Schedule 2-1 Description of the Distributor

Schedule 2-1 Description of the Distributor

name of the distributor-Wellington North Power Inc.

current license number of the distributor-ED-2002-0511

community or communities served-MountForest, Arthur, Holstein

list of adjacent distributors-Hydro One

characteristics of the service area-Urban

embedded or host distributor-Embedded

mailing address-P.O. Box 359, 290 Queen Street West,

Mount Forest, ON

NOG 2L0

key contact:
name-Judy Rosebrugh
title-Administrator
telephone number-519-323-1710
fax number-519-323-2425
e-mail address -

Wellington North Power Inc. is a municipally owned embedded distribution company that has no affiliates and does not share corporate services. We are located at 290 Queen Street West, Mount Forest, Ontario in the Township of Wellington North in the County of Wellington.

Wellington North Power Inc. is a local distribution company, licensed (ED-2002-0511) by the Ontario Energy Board to serve the urban areas of MountForest, Arthur and Holstein.

Hydro One is the distributor directly adjacent to Wellington North Power Inc.

Schedule 2-2 Corporate Structure – Wellington North Power Inc.

Wellington North Power Inc is a local distribution company incorporated under the OBCA on May 26, 2000 and started doing business as such on July 1, 2000.

Shareholders–Township of Wellington North (1410 common shares) Township of Southgate(47common shares)

Board of Directors–Wellington North Power Inc. has a five (5) member Board of Directors

Management–Management staff - two (2)

Administrative Support–Support staff – three full-time and

one part-time staff (3.5)

Line Crew–Distribution Line Crew 3 full-time employees (3)

At December 31, 2004 Wellington North Power Inc. served 3390 electric customers and 942 Street Light connections. There are 2841 residential customers, 450 General Service customers less than 50kW, 37 General Service >50kW Non Time of Use, 9 General Service >50 kW Time of Use, 12 Unmetered Scattered Load Customers and 41 Sentinel Light connections.

Schedule 2-3Audited Financial Statements 2002, 2003, 2004

See attached folder, titled “Schedule 2-3”, which includes folders for each of the years and contains electronic files in .pdf format. We have also included photocopies of our Audited Financial Statement for 2002, 2003, 2004 with our 2006 rate application.

Schedule 2-4 Complete Listing of Rates and Charges

Non-Competitive Rates
Residential
Monthly Service Charge / (per month) / $9.18
Distribution Volumetric Rate / (per kWh) / $0.0144
Network Service Rate / (per kWh) / $0.0057
Line and Transformation Connection Service Rate / (per kWh) / $0.0050
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per month) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
General Service < 50 KW
Monthly Service Charge / (per month) / $15.91
Distribution Volumetric Rate / (per kWh) / $0.0080
Network Service Rate / (per kWh) / $0.0052
Line and Transformation Connection Service Rate / (per kWh) / $0.0045
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per month) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
General Service > 50 KW (Non Time of Use)
Monthly Service Charge / (per month) / $143.66
Distribution Volumetric Rate / (per kW) / $0.8425
Network Service Rate / (per kW) / $2.1218
Line and Transformation Connection Service Rate / (per kW) / $1.7882
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per month) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
General Service > 50 KW (Time of Use)
Monthly Service Charge / (per month) / $1,572.59
Distribution Volumetric Rate / (per kW) / $1.5998
Network Service Rate / (per kW) / $2.2535
Line and Transformation Connection Service Rate / (per kW) / $1.9603
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per month) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
Sentinel Lights (Non Time of Use)
Monthly Service Charge / (per connection) / $0.53
Distribution Volumetric Rate / (per kW) / $4.0739
Network Service Rate / (per kW) / $1.6083
Line and Transformation Connection Service Rate / (per kW) / $1.4113
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per connection) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
Street Lights (Non Time of Use or TOU)
Monthly Service Charge / (per connection) / $0.24
Distribution Volumetric Rate / (per kW) / $1.6554
Network Service Rate / (per kW) / $1.6002
Line and Transformation Connection Service Rate / (per kW) / $1.3824
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per connection) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
Unmetered Scattered Loads
Billed at General Service < 50 kW rates
Monthly Service Charge / (per month) / $15.91
Distribution Volumetric Rate / (per kWh) / $0.0080
Network Service Rate / (per kWh) / $0.0052
Line and Transformation Connection Service Rate / (per kWh) / $0.0045
Wholesale Market Service Rate / (per kWh) / $0.0052
SSS Administration Charge / (per month) / $0.2500
Debt Retirement / (per kWh) / $0.0070
Rural Rate Assistance / (per kWh) / $0.0010
The rates on this schedule include an interim recovery of Regulatory Assets
Other Regulated Rates
As per Chapter 11 of the Electricity Distribution Rate Handbook
Retail Service Charges
Standard Charge ( one-time charge) / (per agreement per retailer) / $100.00
Monthly Fixed Charge / (per month per retailer) / $20.00
Monthly Variable Charge / (per month per customer) / $0.50
Standard Distributor-Consolidated Billing Charge / (per month per customer) / $0.30
Retailer-Consolidated Billing Avoided Credit Cost / (per month per customer) / -$0.30
STR Request Fee / (per request) / $0.25
STR Processing Fee / (per request) / $0.50
Information Delivery Charge / (per request) / $2.00
- other than EBT (more then 2 requests) + any incremental delivery costs
Total Loss Factors
Secondary metered customers
Customer < 5,000 kW / (per kWh) / $1.0565
Customer > 5,000 kW / (per kWh) / $1.0145
Primary Metered customers
Customer < 5,000 kW / (per kWh) / $1.0459
Customer > 5,000 kW / (per kWh) / $1.0045
Specific Service Charges
Late Payment Charge / (per month) / 1.50%
(per annum) / 19.56%
Account Set Up Charge / $8.80
Returned Cheque Charge (actual bank charges plus) / $8.55
Reconnection Charge - During Regular Working Hours / $17.76
Reconnection Charge - After Regular Working Hours / $32.71
Dispute Involvement Charge / $10.00
Arrears Certificate / $10.00
Account History Charge / $5.00
(To be applied on the third and subsequent request if not delivered
electronically through the Electronic Business Transaction system)
Disconnect and Reconnect Service for reasons other than safety / $50.00
Temporary Service / $130.00
Includes Installation and Removal:
Single Phase where secondary voltage is available.
Transformer Ownership Credit / (per kW) / -$0.60
- per kW of Billing Demand for transformation that meets utility
transformer loss specifications
Primary Metering Adjustment / 1% of kW and kWh billed / 1.00%

Schedule 3-1: Tier 1 Adjustments

This form is to be used for all Tier 1 adjustments, except for non-routine/unusual and CDM adjustments, for which Schedules 3-2 and 3-4 should be used.

1.Standard Distribution Expense Adjustments

This table must be completed for the three standard distribution expense adjustments, outlined below:

2005 Actual (1) / 2004 Actual (2) / Adjustment (3)
(1) – (2)
OEB Annual Assessment and Other Fees Paid to Energy Regulators* / 7,588 / 2,727 / 4,861
Pensions / 22,436 / 21,514 / 921
Insurance / 24,016 / 21,803 / 2,213

* An applicant must provide a breakdown of costs being claimed, if it includes cost recoveries other than OEB annual assessments

An applicant must ensure that relevant information, sufficient to allow all parties to the proceeding to have a full understanding of the adjustments, is included in the summary of the application.

Tier 1 Adjustments identified in Schedule 3-1 can be found in the EDR on Sheet ADJ-3 which include the Standard Distribution Expense Adjustments for OEB Fees, Pensions and Insurance. Actual expenses (if available) were used as a basis to best estimate 2005 amounts. In the case of pensions, the expenses are cleared to payroll burden at year end. Insurance Expense has been incorrectly coded in 2002 and 2003. We have aggregated all appropriate costs in schedule 6-1.

2.Other Standard Distribution Expense and Rate Base Adjustments

State any adjustments that have been made for the following items in the sections below, and provide a full explanation for them.

Specify to which areas adjustments have been made (i.e. rate base, expenses). For rate base adjustments, also provide an explanation of the relevant depreciation adjustments.

If no adjustments have been made, explain why.

Low voltage/wheeling adjustments

Low Voltage Adjustments have been made in the EDR on Sheet ADJ-3 as an “Other Standard Distribution Expense.” Wellington North Power Inc. based these calculations on the peak of network and connection multiplied by .56 per kW using the most recent 12 monthly charges from Hydro One.

Smart Meter initiatives

Wellington North Power Inc. is seeking an additional $335,610.00 recovery for Smart Meters, included in Rate Base Adjustments ADJ-1. The corresponding amortization adjustment calculation has been calculated as $13424.00 in ADJ-3b. **Note, ADJ-3b also indicates the third tranche CDM amortization amount of $1,276 for a total amortization amount of $14,701.

Based on discussion with several vendors, Wellington North Power Inc has come up with a conservative estimate of $300.00 per customer per smart meter for purchase and installation. Since meters must be installed by 2010, Wellington North Power Inc is proactively seeking this adjustment in order to begin the meter roll out immediately. Using the customer base of 3390, this will allow for roll out to approximately 33% of our customers initially.

new transformer stations with a 2005 in-service date

Wellington North Power Inc. does not have any new transformer stations with an In Service date of 2005.

wholesale meters to the 2005 actuals

2005 actual was less than 2004 actual, therefore no adjustment has been made for Wholesale Meters. This figure was taken directly from the current YTD balance in the general ledger for 2005. Please note, in compliance with an earlier directive these capital expenditures were booked in account 1820 rather than 1860.

retirements without replacement

Wellington North Power Inc. does not have any retirements without replacement to report.

Other:

On ADJ-1 Rate Base Adjustments, Wellington North Power Inc. has opted to put an adjustment under the Accounting Adjustment section in Additional Adjustments. This is due to the fact that the Adjustment for Normalized Cost of Power is taken from a three year average. Wellington North has been experiencing steady growth over the past few years and expects to continue with this rate of future development. For example, 2006 will see a third phase expansion at a local Automotive parts manufacturing company.

Schedule 3-2: Tier 1 Non-routine/unusual Adjustments

Wellington North Power Inc. is not making any non-routine/unusual Tier 1 Adjustments.

This form is to be used for Tier 1 Adjustments that are non-routine/unusual adjustments.

If the applicant is not making any such adjustments, a statement to that effect should be made in this Schedule.

Non-routine/unusual Adjustments

1.Provide a detailed explanation of the nature of the adjustment that is being made.

Specify to which of rate base or distribution expenses it applies. For any rate base adjustments, also provide and explain the relevant depreciation adjustments.

Include a detailed breakdown of the amounts of the adjustments made.

2.State why the applicant believes the adjustment is appropriate.

3.The materiality thresholds for an adjustment of this kind have been established as 0.2% of the following amounts:

for distribution expenses: total distribution expenses before PILs and adjustments

for rate base: net fixed assets before adjustments

Confirm that the any proposed adjustment exceeds the relevant materiality threshold.

Specify any 2004 events that may appear to be non-routine or unusual, but which the applicant has determined should not be the subject of such an adjustment (e.g. a significant increase in an expense item in 2004 that is expected to be sustained in subsequent years) and provide a full explanation as to why the applicant believes this to be the case. The explanation must contain the same level of detail as for those non-routine events for which an adjustment is being sought.

Schedule 3-3: Tier 2 Adjustments

Wellington North Power Inc. did experience a loss in 1999 which meant that it was not included in the allowed rate of return calculations for distribution service revenue. This reduced rate of return has cause Wellington North Power to postpone capital expenditures and distribution maintenance and is therefore seeking approval for Tier 2 Adjustments.

The OEB is allowing inclusion for the calculated return that would have been included in rates for the 2006 Electricity Distribution Rate. We have calculated the amount to be the following:

1999 Negative Net Income= $ 246,483

1st Tranche ($82,161 for 5 Yrs) = $410,805

2nd Tranch($82,161 for 4 Yrs) =$328,644

Total amount not received from 2001 – 2006$739,449

In this application the Wellington North Power Inc. seeks to recover $627,000.

The estimated cost of capital projects:

1.Re-place #2 ACSR with 336 MCM conductors from Foster to Victoria St.

in MountForest. 1835$12,000

2Replace poles, Primary and secondary conductors on Wellington St from

Main Street to Church Street in MountForest.1830$15,000

1835$25,000

1850$10,000

3.Replace 44 kV line in Arthur due to industrial and residential growth

The kW from Preston Street to Highway #109 tap point is 1/0 ACSR

which will include replacement of deteriorated poles.1830$175,000

1835$125,000

Re-conductor and reinsulated 5 kV circuit on Preston St from Domville

Street to Smith Street.1835$50,000

1830$30,000

5.Building renovations at 290 Queen Street West in MountForest. Funds

have not been available to complete renovations to alleviate overcrowded

working conditions and storage issues.1808$120,000

6.Internal server required for system integrity and redundancy.1920$15,000

The estimated cost of expense:

OM&A costs directly reflect our inability to hire administrative staff

because of the financial constraints caused by lower rate of return.$50,000

Total Tier Two adjustments$627,000

Schedule 3-4: Conservation and Demand Management adjustments

Wellington North Power Inc. is not seeking approval for any incremental funding for Conservation and Demand Management.

If an applicant is seeking approval of CDM spending in 2006 that is incremental to funding previously approved by the Board, the following information must be provided.

1.Characteristics of the applicant’s distribution system, including:

Peak system load by season;
Average seasonal daily and weekly system load shapes;
Total energy purchases;
Sales by rate class; and
Number of customers by rate class.

2. For each initiative where costs are claimed in 2006, the following information must be provided:

General description;
Customer class(es) targeted;
Projected incremental demand (kW) or energy (kWh) savings;
Projected budget, listing:
capital expenditures in 2006;
operating expenditures for 2006, separated in to direct and indirect expenditures; and
for each direct operating expenditure, an allocation of the expenditure by targeted customer classes;
The input assumptions underlying the forecasted savings and costs; and
The cost / benefit analysis, calculating the net present value of the initiative using the Total Resource Cost test. For the purpose of calculating the net present value, distributors must use a discount rate equal to the incremental after-tax cost of capital, based on the prospective capital mix, debt and preference share cost rates, and the latest approved rate of return on common equity.

A distributor will be required to report annually on the results of each initiative for which spending is approved.

There is no provision for lost revenue adjustment or shareholder incentive in 2006 rates. However, the applicant should indicate in this schedule whether it anticipates a future claim related to the CDM plan for which it is seeking approval of spending in 2006.

The Conservation Manual, shortly to be issued by the Board, will provide detailed guidance on the filing requirements for seeking approval of expenditures and annual reports.

If an applicant is including as a Tier 1 adjustment any rate base related expenditures for third tranche CDM spending, an explanation of the calculation of the adjustment must be provided in this Schedule. An adjustment should be made only if the amounts being claimed are not already included in the 2004 costs.

Schedule 4-1 Capital Expenditures

Project / Acct# / Description / Amt / In-Service Date
Distribution Plant:
Buildings and Fixtures / 1808 / New doors and windows in office ($1526.54), New Doors, Steel doors with Trolleys and Romotes, New Roof Coating, Railings and Kick Plates for East Shed ($10974.22) / 12500.8 / Jan-Dec 2004
Distribution Station Equip / 1820 / This project consists of the upgrade of the Arthur PME wholesale Meter point, ($26407.57) and all labour and inventory relating to upkeep/upgrade of all distribution sub-stations and MS #3 Upgrade. Sub-Stations General, Isabella St., Foster St., Park, Queen St, Holstein PME, Arthur PME / 34581.9 / Jan-Dec 2004
PolesTowers & Fixtures / 1830 / This project included the replacement of poles throughout the year, including various jobs/upgrades as listed: MS #3 Upgrade ($3372.36), Inventory ($6393.29), Sligo Rd/TD Smith Transport ($3972.15), Various Pole Upgrades ($1170.00), Labour and Burdens as pertaining to listed jobs ($24713.60). / 39621.4 / Jan-Dec 2004
Overhead Conductors and Devices / 1835 / MS #3 Upgrade ($3997.56), Sligo/TD Smith Job ($7202.72), Church St Job ($1589.00), Queen St E&W Jobs ($3830.53), Curve Rock Dev ($258.55), Musashi Auto Plant ($1239.30), Inventory ($15538.13), Labour and Burdens as pertaining to listed jobs ($24570.96) / 58226.8 / Jan-Dec 2004
Underground Conduit / 1840 / Various new Underground services including Queen St. E Job ($260.00), Henry & Durham St. Parks ($1606.40), Inventory ($2672.32), Contributed Capital ($38521.00). Labour and Burdens as pertaining to listed jobs ($2380.61) / 45440.3 / Jan-Dec 2004
Contributed Capital Includes: $24500.00 Martin, Conestoga Street, $5301.00 Martin, Duke Street, $2220.00 Coffey, Mccord Street, $6500.00 Reeves, MF 69 Lots,
Underground Conductors and Devices / 1845 / MS #3 Upgrade ($14122.90), Contributed Capital ($45238.00), Home Building Centre ($2062.88) Inventory ($6893.27) / 68317.1 / Jan-Dec 2004
Contributed Capital Includes: $11310.00 Martin, Conestoga Street, $7538.00 Martin, Duke Street, $7540.00 Coffey, Mccord Street, $18850.00 Reeves, MF 69 Lots,
Line Transformers / 1850 / This account includes the MS #3 Upgrade ($4430.50), Contributed Capital ($60885.00), Home Building Centre ($6951.96) Inventory ($566.07), AnimalHospital ($2100.00), Mccord, Conestoga, Owen Transformers ($736.65), Labour and Burdens pertaining to listed jobs ($1255.14) / 76925.3 / Jan - Dec 2004
Contributed Capital Includes: $20953.00 Martin, Conestoga Street, $1932.00 Martin, Duke Street, $10000.00 Coffey, Mccord Street, $28000.00 Reeves, MF 69 Lots,
Services / 1855 / MS #3 ($125.00), Contributed Capital ($51617.00), Inventory ($3992.03), Labour and Burdens pertaining to listed jobs ($17267.80) / 73001.8 / Jan - Dec 2004
Contributed Capital Includes: $2500.00 Martin, Conestoga Street, $3596.00 Martin, Duke Street, $13840.00 Coffey, Mccord Street, $31681.00 Reeves, MF 69 Lots,
Meters / 1860 / Capital projects included the purchase of meters for commercial and residential use; remote meters and CT/PT Upgrades etc., meters purchased specifically for Musashi Auto, MF Public School, New Home Hardware, labour and burdens associated with all meter specific jobs / 23159 / Jan - Dec 2004
General Plant:
Office Furniture & Equip / 1915 / Purchase of New Phone System with Call Logging/Tracking capability. Digital camera accessories. / 9463.6 / July - October 2004
Computer Equip -
* Hardware / 1920 / Purchase of Digital Camera ($2807.97), Printers and Accessories ($587.36), Computer for Front Counter ($1422.68), Battery Backups, Modems, Warranty ($2595.69), New IMO Server ($1060.57) / 8474.27 / Mar - Dec 2004
Transportation Equip / 1930 / Purchase of 2005 Dodge Dakota and Pressure Washer (1/2 cost) / 33541.2 / Nov - Dec 2004

Schedule 5-1: Weighted Debt Cost