Last week the Ontario Energy Board released the Regulated Price Plan (RPP) rates for November through April. I wrote a serious evaluation of the last rate hike, in the spring; this time I’ve just read the media backgrounder, and pulled some of the same figures out of the new price report.

This time the rates aren’t going up entirely due to renewables - and they are going up slightly less this winter because costs were less than anticipated over the summer; the variance account that built up lowers rate hike from 9%+ to 7%.

More than any other rate report, the latest looks like it expects costs to rise over 9% because it expects rates to rise over 9%. Here’s the history:

So rates are going up as they have come to do each year.

Looking at the same component figures for winter rates that I explored for summer rates 6 months ago, renewables are no longer the sole reason for the rate hike:

Here’s the meat of the reasoning that leads to the hike in “OPG Prescribed” costs - which non coincidentally causes the rate hike to be basically the same as it always is.

On September 27, 2013, OPG filed an application (EB‐2013‐0321) for the approval of payment amounts for the prescribed assets for a two‐year period. The oral hearing of this application has concluded but the Board has not yet issued a decision and order. The Board believes that it is prudent to take into account some effect of the application for increased payment amounts. This approach is consistent with one of the objectives of the RPP which is to smooth changes in prices over time. Therefore, approximately 50% of the requested cost increase for the prescribed assets has been used for the purpose of calculating the RPP prices, with an assumed implementation date of January 1, 2015 and no assumptions on retroactive recovery. The inclusion of an amount in the RPP should in no way be taken as predictive of the outcome of that proceeding. Regardless of whether the Board approves higher or lower payments to OPG, any difference will be reflected in a variance account, and will be included in electricity prices when they are reset in May 2015.

There’s a lot of assumptions going on there, resulting in the winter rates being “consistent with one of the objectives of the RPP which is to smooth changes in prices over time.”

I suspect the assumptions that result in the winter 2014-15 pricing were made to rationalize the decision for the “smooth change” in the rates, and not much else.