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2014 Sustainability-based Annual Report

26 Cost of Service Making the Grade – Priceless Reliability, at Affordable Rates “Regulatory approval may not sound critical to the functioning of an electricity distributor, but it’s everything.” Indy Butany-DeSouza, Vice President, Regulatory Affairs In 2014, Horizon Utilities got the green light from the Ontario Energy Board (OEB) for its five-year capital and operating plan. This approval ensures we have the means to replace end of life assets with newer, more efficient and productive technologies, while minimizing the cost impact to customers. This is the foundation for us to renew and modernize the electricity distribution system in our communities, ensuring reliable and efficient delivery of electricity to all our customers for decades to come. Regulatory approval may sound more like a procedure than an achievement, but it is essential for business success in the electricity distribution world. Our accomplishment was of even greater significance. Horizon Utilities was the first local electric utility in the province both to file a complete ‘custom’ incentive rate-setting application under the OEB’s new Renewed Regulatory Framework for Electricity and the first utility to receive rate approval under this new process. Horizon Utilities invested $33 million in capital projects in 2014, including $15 million earmarked for proactive system renewal efforts In developing our Distribution System Renewal Plan, Horizon Utilities employees throughout the organization worked together to pinpoint and substantiate precisely which assets require replacement or refurbishment, and when. As well, we looked at which new technologies could best be leveraged to deliver more reliability and efficiency. In short – fewer outages, and shorter outages. As always, that infrastructure renewal is balanced with a responsible rate structure. In most customer classes, the rates charged by Horizon Utilities make up a little over one-fifth of the total monthly power bill. That small portion goes to supporting the entire local electricity distribution system – including poles, lines, substations, trucks and crews. Utilities like Horizon must clearly demonstrate to the OEB that the rates they propose deliver the needs and expectations of their customers for the safe and reliable delivery of electricity. The level of planning and the evidence required is considerable to withstand the meticulous examination of the OEB and intervenors, which represent a broad range of customers and stakeholders. Horizon Utilities passed the test. Horizon Utilities also became the first utility in Ontario to meet the OEB’s new stringent public consultation requirement. We took our Distribution System Renewal Plan directly to our customers. Horizon developed a 26-page workbook and held a series of “Have Your Say” sessions, including one-on-one briefings, focus groups and online outreach. The result was an engaged and well-informed customer base giving a 92 per cent satisfaction rating. As we look ahead to the next five years under this regulatory approval, Horizon Utilities is on solid financial ground, ready to renew and modernize the electricity system in our communities, allowing them to plan, build and grow sustainably – economically, socially and environmentally. ECONOMIC SUSTAINABILITY


2014 Sustainability-based Annual Report
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