Hydro Ottawa Limited EB-2015-0004 Exhibit B Tab 1 Schedule 1 ORIGINAL Page 1 of 6 1 RATE BASE 2 3 1.0 INTRODUCTION 4 5 This Schedule provides an overview of Hydro Ottawa Limited’s (“Hydro Ottawa”) 6 distribution rate base and a discussion of year over year variances. 7 8 In accordance with the Ontario Energy Board’s (“the Board”) Update to Chapter 2 of the 9 Filing Requirements For Electricity Distribution Rate Applications, issued July 18, 2014, 10 the rate base used to determine the revenue requirement for the Test Years include a 11 forecast of net fixed assets, calculated on a mid-year average basis, plus working capital 12 allowance (“WCA”). Net fixed assets are gross assets in service minus accumulated 13 amortization and contributed capital. 14 15 Table 1 shows Hydro Ottawa’s rate base values for historical years (2012 Approved, 16 2012 and 2013 Actual, 2014 forecast), bridge year 2015 and test years 2016 through 17 2020 Budget. Table 1 provides the opening, closing and average balances for gross 18 assets and accumulated depreciation. Table 1 further provides the closing balance for 19 net fixed assets and Hydro Ottawa’s working capital allowance. 20 21 Table 2 shows the following variances: 22 • Historical Board-approved (2012) vs. Historical Actual (2012); 23 • Historical Actual (2013) vs. preceding Historical Actual (2012); 24 • Forecast (2014) vs. preceding Historical Actual (2013); 25 • Bridge (2015) vs. Forecast (2014) 26 • Test Year (2016) vs. Bridge (2015); and 27 • Test Years (2017 to 2020) vs. preceding Test Years (2016 to 2019) 2016 Hydro Ottawa Limited Electricity Distribution Rate Application Hydro Ottawa Limited EB-2015-0004 Exhibit B Tab 1 Schedule 1 ORIGINAL Page 2 of 6 1 Table 1 – Summary of Rate Base (000) 2012 2012 2013 2014 2015 2016 Test 2017 Test 2018 Test 2019 Test 2020 Test Approved Actual Actual Forecast Bridge Year Year Year Year Year Year Opening Gross Assets 586,645 571,283 626,263 616,6431 728,873 834,010 920,628 1,005,754 1,098,217 1,165,068 Closing Gross Assets 653,691 626,263 730,170 728,873 834,010 920,628 1,005,754 1,098,217 1,165,068 1,276,967 Average Gross Assets 620,168 598,773 678,217 672,758 781,441 877,319 963,191 1,051,986 1,131,643 1,221,018 Opening Accumulated Depreciation $39,178 $36,818 $75,370 $02 $35,919 $73,464 $113,277 $156,409 $202,443 $250,379 Closing Accumulated Depreciation $78,417 $75,370 $114,030 $35,919 $73,464 $113,277 $156,409 $202,443 $250,379 $299,661 Average Accumulated Depreciation $58,798 $56,094 $94,700 $17,960 $54,692 $93,371 $134,843 $179,426 $226,411 $275,020 Average Net Fixed Assets Closing 561,371 542,679 583,517 654,798 726,750 783,948 828,348 872,559 905,231 945,998 Working Capital Allowance 107,692 111,188 119,825 119,859 132,740 139,358 142,234 147,738 145,493 148,273 Rate Base 669,062 653,867 703,342 774,657 859,490 923,306 970,582 1,020,297 1,050,724 1,094,270 2 3 4 5 6 1 Includes one-time adjustment of a decrease to opening Gross Asset values of $114,030k as well as an adjustment of $502k for IFRS financial reporting as described in B-2-1 2 Includes one-time adjustment of a decrease to opening Accumulated Depreciation values of $114,030k for IFRS financial reporting as described in B-2-1 2016 Hydro Ottawa Limited Electricity Distribution Rate Application Hydro Ottawa Limited EB-2015-0004 Exhibit B Tab 1 Schedule 1 ORIGINAL Page 3 of 6 1 Table 2 – Rate Base Variances (000) 2012 Board 2013 Vs 2014 Vs 2015 Vs 2016 Vs 2017 Vs 2018 Vs 2019 Vs 2020 Vs Approved 2012 2013 2014 2015 2016 2017 2018 2019 Vs Actual Opening Gross Assets 15,362 54,980 (9,621)3 112,230 105,137 86,618 85,126 92,463 66,851 Closing Gross Assets 27,428 103,907 (1,297) 105,137 86,618 85,126 92,463 66,851 111,899 Average Gross Assets 21,395 79,443 (5,459) 108,684 95,878 85,872 88,795 79,657 89,375 E Opening Accumulated Depreciation 2,360 38,551 (75,370)4 35,919 37,545 39,813 43,132 46,034 47,936 Closing Accumulated Depreciation 3,047 38,660 (78,110)5 37,545 39,813 43,132 46,034 47,936 49,282 Average Accumulated Depreciation 2,704 38,606 (76,740) 36,732 38,679 41,473 44,583 46,985 48,609 Average Net Fixed Assets 18,691 40,838 71,2816 71,952 57,199 44,400 44,211 32,672 40,766 Working Capital Allowance (3,496) 8,637 35 12,881 6,617 2,876 5,504 (2,245) 2,780 Rate Base Change 15,195 49,475 71,316 84,833 63,816 47,276 49,716 30,427 43,546 3 Includes one-time adjustment to opening Gross Asset values of $114,030k 4 Includes one-time adjustment to opening Gross Asset values of $114,030k 5 Includes one-time adjustment to opening Gross Asset values of $114,030k 6 2014 opening Net Fixed Asset balance includes a one-time adjustment $502k, please see Exhibit B-2-1 2016 Hydro Ottawa Limited Electricity Distribution Rate Application Hydro Ottawa Limited EB-2015-0004 Exhibit B Tab 1 Schedule 1 ORIGINAL Page 4 of 6 1 2 2.0 2012 ACTUAL RATE BASE VERSUS 2012 APPROVED 3 4 Hydro Ottawa’s approved 2012 rate base was $15.2M higher than actual rate base 5 • Average assets were $18.7M lower in 2012 actual 6 o Additional $16.4M in net assets, $11.4M less than Board approved 7 o $27.1M more actual construction in progress (“CIP”) than forecasted 8 • $3.5M more was required in WCA in 2012 actual over approved 9 10 3.0 2013 ACTUAL VERSUS 2012 ACTUAL 11 12 Hydro Ottawa’s actual 2013 rate base was $49.5M higher than 2012 actual 13 • Average assets were $40.8M higher in 2013 14 o $65.2M additions in 2013, $48.8M higher than 2012 15 o $2.8M in net deletions, $3M higher than 2012 16 • $8.6 more was required in WCA over 2012 17 18 4.0 2014 FORECAST VERSUS 2013 ACTUAL 19 20 Hydro Ottawa’s forecasted 2014 rate base was $71.3M higher than 2013 actual. 21 • Average assets are forecasted to be $71.3M higher 7 22 o $76.3M additions are forecasted in 2014 , $11.1M higher than 2013 23 o $1.1M in net deletions, $1.7M less than 2013 24 o $6.1M less is forecasted to be in CIP at the end of 2014 25 • WCA is forecasted to stay relatively flat 26 27 5.0 2015 BRIDGE VERSUS 2014 FORECAST 28 7 Excluding one-time adjustment to 2014 opening net fixed assets 2016 Hydro Ottawa Limited Electricity Distribution Rate Application Hydro Ottawa Limited EB-2015-0004 Exhibit B Tab 1 Schedule 1 ORIGINAL Page 5 of 6 1 Hydro Ottawa’s 2015 Bridge Year rate base is budgeted to be $84.8M higher than 2014 2 forecast. 3 • Average assets are budgeted to be $72.0M higher 4 o $67.6M additions are budgeted in 2015, $8.7M less than 2014, 5 o $18.2M less is budgeted to be in CIP at the end of 2015 6 • WCA is budgeted to be $12.9M more than required 2014 forecast 7 8 6.0 2016 TEST YEAR VERSUS 2015 BRIDGE YEAR 9 10 Hydro Ottawa’s 2016 Test Year rate base is budgeted to be $63.8M higher than 11 budgeted for the 2015 Bridge Year. 12 • Average assets are budgeted to be to be $57.2M higher 13 o $46.8M additions planned in 2016, $20.8M less than 2015 14 o $8.2M more is budgeted to be in CIP at the end of 2016 15 • WCA is budgeted to be $6.6M more than required 2015 16 17 7.0 2017 TEST YEAR VERSUS 2016 TEST YEAR 18 19 Hydro Ottawa’s 2017 Test Year rate base is budgeted to be $47.3M higher than the 20 2016 Test Year. 21 • Average Assets are budgeted to be to be $44.4M higher 22 o $42M additions planned for 2017, $4.8M less than 2016 23 o $4.1M more is budgeted to be in construction in progress at the end of 24 2017 25 • WCA is budgeted to be $2.9M more than required in 2016 26 27 8.0 2018 TEST YEAR VERSUS 2017 TEST YEAR 28 29 Hydro Ottawa’s 2018 Test Year rate base is budgeted to be $49.7M higher than 2017 30 Test Year. 31 • Average Assets are budgeted to be to be $44.2M higher 2016 Hydro Ottawa Limited Electricity Distribution Rate Application Hydro Ottawa Limited EB-2015-0004 Exhibit B Tab 1 Schedule 1 ORIGINAL Page 6 of 6 1 o $46.4M additions planned for 2018, $4.4M more than 2017 2 o $4.1M less is budgeted to be in CIP at the end of 2018 3 • WCA is budgeted to be $5.5M more than required in 2017 4 5 9.0 2019 TEST YEAR VERSUS 2018 TEST YEAR 6 7 Hydro Ottawa’s 2019 Test Year rate base is budgeted to be $30.4M higher than the 8 2018 Test Year.