As announced in early January, PUC Distribution is in the process of filing its Cost of Service application with the Ontario Energy Board (OEB). The Cost of Service application occurs every five years and determines what each electric utility can charge for its distribution rate.
PUC officially filed its application with the OEB on March 29th, 2018.
How this process works is PUC puts together the data based on what their costs are, the trends over the last five years in terms of what it costs to provide these services. They then submit the 1500 page document which outlines what the PUC needs, what needs to be replaced, and what their long-term capital replacement plan is, called a Distribution Services Plan (DSP).
It lays out the criteria, to the letter, of what the PUC wants to do with increases.
Following that, a town hall will take place so that people can provide feedback, and then the business case will goes to hearing. Interveners will come in on behalf of the public to challenge the evidence to make sure it is legitimate and well-calculated.
A decision will then be made by the OEB as to what rates the PUC can charge.
In terms of the town hall, the PUC encourages customers to come in an effort to keep customers informed and involved in the progress of its Cost of Service application. The Community Meeting is scheduled for June 19th, 2018, at the Royal Canadian Legion. The meeting will run from 6:30PM to 8:30PM. During the meeting, the OEB will deliver a presentation outlining the rate-setting process, and the role they play in it.
After which, PUC will provide customers with a presentation outlining its Cost of Service application and its impact on customers. The evening will conclude with a question and answer period, where customers will have the opportunity to ask both OEB and PUC representatives questions on the process and the proposed rate increase.
How This Affects You
In this application, PUC is applying to the OEB for approval to increase its distribution rate by $6.98 per month resulting in a net increase of $1.94 per month for the average provincial customer consuming 750 kWh per month. The difference between the OEB advertised distribution rate increase of $6.98 and the $1.94 total bill increase is due to a combination of regulatory changes, and a number of benefits specific to Sault Ste. Marie.
For an average PUC customer of 910 kWh, the distribution rate change will result in a $0.62 per month increase. “The reason our customers won’t see the full amount is primarily due to the number of solar farms connected to our system, resulting in a credit to a customers’ account which reduces the overall bill impact. In fact, one-third of PUC Residential customers will actually see a decrease in their monthly bill,” says, Andrew Belsito, PUC Rates and Regulatory Affairs Officer.
“As you can see in the chart, the average PUC residential customer using 910 kWhs will see a $0.62 increase if the application is approved,” says, Belsito. “If customers would like to know how this proposed increase could impact their bill, they can call Customer Care at 705-759-6522 and our staff can give them their total projected bill impact, with the credits applied.”
Calling that number if you have questions is integral to understanding your PUC bill, because the staff will be able to go through with you, on an individual basis, exactly what the impact will be.
Brewer stated, “It will be a far cry from $6.98 a month,” and this is primarily due to the solar farms we have in our region.
|Residential Customer (monthly usage)||Total Bill (Electric)||Distribution Increase||Total Bill Increase /Decrease||Total Bill Impact %|
* PUC average monthly consumption for a residential customer (2 year running average)
“We completely understand the concerns customers have over the price of electricity, and we take them seriously. This is why we work hard to control our portion of the bill and keep our costs as low as possible,” says Giordan Zin, PUC Supervisor of Community Engagement. “However it’s critical that we ensure responsible investments are made to maintain and upgrade our community’s electrical distribution assets.”
“Customers looking for more information on the PUC’s Cost of Service Application process, and the proposed rate increase, are encouraged to come to the OEB’s Community Meeting scheduled for June 19th, at the Royal Canadian Legion,” says Rob Brewer, PUC President and CEO. “We want to help our customers stay informed, and we feel the best way to do that is with an open dialogue about the state of our utility and our plans for the future.”
Brewer told SaultOnline, “We do all we can to keep our rates as low as we possibly can. But we do have significantly aging infrastructure, like a lot of municipalities, that is now coming to age, so we’ve seen a huge spike in terms of the capital needed to maintain reliable power.”
He continued, “We understand that affordability is a big issue in town, but we think 62 cent increase a month, which is the net ask – is a pretty reasonable request given what it is that we provide.”
The increases will go towards covering the cost of replacing the sub station in 2019, which costs almost $4 million dollars, as well as maintaining it.
PUC’s rates fall in 3rd and 4th lowest in all of Ontario in 2016 and 2017 out of 81 distributors. 25% of each PUC bill is kept by the company in order to complete multi-million dollar projects.
PUC’s one-year average spend is between $5 million and $6 million dollars, so adding $4 million dollars is significant and this 0.5% of an increase per household per month is how they intend to accommodate it.