MANAGER’S SUMMARY
Terrace Bay Superior Wires Inc.
RP-2005-0020
EB-2005-0418
IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15,
Schedule B of the Energy Competition Act, 1998:
AND IN THE MATTER OF an Application by Terrace Bay Superior Wires Inc. for
2006 electricity distribution rates, effective May 1, 2006, in accordance with the
Electricity Distribution Rate Handbook issued May 11, 2005 by the Ontario
Energy Board.
1.
Introduction
1.1
Terrace Bay Superior Wires Inc. (the “Company”) is a licensed
electricity distribution business operating in the Township of
Terrace Bay, under Licence # ED-2002-0543 with no special
conditions in its’ licence.
1.2
The Company submits this Application which includes the 2006
Electricity Distribution Rates (EDR) Model, the Regulatory Assets
Worksheet, the PILs / Corporate Tax Filing and the required
documentation/schedules for the calculation of just and reasonable
distribution rates effective May 1, 2006 in accordance with the
Filing Guidelines issued by the Ontario Energy Board (“Board”) and
dated May 11, 2005.
1.3
Terrace Bay Superior Wires Inc. will prorate customer
consumptions, with pre-May 1, 2006 consumption at the old rates
and post-May 1, 2006 consumption at the new rates.
2.
Electricity Distribution Rates (EDR) Model
The following information summarizes the output of the EDR Model.
Only sheets with information inputs are identified.
2.1
Tab 1.1
General Input
As per the instructions issued by the Board, general
information related to the application has been
entered.
2.2
Tab 2.1
Trial Balance Data
As per the instructions issued by the Board, trial
balance account data for the years 2002, 2003 and
2004, consistent with the audited books of account
have been entered.
2.3
Tab ADJ. 1 Rate Base - Tier 1
Terrace Bay Superior Wires does not have any Tier 1
adjustments to the Rate Base.
Tab ADJ. 1a Rate Base – Tier 1 - Sheet 2
Terrace Bay Superior Wires does not have any Tier 1
adjustments that are related to the Rate Base.
2.4
Tab ADJ 2
Rate Base – Tier 2
Terrace Bay Superior Wires does not have Tier 2
adjustments to the Rate Base.
2.5
Tab ADJ 3
Distribution Expense – Tier 1.
As per the instructions issued by the Board, the
required Tier 1 adjustments in 2005 for distribution
expenses, have been identified in item 1, “Annual
Dues and Other Regulatory Costs” as follows:
OEB Regulatory Expenses
OEB License Fee
Electrical Safety Authority Annual Fee
Electrical Safety Inspection (Est.)
Total
$3,084
800
1,540
4,000
$9,424
This resulted in a net adjustment to distribution
expenses of $8,090.
Tab ADJ 3a Distribution Expense – Tier 1- Sheet 2
The Company does not have non-routine or unusual
adjustments to distribution expenses.
Tab ADJ 3b Tier 1 Amortization – Sheet 3
The Company does not have adjustments to
amortization related to Tier 1 adjustments to the Rate
Base.
2.6
Tab ADJ 4
Distribution Expense – Tier 2
Terrace Bay Superior Wires does not have any Tier 2
distribution expense adjustments that are related to
the Rate Base.
2.7
Tab ADJ 5
Specific Distribution Expense
As per the instructions issued by the Board, the
Company has identified the following:
Third Party Insurance company name and
premiums paid, for 2002, 2003 and 2004.
Bad Debt expenses have been broken down
by customer class for the years 2002, 2003
and 2004.
The total of OMERS pension premium and
adjustments have been entered for the years
2002, 2003 and 2004.
2.8
Tab ADJ 6
Revenue – Tier 1
Terrace Bay Superior Wires does not have Tier 1
adjustments to Revenue.
2.9
Tab 2-4
Adjusted Accounting Data
As per the instructions issued by the Board, the
following adjustments, to remove the Standard Supply
Service Administration Charge recorded in a/c 4080b
and add in a/c 4090 and to remove Pole Rental
Revenue recorded in a/c 4210 and add tin a/c 4230,
have been made to the accounting data:
a/c 4080
a/c 4090
a/c 4210
a/c 4230
2.10
Tab 2-6
$2,852 DR
($2,852) CR
$3,724 DR
($3,724) CR
Other – Employee Compensation
As per the instructions issued by the Board, the
Employee total compensation has been entered.
2.11
Tab 3-2
Cost of Capital
As per the instructions issued by the Board, the
company’s proposed Return On Equity (ROE) is 9%.
2.12
Tab 3-3
Capital Structure
As per the instructions issued by the Board, the
company’s capital structure shows total debt of
$844,107 and a total equity of $750,000 (53% Debt
and 47% Equity).
2.13
Tab 3-4
Weighted Debt Cost
As per the instructions issued by the Board, the Long
Term Debt of $844,107 to the Township of Terrace
Bay has been identified.
2.14
Tab 4-2
Output from PILS Model
As per the instructions issued by the Board, the PILS
Tax worksheet has been completed with an amount
calculated by the Tax Model of $ 0.00. This output
amount has been entered.
2.15
Tab 5-2
Specific Service Charges
The Company has indicated that the Standard
amounts for Specific Service Charges will apply and,
as per the instructions issued by the Board, the
required data to determine revenues for specific
service charges has been entered. The total Revenue
Offset calculated is $11,639.40.
2.16
Tab 5-3
Other Regulated Charges
As per the instructions issued by the Board, the RPP
Administration Charge Revenue of $2851.55 has
been entered.
2.17
Tab 5-4
CDM
The Company does not have an input to CDM,
attributable to specific classes.
2.18
Tab 6-1
Customer Classes
As per the instructions issued by the Board, the
Company’s customer classes have been identified
and will include the Unmetered and Scattered Load
Class.
2.19
Tab 6-2
Demand, Rates
As per the instructions issued by the Board, the
required inputs for customer numbers and load data
for 2002, 2003 and 2004 and the applicable rates for
2004 and 2005 have been entered.
2.20
Tab 6-3
Transformer Ownership
As per the instructions issued by the Board, the
required data for customer owned transformers has
been entered.
2.21
Tab 7-3
Allocation CDM
The Company does not have an input directly
allocated on this sheet attributed to CDM.
2.22
Tab 8-4
Rate Riders – Regulatory Assets
As per the instructions issued by the Board, the rate
riders from the regulatory assets worksheet have
been entered, under the minimum review process,
following the completion of the Regulatory Asset
model.
NOTE: Terrace Bay Superior Wires Inc. and its’ Board
of Directors strongly oppose the OEB’s requirement
that an electric distribution utility must choose
between loosing transition costs, over $60.00 per
customer ($18,473), by choosing a minimum review,
or alternatively, in choosing the comprehensive
review and incur additional Board-assessed
intervenor costs that this utility cannot afford. In its
attempt to recover all its fairly and reasonably
incurred transition costs, they would have to incur
these costs and risk losing the $18,473. This is
grossly unjust and unfair to the utility, its’
shareholders and ultimately the end use customers.
2.23
Tab 8-5
Distribution Rates
The analysis on Sheet 9-1ALT shows that bill impacts
by class will be as follows:
Low
High
Residential
<50kW
>50kW
1.78%
2.78%
2.75%
5.78%
4.59%
4.78%
Based on the identified range of impacts, Terrace Bay
Superior Wires Inc. does not intend to override the
calculated rates to mitigate costs.
2.24
Tab 8-6
Retail Transmission Rates
As per the instructions issued by the Board, the retail
transmission rates have been entered. The Company
does not intend to revise its RTS rates at this time.
2.25
Tab 8-7
Other Charges, Commodity
As per the instructions issued by the Board, the
wholesale market service rates, the debt reduction
charge, cost of power rates and new loss adjustment
factors have been entered.
2.26
Tab 9-1
Bill Impacts
The following was taken from Sheet “9-1ALT BILL
IMPACTS”
Rate Class
Consumption
Increase
Residential
1000 kWh
$ Amount
5.40
Percent
5.16%
General Service <50 kW
2000 kWh
7.44
3.59%
General Service > 50 kW
100 kW
40000 kWh
97.81
2.75%
In comparing our current rates effective April 1, 2005
and the new rates effective May 1, 2006 shows that in
all classes, fixed and variable rates will reduce yet the
bill impact calculations all show that the 2006 bills will
increase.
Signed this 3rd day of October 2005 at Terrace Bay by:
Original signed by:
______________________
Mariette Mifflin
General Manager and Secretary Treasurer
Terrace Bay Superior Wires Inc.