2018-2019 Annual Report
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2018 – 2019 Annual Report Energy at a Glance: 2018–2019 Protecting Consumers Electricity distribution customers: Natural gas distribution customers: 5,213,918 3,681,393 Residential and Residential and small business customers: small business customers: 5,158,178 3,664,663 Sector Oversight In the electricity sector, the OEB regulated or licensed: 69 8 465 2 111 63 31 16 Distributors Transmitters Generators Agencies: Wholesalers Retailers Unit Electricity Independent Electricity System Operator and sub-meter storage Smart Metering Entity providers providers 2 32 In the natural gas sector, the OEB regulated or licensed: Distributors Marketers Consumer Participation Number of OEB Held 13 community $3 million hearings & proceedings meetings in 12 locations Amount provided to intervenor groups to fund where intervenors throughout Ontario about their participation including: consumer groups, participated: major rate applications manufacturers, farmers, landowners and Indigenous 52 communities Consumer Contacts 8,765 Top Enquiries: Contacts Ontario Electricity Support Program (OESP), Low-income Energy received Assistance Program (LEAP), request for information on licensees, disconnections, contract renewals and amendments Assistance for LEAP assisted 14,000 OESP assisted an average of Low-Income customers with 239,000+ low-income $5.9 million in emergency households a month with almost Energy funding to help with their $166 million in on-bill credits Customers natural gas and electricity bills over the year Energy at a Glance: 2018–2019 (continued) Reliable and Sustainable Energy Infrastructure Electricity distribution system – Natural gas distribution system – total assets: total assets: $26,215,324,533 1 $18,100,774,972 1 1 $2.1 billion $168 million invested in the electricity grid invested in natural gas infrastructure 1 km 36 km 551 of new and replacement natural gas pipelines of new distribution wires approved for construction: • 4.8 km in the City of Toronto • 7.0 km in the Regional Municipality of Durham 641 km of electricity transmission lines approved • 19.0 km in the Town of Lakeshore and Town of for construction Kingsville in the county of Essex • 5.2 km in the counties of Oxford and Norfolk Managing Costs Average residential OEB’s operating expenses per monthly natural gas bill: customer annually for 2018-2019 were $5.16, up $0.18 due to higher $71.26 salaries and benefts costs as a result of flling vacancies and infation Average residential monthly Rate increases of About $12.2 million in avoided electricity bill: 0.25%, on average, rate increases achieved from our for electricity review of major rate applications 2 54 6 $113.26 distributors that fled fled by electricity distributors annual applications for Number of rate decisions issued: 74 infationary increases Total decisions: 272 1 Source: 2018 RRR data as fled by electricity and natural gas distributors on April 30, 2018 (for the 12 month period ending December 31, 2018). 2 Refects the impact of the Ontario Fair Hydro Plan Act, 2017 Table of Contents Vision, Mission and Values 2 Executive Summary 3 Our Performance 5 New Outcomes-Based Performance Measurement Framework 11 Financial Performance 12 Report on Regulatory Costs 13 Cost Awards & OESP Administrative Costs 14 Risks and Risk Management 15 Financial Statements 19 Board Members 33 Contact Information 34 1 ONTARIO ENERGY BOARD Annual Report 2017–2018 1 ONTARIO ENERGY BOARD Annual Report 2018–2019 VISION The OEB supports and guides the continuing evolution of the Ontario energy sector by promoting outcomes and innovation that deliver value for all Ontario energy consumers. MISSION We will pursue this Vision by: • Strengthening the focus on demonstrable consumer value during a period of sector evolution • Incenting and enabling innovation in a way that enhances consumer choice, control and value • Strengthening and sustaining the confidence of consumers during a period of accelerating change • Equipping our own organization to meet the challenges presented by sector evolution VALUES • Effective: We hold ourselves to a high standard regarding the quality and efficiency of our work. • Independent: We are objective and bring an open mind to all we do. • Engaged: We learn from our dialogue with consumers, utilities and other industry participants. • Expert: We are experts in our field and share our knowledge with others. • Forward-looking: We support innovative solutions both within our own organization and by those we regulate. • Respectful: We serve the public interest and treat everyone with respect. ONTARIO ENERGY BOARD Annual Report 2018–2019 ONTARIO ENERGY BOARD Annual Report 2018–2019 2 Executive Summary We are pleased to provide the following annual a reduction in the distribution rates utilities report, which includes the Ontario Energy requested by about 15.4 per cent, on average. Board’s (OEB) financial statements for the Further, we reviewed 54 applications from fiscal year ending March 31, 2019, our Risks electricity distributors seeking annual inflationary and Risk Management Summary and a report adjustments and allowed rates to increase by just on our performance. The performance results 0.25 per cent, on average, a level of increase that described in this annual report reflect the OEB’s remains below the rate of inflation. performance against our 2018-19 Business Plan, We also decided seven applications from which was approved by the then Minister of utilities requesting approval to amalgamate or to Energy in April 2018. Just before the end of the acquire another utility. We approved all but one 2018-19 fiscal year, the government introduced application. legislation that will, when proclaimed into force, materially change the OEB’s corporate In the fourth quarter, we announced the governance structure. In the 2019-20 fiscal year, completion of our review of performance the OEB will transition to that new governance standards for processing rate applications to structure and we expect to refresh our provide greater certainty and predictability to strategic vision and direction, informed by the applicants. The new performance standards recommendations set out in the Ontario Energy for rate applications were posted on the OEB Board Modernization Review Panel’s report to the website (OEB.ca) in a schedule format, identifying Minister of Energy, Northern Development and the typical procedural steps and the number of Mines, which was also published in late March days typically required for each. An Application 2019. Planning Tool has also been posted that allows users to estimate the duration of a proceeding. In fiscal year 2018-19, the OEB remained focused on our core work of setting just and reasonable Protecting energy consumers. We issued new energy rates, protecting energy consumers customer service rules for electricity and natural and encouraging the energy sector to become gas utilities and unit sub-meter providers to more responsive to consumers’ expectations enhance consumer protection throughout the for value, quality of service, choice and control. province. Our review on major areas including We also maintained our emphasis on continuous disconnections, security deposits and billing was improvement so that we remain well-equipped to designed to ensure that our customer service guide and support the ongoing evolution of the rules continue to serve the interests of customers energy sector. and maintain an appropriate balance between consumer protection and the ongoing operational Setting just and reasonable rates for needs of utilities. regulated energy utilities. After careful scrutiny of six major rate applications from electricity The OEB undertook more than 20 inspections utilities, the OEB disallowed about $12.2 million of regulated entities in this fiscal period. Issues in distribution revenue increases, representing of compliance were identified and they were required to take corrective action. More than 3 ONTARIO ENERGY BOARD Annual Report 2018–2019 Executive Summary (continued) 1,022 consumer complaints regarding regulated organization undertakes from year to year. In all, entities were reviewed, and staff took appropriate 19 performance indicators have been developed, steps to address any compliance issues and which we expect will be a solid basis for further facilitate resolution between the regulated entity testing and refinement. and the complainant. The 2018-2019 period saw a number of key We also continued our work to assist low-income accomplishments highlighting the OEB’s energy consumers. The Ontario Electricity commitment to ensuring that Ontario’s energy Support Program, a program we administer that is consumers receive good value for their energy now funded through provincial revenues, assisted dollars and that regulated utilities are well an average of 239,000+ low-income households equipped to deliver high quality service. We look a month with almost $166 million in on-bill credits forward to continuing to serve the public interest over the year. In addition, the Low-income Energy in our role as a knowledgeable, responsible Assistance Program assisted 14,000 customers and responsive energy regulator under our new through $5.9 million in emergency funding to governance structure and a refreshed strategic help with their natural gas and electricity bills. vision and direction. Preparing for tomorrow. How to advance our regulatory work to meet the demands of the evolving energy sector was the subject of recommendations contained in a report from the Advisory Committee