OPERATIONAL INVESTMENTS

Transcription

1 Page of OPERATIONAL INVESTMENTS 0 AVERAGE COST PER CUSTOMER CONNECTION Customer Costs When THESL receives a request to connect a new customer load or upgrade connection capacity for an existing customer, an Offer to Connect is issued to the customer. The Offer to Connect consists of Basic and Variable Connection Costs, Capital Contribution and Security Deposit. An economic evaluation is carried out to determine if the future revenues from the connected customer(s) will adequately cover the costs pertaining to the new connection or the capacity upgrade. Should the Net Present Value ( NPV ) of the costs and revenues associated with the Expansion be less than zero, a capital contribution in the amount of the shortfall is required. The amount of the capital contribution is set out in THESL s Offer to Connect to the customer. 0 The parameters used in the Business Economic Model for the economic evaluation of the expansion project include: Enhancement Costs New Expansion Costs Basic Connection Costs Operating, maintenance and administration costs ( OM&A Costs ) Estimated Incremental Revenues Enhancement Costs Enhancement Costs are calculated using the estimated incremental demand and the average distribution system enhancement capital cost of $.00 per kw. The average enhancement cost represents the aggregated costs, which THESL has incurred over the past three years to increase the distribution system capacity to accommodate new customer loading facilities. Aggregated costs are updated annually.

2 Page of New Expansion Costs New Expansion Costs are the capital expenditures associated with the installation of new distribution facilities and circuits when these are essential to accommodate new customer loading and which are not used to serve other customers. If within five years from the connection date, non-forecasted customers are connected to this new plant any further capital costs, THESL will rebate the initial customer for that customer s portion of the New Expansion that is shared with non-forecasted customers. 0 Basic Connection Costs The Basic Connection Cost is the cost for connecting the standard 0-metre overhead service including the connection and equipment. The Basic Connection Cost for 00 is $,.00. The Basic Connection Cost is recovered through distribution rates. This figure is updated annually. 0 Operating, Maintenance and Administration Costs For the purpose of determining OM&A Costs, THESL uses system average operating and maintenance expenditures as a proxy for incremental OM&A expenditures, and apportions them as fixed costs (for Rate Class and customers) or as a function of $/kw of demand (for Rate Class,, and customers). These values are updated annually. The average Operating and Maintenance (O&M) costs are summarized in Table. In addition to the O&M costs presented in Table, the administration cost in 00 was 0. percent.

3 Page of Table : Average O&M Costs 00 Actual 00 Bridge 00 Test Rate Class $. $. $0.0 Rate Class $. $. $0. Rate Class $. / kva $. / kva $./ kva Rate Class (Time-of-Use) $. / kva $. / kva $./ kva Estimated Incremental Revenues Estimated Incremental Revenues are calculated using the Estimated Incremental Demand, the Fixed Charge and the Variable Charge that have been approved by the OEB for the Rate Class applicable to each individual new meter installed in connection with the expansion project. For existing customers, THESL apportions the Fixed Charge based on the ratio between the incremental load and the combined load. 0 0 Variable Connection Costs Variable Connection Costs are the firm costs associated with the installation of Connection Assets above and beyond the Basic Connection Cost. The Variable Connection Costs are paid 00 percent by the customer. The Variable Connection Costs are not required for the economic evaluation of the Capital Contribution. Table below shows the typical Variable Connection Costs for the different service types in each of the customer classes. The actual variable connection costs for the different service types in each customer classes are based on the site-specific requirements.

4 Page of Table : Typical Variable Connection Costs (00) Class Description Type of Service - Residential Single Overhead Overhead Service - Residential (A) Service Underground (not requiring Underground Service - Residential (A) facilities on - General Service 0 0kW Overhead - Single Service Overhead Service - Commercial (B) Typical Variable Connection Fee See Note below table # * See Note below table # * A - General Service 0kW - kw Underground - Single Service (not requiring facilities on Overhead - Single Service (not requiring facilities on See Note below table # * Underground Service - Commercial (B) See Note below table # * 00A, 0/0V (Requiring new estimate) $00.00

5 Page of Class Description Type of Service Typical Variable Connection Fee 00A, 0/0V, P (Requiring new estimate) $,0.00 Up to 00A, /00V (Requiring new estimate) $0.00 * 00A, /00V (Requiring new estimate), applicable $0.00 for upgrades in some area only Underground - Single Service (not 00A, 0/0V $,00 requiring facilities on 00A, 0/0V, P $,00 Up to 00A, /00V $,00 00A, /00V, applicable for upgrades in some area $,00 only 00A, 0/0V, for network system in Toronto $,00 Downtown area only 00A, 0/0V, for network system in Toronto $,00 Downtown area only Overhead/Underground Combination (requiring 0 to 000 kva Pad (A to A and B to B) $,000 to $,000 facilities on Modular vault 00 to 000kVA () $,000 to $0,000

6 Page of Typical Variable Class Description Type of Service Connection Fee B - General Service 0kW - kw C - Residential Subdivision - General Service 000kW and Up Underground (Bulk or individual meter) Multi-units or townhouse complex with on private property Underground (Bulk or individual meter) Multi-units or townhouse complex with no on private property Underground Residential 0 to 000 kva Pad (A to A and B to B) $,000 to $,000 Subdivision mini-pad Tx & tap boxes $,00 per lot Subdivision submersible Tx & tap boxes $,00 per lot 00A, 0/0V with tap box $,00 per lot Subdivision mini-pad Tx & tap boxes $,00 per lot Subdivision to individual meter base Subdivision submersible Tx & tap boxes $,00 per lot Overhead/Underground 00kVA Pad (A, B) $,000 to Combination (requiring $,000

7 Page of Class Description Type of Service Typical Variable Connection Fee facilities on Modular vault 00 to 00kVA () $,000 to $,000 Overhead/Underground Combination (Customer Owned Customer Owned Substation (A, B, ) $,000 to $0,000 Substation) - Large Users > MW Overhead/Underground Combination (Customer Owned Substation) Customer Owned Substation (A, B, ) $,000 to $0,000 Note *The Basic Connection Fee of $, with is recovered through distribution rates. The typical variable connection fee is zero, however, it could vary based on site specific conditions for connection assets beyond the basic allowance.

8 Page of Average Costs for Customer Connection The average costs for customer connection, including new services and upgrades to existing services, are calculated from the capital expenditures for the different types of services and the number of customer connection of each type per year. These costs are THESL gross capital costs to connect customers to THESL s existing infrastructure (refer to Table ), before customer capital contributions (refer to,, Schedule -). 0 For some large services, the costs to connect the customer may occur over many months, or between fiscal years. The reporting of the physical connection is made when the customer is energized. Therefore, the average cost per customer may be skewed in a given year and is affected by the site specific conditions. Table provides historical, bridge and test years Customer Connections and services. Table : Customer Connections and Costs Types of Services 00 Actual Budget Historical Proposed Number of Residential Customers Connected 0,0,,, Number of Commercial Customers Connected 0 0 Total Install Cost Residential Customers ($ millions) Total Install Cost.... Commercial Customers ($ millions) Average Cost of Residential,, 0 Customer Connection ($) Average Cost of Commercial,0,,0, Customer Connection ($)

9 Page of Total install cost for residential customers reduced from $. million in 00 to $.0 in 00 due to a reduction of sub-division residential construction activities. 0 Customer capital contributions are expected to be $.0 million for 00. This is down from the 00 figure of $. million reflecting a forecasted decline in customer development due to deteriorating economic market conditions. Similarly 00 investment requirements (net after capital contributions) are expected to decline to $. million as shown on, Tab, Schedule. The capital contribution in this table includes other contributions such as Externally Initiated Plant Relocations. This is supported by the reduction of construction permits issued for building construction and the builders construction outlook for development within the GTA.