Last week, the Ontario Energy Board held the third of nine public meetings regarding Hydro One's application to up its distribution rates over the next five years. (Photo: Pixabay).

Hydro One’s distribution rate application, explained

The Ontario Energy Board held a public consultation session last week in Rockland, regarding Hydro One’s application to up its delivery rates over the next five years.

At the meeting, Oded Hubert, the vice president of Regulatory Affairs for Hydro One, presented why the utility’s Distribution Plan.

The plan highlights necessary infrastructure upgrades and future investments for increased productivity.

For example, after identifying about 400,000 poles—of the 1.6 million owned by Hydro One—that will reach the end of their service life within the next five years, the plan indicates only about 72,000 will be replaced within the time frame relevant to the application, so between 2018 and 2022, for a total cost of $579 million.

That’s nearly $8,050 per pole.

According to Hubert, a large part of the infrastructure was installed in the 1950s and 1960s and now “requires attention,” since the average life of a power pole is 62 years.

Hélène Dutrisac asked why this wasn’t taken into account before now.

“Yes, we did know there would be a bulge, but until now the work program did not require massive investment, now is the time we need to step up the investment,” said Hubert.  

Also over the next five years, Hydro One wants refurbish an average of 15 stations per year, for a total of $148 million, about $1.97 million per station.

When it comes to maintenance, the presentation showed it will cost about $150 million to maintain 12,750 kilometres of “rights-of-way,” and $78 million for an estimated 42,645 trouble calls in 2018 alone.

To fund these projects, the utility application would increase the base distribution charge from $51.02 per month in 2017 to $62.77 per month in 2022. This is according to the OEB’s presentation at the public meeting.

Fair Hydro Plan

Earlier this year, the province approved the Fair Hydro Act, which will drop hydro prices next month.

On average the Act is said to drop overall hydro bills by about 25 per cent for an average consumer, using about 750 kWh per month.

But that cut will likely lead to increased costs down the line.

Both Hubert and Kristi Sebalj, the registrar and senior legal counsel for the OEB, said they received many messages asking why Hydro One was upping its prices

The Fair Hydro Act introduces distribution rate protection. In the case of Hydro One, that protection applies to R2 and R1 customers.

Under the protection, the OEB sets a maximum monthly base distribution charge, which is says is a decrease for most eligible customers.

On June 22, the OEB set the maximum monthly base charge at $36.43, which will kick in on July 1 and will remain until changed by the OEB.

When it comes to Hydro One’s application, Sebalj said the OEB is still currently collecting customer input.