12/01/2010

AMO Response to the Ontario Energy Board (OEB) re: Streetlights Cost Allocation Policy.
AMO does not usually get involved in OEB issues but felt that this issue merited AMO's attention because of the potential impact on our members as large energy consumers. According to a 2008 IESO Report, the municipal sector consumes well over 6.6 billion kilowatt hours of electricity per year—approximately 14% of which is dedicated to streetlights.1 Street lighting is an important public safety matter in the community and our members take the provision of this particular social good very seriously.

Second, AMO is fully supportive of the aims of the OEB’s cost allocation policies to apportion costs fairly and to avoid cross-subsidization amongst rate classes. AMO decided not to intervene in the process that commenced with the 2007 Report because our Board recognized that streetlight costs were historically under-assessed. The rate adjustments that resulted from the 2007 Cost Allocation Report addressed relationships among rate classes that were largely unchanged for the past twenty years and that had some large inequities and cross-subsidization. AMO does not take issue with the OEB’s targeted Revenue-to-Cost Ratios of 70-120% for the streetlight class—as long as the method used to determine these ratios fairly represents the actual costs to service streetlights.