ARCHIVED - Ontario Independent Electricity System Operator's (IESO) Comments

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Dear Ms. Chantal Robert,

Please find below the Ontario Independent Electricity System Operator's (IESO) comments regarding the National Energy Board's Proposed Electricity Cost Recovery Options:

On new international transmission power line (IPL) application fee/greenfield fees:

* The IESO supports recovery based on actual estimated cost for each hearing (based on number of staff hours) as it will provide the NEB full cost recovery and revenue stability by yielding revenues very close to the revenue requirements for which they were developed. It will also eliminate the need for subsequent adjustments to keep revenue yields close to the revenue requirements.

On export authorization fee:

* The IESO supports a flat application fee for export permits that will allow the NEB to recover part of its costs attributable to rendering this service and not present a barrier to entry.

On non application costs (all other costs):

* Recognizing that the nature of these costs is such that it is very difficult to attribute direct benefit to a specific NEB applicant, the IESO supports a straight ratio (% for transmission companies and % for exporters). There are several reasons for recommending this cost recovery mechanism:

* To use reliability as a direct benefit is too broad to assign to a particular participant, given that all entities have responsibilities and accountabilities for reliability, be it transmission owners, transmission providers, generators or local distribution companies.

* It is simple to administer, resulting in lower NEB operating costs. Another important aspect that drives simplicity is materiality. Recovery of such a small proportion of the NEB costs would not justify a complex fee structure and calculation methodology.

* It is fair, equitable and neutral in that the allocation is a straight ratio to those NEB applicants (transmission companies and exporters) that are the primary beneficiaries of the NEB's overall products and services. It also leverages the existing billing structure.

Respectfully submitted,
Helen Lainis
Senior Regulatory Analyst
Independent Electricity System Operator
905-855-4106
helen.lainis@ieso.ca

On behalf of,
Kim Warren
Manager, Regulatory Affairs
Independent Electricity System Operator
416-506-2821
kim.warren@ieso.ca

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