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Toronto Hydro CR Report 2016

INTRODUCTION MATERIALITY AND STAKEHOLDER ENGAGEMENT OUR CITY OUR OUR PEOPLE ENVIRONMENT GLOSSARY AT A GLANCE Investing in the grid - Capital Expenditure Plan Renewing the grid and replacing aging distribution equipment, while meeting the needs of a growing city, is a costly and complex endeavour. To address these challenges, Toronto Hydro has developed a five-year capital plan, known as the 2015-2019 Distribution System Plan (the “DSP”). The DSP was presented to the OEB in 2014/2015 and allowed Toronto Hydro to secure funding to invest in the system. The DSP consists of four main investment categories: system access, system renewal, system service and general plant. 1. Investments in the System Access category are driven by statutory, regulatory or other obligations to provide customers with access to Toronto Hydro’s distribution system. This category includes investments to connect renewable energy generation facilities, and metering-related investments to maintain compliance with Measurement Canada regulations and the IESO Market Rules. 2. Investments in the System Renewal category target the renewal and reconfiguration of distribution assets that are no longer performing at an acceptable standard. These programs focus on remediating assets that are at, near or exceeding the end of their useful lives, and assets that no longer align to current operating practices. This includes assets with accessibility or serviceability conflicts (e.g. assets located in ravines, rear lots, highway crossings, etc.), which pose increased reliability and safety-related risks. 3. Investments in the System Service category target system-wide critical issues such as capacity and operational constraints, security-of-supply, safety, system reliability and other considerations for the effective operation of the distribution grid. 4. Investments in the General Plant category are essential to Toronto Hydro’s 24/7 day-to-day operational activities. These investments include the upgrade and renewal of critical software and hardware systems, vehicles and associated equipment, and facilities. OUR CITY I TORONTO HYDRO 23 Investing in the distribution grid In 2015 and 2016 combined, the Corporation spent more than a billion dollars in capital expenditures. These investments notably include: • Renewing aging underground and overhead infrastructure • Providing additional capacity in the downtown core through Copeland Station • Expanding and enhancing the distribution system to connect new customers • Consolidating and modernizing Toronto Hydro’s work centres in east and west areas of the city • Upgrading critical radio system infrastructure to support safe and efficient distribution operations The following table summarizes Toronto Hydro Corporation’s capital expenditures for the periods indicated (in millions of Canadian dollars). Year Ended December 31 (in millions $) 2016 2015 Regulated local distribution company Distribution system Planned1 365.3 392.8 Reactive 47.6 35.8 Copeland Station 22.6 23.7 Facilities Consolidation 50.6 31.3 Technology assets 49.1 28.9 Other2 10.8 20.1 Regulated Capital Expenditures 546.0 532.6 Unregulated Capital Expenditures3 5.7 4.6 Total consolidated capital expenditures 551.7 537.2 1. Includes, among other initiatives, the replacement of underground and overhead infrastructure and the delivery of customer connections. 2. Includes fleet capital and buildings. 3. Primarily relates to street lighting and generation equipment.


Toronto Hydro CR Report 2016
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