On May 13, 2009, the Ontario Energy Board (OEB) issued its approval (Decision) on our 2009 Distribution Rate Application. The new delivery rates are implemented as of June 1, 2009. The OEB has approved an effective date of May 1, 2009 for our 2009 Delivery rates. To account for the one month delay in implementing delivery rates, a retroactive charge will be applied to rates from June 1, 2009 to April 30, 2010.

You will see the new delivery rates on your first bill issued on or after June 18, 2009.

Why are Delivery rates increasing?
We have followed the OEB’s guidelines and rates are increasing to account for inflation less an adjustment for utilities to find efficiencies in their operations. Rates were also increased by the OEB to reflect the growth in our distribution system.

Additional funding is also required for smart meter installations and infrastructure costs. As directed by the OEB, customers have been paying $0.93 a month on their bill towards the Province’s smart meter program. Customers will now pay $1.65 a month. This charge has been added to the Distribution Service Charge, included in the Delivery line on the bill.

Are there any other changes to my bill?
The following changes are directed by the OEB:

• The Rural or Remote Rate Protection Charge, which is included in the line item Regulatory Charges, is increasing from 0.1 cents per kWh to 0.13 cents per kWh. This increase is needed to partly offset the higher costs of providing electricity to customers who live in rural and remote areas.
• Retail Transmission Rates are also increasing to account for the higher cost to transmit electricity. These rates are included in the Delivery line on the bill.

How much will my bill increase?
The affect on your bill will vary depending on your service type and the amount of electricity you use. The increase is higher for seasonal high density customers and customers who have community-specific rates (also see "Rate Harmonization"). For more details, see the impact table below, or download our bill inserts (PDF):

• Residential, Farm & General Service customers
• Seasonal High Density customers
• Acquired customers with community-specific rates.

Average % Increase for Most Customers

Some farm and general service customers will see a delivery rate decrease. For more details, see the impact table below or read our bill insert (PDF).

Average $ Decrease for Some Seasonal, General Service and Farm Customers

To see your new delivery rates, visit the "Rates & Pricing" section under your specific Customer class. For more information, read the OEB's bill impact table on 2009 Distribution Rates (PDF).

Our rate applications undergo rigorous regulatory approval before the OEB sets new delivery rates. Learn more about the regulatory process from the OEB's website.

Rate Harmonization
In order for delivery rates to be fair, they must be applied consistently across our customer base and reflect the true cost of delivering electricity to homes and businesses. For this reason, we are harmonizing or consolidating rates for customers with community-specific rates so that all customers pay the same rates for the same service, regardless of where they live.

To see if you are affected by our harmonization plan, you will need to check if you have community-specific rates. If you have a community name listed beside “Your service type” on page 2 of your bill you are affected.

We are phasing in the consolidation, or harmonization, of rates over four years to minimize the impact on customer bills. We have already phased in the first step of the harmonization plan and are now increasing your rates for the second step of the plan. When this harmonization is completed your delivery rates will be on par with other communities served by Hydro One. The increase for an average customer with community-specific rates will be no more than 10% on the total bill for 2009 rates. See impact tables by community for Residential and General Service (Energy-billed, Demand-billed and Unmetered) accounts.

New Customer Rate Classes
To simplify our rate structure, we are reducing the number of rate classes from 284 to 12, over a period of four years.

The Seasonal High Density and Seasonal Normal Density rate classes will be combined into one Seasonal rate class over a period of four years.

By 2011, the rate classes will be as follows:

1. Urban Residential (High Density)
2. Residential (Medium Density)
3. Residential (Low Density)
4. Seasonal
5. Urban General Service Energy Billed
6. Urban General Service Demand Billed
7. General Service Energy Billed
8. General Service Demand Billed
9. Streetlighting
10. Sentinel Lights
11. Sub-Transmission
12. Distributed Generation.

New Adjustment Factors
Most residential customers with community-specific rates will see their Adjustment Factor increase from 1.078 to 1.085. Some customers from the 11 communities below may see their Adjustment Factor remain at 1.078.

1. Arnprior
2. Brockville
3. Caledon
4. Carleton Place
5. Owen Sound
6. Lindsay
7. Perth
8. Quinte West
9. Smith Falls
10. Thorold
11. Stouffville

The Adjustment Factor accounts for line losses in the electricity system that are not measured by your meter. It is used to calculate your charges under the Electricity line on your bill and some of the charges in Delivery and Regulatory Charges. You can find your adjustment factor under Your electricity charges on your bill. For more information on the Adjustment Factor, please call us at 1-866-543-8031 or read our Frequently Asked Questions.

 
Frequently Asked Questions - Adjustment Factor

What is an adjustment factor?
The adjustment factor accounts for line losses in the electricity system that are not measured by your meter. It is approved by the OEB and is used to calculate the Electricity line on your bill and some of the charges under Delivery and Regulatory Charges.

What are line losses?
When electricity is transmitted over distances and passes through lines and transformers, a small percentage is lost naturally. Line losses are an unavoidable part of delivering electricity. Therefore, we must purchase a small amount more than what you use. To determine the amount of electricity that we need to buy for you, we use a calculation called an adjustment factor to adjust your usage.

Why is my adjustment factor changing?
We have followed the OEB’s guidelines and have changed the adjustments factor for some of our rate classes.

My adjustment factor is increasing. What does that mean to my bill?
A higher adjustment factor will slightly increase the amount you are charged for Electricity, Delivery and Regulatory Charges on your bill.

Where is the adjustment factor found on my bill?
You can find your adjustment factor under Your electricity charges on page 2 of your bill.

When will my adjustment factor change?
Most residential customers with community-specific rates will see their adjustment factor increase from 1.078 to 1.085. This change will occur when all your consumption occurs after June 1, 2009. To see if you are affected by this change, please call us at 1-866-543-8031.

Please note some residential customers* with community-specific rates will see no change to their 1.078 Adjustment Factor.

* The affected communities are Arnprior, Brockville, Caledon, Carleton Place, Owen Sound, Lindsay, Perth, Quinte West, Smith Falls, Thorold and Stouffville. Some residential customers from these communities will see their Adjustment Factor increase.

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