Transcript SCO Overview

Stakeholder Consultation
Distribution Custom IR Rate
Application 2015-2019
Stakeholder Session #1
April 29, 2013
Agenda
1:00 p.m. Registration
1:15 p.m. Welcome
1:20 p.m. Introductions and Agenda
1:30 p.m. Plans for the Custom IR
1:50 p.m. Facilitated Discussion on Custom IR
2:35 p.m. BREAK
2:45 p.m. Overview of Customer Survey
3:05 p.m. Facilitated Discussion on Customer Survey
3:40 p.m. Overview of Rate Classification and
Facilitated Discussion
4:00 p.m. Overview of Seasonal Rate Initiative and
Facilitated Discussion
4:25 p.m. Closing Remarks/Next Steps
4:30 p.m. Adjourn
Allan Cowan, Director Major Applications,
Hydro One Networks
Bob Betts, Facilitator,
OPTIMUS|SBR
Allan Cowan, Director Major Applications,
Hydro One Networks
Bob Betts, Facilitator,
OPTIMUS|SBR
Laura Cooke, Vice President Corporate Relations
Hydro One Networks
Bob Betts, Facilitator,
OPTIMUS|SBR
Henry Andre, Manager Distribution Pricing
Hydro One Networks
Bob Betts, Facilitator,
OPTIMUS|SBR
Henry Andre, Manager Distribution Pricing
Hydro One Networks
Bob Betts, Facilitator,
OPTIMUS|SBR
Allan Cowan, Director Major Applications,
Hydro One Networks
2
Facilitator’s Remarks

Introductions Facilitator, Bob Betts & OPTIMUS |
SBR support team

Meeting Facilities

Safety Review

Note taking process

Participant Introductions
3
Meeting Process
 Mobile phones “Off” or “Silenced”
 Avoid side discussions while others speaking
 All questions are good ones
 All comments are appreciated
 All comments are appreciated
 Materials and notes will be posted on Hydro
One’s Regulatory Website:
www.HydroOne.com/RegulatoryAffairs
4
Distribution Custom IR
Applications
2015-2019
Overview
 Preliminary Timeline for our OEB Distribution and
Transmission applications over the 12 months
 Overview of Hydro One’s preliminary plans for the 20152019 Custom IR (CIR) evidence
 Solicit Stakeholder input on our approach and views
regarding the Chapter 5 guidelines recently issued by the
OEB
 Identify items for next Stakeholder session
2
Renewed Regulatory
Framework
Annual IR Index
 Existing rates adjusted by the Annual Adjustment
Mechanism (AAM)
 Suited to LDC’s in a status quo mode
4th Generation IRM
 COS for base year followed by 4 years under IRM with
rates adjusted by the AAM
 ICM available on application
Custom IR
 COS type of review for 5 test years
 Annual reporting requirements
 Detailed investment plan support required
3
Regulatory Filing Timetable
Application
2013
Q1 Q2
Q3
Q4
2014
Q1
Q2
1 Dx IRM (2014)
File
X
2 Dx 5 Yr CIR (2015-19)
File
X
3 Tx 2 Yr COS (2015-16)
File
X
4
CIR Under Chapter 5
 Plan to follow a similar evidence format as in previous COS
applications recognizing that significant more detail and 3rd
party input required per Chapter 5
 Continue to follow the SDO & Shared Services approach with
high level mapping to new OEB investment categories where
necessary
 Distribution System Plan (DSP) will provide 10 years of spend
detail (2010-2013 historical, 2014 bridge and 2015-2019
forecast) including comparisons to OEB approved levels
 DSP developed after consultation with regionally
interconnected distributors, Hydro One Transmission and the
OPA
5
CIR Under Chapter 5 (cont)
 DSP will show how investments benefit customers and is
supportive of their preferences (Customer Engagement
Activities) and contribute to reliability and other
performance measures
 Will identify methods and measures (metrics) which will
be used to monitor annual performance
 Regional Infrastructure Plans prepared by Hydro One
Transmission in support of the DSP will be filed when
available, Letter of Support otherwise
 Detailed Asset Management Process section will provide
support for investments planned & the prioritization of the
work in the DSP leveraging our Asset Analytics tool
6
CIR Under Chapter 5 (cont)
 Support for in-service placement of Smart Meters, Smart
Grid and CIS and closing of associated variance accounts
 Project by project in-service reporting of approved 2013
Distribution ICM projects
 Smart grid and Renewable Energy Generation
expenditures treated as a normal expenditures and will be
included in the DSP
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Custom IR Studies Required
Studies and analysis to be filed in support of the application
will include:
 Depreciation
 Lead-Lag
 Shared OM&A Allocation
 Shared Asset Allocation
 Overheads Capitalized
 Line Loss
 Seasonal Rates
 Rate Classification
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Areas for Future Stakeholder
Session Discussions
 Rate smoothing options to manage customer impacts over
the 5 year horizon
 Annual Adjustments
 Performance Metrics and Scorecard elements
 Study Updates
 Customer Preference Update
 Potential Off-ramps
9
Custom IR
Facilitated Discussion
10
Break
Customer Research
Daffyd Roderick
Director, Corporate Communications
April 29, 2013
Original 1999 Purpose Statement
for Customer Satisfaction Research Program
The purpose of the research is to provide Hydro One with an on-going data gathering, analysis and reporting
process that will significantly improve customer responsiveness and customer focused performance. The overall
objective is to obtain a deeper understanding of customer needs to facilitate building and managing strong
productive relationships with customers now and in the future. Specific objectives:
Desired Outcome:
Strong customer relationships
based on competitively superior
levels of operational excellence.
2
Survey Summary
Residential and Small
Business Impressions
Transactional Surveys
Business to Business
Impressions
Brand Research
• Residential and Small Business
• Cross-Canada benchmarking, including CEA Public Attitude
• Bi-annual (April/September)
• CCC, BCC, Complex, My Account, Provincial Lines connects/upgrades,
Forestry, Gen Dx connections
• Ongoing
• Large Tx, LDC, Gen Tx, LDA, Commercial Den Dx
• Annual
•Customer, key stakeholders
•Re-start 2013
•Post-event – retail events, fairs, community events
Event Surveys
3
Residential and Small Business
Our bi-annual residential and small business
survey asks customers about the following*:
1.
2.
3.
4.
5.
6.
Overall impressions of Hydro One
Call Centre
Billing
Reliability/Outages
Communication
Conservation and Demand Management
*phone interviews conducted by a third-party in April/September
4
Residential and Small Business
• Representative sampling of our rate classes
Total Completes
W1 2013
Total
Completes
W2 2013
Total
Completes
2013
Confidence Interval for
Total 2013
Residential Low
350
350
700
3.7
Residential Medium
350
350
700
3.7
Residential Urban
125
125
250
6.2
Residential Seasonal
150
150
300
5.7
Residential Agriculture
100
100
200
6.9
GS Demand
80
80
160
8.0
GS Non-Demand
50
50
100
10.0
1205
1205
2410
2.0
Sample Group
Total
Scope: Impressions of overall service delivery: Overall Impressions, Rates, Bill & eBills, Reliability,
Outage handling, Relationship, Access, Communications, Website, CDM
* +/- given number of percentage points at the 95% confidence level.
5
Key Issues Unsatisfied Customers want
to see Addressed
End User
(n=42)
LDA (n=54)
Cost effectiveness
39%
Reliability / line maintenance
30%
Efficiency / quality of service
9%
Responsiveness
7%
Communication / access
6%
10%
Restoration time / outage handling
4%
10%
Information
2%
Costs
19%
No issues
17%
Accessibility
2%
Responsiveness, follow-up
12%
Reliability/line maintenance/power
quality
Outage planning/outage
notifications
Communications/proactive phone
calls
Infrastructure/upgrade
31%
Load transfers
Other
7%
-12%
6
Residential and Small Business
 Hydro One has put a Customer Satisfaction
Leadership Team in place to look at the research
findings
 This cross-functional team puts actions against
some of the areas where Hydro One can improve
 Meet 2-3 times per year
7
Out of Research…
• Customer research has played a major role in
informing how we operate
– Development of industry leading Estimated Times
of Restoration
– Improved HydroOne.com
– Development of Outage App
– Forestry practices
– Some things we don’t do
8
Next Steps
 Renewed Regulatory Framework requires us
to seek more information to guide investment
 Factors could include Power Quality,
Reliability versus Price
 Seeking input from Stakeholders on
methodology and areas of focus for improving
research
9
Customer Survey
Facilitated Discussion
10
Rate Class Review
Hydro One Rate Class Review
 As part of the settlement in HONI’s 2013 Dx Rates
Application, we agreed to make best efforts to review the
rate classifications of our customers to ensure they are
within the appropriate current rate classifications.
 Rate Class review will ensure that:
o customers located in communities that have grown are
located in the appropriate rate class
o Clean-up current customer classifications to align with
approved rate class definitions
2
Leveraging GIS Tool
 The Geographic Information System (GIS) is a tool that
provides information about the physical location of our
assets and customers.
 HONI will undertake an analysis that leverages the power
of the GIS tool to identify density zones based on the
distribution of customers and km of line.
 The GIS tool will help to better understand the distribution
of our customer base by allowing the visualization and
analysis of the data in ways that have not been available in
the past.
3
Proposed Rate Class
Review Process
1. Identify customer clusters that meet approved Density Zone
definitions:

>3000 customers and >= 60 cust/line km (High density zone)

>100 customers and >= 15 cust/ line km (Medium density zone)

< 15 cust/ line km (Low density zone)
2. Use GIS layer information to identify Density Zone boundaries that
can be clearly communicated and implemented. GIS layers include:
i.
physical boundaries such as roads, railways, rivers, lakes
ii.
property fabric (e.g. lot and conc, land parcels)
3. Confirm the # of customers that shift between rate classes, which
will then be used to update our Load Forecast and Cost Allocation
Model inputs for the Customer IR pre-filed evidence
4. Define on-going process to maintain Density Zone boundaries up-todate
4
Rate Class Review
Facilitated Discussion
5
Consultation on Seasonal
Customer Rates
Seasonal Rates
Pre-Harmonization
 Seasonal customer rates have been in place since the
1970s
 A Seasonal customer is defined as any residential service
not meeting the residential year-round criteria. It includes
dwellings such as cottages, chalets and camps.
 A Seasonal rate class recognizes that average monthly
consumption for Seasonal customers (~500 kWh) is well
below that of full-time residential customers (~1000 kWh)
 Prior to harmonization of rates as part of HONI’s 2008
Rates Application, HONI had 2 Seasonal rate classes (R3
and R4)
2
Rates Harmonization
 As part of HONI’s 2008 Rates Application (EB-2007-0681),
the number of rate classes administered by HONI were
reduced from >300 to 12
 The harmonization process combined the two Seasonal
rate classes (R3 and R4) into a single Seasonal class
 The harmonization process adopted the lower R3 fixed
charge as the “target” for the harmonized class
o shifted revenue to be collected from fixed to variable charge
o Dx revenue requirement increases between 2008 and 2011 were
largely absorbed by higher variable charges
 The harmonization process was stakeholdered, approved
by the OEB, and implemented over the 2008-2011 period
3
Process for Addressing
Seasonal Customer Issues
1. Solicit written comments from broad representation of
Seasonal stakeholders on their key issues (June)
2. Provide written feedback from HONI on issues and options
for addressing issues (July)
3. Hold Seasonal stakeholder session to review options and
finalize proposals for addressing issues (early Sept)
4. Incorporate proposed solution into pre-filed evidence for
load forecast, cost allocation and rate design
4
Seasonal Rates
Facilitated Discussion
5
Thank you for attending!
Check our website for further information:
www.HydroOne.com/RegulatoryAffairs