0
0
0
0
0
Summer
Summer
Summer
Summer
Summer
n/a
Summer
Summer
Summer
$5.89
$6.59
$8.34
$10.09
$20.59
$5.89
$4.84
$3.97
$3.44
19.9%
19.6%
19.0%
18.7%
18.0%
19.9%
20.5%
21.4%
22.2%
$8.39
$9.73
$13.03
$16.35
$36.25
$8.65
$6.40
$4.75
$3.74
21.7%
21.7%
21.5%
21.4%
21.3%
22.4%
21.9%
22.2%
22.5%
$9.14
$10.67
$14.43
$18.21
$40.91
$9.34
$6.81
$4.96
$3.82
9.0%
8.5%
7.8%
7.5%
6.9%
9.1%
10.1%
12.3%
15.8%
800
1,000
1,500
2,000
5,000
800
500
250
100
1,000
2,000
35,000
25,000
75,000
25,000
435,000
100,000
40,000
180
180
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,480
500
100
1
1
Summer
Summer
Summer
Summer
Summer
n/a
Summer
Summer
Summer
Non‐res.
Non‐res.
Non‐res.
Non‐res.
Non‐res.
n/a
n/a
n/a
n/a
Non‐res.
Non‐res.
$8.42
17.0%
$11.16
$9.40
16.8%
$12.84
$11.85
16.5%
$16.99
$14.30
16.3%
$21.16
$29.00
15.9%
$46.16
$8.42
17.0%
$11.42
$6.95
17.3%
$8.66
$5.73
17.8%
$6.59
$4.99
18.2%
$5.32
$5.89
19.5%
$9.02
$9.19
18.5%
$15.42
$118.09
17.1%
$227.28
$85.09
17.2%
$163.07
$250.09
17.1%
$484.05
$85.09
17.2%
$171.09
($368.79)
(4.5%) $1,588.33
($65.77)
(2.4%)
$580.36
$57.91
10.1%
$193.55
$3.26 >100% $4.20
$0.18
12.9%
$1.23
19.0%
19.1%
19.2%
19.2%
19.3%
19.5%
18.9%
18.8%
18.6%
22.4%
22.1%
21.8%
21.8%
21.8%
22.8%
11.6%
12.5%
20.5%
82.9%
29.0%
$11.91
$13.78
$18.39
$23.02
$50.82
$12.11
$9.07
$6.80
$5.40
$9.96
$17.28
$259.90
$186.36
$553.92
$192.69
$1,964.08
$666.74
$228.10
$4.35
$1.38
9.8%
9.3%
8.7%
8.3%
7.7%
9.9%
10.8%
12.6%
14.9%
8.3%
7.4%
6.4%
6.4%
6.4%
7.0%
4.0%
5.3%
5.5%
23.2%
7.7%
Note: RPP Rate Class of "n/a" indicates Non-RPP customers subject to the Global Adjustment Rate Rider
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
48.
Ref:
Exhibit 9 / Tab 2 / Schedule 2 / Table 1
The Application indicates In accordance with the Z-factor guidelines contained within
Chapter 3 of the Board’s Filing Requirements for Transmission and Distribution
Applications (dated July 22, 2009), Veridian provides notice to the Board as part of this
application, that it will record its 2009 PCB testing cost amounts in account 1572,
Extraordinary Event Costs, and will seek recovery of these amounts at the time of a
future rate application.
Request
Why is the PCB Extraordinary Cost deferral account required rather than simply
tracking PCB remediation costs and including ¼ of the prior years expenses in
rates or alternatively using a variance account to record the difference in rates and
actual cost. Please explain
Response:
Veridian would be amenable to these suggestions, subject to Board approval.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
49.
Ref:
Exhibit 9 / Tab 2 / Schedule 1
Exhibit 9 / Tab 4 / Schedule 4 / Attachment 1
The application indicates:
• a $6.6 M increase in rate base representing the net book value of Smart Meter
capital assets as of December 31, 2008
• a rate rider of $0.54 per month for all metered customers to recover the under
collection of incremental revenue requirement associated with Smart Meter
capital investments and operating expenses to December 31, 2008. The rider to be
effective for a period of one year, from May 1, 2010 to April 30, 2011.
Request
Reconcile the balances to be disposed of with the balance of Smart Meter Related
Fixed Assets Net Book Value of: $6,644,822 used for calculation of the 2010
Smart Meter Rate Adder.
Response:
Please see the response to Board Staff Interrogatory #55.
50.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Ref: Exhibit 9 / Tab 4 / Schedule 5
Preamble: The Application states:
Meter installation in Gravenhurst will be completed in 2010 (5,359 residential, 710 GS < 50kW).
In addition, approximately 4,777 GS < 50kW in the remainder of Veridian’s service
territory will be left to complete in 2010.
Request
(a) Provide Support/details of the 2009-2011 Residential Class SM Unit costs (procurement
and installation)
(b) Provide Support/details of the 2009-2011 Residential Class SM AMI, communications
and back office costs (procurement and installation)
(c) Provide Support/details of the 2009-2011 Commercial Class SM Unit costs (procurement
and installation)
(d) Provide Support/details of the 2009-2011 Commercial Class SM Unit costs (procurement
and installation)
Response
(a) Veridian understands this request to be to provide a calculation of the SM capital unit costs
for the residential class for its forecast smart metering activities (procurement and
installation) during 2009-2010.
Veridian is unable to provide a class specific SM unit meter cost as not all capital costs have
been tracked separately by rate class.
In its pre-filed evidence, at Exhibit 9, Tab 4, Schedule 6, Attachment 1, Veridian provides an
estimated SM unit cost of $260. In preparing the response for VECC interrogatory #14,
some errors were found in Exhibit 9 Tab 4 Schedule 6 Attachment 1, smart meter funding
adder calculation. An updated version of the calculation is attached.
The corrected calculation of the “Per Meter Cost Split” is provided below.
The revised average (residential and GS < 50 kW) SM capital unit cost for the forecast SM
installations in 2009 and 2010 is $137.63 as stated in the table below.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
Per Meter Cost Split:
Smart meter including installation
Computer Hardware Costs
Computer Software Costs
Tools & Equipment
Other Equipment
Smart meter incremental operating
expenses
Total Smart Meter Costs per meter
$
$
$
$
$
$
$
Per Meter
137.63
3.09
16.66
157.38
Installed
36,392
107,261
107,261
107,261
107,261
107,261
$
$
$
$
$
Investment
5,008,678
331,934
-
% of Invest
70%
5%
0%
0%
0%
$
$
1,786,556
7,127,168
25%
100%
Note on per meter cost calculations:
1) Smart meter including installation - 2009 & 2010 estimated costs for total of 2009 & 2010
forecast installs
2) All other costs - calculated as 2009 & 2010 estimated costs for total of all units installed as they
support all meters not just the forecast 2009 & 2010 meters installed
(b) The SM AMI, communications and back office costs(listed in the table above as
Computer Hardware Costs and Computer Software costs) in the preceding table contain
single costs that support both classes, therefore we are unable to provide a breakdown by
class. The forecast investment in these systems will support all smart meters already
installed as well as those forecast to be installed in 2009 and 2010. The per unit cost is
$3.09.
(c) See response to a) above.
(d) This appears to be a duplicate of c) above.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
51.
Ref:
Exhibit 9 / Tab 4 / Schedule 6 / Attachment 2 / Appendix 2-S
Request
(a) Provide a schedule that gives a breakdown of the AMCD Capital Costs shown
in lines 1.1.1-1.5.6 between the Residential and GS<50kw and other classes.
(b) Provide a breakdown of the O&M costs shown at lines 2.1.1-2.5 between the
Residential and GS<50kw and other classes.
Response:
(a) The requested schedule has been provided as Attachment 1. Some capital costs such
as computer hardware and software are for investments that pertain to both the
Residential and GS < 50 kW classes and have not been tracked separately by class.
(b) Generally, operating costs are common costs that are not class specific. These costs
have not been tracked separately by class, therefore a breakdown of the O&M costs
shown at lines 2.1.1-2.5 between the Residential and GS<50kw and other classes is
not available.
Veridian_VECC IRR_51 ‐ Attachment 1
Capital Costs
2009 Residential
2009 GS<50 Total 2009 Forecast
2010 Residential
2010 GS<50
Total 2010 Forecast
Grand Total
$ 1,741,576 $ 220,000 $ 1,961,576
$ 713,474 $ 1,097,400 $ 1,810,874 $ 3,772,450
1.1.2 Installation Cost $ 240,821 $ 41,250 $ 282,071
may include socket kits plus shipping, labour, benefits, vehicle, etc.
$ 275,900 $ 205,763 $ 481,663 $ 763,734
1.1.1 Smart Meter may include new meters and modules, etc.
1.1.3a Workforce Automation Hardware
may include fieldworker handhelds, barcode hardware, etc.
$ ‐
$ ‐
$ ‐
1.1.3b Workforce Automation Software
may include fieldworker handhelds, barcode hardware, etc.
$ ‐
$ ‐
$ ‐
Total Advanced Metering Communication Device (AMCD)
$ 1,982,397 $ 261,250.00 $ 2,243,647
$ 989,375 $ 1,303,163 $ 2,292,537 $ 4,536,184
1.2 ADVANCED METERING REGIONAL COLLECTOR (AMRC) (includes LAN)
1.2.1 Collectors
$ 227,800
$ 207,195 $ 434,995
1.2.2 Repeaters
$ ‐
$ 2,280 $ 2,280
1.2.3 Installation
may include upgrades to collectors for AMCC integration
$ 6,700
$ 28,518 $ 35,218
Total Advanced Metering Regional Collector (AMRC) (includes LAN)
$ 234,500
$ 237,993 $ 472,493
1.3.1 Computer Hardware
$ 150,058
$ 41,147 $ 191,205
1.3.2 Computer Software
$ ‐
$ ‐
$ ‐
1.3.3 Computer Software Licence & Installation (includes hardware & software)
may include installation and licensing fees, capitalized labour for installation
$ ‐
$ ‐
$ ‐
Total Advanced Metering Control Computer (AMCC)
$ 150,058
$ 41,147 $ 191,205
1.4 WIDE AREA NETWORK (WAN)
1.4.1 Hardware (modems)
$ ‐
$ ‐
1.3 ADVANCED METERING CONTROL COMPUTER (AMCC)
$ ‐
1.4.2 Configuration license fees
May include project management, configuration, testing and verification
$ ‐
$ ‐
$ ‐
Total Wide Area Network (WAN)
$ ‐
$ ‐
$ ‐
1.5 OTHER AMI CAPITAL COSTS RELATED TO MINIMUM FUNCTIONALITY
1.5.1 Customer equipment (including repair of damaged equipment)
$ ‐
$ ‐
$ ‐
1.5.2 AMI Interface to CIS
$ ‐
$ ‐
$ ‐
1.5.3 Professional Fees
$ ‐
$ ‐
$ ‐
1.5.4 Integration
$ ‐
$ ‐
$ ‐
1.5.5 Program Management
$ ‐
$ ‐
$ ‐
1.5.6 Other AMI Capital
$ 140,729
$ ‐
$ 140,729
Total Other AMI Capital Costs Related To Minimum Functionality
$ 140,729
$ ‐
$ 140,729
Total Capital Costs
$ 2,768,934
$ 2,571,678 $ 5,340,612
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
52.
Ref:
Exhibit 9 / Tab 4 / Schedule 6 / Attachment 2 / Appendix 2-S
Request
(a) Based on the rate class split in capital and operating costs provided in the
response to VECC IR#2 parts a, and b, provide a schedule that shows the amount
to be recovered (including carrying costs) and the May 2010 onward SM Adder
by rate class and compare this to the aggregate $1.14 per month per metered
customer.
(b) Provide extension of the Table in appendix 2-S into 2011 and if required 2012.
Response:
(a) Veridian is unable to resolve the reference given in the interrogatory. VECC IR#2
parts a and b reference Exhibit 1, Tab 2, Schedule 1, page 16 and pertain to the
proposed apportionment of revenue requirement between VCI_Main and
VCI_Gravenhurst, rather than any ‘rate class split’ information.
As Veridian cannot resolve the reference of ‘rate class split’, it cannot provide the
requested schedule.
(b) Veridian forecasts completion of its smart metering activities in 2010 so there would
be no forecast costs in 2011 or 2012.
Veridian Connections
EB-2009-0140
Response to Vulnerable Energy Consumers Coalition Interrogatories
January 11, 2010
53.
Ref:
Exhibit 9 / Tab 4 / Schedule 6 / Attachment 2 / Appendix 2-S
Request
(a) Provide a cash flow projection showing SM rate adder revenue and SM
expenditures by Month for each class for the 2009, 2010 and 2011 rate years.
(b) Is Veridian recording its Smart Meter Costs by class in the smart meter variance
accounts 1555 and 1556? If not why not.
Response:
(a) A cash flow projection as requested is provided as Attachment 1.
(b) Veridian is not recording Smart Meter cost by class in the smart meter variance
accounts 1555 and 1556. Some costs are common or related to all classes and cannot
be directly allocated to specific rate classes. Veridian is not aware of any Board
issued accounting guidelines or directions requiring separate tracking of costs by rate
class.
Veridian_VECC IRR_53 ‐ Attachment 1 2009 Smart Meter Cashflow
Smart Meter Rate Adder Revenue
Residential
GS<50
GS>50
Intermediate
Large Use
Total Adder Revenue
Jan
Apr
May
Jun
Jul
68,266 81,922 73,750
5,210 6,780 6,852
788 714 841
0 3 1
4 4 3
74,268 89,422 81,448
66,091
4,633
693
2
4
71,422
83,644
7,088
797
1
4
91,533
72,883
6,361
779
2
4
80,028
70,653
5,668
820
1
4
77,146
Smart Meter Capital Costs
Smart Meter Operating Costs
49,759 411,250 261,789
21,946 35,714 136,148
364,475
83,342
485,503
51,387
423,803
10,917
406,616
202,245
Net Cashflow
2,564 (357,543) (316,489) (376,395) (445,357) (354,692) (531,715) (131,822) (447,050) (375,198) (184,250) (37,451) (3,555,397)
Feb
Mar
Mar
Aug
Oct
Nov
Dec
2009 Total
80,814 75,414
6,956 6,137
742 756
2 2
4 4
88,517 82,314
63,526
5,468
762
1
4
69,762
86,066
7,205
742
2
3
94,018
74,821
6,214
767
1
4
81,807
897,851
74,572
9,201
18
44
981,686
185,809 387,017
34,530 142,347
380,753
64,207
198,384
79,884
85,022
34,236
3,640,180
896,903
Aug
Sep
Apr
May
Jun
Jul
74,242 74,291 74,341
6,160 6,163 6,167
794 758 758
1 1 1
4 4 4
81,201 81,218 81,271
74,391
6,171
758
1
4
81,324
101,974
8,458
1,038
2
5
111,477
102,043
8,463
1,038
2
5
111,551
102,112
8,468
1,040
2
5
111,627
Smart Meter Capital Costs
Smart Meter Operating Costs
68,017 85,022 102,026
90,995 72,605 72,605
136,035
72,605
238,061
72,605
238,061
72,605
229,558
72,605
Net Cashflow
(77,811) (76,409) (93,360) (127,316) (199,189) (199,115) (190,537) (190,463) (88,363) (79,786) (62,706) 13,900
2010 Smart Meter Cashflow
Smart Meter Rate Adder Revenue
Residential
GS<50
GS>50
Intermediate
Large Use
Total Smart Meter Rate Adder Revenue
Jan
Feb
Sep
Oct
Nov
Dec
2010 Total
102,181 102,250
8,473 8,478
1,040 1,040
2 2
5 5
111,701 111,775
102,320
8,483
1,040
2
5
111,850
102,390
8,488
1,040
2
5
111,925
102,468
8,497
1,040
2
5
112,012
1,115,003
92,469
11,383
22
55
1,218,932
229,558 127,532
72,605 72,605
119,030
72,605
102,026
72,605
25,506
72,605
1,700,432
889,653
(1,371,154)