RATE DESIGN OVERVIEW. Filed: October 10, 2008 Updated: January 30, 2009 PowerStream Inc. EB Exhibit I Tab 1 Schedule 1 Page 1 of 3

Transcription

1 Filed: October 10, 2008 Updated: January 30, 2009 Tab 1 Page 1 of 3 1 RATE DESIGN OVERVIEW This Exhibit explains how PowerStream designed its proposed rates in order to collect its proposed revenue requirement for 2009; that is, the Base Revenue Requirement plus the Transformer Ownership Allowance. The existing Tariff of Rates and Charges (May 1, 2008) is provided in, Tab 6,. The proposed Tariff of Rates and Charges (May 1, 2009) is provided in, Tab 6, Schedule 2. The bill impacts for typical customers are provided in, Tab 6, Schedule 3. PowerStream developed its own rates model by modifying the Board's 2006 EDR model to accommodate a future test year. The following steps were taken in the rate design process: 1. The Base Revenue Requirement ("BRR") for 2009 was allocated to the customer classes using, for this purpose, a similar allocation methodology as the OEB 2006 EDR allocation model. 2. Low voltage charges and the transformer ownership allowance were allocated to the customer classes separately using, for this purpose, the methodology in the 2006 EDR model. More detail is provided, respectively in,, Tab 4, and Exhibit C1. 3. The 2009 costs and 2009 BRR allocated to customer classes, were used as an input for the 2009 Cost Allocation Study ( 2009 CAS ), as described in Exhibit H, Tab 1, ) 4. PowerStream then adjusted the allocation of BRR to the customer classes so that the proposed rates for 2009 result in revenuetocost ratios that would fall within the ranges established in the following Report of the Board: Application of Cost Allocation for Electricity Distributors dated November 28, 2007 (EB ).

2 Filed: October 10, 2008 Updated: January 30, 2009 Tab 1 Page 2 of The revenue allocation by customer class is presented in Table 1. More detail on the 2009 revenuetocost ratios is provided in Exhibit H, Tab 1, Schedule Table 1: Revenue Allocation As per Information filing 2009 Test Year at calculated rates Proposed per Application 2006 % % Residential 51,150,319 61,125, % 61,181, % GS Less Than 50 kw 17,065,172 18,143, % 18,143, % GS 50 to 4,999 kw 32,077,565 39,193, % 39,193, % GS 50 to 4,999 kw Legacy 0.00% 0.00% Large Use 1,274, , % 59, % Unmetered Scattered Load 553, , % 481, % Sentinel Lighting 6,212 12, % 18, % Street Lighting 709,984 1,132, % 1,226, % Total 102,837, ,304, % 120,304, % 5. The floor and ceiling values for the monthly fixed service charges, as calculated in the 2009 CAS, net of the Smart Meter rate adder, were used to determine the monthly fixed charge for each customer class. An additional fixed rate mitigation adjustment was required for the Large Use class because it has only one customer; see Exhibit H, Tab 1, Schedule The variable distribution rates were determined based on the distribution revenue allocated to each customer class, net of monthly fixed charges and the Smart Meter rate adder, and forecasted (kw) load and consumption (kwh) for The proposed distribution rates for 2009 are presented in Table 2 below

3 Filed: October 10, 2008 Updated: January 30, 2009 Tab 1 Page 3 of 3 46 Table 2: Proposed Distribution Rates DISTRIBUTION CHARGES FINAL RATES Transformer Variable Fixed LV SM Variable Fixed Allowance A B C D E F=A+C+D G=B+E Residential GS Less Than 50 kw GS 50 to 4,999 kw Large Use , , Unmetered Scattered Load Sentinel Lighting Street Lighting Note: LV means the Low Voltage Charges and SM means the Smart Meter Rate Adder The derivation of the Smart Meter Rate Adder is described in, Tab 3, Schedule 2. The derivation of the Low Voltage Charges is described in, Tab 4, Schedule 1., Tab 2, explains PowerStream s proposed rate rider to recover LRAM and SSM amounts that are attributable to its CDM programs from 2005 to Both the LRAM claim of 429,897 and the SSM claim of 398,214 relate only to the socalled 3 rd tranche funded programs. PowerStream proposes that the requested rate riders would be applicable only to the customer classes that benefited from these CDM programs.

4 Filed: October 10, 2008 Updated: January 30, 2009 Exhibit 1 Tab 1 Schedule 2 Page 1 of 2 1 RATE DESIGN PROPOSAL 2 The following is a summary of PowerStream s rate design proposals: PowerStream proposes a Base Revenue Requirement of 120,304,162 (Exhibit G, Tab 1, ), transformer ownership allowances of 2,551,097, and low voltage charges of 1,405,088 (, Tab 4, ) PowerStream proposes to collect this total revenue requirement from the customer classes in proportions that are similar to the current proportions but, nevertheless, adjusted for some customer classes based on the results of the 2009 Cost Allocation Study (revenuetocost ratios). The affected customer classes are: Residential, Large User, Sentinel Lighting, and Street Lighting. The Rate Design issues are discussed in detail in, Tab 1,. PowerStream proposes to eliminate the TimeofUse (Legacy) customer class. This class was created in connection with the initial 2001 rates unbundling. The customers in this class were billed seasonal rates, prior to unbundling, based on the summer/winter cost of power. This classspecific consumption pattern enabled the allocation of energy revenue from the total revenue component in the 2001 unbundling process thereby facilitating the creation of the TimeofUse class. Only two customers remain in this class today, there are no real timeofuse rates charged to them, and there are no other distribution asset identifiers that make these customers different from any other General Service customer. It is proposed to add the two customers to the GS>50kW class. On average, these customers will see the total bill reduction of 2.5%. PowerStream proposes to clear the balances that have accumulated to December 31, 2007 in certain deferral and variance accounts since January 1, 2005 with certain exceptions. This proposal would result in a refund of 27.9M to customers over two years May 1, 2009 to April 30, 2011 through rate rider credits that vary in amount by customer class. The exceptions are Account 1588 RSVA Power, Subaccount Global Adjustment and Account 1592 PILS

5 Filed: October 10, 2008 Updated: January 30, 2009 Exhibit 1 Tab 1 Schedule 2 Page 2 of and Tax Variances for 2006 and Subsequent Years. These matters are discussed in detail in Exhibit E, Tab 1, Schedules 1 and 2. PowerStream is proposing to recover LRAM/SSM amounts of 828,110 by means of a rate adder for the rate classes that benefited from these CDM programs. The rate adder would be in place for one year starting May 1, This total is attributable to the CDM programs funded by the socalled "3 rd tranche rate increase" and completed from 2005 to The calculation of LRAM/SSM rate riders is shown in, Tab 2,. PowerStream is proposing a rate adder with a 0.19 credit per month for all metered customers in 2009 rate year, to clear actual Smart Meter costs to December 31, PowerStream is also proposing an updated monthly future cost offset rate adder of 1.04 for the 2009 rate year in respect of 2008 and 2009 capital expenditures and incremental operating costs related to Smart Meters. The details on Smart Meter rate rider calculation are presented in, Tab3, Schedule 2.

6 Filed: October 10, 2008 Tab 2 Page 1 of LOST REVENUE ADJUSTMENT MECHANISM (LRAM) AND SHARED SAVINGS MECHANISM (SSM) CLAIM OVERVIEW PowerStream is seeking to recover the following amounts calculated up to December 31, 2007: Lost Revenue Adjustment Mechanism ("LRAM") 429,896 and Shared Savings Mechanism ("SSM") 398,214. These amounts reflect not only PowerStream's Conservation and Demand Management ("CDM") plan for the years 2005 to 2007, but also the results of Aurora's CDM plan for the year 2005 prior to November 1, The total amount of the two plans is 7.3M. Both CDM plans were approved by the Board. No adjustments have been made for taxes in accordance with the Board's Decision and Order in the EB proceeding (Toronto Hydro Electric System Limited). PowerStream proposes to recover the total of 828,110 through classspecific volumetric rate riders that would be in effect for the 2009 rate year. The classspecific volumetric rate riders were determined by totalling the classspecific LRAM and SSM amounts by program and dividing by the classspecific forecast kwhs or kws for Table 1 summarizes the total LRAM and SSM amount for each customer class, the forecast 2009 volumetric billing quantity and the resulting rate rider. Tables are at the end of this section. Delays in receiving various supplier parts and materials as well as consultation services led PowerStream to conclude that its CDM programs would be substantially, but not fully, complete by the target date of September 30, As a result, PowerStream applied for and received approval from the Board to extend the completion of some CDM activities until September 30, 2008.

7 Filed: October 10, 2008 Tab 2 Page 2 of PowerStream has spent over 7.0M on its CDM programs as of June 30, The remaining CDM programs will be fully deployed by September 30, 2008 to reach the approved amount of 7.3M. AUTHORIZATION FOR LRAM / SSM RECOVERY The Board issued its Guidelines for Electricity Distributor Conservation and Demand Management EB ( Guidelines ) on March 28, The purpose of the Guidelines is to "provide comprehensive information on the Board's policies relating to CDM activities undertaken by electricity distributors in Ontario" (p. 1). Section 5 of the Guidelines expresses the understanding that distributors can expect to have lower revenues due to unforecasted reductions in energy use as a result of CDM activities. This section states that LRAM is an acceptable process to compensate distributors for lost revenues and thereby to remove the disincentive created from CDM energy savings. Section 6 of the Guidelines expresses the Board's recognition that there needs to be an incentivebased mechanism to encourage more aggressive CDM activities. The SSM is accordingly available when customerfocused initiatives are funded through distribution rates and when the costs of such initiatives are expensed. 18

8 Filed: October 10, 2008 Tab 2 Page 3 of METHODOLOGY FOR CALCULATING LRAM AND SSM The Guidelines provide the basis and methodology required to file an application for LRAM and SSM recovery. PowerStream used the Guidelines in calculating the quantities and dollar amounts that comprise this claim. In addition, PowerStream has followed the Board s Decision and Order in the EB proceeding in which the Board approved Toronto HydroElectric System Limited s LRAM/SSM recovery application ( THESL Decision ). LRAM and SSM amounts are recoverable on a retroactive basis in accordance with the Guidelines. PowerStream utilized the Total Resource Cost ( TRC ) test and measures to determine the costs and benefits from each of the CDM program initiatives. PowerStream has used the inputs and assumptions for the various CDM measures listed in the Board s Guidelines. LRAM amounts were based on energy savings by customer class from various CDM programs; Table 4 lists these programs. LRAM quantities were adjusted for freeridership as required in the TRC mechanism with adjustment in accordance with the THESL Decision. Table 5 shows the gross and net kwh and kw savings. The SSM calculation was prepared in accordance with the Guidelines and the THESL Decision. The net benefits of each program were identified using the TRC test. PowerStream then applied the allowable 5% to each CDM initiative. The SSM total includes any programs that had negative benefits and has not been adjusted for taxes. All of the CDM activities for which LRAM and SSM are being claimed were funded by the "3 rd tranche increase" in PowerStream's market adjusted revenue requirement during the 2005 rate year and, as such, PowerStream does not need an independent review of these calculations. It should be noted, however, that PowerStream utilized CDM consultants for the preparation of the annual reports to the Board from which most of the data flows and used other CDM consultants to assist in the preparation of the LRAM/SSM claim.

9 Filed: October 10, 2008 Tab 2 Page 4 of LRAM CALCULATION The LRAM was calculated by multiplying the net energy savings, kw or kwh, for each program by PowerStream s Boardapproved variable distribution charge appropriate for each rate class on a year by year basis. PowerStream s total LRAM claim for the three year period ending December 31, 2007 is 429,897. This includes carrying charges of 39,604. Table 3 provides a summary of the savings quantities and the LRAM dollar amounts by program and rate class for each of the three years. PowerStream made adjustments to apportion the savings achieved in the year a program was initiated. The start date of each program was determined. A program that started on October 1, 2005 would have a 25% of the full year savings applied in order to account for the three month period that the program was effective. The program would be in effect for all of 2006 and Tables 7A, 7B and 7C show the LRAM amounts for each of the CDM programs in each of the three years. In these tables the terms partially effective and fully effective are used to account for the timing issues discussed in this paragraph. Regulatory asset recovery riders were excluded from the approved rates in calculating the LRAM. PowerStream s approved rates did not contain any adjustment for the effects of CDM programs. The LRAM amounts to be recovered have been adjusted for free riders as defined in the Guidelines. LRAM is based on net kwh or kw after deducting for free riders. The amount of free riders varies depending on the CDM program. PowerStream based its percentage reductions on the THESL Decision. Table 5 shows the free rider impact on the quantities for each program for the years 2005 to For those rate classes where a transformer allowance was applicable, PowerStream deducted the transformer allowance from the LRAM amount calculated. The total reduction in PowerStream s LRAM claim related to the transformer allowance, for the three year period, amounted to 9,459. Tables 9 and 10 show the details.

10 Filed: October 10, 2008 Tab 2 Page 5 of SSM CALCULATION As stated in the Guidelines, SSM is based on 5% of the net benefits before tax as calculated using the TRC test. PowerStream is making an SSM claim for 398,214. Table 2 provides a summary of the SSM amount for each program in the three years 2005 to The SSM was only applied to customerfocused initiatives that reduce demand and/or reduce the level of consumption. The SSM calculation is a function of the net present value of the program benefits as defined by the TRC measures. Program net benefits are determined by the present value of the stream of benefits over a program s life, comprised mainly of avoided generation, transmission and distribution costs offset by the present value of program costs. PowerStream used the following discount rates: 6.5% for 2005, 7.3% for 2006 and 7.3% for Tables 8A, 8B and 8C provide a summary of the TRC costs and TRC benefits for each of the CDM programs covering the 2005 to 2007 years. Programs with a negative TRC benefits have been included in calculating the SSM amount. CARRYING CHARGES In the THESL Decision the Board found that the distributor was entitled to carrying charges on LRAM balances. PowerStream has calculated carrying charges on LRAM amounts to April 30, 2009 in the amount of 39,604. PowerStream used the Board s prescribed interest rates from second quarter (Q2) 2006 up to Q For 2005 the three month Banker s Acceptance historical data obtained from the Bank of Canada website plus a 0.25% spread was used. PowerStream assumes that the Board's prescribed rate for Q remains unchanged for Q4 2008, Q and Q The rate for each year was obtained by taking an average of the four quarterly rates.

11 Filed: October 10, 2008 Tab 2 Page 6 of Interest has been calculated on the average balance for each year using the average interest rate for the year. For 2009 interest was calculated for the fourmonth period to April 30, The average balance for the year is a simple average of the opening and closing balances. Opening and closing balances were determined as follows: programs originating in 2005 were assumed to start October 1, 2005 and the savings were spread evenly over the twentyseven months to December 31, 2007; programs originating in 2006 were assumed to start July 1, 2006 and the saving spread evenly over the 18 months to December 31, Table 6 shows the LRAM carrying charge calculations.

12 Filed: October 10, 2008 Updated: January 30, 2009 PowerStream Inc Tab 2 Page 1 of 14 Table 1: LRAM/SSM Totals by Rate Class and Rate Riders 2005 Program 2007 Program Rate Class Amounts 2006 Program Amounts Amounts LRAM SSM LRAM SSM LRAM SSM LRAM SSM Total Total Combined Total Billing Type Billing Units (2009) Rate Rider Residential 60,695 18, , ,730 8,132 (15,776) 290, , ,104 kwh 2,034,450, GS<50 kw 1,144 31,542 1,144 31,542 32,686 kwh 803,126, GS>50 kw 69,001 21,507 42,934 98,953 25,824 34, , , ,320 kw 10,189, Large Use kw 82, TOTALS 129,695 39, , ,682 35,100 49, , , ,110 2,847,849,726 NOTES: 1) GS>50 and Large Use class LRAM amounts have been reduced by the transformer allowance credit. 2) Program savings were calculated from the start date to December 31/07. 3) Amounts have not been adjusted for taxes. 4) LRAM amounts include carrying charges.

13 Table 2: Shared Savings Mechanism (SSM) Summary for the Years 2005 to 2007 Filed: October 10, 2008 Tab 2 Page 2 of 14 Program Year RESIDENTIAL GS<50 GS>50 LARGE USER TRC Net Benefits SSM Incentive TRC Net Benefits SSM Incentive TRC Net Benefits SSM Incentive TRC Net Benefits SSM Incentive TOTAL SAVINGS TRC Net Benefits SSM Incentive Co branded Mass Markets ,958 23, ,958 23, ,148, ,447 4,148, , (162,468) (8,123) (162,468) (8,123) Program sub total 4,456, ,822 4,456, ,822 Design Advisory Audit Program 2005 (167,470) (8,373) (167,470) (8,373) ,188 2,709 54,188 2,709 Program sub total (167,470) (8,373) 54,188 2,709 (113,282) (5,664) Residential Load Control 2005 (17,470) (873) (17,470) (873) ,662 3,383 67,662 3, ,655 28, ,655 28,833 Program sub total 50,192 2, ,655 28, ,847 31,342 Social Housing ,100 3,905 78,100 3, (22,005) (1,100) (22,005) (1,100) ,516 4,326 86,516 4,326 Program sub total 142,611 7, ,611 7,131 Energy Audti Retrofit and Partnerships , , (239,562) (11,978) (239,562) (11,978) Program sub total (239,562) (11,978) 19, (220,150) (11,008) Leveraging Energy Conservation ,900 23, ,900 23, (164,954) (8,248) (164,954) (8,248) ,032 22, ,032 22,802 Program sub total 762,978 38, ,978 38,149 CI and I Load Control Initiative 2005 (17,670) (883) (17,670) (883) ,656 23, ,656 23,133 Program sub total 444,986 22, ,986 22,249 Design Advisory >50 kw 2005 (17,470) (873) (17,470) (873) ,600 34, ,600 34, ,170 6, ,170 6,109 Program sub total 792,300 39, ,300 39,615 Distributed Energy 2005 (26,040) (1,302) (26,040) (1,302) ,456,405 72,820 1,456,405 72, (358,815) (17,941) (358,815) (17,941) Program sub total 1,071,550 53,578 1,071,550 53,578 GRAND TOTALS 4,242, , ,843 31,542 3,091, ,561 7,964, ,214 TOTALS BY YEAR ,118 18, ,132 21, ,250 39, ,194, ,730 1,979,051 98,953 6,173, , (315,514) (15,776) 630,843 31, ,043 34, ,372 49,869 4,242, , ,843 31,542 3,091, ,561 7,964, ,214 NOTE: 1) TRC (total resource cost) benefits are based on the approved measures and calculations as defined by the OEB's October 2,2006 Total Resource Cost Guide.

14 Filed: October 10, 2008 Tab 2 Page 3 of 14 Table 3: Lost Revenue Adjustment Mechanism (LRAM) Savings by Program and Class for 2005 to 2007 PROGRAM YEAR RESIDENTIAL GS<50 GS>50 LARGE USE LRAM KWH Savings LRAM KW savings LRAM (3) KW savings KWH Savings TOTAL SAVINGS LRAM (3) KWH Savings KW Savings LRAM Co branded Mass Markets ,619,540 42,312 3,619, , ,271, ,594 20,271, , ,425 4, , ,986 Program sub total 24,325, , ,325, ,893 Design Advisory Audit Program ,506 1, , ,065 Program sub total 104,506 1, , ,065 Residential Load Control (Energy AR and P) ,321 1, , ,812 Program sub total 177,321 1, , ,812 Social Housing ,688 11, , , , , Program sub total 990,493 12, , ,687 Energy Audti Retrofit and Partnerships , , Program sub total 668 1, ,449 Leveraging Energy Conservation ,231 20,015 9,231 20, ,862 7,573 3,862 7, Program sub total 13,424 28,377 13,424 28,377 CI and I Load Control Initiative ,000 20,983 10,000 20,983 Program sub total 10,000 20,983 10,000 20,983 Design Advisory >50 kw ,581 18,277 8,581 18, ,078 2,262 1,078 2,262 Program sub total 9,659 20,539 9,659 20,539 Distributed Energy ,484 40,187 18,484 40, ,288 13,301 6,288 13, Program sub total 24,772 53,488 24,772 53,488 GRAND TOTALS 25,492, , ,506 1,065 58, ,836 25,597,400 58, ,292 SUMMARY BY YEAR ,549,228 54,229 28,383 61,651 4,549,228 28, , ,271, ,594 18,731 39,151 20,271,115 18, , ,551 7, ,506 1,065 11,409 24, ,057 11,409 32,668 25,492, , ,506 1,065 58, ,836 25,597,400 58, ,292 Summary by Year include Carrying charges (4) ,549,228 60,695 28,383 69,001 4,549,228 28, , ,271, ,167 18,731 42,934 20,271,115 18, , ,551 8, ,506 1,144 11,409 25, ,057 11,409 35,100 25,492, , ,506 1,144 58, ,758 25,597,400 58, ,896 NOTES: 1) The amounts shown above for each year represent savings that occcured from the start of the program to the end of ) Program savings have prorated in the intial year based on the start date. 3) LRAM amounts for programs applicable to GS>50 kw and Large Use customers have been reduced by the estimated transformer allowance (Table 10). 4) Table 6 shows the calculations of carrying charges which amounted to 39,604

15 Table 4: CDM Programs Eligible for LRAM and SSM Filed: October 10, 2008 Tab 2 Page 4 of 14 Program Name Duration Participation Levels (1) Free Rider ship Level (2) RESIDENTIAL AND SMALL COMMERCIAL (< 50kW) Co branded Mass Markets ,803(2005); 136,974(2006); 9046(2007) 5% to 10% Design Advisory Audit Program (2007) 0% to 10% Energy Audit Retrofit and Partnerships (2005); 520(2007) 10% to 25% Residential Load Control < 50kW (3) (2006); 1,700(2007) 0% Social Housing 2005, (2005); 992(2007) 1% COMMERCIAL, INDUSTRIAL AND INSTITUTIONAL (>50kW) Leveraging Energy Conservation (2005); 1,176(2006); 146(2007) 10% to 30% Load Control > 50kW (2007) 0% Energy Audit Retrofit and Partnerships > 50kW (2005) 10% Design Advisory > 50 kws 2006, (2006); 11(2007) 10% to 30% Distributed Energy 2005, (2005); 1(2006) 30% NOTES: 1. Participation level refers to the number of customers or units for the various CDM programs above. Within the main program categories there are a number of individual programs. Qualification of programs are based on the TRC guide and are filed with the OEB CDM annual report. 2. Free ridership levels are determined by individual program. 3. Residential load control < 50kW had SSM eligible savings but no LRAM savings since kwh savings could not be validated

16 Filed: October 10, 2008 Tab 2 Page 5 of 14 Table 5: Gross and Net kwh/ kw Savings Residential and Small Commercial <50kW 2005 kwh / kw Gross 2005 kwh / kw Net 2006 kwh / kw Gross 2006 kwh / kw Net 2007 kwh / kw Gross 2007 kwh / kw Net Total kwh /kw Gross Total kwh /kw Net Co Branded Mass Markets 3,619,540 3,257,586 20,271,115 18,267, , ,566 24,325,080 21,914,499 Design Advisory Audit Program 0 0 Energy Audit Retrofit and Partnerships 177, , , ,540 Leveraging Energy Conservation 0 0 Distributed Energy 0 0 Design Advisory < 50 kw 104,506 94, ,506 94,236 Residential load control < 50kW 0 0 Social Housing 929, ,391 60,805 60, , ,603 Total kwh 4,549,228 4,177,977 20,271,115 18,267, , ,554 25,597,400 23,130,878 Demand Billed Classes 2005 kwh / kw Gross 2005 kwh / kw Net 2006 kwh / kw Gross 2006 kwh / kw Net 2007 kwh / kw Gross 2007 kwh / kw Net Total kwh /kw Gross Total kwh /kw Net Co Branded Mass Markets 0 0 Social Housing 0 0 Load control > 50kW 10,020 10,000 10,020 10,000 Energy Audit Retrofit and Partnerships Leveraging Energy Conservation 13,187 9,231 4,265 3, ,963 13,424 CI and I Load Control Initiative 0 0 Design Advisory > 50 kw 11,893 8,581 1,519 1,078 13,411 9,659 Distributed Energy 26,406 18,484 8,955 6,288 35,361 24,772 Total kw 40,335 28,383 25,113 18,731 12,049 11,409 77,498 58,523 NOTES: 1. This table shows the accumulative gross and net kwh and kw savings for the various CDM programs in the period 2005 to 2007 inclusive. Gross savings includes any partial year reduction factor. The net savings are after the "free riders" quantities have been deducted and partial year reduction factor has been applied. Free Ridership is defined as a program participant who would have installed a measure on their own initiative without the program 2. Columns labeled 2005 reflect calculated savings based on start date in 2005 plus the full year savings for both 2006 and Columns labeled 2006 reflect calculated savings based on start date in 2006 plus the full year savings for Columns labeled 2007reflect calculated partial year savings based on start date in 2007.

17 Filed: October 10, 2008 Tab 2 Page 6 of 14 TABLE 6: FUTURE TEST YEAR 2009 LRAM CARRYING CHARGES LRAM Additions per year CDM Program Start Year Total LRAM Year End Balance CDM Program Start Year ,876 51,502 51, , ,876 64, , , , , , , , , ,668 32, ,668 32,668 12, , , ,292 12, , , ,292 LRAM Average Balance Interest CDM Program Start Year Total Rate 3.29% 4.28% 4.73% 3.98% 3.35% ,438 77,253 96, , ,306 4,568 4,612 1,276 13, , , ,745 3,449 7,623 9,621 2,663 23, ,334 32, , ,433 6, , , , ,755 12,963 15,534 4,299 39,604 Allocation of Carrying Charges to Rate Class: Residential GS<50 GS>50 LU Total ,465 7,350 13, ,573 3,783 23, ,790 2,433 Total 26, ,922 39,604 Interest Rates Jan 05 Interest Rate Dec/05 interest rate 2005 Average Rate Dec/06 interest rate Average 2006 Interest Rate Average 2007 Interest Rate 2008 Average Rate 2009 Rate 2.80% 3.78% 3.29% 4.59% 4.28% 4.73% 3.98% 3.35% NOTES: 1 Carrying charges have been calculated on a simple interest basis, with interest calculated on principal amounts only. For 2009, interest has been calculated from January 1, 2009 to April 30, Q1 means January 1 to March 31, Q2 means April 1 to June 30, Q3 means July 1 to September 30, Q4 means October 1 to December Programs starting in 2005 are assumed to have started Oct 1/05 and savings accrued evenly over the period to Dec 31/07. 4 Programs starting in 2006 are assumed to have started Jul 1/06 and savings accrued evenly over the period to Dec 31/07. 5 Average balance is a simple average of the opening and closing amounts. 6 Interest rates have been taken from the OEB prescribed interest rates for Approved Accounts for Q22006 to Q For 2005 and Q12006, interest rates have been determined using the same method as the OEB approved rates. Interest rates have been taken from the OEB prescribed interest rates for Approved Accounts for Q22006 to Q Q12006 was determined to be 3.78%, taken with the prescribed rates for Q2, Q3 and Q4 results in an average rate for 2006 of 4.28%. 8 Q42008 and Q12009 are assumed to be 3.35%, the same as Q Interest has been allocated to the classes based on their proportion of LRAM for the program year to the total LRAM for the program year.

18 Filed: October 10, 2008 Tab 2 Page 7 of 14 Table 7A: 2005 CDM Results LRAM Calculation Program Program Start Date 2005 Partially Effective Factor Rate Class 2005 Distribution Rate 2006 Distribution Rate 2007 Distribution Rate Fully Effective kwh Savings mthly Full Effective kw Savings Net Net Partially Effective 2005 kw/kwh Savings LRAM 3 yr kw/kwh accum CoBranded Mass Markets Oct Residential ,447,816 n/a 361,954 42,312 3,257,586 Design Advisory Audit Program n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Residential Load Control n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Social Housing 1Oct Residential ,125 n/a 54,141 11, ,391 Energy Audit Retrofit and Partnerships 1Oct General Service >50kW n/a , Leveraging Energy Conservation & Load Management Oct General Service >50kW n/a ,400 9,231 Mayor's MW Challenge 1Oct General Service >50kW n/a ,277 Sustainable Schools 1Oct General Service >50kW n/a ,123 CI&I Load Control Initiative n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Design Advisory > 50 kv n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Distributed Energy 1Oct General Service >50kW n/a ,960 18,484 TOTAL 120,138

19 Filed: October 10, 2008 Tab 2 Page 8 of 14 TABLE 7B: 2006 CDM Results LRAM Calculation Program Program Start Date Partially Effective Factor Rate Class 2006 Distribution Rates 2007 Distribution Rates Fully Effective kwh Savings Mthly Full Effective kw Savings Partially Effective 2006 kwh /kw Savings LRAM kwh /kw Net Net CoBranded Mass Markets Residential ,605,185 n/a 5,662, ,594 18,267,347 CFL Distribution 6Jan Residential ,676,716 n/a 838,358 Keep Cool RAC Energy Star 1Jun Residential ,386 n/a 5, Keep Cool RAC Retirement 1Jun Residential ,068 n/a 67,068 1,730 EKC Spring CFLs 1May Residential ,296,210 n/a 2,864,140 92,225 EKC Spring Timers 1May Residential ,973 n/a 235,315 7,577 EKC Spring P Stats 1May Residential ,559 n/a 91,039 2,931 EKC Spring Fans 1May Residential ,889 n/a 69,259 2,230 EKC Fall CFLs 1Oct Residential ,486,105 n/a 1,121,526 72,002 EKC Fall SLED (replacing 5W incandescent) 1Oct Residential ,820 n/a 64,205 4,122 EKC Fall SLED (replacing mini lights) 1Oct Residential ,111 n/a 24,528 1,575 EKC Falll P Stats (space heating) 1Oct Residential ,136 n/a 141,034 9,054 EKC Falll P Stats (space cooling) 1Oct Residential ,220 n/a 39,805 2,555 EKC P Stats Baseboard 1Oct Residential ,491 n/a 28,373 1,822 EKC Timer 1Oct Residential ,889 n/a 43,722 2,807 EKC Motion Sensor 1Oct Residential ,612 n/a 28,403 1,823 SLED Exchange 6Dec08 1 Residential n/a n/a n/a n/a Design Advisory <50 kw n/a n/a n/a n/a n/a n/a n/a n/a n/a Load Control <50 kw 1Jul Residential n/a 0 Social Housing n/a n/a n/a n/a n/a n/a n/a n/a n/a CI&I > 50kW n/a n/a n/a n/a n/a n/a n/a n/a n/a Energy AR&P n/a n/a n/a n/a n/a n/a n/a n/a n/a Leveraging Energy Conservation & Load Management 1Nov General Service >50 kw n/a ,822 3,862 MECO Fridge Bounty Fridges 1Nov General Service >50 kw n/a ,085 MECO Fridge Bounty Freezers 1Nov General Service >50 kw n/a ,806 MECO Fridge Bounty RACs 1Nov General Service >50 kw n/a ,132 MECO MMCC Energy Audit n/a n/a General Service >50 kw n/a n/a n/a n/a MECO Load Shedding Month of Aug 0.08 General Service >50 kw n/a MECO Conveyor Toaster Replacement month of Aug 0.08 General Service >50 kw n/a MECO Garage Lighting Retrofit 30Jun General Service >50 kw n/a Load Control >50 kw n/a n/a n/a n/a n/a n/a n/a n/a Design Advisory >50 kw 1Mar General Service >50 kw n/a ,719 8,581 PBIP Chiller Replacement 1Mar General Service >50 kw n/a ,851 PBIP Lighting Retrofits 1Mar General Service >50 kw n/a ,868 Distributed Energy 1Nov General Service >50 kw n/a ,358 6,288 TOTAL 245,493 18,286,078

20 Filed: October 10, 2008 Tab 2 Page 9 of 14 Table7C: 2007 CDM Results LRAM Calculation Program Program Start Date Partially Effective Factor Rate Class 2007 Distribution Rate Fully Effective kwh Savings Mthly Full Effective kw Savings Partially Effective 2007 kwh/kw Savings LRAM kwh/kw annualized (1) Net Net CoBranded Mass Markets 0.46 Residential , ,566 4, ,566 CFL Distribution Feb Residential , ,566 4,986 Load Control <50kW July Residential, Sm. Commercial <50kW , Programmable Thermostats July Residential, Sm. Commercial <50kW , Social Housing Residential , , ,212 A/C Retirment July 2007 (Summer Months Only) 1 Residential , , Fridge Replacement Jul Residential , , Low Flow Showerheads Jul Residential , , Smart Thermostats Jul Residential , , Design Advisory <50 kw Jul Sm. Commercial <50kW , ,236 1,065 94,236 No Catch to Conserve Fluorescent Lighting Jul Sm. Commercial <50kW , , No Catch to Conserve Programmable Thermostats Jul Sm. Commercial <50kW , , No Catch to Conserve Water Heaters Jul Sm. Commercial <50kW , , Energy AR&P Mar Residential , ,540 1, ,540 TRCA Cold Water Washing Mar Residential , ,450 1,196 TRCA Full Dryer Mar Residential , , Leveraging Energy Conservation & Load Management Dec General Service >50 kw ,408, MECO Building Automation Dec General Service >50 kw MECO Gas Fired Dehumidifier Dec General Service >50 kw , MECO Lighting Retrofits Dec General Service >50 kw , MECO Retirement Program Dec General Service >50 kw ,033, Home Depot Jun General Service >50 kw , Load Control (DR) >50 kw Nov General Service >50 kw , ,783 10,000 Enershift Nov General Service >50 kw Design Advisory >50 kw Nov07 General Service >50 kw ,937, ,456 1,078 PBIP Blue Power Distribtuion Energy Corp. Feb General Service >50 kw , PBIP Central Canadian Glass Aug General Service >50 kw , PBIP Gracious Hanlan Automortive Living Corp. Parts Distribution Nov General Service >50 kw , Limited Nov General Service >50 kw , PBIP Norampac Leaside Division Nov General Service >50 kw , PBIP Powerstream Inc. Nov General Service >50 kw , PBIP Prospec MFG Inc. Nov General Service >50 kw , PBIP TYCOS Tool & Die Nov General Service >50 kw , Distributed Energy n/a 1 General Service >50 kw n/a n/a n/a n/a TOTAL 34, ,963 NOTES: (1) The partial effective kw savings pgms are mulitplied by 12 months to annuallize. Kwh already represent represent annual amounts thus no multiplier is required

21 Filed: October 10, 2008 Tab 2 Page 10 of 14 Table 8A 2005 SSM Calculation TRC Inputs Program Savings Horizon TRC Results (NPV) Program Program Start Date Rate Class Participants/P rojects Freeridershi p Utility Program Costs (net of incentives) kwh Savings Mthly kw Savings Customer Equipment Costs (net) TRC Costs TRC Benefits TRC Net Benefits SSM Gross Net Gross Net CoBranded Mass Markets Oct Residential 13,603 5 to 10% 74,454 1,608,684 1,447, , , , ,958 23,498 Design Advisory Audit Program n/a n/a n/a n/a 167,470 n/a n/a n/a n/a 167,470 (167,470) (8,373) Residential Load Control n/a n/a n/a n/a 17,470 n/a n/a n/a n/a 17,470 (17,470) (873) Social Housing 01Oct05 Residential 350 1% 17, , , ,500 34, ,070 78,100 3,905 Energy Audit Retrofit and Partnerships Leveraging Energy Conservation & Load Management Mayor's MW Challenge Sustainable Schools 01Oct05 Oct Oct05 01Oct05 General Service >50kW General Service >50kW General Service >50kW General Service >50kW % 146, , , , ,612 19, % 917, , , , , , , % 797, , , , , , , % 120,000 84, , , , , ,340 CI&I Load Control Initiative n/a n/a n/a n/a 17,670 n/a n/a n/a n/a 17,670 (17,670) (883) Design Advisory > 50 kv n/a n/a n/a n/a 17,470 n/a n/a n/a n/a 17,470 (17,470) (873) Distributed Energy 01Oct05 General Service >50kW 1 30% 175, , , , ,960 (26,040) (1,302) OTHER SUPPORT COSTS n/a n/a n/a n/a n/a n/a n/a n/a 0 0 TOTAL 793,250 39,663

22 Table 8B: 2006 CDM Reported Results Filed: October 10, 2008 Tab 2 Page 11 of 14 TRC Inputs Program Savings TRC Results (NPV) Program Program Start Date Rate Class Participants/ Projects Free Ridership Utility Program Costs (net of incentives) Total CDM Funding (spent in 2005) kwh Savings kw Savings Customer Equipment Costs (net) TRC Costs TRC Benefits TRC Net Benefits SSM Gross Net Gross Net CoBranded Mass Markets Residential 136,974 5 to 10% 292,919 13,985,011 12,605, , ,637 4,781,577 4,148, ,447 CFL Distribution 6Jan08 Residential 17,845 10% 1,863,018 1,676,716 Keep Cool RAC Energy Star Keep Cool RAC Retirement 1Jun06 Residential 68 10% 5,984 5, Jun06 Residential % 74,520 67, EKC Spring CFLs 1May06 Residential 45,877 10% 4,773,567 4,296,210 EKC Spring Timers 1May06 Residential 2,149 10% 115, ,973 EKC Spring P Stats 1May06 Residential % 392, , EKC Spring Fans 1May06 Residential % 151, , EKC Fall CFLs 1Oct06 Residential 47,745 10% 4,984,561 4,486,105 EKC Fall SLED (replacing 5W incandescent) 1Oct06 Residential 6,413 5% 270, ,820 EKC Fall SLED (replacing mini lights) 1Oct06 Residential 6,413 5% 103,275 98,111 EKC Falll P Stats (space heating) 1Oct06 Residential % 626, ,136 EKC Falll P Stats (space cooling) 1Oct06 Residential 1,112 10% 176, , EKC P Stats Baseboard 1Oct06 Residential 86 10% 126, ,491 EKC Timer 1Oct06 Residential 1,398 10% 194, ,889 EKC Motion Sensor 1Oct06 Residential % 126, ,612 SLED Exchange 6Dec08 Residential 5,200 5% Design Advisory <50 kw n/a n/a Load Control <50 kw 1Jul06 Residential 250 0% 159, , , ,888 67,662 3,383 Social Housing n/a n/a n/a n/a 22,005 22,005 (22,005) (1,100) CI&I > 50kW n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Energy AR&P n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Leveraging Energy Conservation & General Service Load Management 1Nov06 >50 kw 1, ,005 1,208,534 1,087, , , ,012 (164,954) (8,248) MECO Fridge Bounty Fridges General Service 1Nov06 >50 kw % 838, , MECO Fridge Bounty Freezers General Service 1Nov06 >50 kw % 297, , MECO Fridge Bounty RACs General Service 1Nov06 >50 kw 47 10% 29,187 26, MECO MMCC Energy Audit General Service n/a >50 kw 1 n/a n/a n/a n/a n/a n/a n/a n/a n/a MECO Load Shedding General Service Month of Aug >50 kw 1 0% 1,749 1, MECO Conveyor Toaster Replacement month of Aug General Service >50 kw 1 0% 3,266 3, MECO Garage Lighting Retrofit 30Jun05 General Service >50 kw 96 10% 37,632 33, Load Control >50 kw n/a n/a n/a n/a 24,653 n/a n/a n/a n/a n/a n/a n/a n/a Design Advisory >50 kw General Service 1Mar06 >50 kw ,127,319 2,298, , ,543 1,556, ,600 34,380 PBIP Chiller Replacement General Service 1Mar06 >50 kw 1 10% 545, , ,950 4, , ,400 PBIP Lighting Retrofits General Service 1Mar06 >50 kw 12 30% 2,581,744 1,807, , ,593 1,014, ,200 Distributed Energy 1Nov06 General Service 1 30% 348,458 3,266,880 2,286, ,000 1,148,458 2,604,863 1,456,405 72,820 TOTAL 6,173, ,682

23 Table 8C: 2007 CDM Reported Results SSM Calculation Filed: October 10, 2008 Tab 2 Page 12 of 14 TRC Inputs Program Savings TRC Results (NPV) Program Program Start Date Rate Class Participants/Pr ojects Freeridership Utility Program Costs (net of incentives) kwh Savings kw Savings Customer Equipment Costs (net) TRC Costs TRC Benefits TRC Net Benefits TRC Benefit Cost Ratio SSM Gross Net Gross Net CoBranded Mass Markets Feb07 Residential 9, , , , , , ,961 (162,468) 0.56 (8,123) CFL Distribution Feb07 Residential 9,046 10% 353, , ,962 16, , ,961 (162,468) 0.56 Load Control <50kW July Programmable Thermostats July Residential, Sm. Commercial <50kW 1, , , , , ,398 1,190, , ,833 Residential, Sm. Commercial <50kW 1,700 0% 511, , , , ,398 1,190, , Social Housing Residential 992 1% 117, , , , , ,804 86, ,326 A/C Retirment (Summer Months Only) Residential 54 1% 4,320 4, Fridge Replacement Jul07 Residential 450 1% 30,273 29, Low Flow Showerheads Jul07 Residential 350 1% 173, , Smart Thermostats Jul07 Residential 138 1% 22,175 21, Design Advisory <50 kw Jul07 Sm. Commercial <50kW 1,092 10% 75, , , , , ,645 54, ,709 No Catch to Conserve Fluorescent Lighting Jul07 Sm. Commercial <50kW 1,001 10% 392, , ,297 No Catch to Conserve Programmable Thermostats Jul07 Sm. Commercial <50kW 46 0% 7,238 7, ,730 No Catch to Conserve Water Heaters Jul07 Sm. Commercial <50kW 46 10% 18,393 16, ,400 Energy AR&P 1Mar Residential , , , , ,617 42,055 (239,562) 0.15 (11,978) TRCA Cold Water Washing Mar07 Residential % 149, , TRCA Full Dryer Mar07 Residential % 64,120 57, Leveraging Energy Conservation & Load Management Dec07 General Service >50 kw % 314, ,012,217 1,408, , ,468 1,400, , ,802 MECO Building Automation Dec07 General Service >50 kw 1 30% 150, , ,000 83, ,900 19, MECO Gas Fired Dehumidifier 1Dec07 General Service >50 kw 1 30% 300, , ,000 83, , , MECO Lighting Retrofits Dec07 General Service >50 kw 30% 57,600 40, ,000 71,000 16,600 (54,400) 0.23 MECO Retirement Program Dec07 General Service >50 kw 30% 1,477,063 1,033, ,000 43, , , Home Depot Jun07 General Service >50 kw % 27,397 19, , , , , Load Control (DR) >50 kw Nov07 General Service >50 kw 1 297, , , , ,715 1,185, , ,133 Enershift Nov07 General Service >50 kw 1 0% 297, , , , ,715 1,185, , Design Advisory >50 kw Nov07 General Service >50 kw to 30% 13, ,719,882 1,937, , , , , ,109 PBIP Blue Power Distribtuion Energy Corp. Feb07 General Service >50 kw 1 10% 166, , ,000 31,000 62,600 31, PBIP Central Canadian Glass Aug07 General Service >50 kw 1 30% 197, , ,000 61,000 76,400 15, PBIP Gracious Living Corp. Nov07 General Service >50 kw 1 30% 174, , ,000 12,000 40,200 28, PBIP Hanlan Automortive Parts Distribution Limited Nov07 General Service >50 kw 1 30% 21,296 14, ,000 7,000 4,600 (2,400) 0.66 PBIP Norampac Leaside Division Nov07 General Service >50 kw 1 30% 1,265, , , , ,700 63, PBIP Powerstream Inc. Nov07 General Service >50 kw 1 30% 383, , ,000 88,000 87,000 (1,000) 0.99 PBIP Prospec MFG Inc. Nov07 General Service >50 kw 1 30% 86,409 60, ,000 31,000 19,600 (11,400) 0.63 PBIP TYCOS Tool & Die Nov07 General Service >50 kw 1 30% 423, , ,000 86,000 97,500 11, ERIP Crown Metal Packaging (1) n/a General Service >50 kw 1 30% 0 ERIP Sears Canada (1) n/a General Service >50 kw 1 30% 0 ERIP The Toronto Star (1) n/a Large User 1 30% 0 Distributed Energy n/a General Service >50 kw n/a 358, ,541,866 5,279,306 1, , ,815 0 (358,815) (17,941) OTHER SUPPORT COSTS TOTAL 2,305, ,080,353 10,249,944 9, , ,840,475 4,145,617 5,142, , ,869 NOTES : 1) ERIP 3 pgms are included in OPA pgms and recovered from OPA.

24 Filed: October 10, 2008 Tab 2 Page 13 of 14 Table 9: Estimated Adjustment to LRAM due to Transformer Allowance (TA) Purpose: To reduce the LRAM by the amount of transformer allowance (TA) credit that would have been deducted from distribution revenue YEAR TA kw (1) All customers Total billed kw % of kws Receiving TA Customers participating in CDM Programs Gross LRAM kw Savings by class (2) TA kw TA (/kw) Estimated TA GS >50 kw 2,275,430 9,077, % 28,383 7, ,258 Large Use 710, , % TOTAL ,986,195 9,787, % 28,383 7, , YEAR GS >50 kw 2,667,474 9,379, % 18,731 5, ,147 Large Use 485, , % TOTAL ,153,229 9,919, % 18,731 5, , YEAR GS >50 kw 2,982,390 10,077, % 11,409 3, ,054 Large Use 86,879 86, % TOTAL ,069,269 10,164, % 11,409 3, ,054 GRAND TOTALS 9,208,693 29,871, % 58,523 15, ,459 NOTES: 1) The class average ratio of transformer allowance kws /billed kws for the year has been used to estimate transformer allowance. 2) See table 10 for details by program and customer class.

25 Table 10: Transformer Allowance (TA) by Program and Customer Class Filed: October 10, 2008 Tab 2 Page 14 of PROGRAMS GS>50 kw Savings (1) GS>50 TA (kw) GS>50 TA Large User kw Savings Large User TA (kw) Large User TA Total kw Savings Total TA CoBranded Mass Markets Design Advisory Audit Program Residential Load Control Social Housing Energy Audit Retrofit and Partnerships Leveraging Energy Conservation & Load 9,231 2,308 1, ,231 1,385 CI&I Load Control Initiative Design Advisory > 50 kw Distributed Energy 18,484 4,621 2, ,484 2,773 Total ,383 7,096 4, ,383 4, PROGRAMS GS>50 kw Savings (1) GS>50 TA (kw) GS>50 TA Large User kw Savings Large User TA (kw) Large User TA Total kw Savings Total TA CoBranded Mass Markets Design Advisory Audit Program Residential Load Control Social Housing Energy Audit Retrofit and Partnerships Leveraging Energy Conservation & Load 3,862 1, , CI&I Load Control Initiative Design Advisory > 50 kw 8,581 2,403 1, ,581 1,442 Distributed Energy 6,288 1,761 1, ,288 1,057 Total ,731 5,245 3, ,731 3, PROGRAMS GS>50 kw Savings (1) GS>50 TA (kw) GS>50 TA Large User kw Savings Large User TA (kw) Large User TA Total kw Savings Total TA CoBranded Mass Markets Design Advisory Audit Program Residential Load Control Social Housing Energy Audit Retrofit and Partnerships Leveraging Energy Conservation & Load Management CI&I Load Control Initiative 10,000 3,000 1, ,000 1,800 Design Advisory > 50 kw 1, , Distributed Energy Total ,409 3,422 2, ,409 2,053 Transformer Allowance 3 Year Totals 58,523 15,763 9, ,523 9,459 Transformer Allowance kws as % of total kws Billed see table Transform allow. GS>50kW 25.00% 28.00% 30.00% Transform allow. Large user % 90.00% % NOTES: 1) Net kw savings is the calculated gross kw savings with freeridership kw deducted. See table 5 for details 2) Transformer allowance is calculated using current transformer allowance credit of 0.60 per kw.