Understanding Toronto Hydro's rate application

Learn more about our 2020-2024 rate application.

On December 19, 2019, following a comprehensive public review process, the Ontario Energy Board (OEB) released its decision (PDF, 1.8 MB) on our 2020-2024 electricity distribution rates application and investment plan.

Toronto Hydro is pleased that the OEB has approved a plan which provides most of our customers with a rate reduction in 2020.

In addition to providing customers with the certainty of affordable electricity, the OEB’s approval of approximately $3.8 billion of funding over the next five years will also enable us to make continued investments in grid safety and reliability, support a growing city, and meet the needs of our customers.

Learn more about the impact on your bill

Toronto Hydro's electricity rates for customers are set by the Ontario Energy Board (OEB) through a public review known as a rate application. This comprehensive and transparent process spanned nearly 17 months and consisted of a final record of more than 14,000 pages of evidence.

Electricity is an important resource in our customers' daily lives. That's why we engaged our customers to understand their needs and preferences before we prepared our plan for 2020-2024. We did this through a series of engagements, including focus groups and online/telephone surveys. Our customers told us that price, reliability and safety were their top three priorities, so we developed a plan that is fundamentally responsive to that feedback.

When we put that plan back to our customers, we received responses from more than 11,000 people and business across the city. What we heard was that approximately two-thirds of our residential customers supported our plan, or one that did even more to improve services. We were pleased with this outcome and we submitted our plan to the OEB for review.

The OEB's review included community meetings across the city and online, where we presented our plan to customers and answered their questions. The OEB also held a nine-day public hearing to examine our plan in detail.

Application process

  1. Ask customers what the plan's priorities should be.

  2. Use customer priorities to prepare the plan.

  3. Ask customers for feedback on the plan, including rate impacts.

  4. Use customer feedback to refine the plan.

  5. Submit the plan to the Ontario Energy Board (OEB).

  6. Discuss plan at townhall community meetings.

  7. OEB holds public hearing.

  8. OEB issues final decision on plan.

  9. OEB sets rates.

Our 2020-2024 plan

Our grid investment plan for 2020-2024 is focused on delivering affordable electricity while investing in the grid to address safety and reliability, support a growing city, and meet customer service needs.

Our plan is focused on five main priorities:

Toronto Hydro operates in a dense and mature urban environment. Investments in this area include:

  • Responding to power outages
  • Inspecting and maintaining our equipment
  • Operating our control room 24/7
  • Providing timely customer care services

Customers expect Toronto Hydro to provide safe and reliable electricity service. Investments in this area include:

  • Renewing deteriorating equipment to maintain reliable service and keep the system safe (deteriorating equipment is the largest cause of power outages for customers)
  • Addressing approximately 25% of our equipment that is beyond its useful life (Toronto is a mature city and some equipment dates back as far as the 1950s). Roughly 36% of outages can be attributed to deteriorating equipment
  • Addressing other causes of outages, including ice storms, severe winds and extreme rainfall. Approximately 20% of outages are caused by environmental events

The following table demonstrates the progress we've made in renewing our system by proactively investing in the grid:

Age of electricity distribution assets

Age of assets 2011 2018
Assets prior to end-of-life 63.0% 67.0%
Assets past end-of-life 28.0% 24.0%
Assets reaching end-of-life in next five years 9.0% 9.0%

Contributors to power outages

Outage cause Percentage of total outages
Deteriorating equipment 36.3%
Other (e.g. tree contacts, human elements, etc.) 28.8%
Environment/weather 12.0%
Loss of supply from Hydro One 11.6%
Foreign interference 9.0%
Scheduled outage 2.2%

Toronto Hydro is committed to supporting the growth of the city of Toronto. Investments in this area include:

  • Addressing the increased demand on the grid as a result of the growth and densification of the city (Toronto has more high-rise buildings under construction than any other city in North America)
  • Connecting new customers to the grid in a timely and cost-effective manner — this includes new condos, office buildings and transit projects that will serve thousands of customers across the city
  • Moving our distribution equipment to enable infrastructure work such as widening roads and large-scale transit projects

Running an efficient utility requires proactive investment in supporting infrastructure. Our plans in this area include investing in:

  • Buildings and operating centres that house the people, vehicles and equipment needed to serve our customers
  • Service vehicles to move personnel and supplies around the city to support the safe and reliable operation of the grid
  • Information technology systems to securely operate the distribution system, manage customer information and privacy, and keep personnel working effectively and efficiently

Technology is changing both the demands on the grid and how we operate our distribution system. Toronto Hydro is investing in the automation and modernization of the grid in order to:

  • Improve safety and reliability
  • Enhance the system's resiliency in the face of extreme weather
  • Optimize our investments through non-wires alternatives that allow us to avoid more costly investments
  • Improve productivity in our operations and drive continuous improvement in serving our customers

Key challenges

Our 2020-2024 plan strikes a balance to deliver service and reliability outcomes that customers value while keeping prices as low as possible. Achieving this balance is not an easy task in light of the many operational challenges that we face day to day. These challenges include:

  • Renewing deteriorating infrastructure: Toronto is a mature city, and some of our equipment dates back to the 1950s
  • Meeting the demands of a growing city: Toronto has more buildings under construction than most North American cities, and a number of high-rise and mid-rise buildings under construction at a rate comparable to New York City
  • Responding to extreme weather events: Extreme weather events such as wind and ice storms have repeatedly and pervasively affected our customers. In 2018, we experienced four extreme storms during the first half of the year, leaving nearly 160,000 of our customers without electricity
  • Operating in a dense, mature urban environment, which is more difficult compared to a suburban environment (for example, it can make it more difficult for us to access equipment)

Continuous performance improvement

Our 2020-2024 plan is focused on providing electricity while continuing to focus on investment in the grid. This has been made possible in part by a range of initiatives that we've undertaken over the years to help deliver value-for-money.

Since 1999, we've generated more than $2.2 billion of savings for our customers through activities such as improved asset management practices, efficient material handling and workforce optimization.

In 2018, we completed our operational centres consolidation program, which reduced our operating costs, lowered square footage per employee by more than 40%, and credited more than $150 million of proceeds from property sales to our customers to help lower their electricity bills.

The OEB measures electricity distributor performance on a range of reliability, customer service and safety metrics. Our average performance from 2015-2018 met or exceeded the OEB's targets on 16 out of 17 of these metrics, including connections of new customers, call centre response times, billing accuracy and reliability.

External reviews also show that we're a strong cost performer on various fronts, including our asset construction and maintenance costs, as well as our workforce compensation costs.

Our focus on customer service

Performance category Measure Industry standard 2014 2015 2016 2017 2018
Service quality New residential/small business services connected on time 90.0% 91.5% 96.9% 97.7% 98.3%

99.8%

Service quality Scheduled appointments met on time 90.0% 99.8% 99.9% 99.5% 99.4%

99.7%

Service quality Telephone calls answered on time 65.0% 71.9% 76.8% 64.7% 77.9%

80.2%

Customer satisfaction Billing accuracy 98.0% 96.6% 97.5% 98.8% 99.2%

99.3%

For Toronto Hydro, customer service and delivering customer value are what's important. Our goal is to make it easier for our customers to do business with us, and integrate their needs and expectations into how we do business with them.

In 2018, we increased our call centre and billing performance, including through effectively resolving customer questions and concerns upon first contact 90% of the time, and generating accurate bills over 99% of the time. We’ve also increased the number of customers on eBills by nearly 300% since 2013, which equates to a reduction in paper almost as high as the CN Tower.

We also engage our customers on a continuous basis to provide feedback on our initiatives and programs, such as the redesign of our website in 2019. We also continue to serve our most vulnerable customers through community outreach, including through building awareness of financial assistance programs.