Cost allocation review : staff discussion paper

This report addressed the need for updated cost allocation studies filed by local electricity distribution companies because they ensure that distribution rates for each customer class remain just and reasonable. According to the 2001 Electricity Distribution Rate Handbook, the Ontario Energy Board requires new cost allocation studies before implementing any future incentive regulation plans. A review of cost allocations allows the Board to consider the need for adjustments to the current share of distribution costs paid by different classes of ratepayers. This report included 14 sections to facilitate consultations with stakeholders on financial information requirements for cost allocation; directly assignable costs; functionalization; categorization; allocation methods; allocation of other costs; load data requirements; cost allocation implementation issues; addition of new rate class and rate design for scattered unmetered loads; addition of new rate class for larger users; rates to charge embedded distributors; treatment of the rate sub-classification identified as time-of-use; and, rate design implementation issues. 1 fig., 7 appendices