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ABOUT OUR RATE APPLICATION

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TRANSMISSION SYSTEM OVERVIEW
 

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What You Need to Know

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FREQUENTLY ASKED QUESTIONS

 

About Our 2019 Transmission Rate Application

Hydro One filed a one-year transmission rate filing with the Ontario Energy Board (OEB) on October 26, 2018. We are asking for a one-year inflationary adjustment to our transmission rates to deliver safe, reliable electricity at the lowest possible cost. This translates to a proposed increase of 23 cents a month, or 0.2 per cent on the total bill, for a typical residential customer with a medium density service type.


We are listening and we know that customers want us to keep electricity bills as low as possible. We know every dollar we spend comes at a cost to our customers and the people of Ontario, which is why we are focusing on the most critical investments to keep the system safe and the power on, while minimizing costs. 


If our application is approved by the OEB, this increase will be applied to the Delivery line on the bill. The Delivery line is made up of distribution and transmission charges as well as other costs to transfer electricity from generators to customers.


For more information about our 2019 transmission rate application, please click on the buttons below.
 

 



About Your Bill

On a typical customer’s monthly bill, a little more than a third is within Hydro One’s responsibility and control. The largest portion is passed through Hydro One to electricity generators.

 

Hydro One's Share of Electricity Costs

Typical Customer Bill Breakdown
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Graph Legend 2


* Based on current rates for a residential customer with a medium-density service type using 1,000 kilowatt hours per month.


 

Transmission System Overview

Our transmission and distribution system safely and reliably serves communities throughout Ontario. Transmission rates pay for the cost for Hydro One to operate and maintain the high-voltage system that carries electricity from generating stations to local electric utilities or large industrial customers, such as manufacturers and mines. Our transmission system serves approximately five million customers, directly or indirectly.

 

Our transmission system is controlled by the Ontario Grid Control Centre and other telecommunications facilities and includes:

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308 transmission stations

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715 transformers
 

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30,000 kilometres of high-voltage transmission lines

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52,000 Steel Towers

 

 

WHAT YOU NEED TO KNOW

 

Our transmission system is aging and needs investment.

Much of our system was built in the 1950s.

  • 25 per cent of our 715 transformers are at the end of their expected service life

  • More than 40 per cent of our transformers will be at the end of their expected service life in the next five years

  • More than 8,000 steel towers are over 80 years old.

 

The Delivery portion of the bill has remained relatively flat.

The Electricity line on your bill, which is for power generation, has increased substantially over the last decade. While Delivery, our portion of the bill, has remained relatively flat.
 

Chart: Historical Bill Comparison
 

Preventative maintenance makes sense and helps to keep electricity rates lower.

Replacing a failed transformer destroyed by fire costs $3 million more than a planned replacement.


 


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In 2017, we bought approximately $1.3 billion in goods and services in Ontario.


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We provide employment opportunities for thousands of highly skilled, highly technical workers in towns and cities across the province.

Hydro One has an important role in the economy.


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A 10-second outage at a paper mill can cost up to $1 million.


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One day of lost mining production costs tens of millions of dollars.


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The failure of a transmission station in Ottawa or Toronto can leave tens of thousands of customers and businesses without power for days.

Frequently Asked Questions

What do transmission rates pay for?

Transmission rates pay for the cost for Hydro One to operate and maintain the high-voltage system that carries electricity from generating stations to local electric utilities or large industrial customers, such as manufacturers and mines.

 

Why do you need to increase transmission rates?

Our transmission system is aging and needs investment. We know every dollar we spend comes at a cost to our customers and the people of Ontario, which is why we are focusing on the most critical investments to keep the system safe, the power on and costs as low as possible. Safe, reliable power is essential to a thriving economy. Our continued investment in the high-voltage electricity system will help to build a strong and prosperous Ontario.

What is the proposed increase for Hydro One’s customers?

Why is the bill impact less than inflation?

While we are asking for an inflationary adjustment to transmission rates, transmission is a portion of a customer’s total bill. This translates to an increase of 0.2 per cent for a customer using 750 kWh a month.

What charges are included in the Delivery line?

The Ontario Energy Board (OEB) sets delivery rates. Some of the delivery charges are "fixed" and do not change no matter how much electricity you use, while other charges vary depending on how much electricity you use.

Delivery charges include:

  • Distribution flat charge: A fixed charge for costs related to meter reading, billing, customer service and account maintenance, and for general utility operations.

  • Distribution volume charge: A variable charge for the cost of building and maintaining the distribution system, including overhead and underground power lines, poles and transformer stations.

  • Smart metering entity charge: A fixed charge that is collected on behalf of the IESO.

  • Transmission rates: A variable charge to pay the cost to operate and maintain the high voltage system that carries electricity from generating stations to local electric utilities or large industrial customers such, as manufacturers and mines.

  • Line loss adjustment: It is normal for a small amount of power to be lost as it travels over power lines to your home or business. In calculating your electricity costs for the billing period, Hydro One or your local electric utility multiplies your electricity cost by an adjustment factor that accounts for those losses. This adjustment factor is approved by the OEB.

Why does so much of the system need to be replaced?

The electricity system in the province expanded rapidly in the 1950s. Now, those assets are reaching the end of their expected service life and need to be replaced or refurbished.


 

More Information


For more information about our 2019 transmission rate application, please click on the buttons below.
 

 

Frequently Asked Questions

What do transmission rates pay for?

Transmission rates pays for the cost of Hydro One to operate and maintain the high voltage transmission system that carries electricity from generating stations to large end-use customers or to electricity distributors.

 

Why are you filing for inflation now if you are going to file another application next year?

Earlier this year, the OEB directed us to change our filing from a five to a four-year transmission rate application to align with our distribution filing which caused us to re-think our investment plan. We are filing this one-year application at the rate of inflation to allow our new Board of Directors the time to conduct a diligent review of our investment plan and submit an application that balances the critical need to invest in our aging transmission system against our desire to keep customers’ rates as low as possible.

Did you consult with customers before submitting the application?

When do you expect a decision?

The Ontario Energy Board has not provided us with a timeline for a decision.

When will your next rate application be submitted?

We expect to submit a three-year transmission rate application in 2019 for the years 2020-2022.

Why do you need to increase transmission rates?

Our transmission system is aging and needs investment. We know every dollar we spend comes at a cost to our customers and the people of Ontario, which is why we are focusing on the most critical investments to keep the system safe, the power on and costs as low as possible. Safe, reliable power is essential to a thriving economy. Our continued investment in the high-voltage electricity system will help to build a strong and prosperous Ontario.

Why does so much of the system need to be replaced?

The electricity system in the province expanded rapidly in the 1950s. Now, those assets are reaching the end of their expected service life and need to be replaced or refurbished.

  • 25 per cent of our 715 transformers are at the end of their expected service life

  • More than 40 per cent of our transformers will be at the end of their expected service life in the next five years

  • More than 8,000 steel towers are over 80 years old.

Where are transmission rates shown on the bill?

Transmission rates also known as retail transmission rates are a part of the Delivery line on the bill. These OEB-approved rates are variable and the amount you are billed will vary depending on how much electricity is used.

When will Hydro One customers see this increase on their bill?

Right now there is a lag between when transmission rates get approved and when they are billed under the Delivery line on customers’ bills. It is likely customers will not be billed new transmission rates until sometime in 2019.

What is the proposed increase for Hydro One’s customers?

If our application is approved as filed, customers will see the following bill impacts:

  • An average residential customer with a medium density using 750 kWh a month will see an increase of:

    • 0.2 per cent on the total bill

    • Approximately 24 cents per month on the total bill.

  • A general service energy billed customer using 2,000 kWh a month will see an increase of 0.1 per cent on the total bill.

  • The estimated average bill impact for a transmission-connected customer is 0.2 per cent.

What makes up the Delivery line on the bill?

Delivery covers the cost of delivering electricity from generating stations across the province to your home or business through high voltage (transmission) and low voltage (distribution) power lines. The Ontario Energy Board approves the Delivery rates that we bill our customers. The Delivery line on your bill is primarily made up of the following rates and charges:

  • Distribution flat charge ($ per month) – a fixed charge that pays for the costs of billing, meter reading, customer service and a portion of the costs of building and maintaining the facilities required to deliver electricity to your home or business, including providing 24-hour power restoration services.

  • Distribution volume charge (cents/kWh or $/kW) – a variable charge that is based on how much electricity that you use. This covers the remainder of the costs not included in the distribution flat charge, associated with building and maintaining distribution lines, poles, stations and transformers that deliver electricity to your home or business.

  • Transmission rates (also known as retail transmission rates – cents/kWh) – a variable charge that is based on how much electricity you use. This covers the costs of operating and maintaining the high voltage transmission system (transmission lines, towers and stations) that carries electricity from generating stations to electricity distributors or large end-use customers such as manufacturers and mines.

What makes up the Electricity line on the bill?

Most of Ontario’s residential and small business customers pay Time-of-Use or Tiered electricity prices that are set by the Ontario Energy Board. These prices reflect the cost of generating electricity. Hydro One delivers electricity but does not generate it.