Alectra Utilities
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, alectra utilities Discover the possibilities May 28, 2019 Ms. Kirsten Walli Board Secretary Ontario Energy Board PO Box 2319 2300 Yonge Street, 27th Floor Toronto, ON M4P 1E4 Dear Ms. Walli: Re: Alectra Utilities Corporation ("Alectra Utilities") Incentive Regulation Mechanism ("IRM") Application for 2020 Electricity Distribution Rates and Charges OEB File No. EB-2019-0018 Alectra Utilities Corporation ("Alectra Utilities") hereby submits its electricity distribution rate ("EDR") application for approval of proposed distribution rates and other charges in the Brampton, Enersource, Guelph, Horizon Utilities and PowerStream Rate Zones effective January 1, 2020. The proposed 2020 rates are based on 2019 rates adjusted by the Ontario Energy Board's ("OEB") Price Cap Index Adjustment Mechanism formula. This application is being filed in accordance with the OEB's Filing Requirements for Electricity Distribution Rate Applications — Chapter 3 Incentive Rate- Setting Applications, updated July 12, 2018 (the "Chapter 3 Filing Requirements"). As part of this application, Alectra Utilities is filling its first five-year Distribution System Plan ("DSP") on an integrated basis for its entire service area. The consolidated DSP has been prepared in accordance with the OEB's Filing Requirements for Electricity Distribution Rate Applications — Chapter 5 Consolidated Distribution System Plan Filing Requirements, updated July 12, 2018. Alectra Utilities is also requesting an approval for capital funding based on a rate- adjustment mechanism that reconciles the capital needs set out in the DSP with the capital-related revenue in rates, and associated 2020 to 2024 capital riders for each rate zone. Alectra Utilities refers to this mechanism as an "M-factor". Alectra Utilities Corporation 2185 Derry Road West, Mississauga, ON L5N 7A6 I t 905 273 7425 alectrautilities.com This application includes live versions of the following: • IRM Models • M-factor Model • HRZ ESM Rate Rider Model • HRZ ESM Table of Allocations • LRAMVA Work Forms • GA Work Forms • 1595 Work Form • RGCRP Models The Chapter 3 Filing Requirements specify that distributors should confirm the accuracy of the billing determinants for pre-populated models. Alectra Utilities wishes to advise the OEB that at the time of this filing, OEB models for 2020 EDR Applications were not yet available. Alectra Utilities has used the 2019 OEB models for creating the models on which this application is based. Alectra Utilities has confirmed the accuracy of the billing determinants to the 2019 RRR, section 2.1.5.4, for each rate zone. In order to assist the OEB, Alectra Utilities has created a Table of Concordance for the application and the DSP. This is included it in the application. Please note that the application includes a small amount of information that Alectra Utilities considers to be confidential. The relevant information has been redacted and a request for confidential treatment of that redacted information will be filed under separate cover. Alectra Utilities has filed an electronic version of this application via RESS and will be providing two paper copies with the OEB. Should you have any questions, please do not hesitate to contact the undersigned. Vice President, Regulatory A airs alectra utilities 212 Discover the possibilities Exhibit 1, Tab 1, Schedule 1 Exhibit List EB-2019-0018 Alectra Utilities Corporation 2020 EDR Application Exhibit 1 Tab 1 Schedule 1 Page 1 of 3 EXHIBIT LIST Exhibit Tab Schedule Contents 1 ADMINISTRATIVE 1 1 Exhibit List 2 1 Legal Application 2 Certificate of the Evidence 3 1 Executive Overview 4 1 Table of Concordance 5 1 Draft Issues List 2 REQUESTS FOR ALECTRA UTILITIES AS A WHOLE 1 1 Summary of Requests for Alectra Utilities 2 Consolidated DSP 3 Capital Funding Mechanism 4 Establishment of New Deferral and Variance Accounts 5 Capitalization Policy 6 Alectra Utilities ESM 3 REQUESTS FOR INDIVIDUAL RATE ZONES 1 1 Summary of Requests for Individual Rate Zones 2 Horizon Utilities RZ Earnings Sharing Mechanism 3 Horizon Utilities RZ Capital Investment Variance Account 4 Annual Price Cap Adjustment Mechanism 5 Rate Design for Residential Customers – PowerStream RZ 6 Electricity Distribution Retail Transmission Service Rates 7 Review and Disposition of Group 1 Deferral and Variance Account Balances EB-2019-0018 Alectra Utilities Corporation 2020 EDR Application Exhibit 1 Tab 1 Schedule 1 Page 2 of 3 Exhibit Tab Schedule Contents 8 Settlement Process with the IESO 9 Renewable Generation Connection Rate Protection 10 Disposition of LRAM Variance Account 11 Tax Changes 12 Summary of Bill Impacts 4 DISTRIBUTION SYSTEM PLAN 1 1 Alectra Utilities 2020-24 Distribution System Plan 5 ATTACHMENTS 1 1 Attachment 1 2018 ROE Calculation Alectra Utilities Attachment 2 2018 ROE Calculation Guelph Hydro Attachment 3 M-factor Revenue Requirement Attachment 4 Current Tariff of Rates & Charges Jan 1, 2019 HRZ Attachment 5 Current Tariff of Rates & Charges Jan 1, 2019 BRZ Attachment 6 Current Tariff of Rates & Charges Jan 1, 2019 PRZ Attachment 7 Current Tariff of Rates & Charges Jan 1, 2019 ERZ Attachment 8 Current Tariff of Rates & Charges Jan 1, 2019 GRZ Attachment 9 Table of Allocations 2017 HRZ ESM Attachment 10 ESM Rate Rider Model HRZ Attachment 11 Table of Allocations 2018 HRZ ESM Attachment 12 IRM Model HRZ Attachment 13 IRM Model BRZ Attachment 14 IRM Model PRZ Attachment 15 IRM Model ERZ Attachment 16 IRM Model GRZ Attachment 17 Proposed Tariff of Rates & Charges Jan 1, 2020 HRZ Attachment 18 Proposed Tariff of Rates & Charges Jan 1, 2020 BRZ Attachment 19 Proposed Tariff of Rates & Charges Jan 1, 2020 PRZ EB-2019-0018 Alectra Utilities Corporation 2020 EDR Application Exhibit 1 Tab 1 Schedule 1 Page 3 of 3 Exhibit Tab Schedule Contents Attachment 20 Proposed Tariff of Rates & Charges Jan 1, 2020 ERZ Attachment 21 Proposed Tariff of Rates & Charges Jan 1, 2020 GRZ Attachment 22 GA Workform PRZ Attachment 23 GA Workform ERZ Attachment 24 1595 workform ERZ Attachment 25 RGCRP HRZ Attachment 26 RGCRP BRZ Attachment 27 RGCRP PRZ Attachment 28 RGCRP ERZ Attachment 29 RGCRP GRZ Attachment 30 LRAMVA WorkForm HRZ Attachment 31 LRAMVA WorkForm BRZ Attachment 32 LRAMVA WorkForm PRZ Attachment 33 LRAMVA WorkForm ERZ Attachment 34 2017 Final IESO Results Report Alectra Utilities Exhibit 1, Tab 2, Schedule 1 Legal Application EB-2019-0018 Alectra Utilities Corporation 2020 EDR Application Exhibit 1 Tab 2 Schedule 1 Page 1 of 5 1 ONTARIO ENERGY BOARD 2 IN THE MATTER OF the Ontario Energy Act, 1998, being 3 Schedule B to the Energy Competition Act, 1998, S.O. 1998, 4 c.15; 5 AND IN THE MATTER OF an Application by Alectra Utilities 6 Corporation to the Ontario Energy Board for an Order or Orders 7 approving or fixing just and reasonable rates and other service 8 charges for the distribution of electricity as of January 1, 2020. 9 APPLICATION 10 1. Alectra Utilities Corporation (the “Applicant” or “Alectra Utilities”), is a corporation incorporated 11 under the Ontario Business Corporations Act, and is licensed by the Ontario Energy Board 12 (the “OEB”) to own and operate electricity distribution facilities under licence number ED- 13 2016-0360. 14 2. Alectra Utilities hereby applies to the OEB pursuant to section 78 of the Ontario Energy Board 15 Act, 1998, as amended (the “OEB Act”), for orders approving: 16 a. Electricity distribution rates and charges in the Horizon Utilities, Brampton, 17 PowerStream, Enersource and Guelph Rate Zones (“RZs”) effective January 1, 2020, 18 based on 2019 rates adjusted by the OEB’s Price Cap Index Adjustment Mechanism 19 formula; 20 b. Capital Funding based on a rate-adjustment mechanism, referred to as an “M-Factor”, 21 which reconciles the capital needs set out in Alectra Utilities’ Distribution System Plan 22 (“DSP”), which has been prepared on a consolidated basis for its entire service territory 23 and included in this Application, with the capital-related revenue in rates, along with 24 the associated 2020-2024 capital riders for each RZ, to be updated annually, if 25 needed, as part of the Price Cap IR application; 26 c. A symmetrical Capital Investment Variance Account (“CIVA”) to capture capital 27 funding in excess of the revenue requirement associated with Alectra Utilities’ actual EB-2019-0018 Alectra Utilities Corporation 2020 EDR Application Exhibit 1 Tab 2 Schedule 1 Page 2 of 5 1 in-service additions, to be credited or debited to customers at the end of the five-year 2 plan term of the DSP; 3 d. A symmetrical Externally Driven Capital Variance Account (“EDCVA”) to capture 4 differences between the revenue requirement associated with externally driven capital 5 expenditures (related to regional transit projects and capital works required by road 6 authorities) as forecasted in the DSP, and the actual revenue requirement for in- 7 service additions associated with such projects in the same period; 8 e. A Customer Service Rules-related Lost Revenue Variance Account (“CSRLRVA”) to 9 record lost revenue and incremental capital costs resulting from changes to customer 10 service rules, and future policy changes implemented by the OEB; 11 f. A Conservation and Demand Management Severance Deferral Account (“CDMSDA”) 12 to record severance costs resulting from the the termination of the Conservation First 13 Framework and associated CDM activities; 14 g. The termination of certain deferral accounts established in its 2018 Electrcity 15 Distribution Rate (“EDR”) Application (EB-2017-0024) to track the change in 16 capitalization policy for the Horizon Utilities, Enersource and Brampton RZs; 17 h. Alectra Utilities’ Earnings Sharing Mechanism (“ESM”) proposal for the 2022-2026 18 period; 19 i. Disposition of the 2017 and 2018 Horizon Utilities RZ (“ESM”) results, having regard 20 to the changes to the capitalization policy and the Board’s findings in respect of item 21 e, above; 22 j. The calculation of the 2017 and 2018 Horizon Utilities RZ capital additions for the 23 purpose of calculating the 2017 and 2018 entry to the Capital Investment Variance 24 Account; 25 k.