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The Ontario Energy Board (OEB) is updating its benchmarking methodology as part of its ongoing efforts to enhance Ontario’s ratemaking framework.
The current Total Cost Benchmarking (TCB) method the OEB uses to assess the performance of each utility has not been updated since 2013. This consultation is aimed at renewing the 2013 benchmarking methodology which is expected to incent distributors towards better productivity. The OEB plans to update this methodology and the data it requires, including updates to the X factor in the I-X formulation. The OEB is also considering the use a Global Stretch Factor (GSF) as a newContinue reading
The Ontario Energy Board (OEB) is updating its benchmarking methodology as part of its ongoing efforts to enhance Ontario’s ratemaking framework.
The current Total Cost Benchmarking (TCB) method the OEB uses to assess the performance of each utility has not been updated since 2013. This consultation is aimed at renewing the 2013 benchmarking methodology which is expected to incent distributors towards better productivity. The OEB plans to update this methodology and the data it requires, including updates to the X factor in the I-X formulation. The OEB is also considering the use a Global Stretch Factor (GSF) as a new Ontario industry-wide productivity expectation for electricity distributors.
As part of our consultation, the OEB is engaging stakeholders in its evaluation of current methods. Their input on recommended changes and improvements will support developing the updated TCB model.
The OEB has retained the consulting firm, Pacific Economics Group Research, LLC (PEG), to support the TCB update and contribute to the associated stakeholder consultation work. Working under the oversight of OEB staff, PEG will engage with stakeholders for review and feedback.
The OEB has launched a consultation to review the use of total cost benchmarking to assess the overall cost performance of rate-regulated electricity distributors. This consultation is aimed at renewing the 2013 benchmarking methodology which is expected to incent distributors towards better productivity. Stakeholder feedback will inform the OEB’s consideration of updates to the components of the X factor in the I-X formulation.
Total Cost Benchmarking is currently at this stage
OEB outlines the scope of the TCB project and how stakeholders will be involved in the review of the current framework as well as share feedback on proposed improvements.
Stakeholder Engagement - Information Session (April 24, 2025)
this is an upcoming stage for Total Cost Benchmarking
During this meeting, PEG will deliver a presentation on the existing TCB framework and the proposed improvements in the upcoming update.
Stakeholder Engagement - Information Gathering & Feedback (April - May 2025)
this is an upcoming stage for Total Cost Benchmarking
OEB engages with utilities and other industry stakeholders to gather information through surveys and the submission of written comments on proposed improvements. Stakeholder input will guide the OEB in making future enhancements to the TCB methodology.
Stakeholder Engagement - Draft Report for Feedback (June - July 2025)
this is an upcoming stage for Total Cost Benchmarking
PEG's preliminary report with recommendations for updating the TCB is shared with the OEB, and will be circulated to stakeholders for feedback.
