Page 1 of 9 (1) Version: 1.0 Table of Content Sheet A Name Data Input Sheet 1 Rate Base 2 Utility Income 3 Taxes/PILS 4 Capitalization/Cost of Capital 5 Revenue Sufficiency/Deficiency 6 Revenue Requirement 7 Bill Impacts : (1) Pale green cells represent inputs (2) Please note that this model uses MACROS. Before starting, please ensure that macros have been enabled. Copyright This Revenue Requirement Work Form Model is protected by copyright and is being made available to you solely for the purpose of preparing or reviewing your draft rate order. You may use and copy this model for that purpose, and provide a copy of this model to any person that is advising or assisting you in that regard. Except as indicated above, any copying, reproduction, publication, sale, adaptation, translation, modification, reverse engineering or other use or dissemination of this model without the express written consent of the Ontario Energy Board is prohibited. If you provide a copy of this model to a person that is advising or assisting you in preparing or reviewing your draft rate order, you must ensure that the person understands and agrees to the restrictions noted above.
Page 2 of 9 Data Input (1) Application Adjustments Per Board Decision 1 Rate Base Gross Fixed Assets (average) $4,141,256,159 (4) $4,141,256,159 Accumulated Depreciation (average) ($2,255,857,193) (5) ($2,255,857,193) Allowance for Working Capital: Controllable Expenses $2,001,524,201 $2,001,524,201 Cost of Power $212,040,512 $212,040,512 Working Capital Rate (%) 12.51% 12.51% 2 Utility Income Operating Revenues: Distribution Revenue at Current Rates $476,755,328 Distribution Revenue at Proposed Rates $528,749,897 Other Revenue: Specific Service Charges $6,980,526 Late Payment Charges $4,800,000 Other Distribution Revenue $6,960,099 Other Income and Deductions ($0) Operating Expenses: OM+A Expenses $212,090,345 $212,090,345 Depreciation/Amortization $167,002,965 $167,002,965 Property taxes $6,737,658 $6,737,658 Capital taxes $1,987,214 Other expenses 3 Taxes/PILs Taxable Income: Adjustments required to arrive at taxable income ($21,112,183) (3) Utility Income Taxes and Rates: Income taxes (not grossed up) $14,573,759 (6) Income taxes (grossed up) $21,431,999 Capital Taxes $1,987,214 Federal tax (%) 18.00% Provincial tax (%) 14.00% Income Tax Credits ($840,000) 4 Capitalization/Cost of Capital Capital Structure: Long-term debt Capitalization Ratio (%) 56.0% Short-term debt Capitalization Ratio (%) 4.0% (2) (2) Common Equity Capitalization Ratio (%) 40.0% Prefered Shares Capitalization Ratio (%) 0.0% Capital Structure must total 100% Cost of Capital Long-term debt Cost Rate (%) 5.60% Short-term debt Cost Rate (%) 1.33% Common Equity Cost Rate (%) 8.01% Prefered Shares Cost Rate (%) 0.00% : This input sheet provides all inputs needed to complete sheets 1 through 6 (Rate Base through Revenue Requirement), except for that the utility may wish to use to support the components. should be put on the applicable pages to understand the context of each such note. (1) All inputs are in dollars ($) except where inputs are individually identified as percentages (%) (2) 4.0% unless an Applicant has proposed or been approved for another amount. (3) Net of addbacks and deductions to arrive at taxable income. (4) Average of Gross Fixed Assets at beginning and end of the Test Year (5) Average of Accumulated Depreciation at the beginning and end of the Test Year. Enter as a negative amount. (6) Income Taxes (not grossed up) net of income tax credits
Toronto Hydro-Electric System Limited Page 3 of 9 Rate Base Particulars Application Adjustments Per Board Decision 1 Gross Fixed Assets (average) (3) $4,141,256,159 $ - $4,141,256,159 2 Accumulated Depreciation (average) (3) ($2,255,857,193) $ - ($2,255,857,193) 3 Net Fixed Assets (average) (3) $1,885,398,966 $ - $1,885,398,966 4 Allowance for Working Capital (1) $276,903,814 $ - $276,903,814 5 Total Rate Base $2,162,302,781 $ - $2,162,302,781 (1) Allowance for Working Capital - Derivation 6 Controllable Expenses $2,001,524,201 $ - $2,001,524,201 7 Cost of Power $212,040,512 $ - $212,040,512 8 Working Capital Base $2,213,564,713 $ - $2,213,564,713 9 Working Capital Rate % (2) 12.51% 12.51% 10 Working Capital Allowance $276,903,814 $ - $276,903,814 (2) (3) Generally 15%. Some distributors may have a unique rate due as a result of a lead-lag study. Average of opening and closing balances for the year.
Page 4 of 9 Utility income Particulars Application Adjustments Per Board Decision Operating Revenues: 1 Distribution Revenue (at Proposed Rates) $528,749,897 $ - $528,749,897 2 Other Revenue (1) $18,740,626 $ - $18,740,626 3 Total Operating Revenues $547,490,523 $ - $547,490,523 Operating Expenses: 4 OM+A Expenses $212,090,345 $ - $212,090,345 5 Depreciation/Amortization $167,002,965 $ - $167,002,965 6 Property taxes $6,737,658 $ - $6,737,658 7 Capital taxes $1,987,214 $ - $1,987,214 8 Other expense $ - $ - $ - 9 Subtotal $387,818,182 $ - $387,818,182 10 Deemed Interest Expense $68,960,160 $ - $68,960,160 11 Total Expenses (lines 4 to 10) $456,778,343 $ - $456,778,343 12 Utility income before income taxes $90,712,180 $ - $90,712,180 13 Income taxes (grossed-up) $21,431,999 $ - $21,431,999 14 Utility net income $69,280,182 $ - $69,280,182 (1) Other Revenues / Revenue Offsets Specific Service Charges $6,980,526 $6,980,526 Late Payment Charges $4,800,000 $4,800,000 Other Distribution Revenue $6,960,099 $6,960,099 Other Income and Deductions ($0) ($0) Total Revenue Offsets $18,740,626 $18,740,626
Page 5 of 9 Taxes/PILs Particulars Application Per Board Decision Determination of Taxable Income 1 Utility net income $69,280,181 $69,280,181 2 Adjustments required to arrive at taxable utility income ($21,112,183) ($21,112,183) 3 Taxable income $48,167,998 $48,167,998 Calculation of Utility income Taxes 4 Income taxes $14,573,759 $14,573,759 5 Capital taxes $1,987,214 $1,987,214 6 Total taxes $16,560,973 $16,560,973 7 Gross-up of Income Taxes $6,858,240 $6,858,240 8 Grossed-up Income Taxes $21,431,999, $21,431,999, PILs / tax Allowance (Grossed-up Income taxes + 9 Capital taxes) $23,419,213 $23,419,213 10 Other tax Credits ($840,000) (1) ($840,000) Tax Rates 11 Federal tax (%) 18.00% 18.00% 12 Provincial tax (%) 14.00% 14.00% 13 Total tax rate (%) 32.00% 32.00% (1) Total PILs per 9 is net of income tax credits.
Page 6 of 9 Capitalization/Cost of Capital Particulars Capitalization Ratio Cost Rate Return Application (%) ($) (%) ($) Debt 1 Long-term Debt 56.00% $1,210,889,557 5.60% $67,809,815 2 Short-term Debt 4.00% $86,492,111 1.33% $1,150,345 3 Total Debt 60.00% $1,297,381,668 5.32% $68,960,160 Equity 4 Common Equity 40.00% $864,921,112 8.01% $69,280,181 5 Preferred Shares 0.00% $ - 0.00% $ - 6 Total Equity 40.00% $864,921,112 8.01% $69,280,181 7 Total 100% $2,162,302,781 6.39% $138,240,341 Per Board Decision (%) ($) (%) Debt 8 Long-term Debt 56.00% $1,210,889,557 5.60% $67,809,815 9 Short-term Debt 4.00% $86,492,111 1.33% $1,150,345 10 Total Debt 60.00% $1,297,381,668 5.32% $68,960,160 Equity 11 Common Equity 40.0% $864,921,112 8.01% $69,280,181 12 Preferred Shares 0.0% $ - 0.00% $ - 13 Total Equity 40.0% $864,921,112 8.01% $69,280,181 14 Total 100% $2,162,302,781 6.39% $138,240,341 (1) 4.0% unless an Applicant has proposed or been approved for another amount.
Page 7 of 9 Revenue Sufficiency/Deficiency Per Application Per Board Decision Particulars At Current Approved Rates At Proposed Rates At Current Approved Rates At Proposed Rates 1 Revenue Deficiency from Below $51,994,569 $51,994,569 2 Distribution Revenue $476,755,328 $476,755,328 $476,755,328 $476,755,328 3 Other Operating Revenue Offsets - net $18,740,626 $18,740,626 $18,740,626 $18,740,626 4 Total Revenue $495,495,954 $547,490,523 $495,495,954 $547,490,523 5 Operating Expenses $387,818,182 $387,818,182 $387,818,182 $387,818,182 6 Deemed Interest Expense $68,960,160 $68,960,160 $68,960,160 $68,960,160 Total Cost and Expenses $456,778,343 $456,778,343 $456,778,343 $456,778,343 7 Utility Income Before Income Taxes $38,717,611 $90,712,180 $38,717,611 $90,712,180 Tax Adjustments to Accounting 8 Income per 2009 PILs ($21,112,183) ($21,112,183) ($21,112,183) ($21,112,183) 9 Taxable Income $17,605,428 $69,599,997 $17,605,428 $69,599,997 10 Income Tax Rate 32.00% 32.00% 32.00% 32.00% 11 Income Tax on Taxable Income $5,633,737 $22,271,999 $5,633,737 $22,271,999 12 Income Tax Credits ($840,000) ($840,000) ($840,000) ($840,000) 13 Utility Net Income $33,923,874 $69,280,182 $33,923,874 $69,280,182 14 Utility Rate Base $2,162,302,781 $2,162,302,781 $2,162,302,781 $2,162,302,781 Deemed Equity Portion of Rate Base $864,921,112 $864,921,112 $864,921,112 $864,921,112 15 Income/Equity Rate Base (%) 3.92% 8.01% 3.92% 8.01% 16 Target Return - Equity on Rate Base 8.01% 8.01% 8.01% 8.01% Sufficiency/Deficiency in Return on Equity -4.09% 0.00% -4.09% 0.00% 17 Indicated Rate of Return 4.76% 6.39% 4.76% 6.39% 18 Requested Rate of Return on Rate Base 6.39% 6.39% 6.39% 6.39% 19 Sufficiency/Deficiency in Rate of Return -1.64% 0.00% -1.64% 0.00% 20 Target Return on Equity $69,280,181 $69,280,181 $69,280,181 $69,280,181 21 Revenue Sufficiency/Deficiency $35,356,307 $1 $35,356,307 $1 22 Gross Revenue Sufficiency/Deficiency $51,994,569 (1) $51,994,569 (1) : (1) Revenue Sufficiency/Deficiency divided by (1 - Tax Rate)
Page 8 of 9 Revenue Requirement Particulars Application Per Board Decision 1 OM&A Expenses $212,090,345 2 Amortization/Depreciation $167,002,965 3 Property Taxes $6,737,658 4 Capital Taxes $1,987,214 5 Income Taxes (Grossed up) $21,431,999 6 Other Expenses $ - 7 Return Deemed Interest Expense $68,960,160 Return on Deemed Equity $69,280,181 $212,090,345 $167,002,965 $6,737,658 $1,987,214 $21,431,999 $ - $68,960,160 $69,280,181 8 Distribution Revenue Requirement before Revenues $547,490,522 $547,490,522 9 Distribution revenue $528,749,897 10 Other revenue $18,740,626 $528,749,897 $18,740,626 11 Total revenue $547,490,523 $547,490,523 12 Difference (Total Revenue Less Distribution Revenue Requirement before Revenues) $1 (1) $1 (1) (1) 11-8
Page 9 of 9 Selected Delivery Charge and Bill Impacts Per Draft Rate Order Monthly Delivery Charge Total Bill Per Draft Change Per Draft Change Current Rate Order $ % Current Rate Order $ % Residential 800 kwh/month $ 28.31 $ 31.61 $ 3.30 11.7% $ 90.04 $ 93.59 $ 3.55 3.9% GS < 50kW 2000 kwh/month $ 60.94 $ 70.82 $ 9.88 16.2% $ 225.12 $ 236.84 $ 11.72 5.2% : Without proposed Rate Riders