InnPower invited the public to a recent presentation (March 9) on the topic, “How your hydro bill is calculated” but the evening was intended to also explain why electric bills will be going up over the next 5 years. The first part of the meeting explained the different segments of a residential hydro bill: generation; transmission; distribution; and regulation/taxation. They were careful to point out that InnPower only has control over the cost of (local) distribution while the price of generation and transmission are set separately and only passed through to the consumer.
The price of electricity distribution, the part InnPower controls, affects 26% of the total bill. It’s that part of the bill that will be the subject of an InnPower application for a rate increase (2017-2021) at the Ontario Energy Board. This is a detailed and costly process, which occurs on a regular 5 year cycle that puts the operations of the local utility under a microscope. The application is a lengthy technical document, which will be open to public examination and comment.
The need for increased revenue is being driven by the need to invest in new infrastructure within Innisfil as well as the annexed lands that are now part of Barrie but continue to be within InnPower’s service area. Staff highlighted some of the necessary planned major investments such as realignment of the 20th Sideroad at Innisfil Beach Rd., Friday Harbour resort, and Lefroy residential development. Another major factor is preparation of the annexed lands for development, where Barrie is planning a future addition of 40,000 residents – rivaling the projected population of 56,000 for Innisfil in 2030. InnPower has to finance these infrastructure investments from its existing customers before it can begin to recoup the money through electric distribution to new consumers.
InnPower’s rate application, to be filed in April, will outline its expected revenue requirements beginning 2017 and for the next 5 years. A decision on this application will affect the distribution rate appearing on electric bills over that period.