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Commercial Infill Customer Attraction Program
Horizon Utilities already delivers among the lowest operating costs and the lowest residential and commercial rates in Ontario. Its Commercial Infill Customer Attraction Program enhances this positioning by putting additional focus on lowering startup costs for business.
Horizon Utilities Corporation's Commercial Infill Customer Attraction Program has been implemented to lower startup costs for larger businesses. The program, which is inspired by Smart Growth municipal planning principles, is win-win for customers and our shareholder communities.
First, Horizon Utilities built an integrated "one window" database of available commercial properties, utility infrastructure supplying the properties, and major customer-owned assets left behind on the properties. The objective is to lower startup costs by identifying pre-existing business locations with little or no "system expansion" (or direct construction) costs and legacy customer equipment already in place.
Second, Horizon Utilities revised its Conditions of Service to remove "system enhancement" (or indirect utility) costs in its customer connection costs assessment framework. This change, which is a benefit to all new customers, significantly lowers the startup cost for business. This is because the charge, which is scaled to customer peak demand, is otherwise very expensive for large customers.
Removing the system enhancement charge for new commercial customers that locate in Hamilton or St Catharines serves as a tremendous cost-saving incentive to encourage redevelopment of existing sites and attract new business to these urban areas. For example, the capital contribution for a 2,800 kW customer case went from $250,000 with the system enhancement charge to zero without it and a 1,500 kW customer case from $225,000 to zero.
The spin-off benefits are significant as well. First, it is an enhancement of municipal strategies for intensification, green spaces, and walkable communities. Second, it reduces pressure for customer rate increases by providing more utility revenue from existing infrastructure.
Horizon Utilities' innovative new program has been welcomed by the economic development teams of its shareholder communities of Hamilton and St. Catharines, both of which have leading Community Improvement Plans that are complemented by Horizon's customer-focused strategy. The Commercial Infill Customer Attraction Program has also been very well received by the business community, including the chambers of commerce, industrial associations and real estate associations.