CORPORATE CHARGES
Original : 2006-07-06
HQT-6, Document 6
Page 1 of 4
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Original : 2006-07-06
HQT-6, Document 6
Page 2 of 4
Hydro- Québec
TransÉnergie
Application R-3605-2006
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The corporate charges to be allocated or residual charges correspond to the costs of
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operation reserved by the corporate units for activities whose objective it is not to serve
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one or several business units in particular but rather Hydro-Quebec’s interest as a
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whole.
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They differ from the billed services supplied by the corporate units, since the latter are
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subject to a customer-supplier agreement.
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The allocation of corporate charges is carried out according to the method authorized by
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the Régie in decision D-2005-50, which is applied as follows:
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1st step
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Corporate charges are allocated to all of Hydro-Quebec’s units excluding the
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corporate units within the following parameters:
Component
Corporate charges
Human resources
Allocation
except As a function of charges for
operation and management and
net capital assets, in a 50% - 50%
proportion.
Corporate charges - Human As a function of base salaries
resources
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2nd step
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The allocation of corporate charges from service units to business units as a
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function of their consumption of products and services in internal billing.
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Table 1 hereafter shows the portion of residual corporate charges included in the
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Transmission Provider’s revenue requirement
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Original : 2006-07-06
HQT-6, Document 6
Page 3 of 4
Hydro- Québec
TransÉnergie
Application R-3605-2006
1
Table 1
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Corporate Charges
Fiscal year ending on December 31
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2005 historic year
2006 base year
2007 test year
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Column 1: PDG offices, PCA, People’s Protection; General Verification; Corporate Affairs and General
Secretariat; Finances; Human Resources
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The variations in the Transmission Provider’s corporate charges from 2005 to 2006
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mainly stem from an increase in the payroll, following an increase in the projected cost
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for the cost of retirement, which represents $6.6 M of the total $7.9 M differential for the
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company’s corporate charges. We note a variation in corporate charges for the
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Corporate Affairs and General Secretariat group. This group is subject to variations of its
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activity levels, depending on the requests and on the context.
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In the course of 2006, it is expected that the Finance group will decrease its corporate
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charges relative to its initial budget, mainly due to a refund in the insurance premium.
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This decrease is not recurrent in 2007. In general, we forecast an increase attributable to
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inflation for the business’ operation and management costs for 2007 compared with the
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2006 budget.
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For the 2005-2007 period, we note a level of stability in the ratio of the Transmission
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Provider’s corporate charges over Hydro-Quebec’s overall corporate charges.
Original : 2006-07-06
HQT-6, Document 6
Page 4 of 4