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The Future for Power Sector Regulation in Ontario

The Future for Power Sector Regulation in Ontario. Jan Carr Vice Chair, Ontario Energy Board APPrO Canadian Power Conference & Trade Show November 24, 2004. Overview. Approach to Economic Regulation Major Electricity Initiatives Regulated Price Plan (RPP) Smart Meters

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The Future for Power Sector Regulation in Ontario

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  1. The Future for Power Sector Regulation in Ontario Jan Carr Vice Chair, Ontario Energy Board APPrO Canadian Power Conference & Trade Show November 24, 2004

  2. Overview • Approach to Economic Regulation • Major Electricity Initiatives • Regulated Price Plan (RPP) • Smart Meters • Electricity Distribution Rates (EDR) • Natural Gas Forum • Gas-fired Power Generation

  3. Approach to Economic Regulation GOALS Facilitate infrastructure investment Create incentives linking profit and performance Protect consumer interests TOOLS Approving expansion of infrastructure Setting utility rates Initiating consumer protection mechanisms

  4. Regulated Price Plan (RPP) • New mechanism to determine electricity commodity price – May 2005 • RPP will reflect true cost of electricity • RPP will be stable and support conservation / smart meters

  5. RPP Components • OPG baseload nuclear and hydro plants • Existing NUG contracts • New OPA procurement contracts • Forecasting of IESO spot market prices

  6. RPP Milestones

  7. Smart Meters • Implementation target is tight • 800,000 customers by 2007; all customers by 2010 • OEB draft implementation plan released November 9 • Comments due on November 26 • Key issues: • Installation priorities • Procurement • Cost • Technology

  8. Electricity Distribution Rates • Dealing with backlog of issues from rate freeze in 2005. • Continued recovery of transition costs • 3rd (final) installment of MARR – tied to spending on DSM • Working to establish a sound basis for future incentive rates • 2006 - Establishment of new revenue requirement • 2007 - Initial cost allocation • 2008 - Further review of revenue requirements

  9. Natural Gas Forum (NGF) • Technical consultations identified a number of key issues in natural gas sector • Research and discussion in three areas: • Utility system supply • Storage and transportation • Rate regulation, with a focus on Performance-Based Ratemaking • Forum raised issues of operational requirements of power generators

  10. Issues in Gas-Fired Power Generation • Increased demand on natural gas infrastructure to supply expected gas-fired power generation • Issues raised in NGF: • Distribution rate structure • Storage and transportation flexibility • Contract arrangements • Infrastructure and distributor arrangements

  11. Conclusion www.oeb.gov.on.ca

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