1 Updated: EB-0-0 Exhibit D Tab Schedule Page of COMMON CORPORATE COSTS CAPITAL FACILITIES AND REAL ESTATE AND STATION SECURITY INFRASTRUCTURE.0 INTRODUCTION This exhibit addresses Facilities and Real Estate s ( F&RE ) capital expenditures to acquire (own or lease) and maintain Hydro One office space and service centres and capital expenditures to enhance security infrastructure. Exhibit D, Tab, Schedule (Summary of Corporate Common Costs Capital) describes which RRFE outcomes are promoted by the investments set out in this Exhibit. Table presents total F&RE and security infrastructure capital expenditures for the Historic, Bridge and Test Years as well as the 0-0 Distribution amounts. Table Total Facilities and Real Estate and Security Infrastructure Capital Expenditures Major MFA Total
2 Updated: EB-0-0 Exhibit D Tab Schedule Page of Allocated to Distribution Major MFA Total COMMON CORPORATE COSTS - FACILITIES & REAL ESTATE Table presents total F&RE capital expenditures for the Historic, Bridge and Test Years as well as the 0-0 Distribution amounts. Table Total Facilities and Real Estate Capital Expenditures Major MFA Total Allocated to Distribution Major..... MFA Total..... The primary driver for the increase in costs is the need to provide suitable space and to accommodate the staff resources and equipment required to handle the substantial
3 Filed: 0-0- EB-0-0 Exhibit D Tab Schedule Page of growth in core sustaining, development and operations work programs over this period (as described in Exhibits C and D). These expenditures encompass the refurbishment, acquisition and/or development of field facilities and the expansion and improvement of head office space.. F&RE Capital Expenditures The F&RE major capital program allows for the provision of workspace for head office facilities, the Ontario Grid Control Centre in Barrie, and field administrative and service centre facilities. 0 Key Program work activities include: Addressing company accommodation requirements in terms of new buildings, buildings additions and major facility renovations; Replacement of major building components including roof structures, windows, heating, ventilating and air conditioning ( HVAC ) systems and other structural elements and building systems; Dealing with environmental issues that may arise such as mould; and Water treatment upgrades to improve quality and reliability of water supply, including conversions to municipal supply.
4 Updated: EB-0-0 Exhibit D Tab Schedule Page of a) Field Facilities Accommodations Requirements Table Total Field Facilities Capital Expenditures Major MFA Total....* *An absence of suitable properties for new facilities hampered the execution of the 0 field facilities capital program. The capital work program includes improvements to existing facilities, building additions and new facilities in line with the company s operational requirements and responding to work program space demands. This program also focuses on ensuring critical facility structural and other building improvements to enhance the life of assets. Maintaining building and site assets in a condition that ensures their long-term viability, while meeting the workspace needs of employees, on a day-to-day basis, is critical for the successful completion of a variety of corporate work activities. Hydro One contracts to have regular inspections of administrative and service centre sites across the province, ensuring critical building/site components (such as HVAC systems, roof, windows) are routinely inspected and major structural and related problems are identified. From the inspection recommendations, component replacement work is scheduled on a priority basis. Planned and corrective replacement of these critical components varies year over year based on recommendations from the facility service providers. The facilities infrastructure
5 Updated: EB-0-0 Exhibit D Tab Schedule Page of base is dominated by buildings and associated systems and components that are at or reaching the end of their asset life cycle. Approximately 0% of administrative and service centre facilities are estimated to be more than 0 years old. The aging facilities asset base in conjunction with work program demands and operational needs of the business units requires capital investment in order to continue to provide adequate workspace accommodation. These requirements will be addressed on a priority basis and/or as opportunities emerge. Further details are available in Exhibit D, Table, Schedule. b) Head Office and GTA Facilities Accommodation Requirements Table Total Head Office and GTA Facilities Capital Expenditures Major MFA Total * *The head office tenant improvement project is approximately months behind schedule. Capital investment of $. million is required for bridge year 0 and $. million for test year 0. This investment will provide for head office improvements. In 0, Hydro One secured an eleven-year lease for Bay Street, to serve its ongoing head office requirements. Within the completed lease renewal of Bay, Hydro One was successful in obtaining the commitment of the Landlord to upgrade
6 Filed: 0-0- EB-0-0 Exhibit D Tab Schedule Page of base building systems/infrastructures and allowances for tenant improvements. The initially planned tenant improvements as outlined in the last distribution rate filling were ultimately deferred during years 0 and 0 given consideration to the capital reductions made by the Board in its last distribution decision and the economic situation in the Province of Ontario. The planned improvements are necessary now as major head office building infrastructure elements are now at the end of their life and require replacement. (This includes the raised flooring, which presents a health and safety issue with increasing number of tripping hazards.) Similarly, furniture systems acquired from the previous tenant and refurbished are also now considered to be at end of life. 0 In 0 the company commenced renovations to head office space. The head office capital investment, consisting of both leasehold improvements and replacement furniture systems, are expected to continue throughout bridge year 0 and test year 0. The leasehold improvements and the furniture systems funding requirements are estimated to be in bridge year $. million and in the following test year $. million. The project costing reflects continuance of the open office environment, completion to standard commercial finishes and commitment to LEED certification. Further details are available in Exhibit D, Table, Schedule. c) Minor fixed Assets ( MFA ) Office workstations and furniture are beyond the end of their normal service life and need to be replaced. Table shows the estimated MFA expenditures in test years 0-0. This includes replacement of furniture and office equipment related to new and renovated space accommodation requirements.
7 Updated: EB-0-0 Exhibit D Tab Schedule Page of.0 SECURITY INFRASTRUCTURE Table summarizes the total security capital expenditure for the historic, bridge and 0-0 test years. Table Total Security Infrastructure Capital Expenditures Totals Allocated to Distribution Total Security infrastructure is designed to effectively deter, delay, detect and respond to security threats that target distribution and transmission stations. There are currently 0 distribution stations. The Distribution Station Security Upgrade capital program follows a risk-based approach to address distribution stations based on their exposure to security threats. Distribution station security upgrades will be prioritized based on station criticality and the number of intrusion and theft occurrences. Copper in station ground grids, fence ground grids, ground connections and neutral connections for electrical equipment are often targeted for theft in Hydro One stations. The removal of ground and neutral copper connections compromises the electrical integrity of the grounding system. This can pose safety hazards to Hydro One employees, the general public and to the intruder. Thieves have gained access into stations by cutting through chain-link fence fabric or breaking lock mechanisms. This program will address distribution station security threats by providing reinforced
8 Filed: 0-0- EB-0-0 Exhibit D Tab Schedule Page of fencing, providing barriers for ground grids and other security measures. This work will help to maintain reliability, reduce power outages and improve employee and public safety. Security upgrade capital expenditures at distribution stations from 0 to 0 will range from $.0 million to $. million as per the table above. Approximately three stations are currently planned to be addressed per year. Based on the success of the security upgrades at deterring intrusions and theft, more distribution stations will be planned for security upgrades in future years. Further details are available in Exhibit D, Table, Schedule.