From:	Laurie Klein
Sent:	June-21-13 10:27 AM
To:	'mtucci@eda-on.ca'
Cc:	RRF
Subject:	EB-2010-0379 Yatchew Model Question

Hi Maurice,

Below are staff’s clarifying questions for Adonis Yatchew:


1.	As noted in the Board’s May 30, 2013 letter to stakeholders providing and update on 
the timeline for expert reports and written comments, the Board asked that expert 
models and datasets supporting be filed with the Board.  Please provide these 
materials to the Board.
2.	Please clarify the dollar amounts in Figure 4.  Do the residential electricity prices 
refer to prices for bundled electricity services or electricity distribution services?

3.	It is unclear in your report how stretch factor assignments would be made using the 
efficiency rankings established by your recommended approach (e.g., PEG 
recommends 5 cohorts).  Will the EDA expand upon this in its final comments?

4.	On page iv, you indicate that your preliminary index-based TFP estimates lead to an 
average productivity factor of -0.7%.  Furthermore on page 4 of Appendix B you 
indicate that you carried out a “robustness check” of your cost model.  In each 
analysis:
a.	Was the cost measure used in the analysis:  the cost measure that was used 
in PEG’s econometric benchmarking model; the cost measure that PEG used 
when estimating the industry’s TFP growth rate using indexing methods; or a 
different cost measure?
b.	Are any of the costs in the cost measure used not included in base rates (i.e., 
not subject to the PCI adjustment)?  

5.	You recommend negative stretch factors be a feature of the Board’s incentive 
regulation mechanism.  Are you aware of other jurisdictions that have approved 
negative stretch factors?  Will the EDA expand upon this in its final comments? 

6.	PEG did not include the following expenses in their data set:  bad debts; federal and 
Ontario capital and income taxes (PILs); interest; and unclassified debits and 
credits.  Have you included any of these expenses in your analyses?

Cheers,
Laurie K.

Laurie Klein | Policy Advisor | Regulatory Policy | Ontario Energy Board 
2300 Yonge Street, 27th Floor | Toronto, Ontario | M4P 1E4 |  416.440.7661  | 416.440.7656 | laurie.klein@ontarioenergyboard.ca