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banner: Hydro One 2018-2022 Distribution Rate Application

A Message to Our Customers


As you may have heard, Hydro One recently filed our distribution rate application with the Ontario Energy Board on March 31, 2017. Because our application process is happening around the same time as the Fair Hydro Plan, people understandably have questions about electricity rates. I want to help by providing you with clarity around these questions.

Earlier this year we advocated to government on behalf of our customers to reduce rates and make electricity more affordable. That's because you told us that the delivery portion of your bill was too high, especially in comparison to those living in more urban settings. Relief has now been established with the introduction of the Fair Hydro Plan. Once this plan has been fully implemented, the majority of our customers will see an average reduction of 31 per cent on their monthly bills, which represents an annual savings of about $600.  For some of our rural customers, their bills will go down even more.

Our most recent distribution rate application outlines our need for additional funding. Although additional costs are required to keep our system reliable, our rate application does not change the savings that customers will see under the Fair Hydro Plan. Here are some important points to keep in mind:
 
Who and where do we serve?

Hydro One is Ontario's largest electricity transmission and distribution provider. We supply local electricity service providers around the province as well as 1.3 million residential and business customers in suburban, rural, northern, remote, First Nations and Métis communities. We proudly serve customers across 640,000 square kilometres, using 30,000 kilometres of high-voltage transmission lines, 123,000 kilometres of local power lines and 1.6 million poles – that means we have more poles than customers. That's why it costs more to serve our customers than other utilities in the province.
 
Why do distribution rates need to increase?

We are in the energy delivery business, hence the delivery line on your bill is the only portion of your bill that Hydro One directly controls. We use the delivery charge to cover much of the infrastructure and services you experience on a daily basis, including lines, poles, stations, storm response, customer service and overall system maintenance.

To achieve this, our focus will be to provide safe, reliable power while at the same time keeping our costs as low as possible to ensure rates remain affordable. To that end, Hydro One has developed a five-year investment plan, which includes the following:

  • Replace more than 72,000 poles over five years ($579M)
  • Refurbish 15 transformer stations on average every year ($148M)
  • Maintain almost 13,000 km of forestry rights-of-way per year ($150M)
  • Work more efficiently – this plan includes built-in productivity savings of $380 million over five years.

Our customers continue to tell us they want us to maintain the system as it is today. We agree. Without this infrastructure being properly maintained and upgraded, we may not be able to deliver the same level of service and meet important commitments to our customers.

Staying in Touch

This site has been designed to help you stay informed through accurate and timely updates about this very important subject. There are a lot of conversations happening about our rate application and we would encourage you to stay informed and engage with our team at the Ontario Energy Board's community meetings.

In addition, we’re committed to listening and responding to our customers. As such, I encourage you to send us your feedback and questions to CustomerCommunications@HydroOne.com or on facebook.com/hydrooneofficial, twitter.com/hydroone and instagram.com/hometownhydroone.

We look forward to continuing to serve you.

Sincerely,

Ferio Pugliese
Executive Vice President, Customer Care & Corporate Affairs

 

Overview of our Application


View the presentation below to find out more about our application and how it may impact you. We've also taken the opportunity to highlight some of the benefits of the Fair Hydro Plan.

thumbnail image: Hydro One 2018-2022 Distribution Rate Application
Click here to download the presentation (.PDF - aussi disponible en français)
 

  

Frequently Asked Questions

     

What is a distribution rate?

The distribution rate appears on your bill as they “Delivery” line and is the only part of the bill Hydro One actually keeps. We use it to cover all the equipment that brings power into your home: lines, forestry, stations, customer service, storm response and maintaining the system.
 

Why are you asking for a distribution rate increase?

Over the last year, we have spoken extensively with our customers and their message was clear: keep costs low and maintain reliable service and capacity.

The challenge we face is that Ontario’s power equipment is aging. In fact, some of our poles have been around for 80 years and approximately 400,000 poles have either reached their expected service life, or will within the next five years.

As Ontario grows, our equipment needs to keep up. We need to invest in the electricity system now to continue providing safe and reliable power in Ontario.

Hydro One filed our distribution rate application with our regulator, the Ontario Energy Board (OEB) on March 31, 2017. It will go through a rigorous review process, which includes public feedback.
 

How will this increase affect my bill? What about the Fair Hydro Plan?

Because of the Fair Hydro Plan, our customers are still going to save a significant amount on their bills. In fact, the majority of Hydro One customers will see a reduction of approximately 31% on their bills by the end of 2017, which means a savings of about $600 a year. For some of our rural customers, the savings will be even higher. This distribution rate application will not change that.

You’re likely familiar with the $2.79 figure from the notice about our application. The typical medium density residential customer – and the majority of our customers – will not see that $2.79 on their bills because of the relief measures for rural customers in the Fair Hydro Plan.

What customers will see, if our application is approved, is a transmission charge of $1.95.

For example, a typical medium density residential customer who was paying $177 per month as of January 1, 2017 will end up paying $124 per month by January 1, 2018, if our application is approved.
 

What is Hydro One going to use this extra money for?

Our application outlines Hydro One’s plans over the next five years, including:

  • Replacing more than 72,000 poles
  • Refurbishing 15 transformer stations on average every year
  • Maintaining almost 13,000 km of forestry rights-of-way
  • Built in productivity savings of $380 million.

But we also owe it to our customers to ensure we are investing strategically. That’s why we will also improve our own efficiency and ensure our spending focuses on the poles, lines and stations that need it most.
 

What could happen if the increase is not approved?

There are several parts of our system (including lines, poles and transformer stations) that are aging and will soon reach the end of their life. In order to continue to provide Ontarians with safe and reliable power, we need to maintain – and at times, replace – key pieces of equipment.
 

Are there any opportunities for me to have a say in the process?

The Ontario Energy Board held several community meetings in June and July at various locations that were open for the public to attend to discuss and review our current rate application.



  

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