In response to the Board letter of October 20, 2010 regarding the Review of Electricity Distribution Cost Allocation Policy (EB-2010-0219), Hydro One has the following questions on the material in the Elenchus report that will be the subject of the November 18, stakeholder session.



MicroFIT:



The current Microfit rate design is premised on the assumption that power consumption associated with these accounts is expected to be negligible. Could there be situations where that is not the case, and if so, what are the implications for cost allocation and rate design?





Weighting Factors for Services and Billing costs:



Will there be an update to the OEB cost factors for Service and Billing costs as a result of changes driven by the adoption of smart meters and TOU billing?





Allocation of Costs to Load Displacement Generation:



Is there a proposed methodology available for carrying out a specific customer avoided cost analysis? What is the simplified approach for determining a default avoided cost value?



What is the basis for the suggestion of a 5% reduction to allocated costs to account for the benefits that load displacement generation may provide?





Revenue to Cost Ratio Ranges:



For those utilities that already have a R/C ratio for their street and sentinel lights customer classes close to the bottom range of 0.80, why is it necessary to implement the move to 0.80 over 3 to 4 years? Could the move to 0.80 be done more quickly?



I hope these questions are useful for furthering the discussion at the upcoming stakeholder session.



Henry Andre

Manager, Transmission and Distribution Pricing

Regulatory Affairs



(416) 345-5124

henry.andre@hydroone.com



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