Electricity Infrastructure and Economic Development … · Electricity Infrastructure and Economic...

Toronto Hydro-Electric System Limited

Anthony Haines President & CEO Toronto Hydro Corporation

Electricity Infrastructure and Economic Development in Toronto City of Toronto Economic Development Committee October 16, 2012


Toronto Hydro at a Glance

2 | City of Toronto - Economic Development Committee – October 16, 2012

• Over 100 years of service history

• One of the largest distribution utilities in Canada

• Approx. 712,000 customers

• Peak load of 5,000 MW

• 18% of Provincial demand

• $2.2 billion in assets

• $2.8 billion revenues

• 1,500 employees


Corporate Structure

$1 Billion

Regulated by Ontario Energy Board (OEB) Local Distribution Company

Contractual Relationship with City of Toronto Owns and operates street lighting 1% of Revenue

$1.4 Billion

OEB’s Affiliate

Relationship Code

Regulated by Ontario Securities Commission Governance Financing

Shareholder Direction

Energy Services



Toronto Hydro and Economic Development

Toronto Hydro supports the City’s ambitious economic development strategy through four key functions:

1. Power Supply and Grid Management: supply current customers, connect new load, plan for future supply needs;

2. Rates: balance ratepayer costs with need for investment in the grid;

3. Customer Care and Key Account Management Services: provide enhanced energy management services to commercial, institutional, and industrial customers

4. Community Builder: significant contributor to city’s economic growth.



Complexity in Stakeholder Mgmt



City Population* Supply Points

Vancouver 603,502 9

Los Angeles 3,792,621 8

London 7,825,200 7

Chicago 2,707,120 5

New York 8,175,133 4

Toronto 2,615,060 2

Power Supply and Grid Management Grid Management: Securing Future Electricity Supply

* Source: www.citypopulation.de/cities.html



Power Supply and Grid Management Toronto Regional Plan

The Ontario Power Authority (OPA), in collaboration with Toronto Hydro, Hydro One and the Independent Electricity System Operator, is in the process of developing the Toronto Regional Electricity Plan. 25-year horizon

• Emphasis on requirements for the first seven years (near-term) • Options for the next seven to twelve years (mid-term) • 25-year long-term

The plan focuses on the City of Toronto’s long-term security of supply and analyzes options including, transmission, DG, conservation, demand response, etc. Toronto Hydro is working in partnership with the City (through the Toronto Environment Office) to develop a stakeholder consultation plan (meeting planned for first week of November) and to ensure the City and Toronto Hydro advocate from a shared position.



Agreement on Supply Criteria

Assess Needs/ Establish Forecast

Develop Solution Options

Consultation and Stakeholdering

Aug 2012

Feb 2013

Mar 2013

Apr 2013

Power Supply and Grid Management Toronto Regional Plan Timeline



Can your neighbourhood survive Toronto's condo boom? STUART A. THOMPSON The Globe and Mail Published Friday, Oct. 12 2012, 8:08 PM EDT Last updated Friday, Oct. 12 2012, 8:17 PM EDT

Power Supply and Grid Management

10 | City of Toronto - Economic Development Committee – October 16 2012


• 58% increase in connection requests since 2009

• Impact of electric vehicle charging on local distribution systems

Approximate # Highrises Under Construction*

1 Toronto 189

2 Mexico City 88

3 New York City 82

4 Chicago 24

5 Houston 22

* Source: Emporis, June 1, 2012

Grid Management Load Intensification


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http://www.thestar.com/entertainment/article/1267427--frank-gehry-hired-to-remake-david-mirvish-s-king-and-john-properties


Power Supply and Grid Management State of Good Repair - Capital Investment

0

50

100

150

200

250

300

350

400

450

500

2006 2007 2008 2009 2010 2011

$185

$289

$215 $249

$391 $454 $M

illio

ns



“The Custom IR rate setting option is intended to be customized to fit individual distributor circumstances. The custom method will be most appropriate for distributors with large

multi-year investment commitments over a five year period or more. Rate setting under the

Custom IR method will be informed by a distributor’s individual application including

forecasted expenditures, inflation and productivity”

Rosemarie T. Leclair CEO - OEB

Power Supply and Grid Management OEB: Renewed Regulatory Framework for Electricity



2.06 2.01

1.76 1.64

1.78 1.63

1

1.2

1.4

1.6

1.8

2

2.2

2.4

2006 2007 2008 2009 2010 2011

Outage Frequency

72.32 74.33

80.95

74.51

82.61

77.6

60

65

70

75

80

85

2006 2007 2008 2009 2010 2011

[min

utes

]

Outage Duration

53 53 54

38 41 35

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011

Worst Performing Feeders

Grid Management Infrastructure Challenges

21% reduction in outage occurrences

45% of outages are due to equipment

failure year to date

34% reduction in Worst Performing

Feeders



Grid Management Distributed Generation in Toronto

387 68

97

Number of Connections by Program

microFIT

FIT

Other

1,992

10,660

74,966

Total Generation (kW) by Program

microFIT FIT Other

0

50

100

150

200

Toronto Scarborough Etobicoke North York East York York

Number of Connections by Region


• Total Number of Projects = 552 • Total Connected DG = 87.6 MW Legend • microFIT: ≤10 KW • FIT: >10 kW ≤ 10 MW • Other: Gas co-gen, diesel back-up systems, and fuel cell


Rates Residential Electricity Rates in Toronto Compared with Other Cities

City Average Monthly Bill ($US) Country

Toronto 100.0

Rome 114.1

Zurich 171.6

Hong Kong 193.1

Barcelona 212.5

London 221.5

New York 225.0

Helsinki 250.0

Tokyo 326.0

Paris 351.3

Source: Economist Intelligence Unit, 2010


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Rates Electricity Relative to Overall Household Spending

1%

29%

13%

10% 6% 2%

30%

9% Electricity

Housing

Transportation

Food

Personal & Recreation

Health Care

Financial Obligations

Other


Toronto Hydro-Electric System Limited 19 | Presentation Subtitle October 16, 2012

0%

1%

2%

3%

4%

5%

6%

Retail Health Care & Social Assistance

Educational Services

Nonmetallic Mineral Product Manufacturing

Food Manufacturing

Paper Manufacturing

Plastics and Rubber Product Manufacturing

% o

f Ope

ratin

g C

osts

Sector Source: U.S. Census Bureau, Sector 31: Manufacturing: Summary Series: General Summary: Detailed Statistics by Subsectors and Industries: 2007

Rates Electricity Relative to Overall Operating Costs in Commercial and Industrial Sector


Rates Toronto Hydro Compared with Other Jurisdictions


$564,497

$551,238

$557,792

$547,480

$564,236

$549,621

$564,843

$552,003

$534,339

$578,247

$546,654

Enersource

EnWin

Horizon

Hydro One Brampton

Hydro Ottawa

Kitchener-Wilmot

London Hydro

Oshawa Hyro

Powerstream

Toronto Hydro

Veridian

Large User Rate Class (10 MW)

$11,682

$11,827

$11,373

$12,652

$11,283

$11,582

$11,802

$11,263

$11,552

$11,523

$12,183

$11,462

Enersource

EnWin

Horizon

Hydro One …

Hydro One …

Hydro Ottawa

Kitchener-Wilmot

London Hydro

Oshawa Hyro

Powerstream

Toronto Hydro

Veridian

Commercial Rate Class 50 KW> (250kW)


• CDM is a good investment and helps to offset rate increases and maintain competitiveness

• CDM projects typically produce annual electricity cost savings of 5-15%

• CDM incentive typically offset an average of 40% of project cost

74%

26%

Toronto Hydro's CDM Strategy

Conservation Demand Management


Rates Conservation and Demand Management (CDM)


Rates Historical Bill

Distribution Bill -- Residential (800 kWh/Month)

2005 2006 2007 2008 2009 2010 2011

Compound Annual Average

Distribution 29.72 27.31 27.64 27.98 28.32 30.39 29.50 -0.12%

Transmission 8.63 8.47 8.47 8.22 8.72 9.94 10.09 2.64%

Regulated Charges 11.00 11.00 11.00 11.00 11.25 11.55 11.25 0.37%

Commodity 41.50 45.65 41.50 46.48 53.62 57.77 66.57 8.19%

GST/HST 6.36 5.55 5.32 4.68 5.10 14.26 15.26 15.71%

Total Bill before OCEB $97.21 $97.97 $93.92 $98.36 $107.00 $123.92 $132.67 5.32%

Ontario Clean Energy Benefit $13.27

Net Total Bill $97.21 $97.97 $93.92 $98.36 $107.00 $123.92 $119.41 3.49%



Key Account Management Services Customer Profile

Customer Segment Total Revenue Total Customers

Revenue Per Customer

Large Business >1,000 KW $694million 550 $1,261,818

Medium Business 50-1,000 KW $1,075 million 12,463 $86,255

Small Business <50 KW $294 million 67,261 $4,371

Residential <50 KW $704 million 629,049 $1,119

$2,767 million 709,323



Commercial and Industrial

• Specialized Customer Service Agents – extended business hours • Dedicated Key Account Managers

offering a single point of contact for all account-related issues

• Enhanced outage management services (24/7 access to key account staff)

• Access to interval data and energy management on-line tools

• CDM programs to help lower consumption, costs and increase competitiveness

• Embedded Energy Managers offering expertise to help identify and implement saving opportunities

Residential

• Well trained Customer Service Agents during business hours

• First call resolution and service quality performance management

• Outage management services – Report an outage and on-line outage mapping

• Access to TOU data and on-line tools to manage energy consumption, transactions and accounts.

• CDM programs to help lower consumption and costs

• On-line energy calculators and mobile applications

Key Account Management Services Customer Care



Community Builder

27 | City of Toronto - Economic Development Committee – October 16 2012

500 Jobs

$50 Million

438k tons CO2

Creation of approximately 5,000 direct & indirect person-years of employment in Ontario from 2011

Average annual dividend paid to the City of Toronto

Contributed to the Green Energy Act and the City’s Climate Change Plan to phase out coal plants by 2014


Thank You



Disclaimer The information in these materials is based on information currently available to Toronto Hydro Corporation and its affiliates

(together hereinafter referred to as “Toronto Hydro”), and is provided for information purposes only. Toronto Hydro does not warrant the accuracy, reliability, completeness or timeliness of the information and undertakes no obligation to revise or update these materials. Toronto Hydro (including its directors, officers, employees, agents and subcontractors) hereby waives any and all liability for damages of whatever kind and nature which may occur or be suffered as a result of the use of these materials or reliance on the information therein. These materials may also contain forward-looking information within the meaning of applicable securities laws in Canada ("Forward-Looking Information"). The purpose of the Forward-Looking Information is to provide Toronto Hydro’s expectations about future results of operations, performance, business prospects and opportunities and may not be appropriate for other purposes. All Forward-Looking Information is given pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify Forward-Looking Information, although not all Forward-Looking Information contains these identifying words. The Forward-Looking Information reflects the current beliefs of, and is based on information currently available to, Toronto Hydro’s management. The Forward-Looking Information in these materials includes, but is not limited to, statements regarding Toronto Hydro’s future results of operations, performance, business prospects and opportunities. The statements that make up the Forward-Looking Information are based on assumptions that include, but are not limited to, the future course of the economy and financial markets, the receipt of applicable regulatory approvals and requested rate orders, the receipt of favourable judgments, the level of interest rates, Toronto Hydro’s ability to borrow, and the fair market value of Toronto Hydro’s investments. The Forward-Looking Information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the Forward-Looking Information. The factors which could cause results or events to differ from current expectations include, but are not limited to, the timing and amount of future cash flows generated by Toronto Hydro's investments, market liquidity and the quality of the underlying assets and financial instruments, the timing and extent of changes in prevailing interest rates, inflation levels, legislative, judicial and regulatory developments that could affect revenues, and the results of borrowing efforts. Toronto Hydro cautions that this list of factors is not exclusive. All Forward-Looking Information in these materials is qualified in its entirety by the above cautionary statements and, except as required by law, Toronto Hydro undertakes no obligation to revise or update any Forward-Looking Information as a result of new information, future events or otherwise after the date hereof.


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