Transcript Stakeholder Conference on Development of a Renewed

October 31, 2012 Webcast
Renewed Regulatory Framework for Electricity
Distributors - Q&A
The audio portion of the meeting will be delivered via phone. To
access the conference line call:
Toll: +1 (416) 406-1280
or
Toll free: +1 (866) 832-4446
Access number: 2812741
During the webcast, please submit questions by clicking on
the ‘Chat’ icon at the top of your screen.
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Renewed Regulatory Framework
for Electricity Distributors
Implementation of the Board’s Policies
October 31, 2012 Webcast
Overview of Webcast
•
Purpose of today’s session:
– To give stakeholders an opportunity to ask Board staff clarifying questions so as to help
better inform understanding of the new framework and participation in the consultations
scheduled throughout the fall and winter.
•
Agenda:
– For each topic, staff will briefly discuss planned consultations and respond to your
questions:
1.
2.
3.
4.
5.
•
Performance Measurement & Continuous Improvement;
Distribution Network Investment Planning;
Regional Infrastructure Planning;
Development of the Smart Grid; and
Electricity Distribution Rate Setting.
All materials related to these consultations, including working groups, will be
posted on the Board’s web site at www.ontarioenergyboard.ca as they
become available.
Please submit your questions at any time during the presentation by clicking on
the ‘Chat’ icon at the top of your screen.
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Summary of all planned consultation activities
Infrastructure investment planning
Target
Distribution
Investment
Smart Grid
The outcome based framework
Regional
Performance
Benchmarking & Rate
Adjustment Indices
Electricity
distribution ratesetting
2012
October
Working groups (WG) established
Working group (WG) established
Web-cast on Report & next steps
November
December
Staff proposal
issued
Working group meetings
Data issued
Staff proposal issued Consultant paper issued
WG meetings
WG Reports issued
Stakeholder meeting
WG meetings
2013
January
Supplementary
report issued
WG meetings
Data validation due
Staff proposal issued
WG meetings
February
WG meetings
Proposed TSC/DSC
amendments issued
WG meetings
Consolidated capital planning filing requirements issued
March
April
Staff Report issued
TSC/DSC amended
Consultant report issued
Stakeholder meeting
Stakeholder
conference
May
Written comments due
June
Supplemental Report of the Board & Consultant final report issued
(incl. rate adjustment indices & filing guidelines)
July
Proposed RRR amendments issued
Stretch factors
assigned
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Performance Measurement &
Continuous Improvement
Implementation of the Board’s Policies
October 31, 2012 Webcast
Performance - Planned consultation activities
•
Guided by the Board’s principles for performance measurement (p. 59 in Report)
•
Proposals will provide a springboard for discussions and focus the work on the
matters to be addressed (pp. 63-65 in Report):
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–
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assessing performance outcomes;
effective planning & implementation;
regulatory reporting (including scorecard); and
benchmarking (including total cost benchmarking, inflation, and productivity).
•
A broad stakeholder meeting will be held to inform and generate ideas prior to
convening the working group.
•
Working group analysis will detail issues and review and evaluate proposals.
•
The group’s work will be documented and will form part of a Staff Report.
•
Broad stakeholder consultation events followed by written comments will inform the
Board’s determinations.
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Performance - Future consultation
• Existing regulatory mechanisms will be maintained/refined.
• Additional regulatory mechanisms may be necessary, and
further consultation planned in due course on:
– the establishment of an “efficiency carry-over” mechanism;
– development of incentives to:
• reward superior performance;
• encourage innovation;
• encourage asset optimization; and
– potential consequences for inferior performance.
• The development of these regulatory mechanisms will be
aligned with the standards and measures referred to above.
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Performance – summary of planned consultation activities
The outcome based framework
Target
Benchmarking & Rate
Adjustment Indices
Performance
Electricity distribution
rate-setting
2012
October
Working group established
November
Data issued
Staff proposal issued
December
Consultant paper issued
Stakeholder meeting
Working group meetings
2013
January
Working group meetings
February
March
April
Data validation due
Working group meetings
Staff Report issued
Consultant report issued
Stakeholder meeting
Stakeholder conference
May
Written comments due
June
Supplemental Report of the Board & Consultant final report issued
(incl. rate adjustment indices & filing guidelines)
July
Proposed RRR amendments issued
Stretch factors assigned
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Distribution Network Investment
Planning
Implementation of the Board’s Policies
October 31, 2012 Webcast
Distribution network investment planning – implementation
tasks
• Implementing the Board’s conclusions on matters
related to distribution network investment planning
requires identifying and developing:
– the types and characteristics of distributor planning
information needed to reflect an integrated, longer term
planning approach;
– the planning-related information on asset management and
investment planning practices that best enables robust
regulatory assessment; and
– the qualitative and quantitative information that best
supports and justifies investment proposals in order to
facilitate the Board’s assessment.
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Distribution network investment planning – working group
scope of work
• advise staff on
– consolidating information on ‘capital expenditures’
– enhancing and standardizing distributor asset
management information
– identifying and specifying appropriate investment
planning information, including on how investments
proposed for cost recovery have been optimized,
prioritized and paced
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Distribution network investment planning – implementation
goals
• advice to staff will inform the next revision of the
Board’s filing requirements:
– consolidated and harmonized Filing Requirements on
capital expenditures currently provided in:
• Filing Requirements for Transmission and Distribution
Applications (ie. Chapter 2); and
• Filing Requirements: Distribution System Plans – Filing under
Deemed Conditions of Licence (ie. GEA/smart grid plans).
– enhanced Filing Requirements (with guidance) on
information related to asset management, capital
plans and investment planning
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Distribution network investment planning - Working Group
Timeline
2012
November
Staff proposal for working group discussion
information and guidance:
asset management; consolidated capital plans
December
working group meetings
2013
January
Staff proposal for working group discussion
information and guidance:
integrated planning; tools and methods
working group meetings
February
working group meeting
Filing requirements and guidance issued
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Regional Infrastructure Planning
Implementation of the Board’s Policies
October 31, 2012 Webcast
Regional Infrastructure Planning - Working Group Process
• Two working groups will be convened. . .
1. More structured regional infrastructure planning process
 Board expects working group report to reflect:
• More structured approach requires assigning lead responsibility
– Merit in appropriate transmitter taking lead and working with OPA to
identify where CDM / DG options represent potential solutions
• Predetermined regions based on electrical system boundaries to
form foundation for process and so LDCs understand resident
regions
– Board suggests IESO zones as starting point
• Protocols for sharing information among relevant parties
• LDCs expected to participate in process
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Regional Infrastructure Planning - Working Group Process
1. More structured regional planning process (cont’d)
 Key elements to be addressed in working group report:
• Information LDCs should be required to provide to transmitter and
frequency information updated;
• Appropriate evaluative criteria to compare potential solutions;
• Circumstances under which OPA should participate;
• Form of broader consultation before regional plan finalized;
• Appropriate regional boundaries and criteria to establish them;
and
• Other key elements working group believes should be addressed
to facilitate move to more structured process
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Regional Infrastructure Planning - Working Group Process
2. Appropriate redefinition of Line Connection assets
 Working group expected to:
• Develop criteria for Line Connection asset redefinition purposes
• Identify assets that meet proposed criteria
 Working group input must take into account:
• Function asset performs
• Reflect beneficiary pays principle
• Consider frequency Line Connections reviewed to ascertain function(s)
providing for future transmission rate proceedings
 Once working group completed, Board to propose amendments
integrating new treatment of applicable Line Connections
 Changes apply on go forward basis (only future upgrades after
amendment into force)
• Avoids retroactive changes in cost allocation / rates
• Only future upgrades potential to affect regional plan execution
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Regional Infrastructure Planning - Board Process
• Changes effected through code amendment process
• Opportunity for broad stakeholder input
• Proposed code amendments informed by working group
reports to Board
• All proposed code amendments in one notice with same
implementation date given interconnected nature of cost
responsibility changes
– Redefinition of Line Connection assets
– TSC cost responsibility rule changes (i.e., Otherwise Planned and
Refund Issue)
• Code amendment process may also address some regional
planning process matters that have been identified by the
working group
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Regional Infrastructure Planning - Timelines
2012
November/
December
Working Group meetings & reports
2013
February
April
June/July
Proposed Code amendments issued
Final Code amendments issued
Board expects Code amendments come into force
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Development of the Smart Grid
Implementation of the Board’s Policies
October 31, 2012 Webcast
Development of the Smart Grid
• Board has determined:
– For rate-setting, no distinction between “smart
grid” and more traditional investments; and
– Behind-the-meter services are a non-utility
activity.
• All other issues to be addressed in a
Supplementary Report
• Smart Grid Working Group to reconvene to
develop appropriate regulatory documents
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Smart Grid Working Group
• Smart Grid Working Group to be
reconvened for meetings in November
• SGWG previously met six times in the
Spring of 2011
– 26 members representing:
•
•
•
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Distributors;
Vendors;
Consumer groups; and
Agencies.
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Smart Grid Working Group
• SGWG will be asked to advise on:
– Staff proposals on content for regulatory
documents e.g.;
• recognition of benefits
• Interoperability
– How best to address cyber-security and privacy;
and
– How best to facilitate consumer access to meter
data.
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Development of the Smart Grid - Timelines
2012
November
Working Group Meetings
2013
January
Supplementary Report of the Board
February
Smart Grid requirements integrated into Filing
Requirements developed in Distribution Network
Investment Planning process
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Electricity Distribution Rate
Setting
Elements of Three Methods
October 31, 2012 Webcast
Electricity Distribution Rate Setting - Planned consultation
activities
• Board led Stakeholder Conference followed by written
submissions
– Issues related to the inflation and productivity adjustment
mechanisms have been explored in several different
consultations over the last ten years.
– The Board has benefited from those consultations and has
gained significant experience applying the results of those
consultations.
• To inform the conference, new inflation, productivity and
stretch factors, will be developed in consultation with
stakeholders as part of the performance, benchmarking and
rate adjustment indices work described previously.
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