D1-3-5 - Shared Services and Other Capital · 3 through 2008, highlighting the total capital spending for Shared Services and Other Capital, as 4 well as the portion allocated to

Updated: February 23, 2007 EB-2005-0501 Exhibit D1 Tab 3 Schedule 5 Page 1 of 35

SHARED SERVICES AND OTHER CAPITAL 1

2

1.0 INTRODUCTION 3

4

Capital expenditures under the Shared Services program support the Sustainment, Development, 5

and Operations work programs of Hydro One Networks Inc. As such they consist of assets that 6

are largely shared by both the Transmission and Distribution businesses. Shared assets include 7

Information Technology installations such as applications software and computer equipment, 8

land, buildings, office equipment, transportation and work equipment (T&WE), tools, and 9

service equipment. 10

11

Shared services cost levels are fully reviewed as part of the annual business planning process 12

described in Exhibit A, Tab 14, Schedule 1. 13

14

Table 1 15

Shared Services & Other Capital Allocated to Transmission 2003-2008 ($ Millions) 16

17

Historic Bridge Test Years

Description 2003 2004 2005 2006 2007 2008

Information Technology 7.3 9.7 20.1 14.9 67.1 26.0

Facilities & Real Estate 1.6 3.1 0.8 1.5 4.0 4.2

Transport & Work Equipment 20.7 4.7 10.1 9.9 10.4 9.7

Service Equipment 2.5 1.7 1.5 1.7 3.1 2.8

Other (3.4) 1.0 3.0 6.1 0 0

Total 28.7 20.2 35.5 34.1 84.6 42.7

18

Table 1 is a summary of the Transmission portion of the Shared Services Capital over the 19

Historic, Bridge, and Test years. Exhibit C1, Tab 5, Schedule 3 outlines the appropriate cost 20

allocation drivers that have been utilized to derive the Transmission allocation of this capital.21


1

The following table provides an overview of the various cost categories for the period 2003 2

through 2008, highlighting the total capital spending for Shared Services and Other Capital, as 3

well as the portion allocated to the transmission business. 4

5

Table 2 6

Total Shared Services & Other Capital ($ Millions) 7

8

Historic Bridge

Test Years Allocated to

Transmission

Description 2003 2004 2005 2006 2007 2008 2007 2008

Information Technology 14.6 20.0 39.6 34.3 131.5 48.1 67.1 26.0

Facilities & Real Estate 2.8 5.9 2.6 3.6 7.2 7.7 4.0 4.2

Transport & Work

Equipment

53.5 13.5 40.5 41.2 43.5 40.6 10.4 9.7

Service Equipment 6.4 4.9 3.1 3.9 7.3 6.5 3.1 2.8

Other (0.1) (2.2) 3.1 6.1 0 0.0 0 0

Total 77.2 42.1 88.9 89.1 189.5 102.9 84.6 42.7

9

Sections 2.0 through 6.0 detail the capital requirements which make up the Shared Services 10

Capital program. 11

12

2.0 INFORMATION TECHNOLOGY 13

14

Information Technology (“IT”) refers to computer systems (hardware, software and applications) 15

that support business processes used by employees throughout the organization. IT infrastructure 16

includes the voice and data telecommunication networks; data centre installations; and computer 17

equipment (servers, computers and printers) that enable employees to access IT systems. Staff 18


access software applications from offices, and field locations using the wide are network, local 1

area networks or through virtual private network connections. 2

3

Capital programs include annual maintenance investments so that existing IT assets are kept 4

current to maintain continuity of operations and minimize risks of interruption or failure. IT 5

capital programs also include investments in newly developed projects to either replace old 6

technology or to introduce new technological processes to serve the business operations. 7

8

For accounting purposes, IT capital expenditures are defined to include software expenditures for 9

projects and programs that in total cost more than $2 million. Also included in this category are 10

minor fixed assets and hardware expenditures such as desktop computers, which are required as 11

part of ongoing refresh and replacement programs. IT investments are made in accordance with 12

approved business strategies, follow the IT Governance process described in Exhibit C1, Tab 2, 13

Schedule 5, and are subject to a formal review process. 14

15

A significant capital investment in major enterprise applications and systems was made 16

concurrently with the de-merger of Ontario Hydro in 1999 to ensure the new company would 17

have the required business systems and to ensure the de-merged systems would be Y2K 18

compliant. 19

20

Investments in enterprise applications made at or around that time were “best of breed” 21

applications and included: Customer One - customer information and billing system (1998); 22

PassPort - accounts payable, purchasing, inventory and supply management system (1999); 23

PeopleSoft - financial and human resources system (1999). Other than in 2002, when an upgrade 24

was made to the PeopleSoft system, the applications have not been upgraded. Certain of the 25

applications have undergone significant customization to provide additional functionality since 26

the date of their installation. 27

These applications have reached, or are approaching, their end of life. An application approaches 28

its end of life when the application does not provide sufficient functionality or does not have 29


additional capacity to be redesigned or modified to add such functionality to meet current and 1

foreseen business needs. Additionally these older versions are no longer, or will no longer be, 2

supported by the software vendors. Work which is planned for the major application replacement 3

program (Cornerstone) in 2006, 2007 and 2008 is discussed below under the heading 4

Development Projects. 5

6

Capital work that was previously scheduled for Cornerstone in 2006 was postponed in order to 7

expand the assessment and planning of the process changes for these core applications. 8

9

Hydro One’s approach to ensuring ongoing reliability and capacity is to upgrade and/or 10

renew/replace applications and systems when required to either meet changing business needs, 11

when the software application or systems are no longer vendor supported, or to mitigate business 12

risks. Hydro One’s objective is to maintain its systems as near to a current basis as possible to 13

ensure its technology environment is vendor supported. 14

15

In addition to the replacement cycle for existing systems, organic growth and increased reliance 16

on technology requires the systems to grow to accommodate the business needs. In data storage, 17

Hydro One has observed increases averaging 30% per annum. According to a June 2006 White 18

Paper by IBM, this is in line with Industry expectations estimated at 37% per annum. Faster 19

processing speeds to address upgraded application requirements are also facilitated through 20

server and storage improvements or replacements. The increasingly heavy reliance of technology 21

in the field and at field locations has continued to place an upward demand on the IT data 22

infrastructure in terms of volume, speed, connectivity and concurrent use. Field office locations 23

are increasingly utilizing larger more complex business applications such as Passport, Customer 24

One, ArcFM and outage management applications (ORMS). Data networks (wide area and local 25

area networks) are monitored on an ongoing basis and upgrades are made as required to address 26

the business needs and to ensure that application performance is acceptable. 27


2.1 Total IT Capital Expenditures 1

2

Table 3 lists the capital expenditures for programs and projects 3

. 4

5

6

Capital IT expenditures respond to the needs of three general business drivers and are undertaken 7

as projects or programs: 8

9

• Software Refresh and Maintenance Program ensures continued operations of the installed IT 10

application infrastructure 11

• Minor Fixed Assets (MFA) program ensures the continued operations of the installed IT 12

hardware infrastructure. Expenditures in this category address equipment needs which are 13

generated by the growth in demand for IT services, in addition to the replacement of end-of-14

life and under-capacity assets in IT and in the Business Telecom network. 15

• Development Projects replace or upgrade older and end-of-life applications or develop new 16

applications or processes, including those: 17

o that have become inadequate for current functional needs; 18

o that require new applications to improve Business operations 19

o that result from legislative or market driven initiatives 20

21

Bridge

Description 2003 2004 2005 2006 2007 2008 2007 2008

Software Refresh & Maintenance Program 0.7 3.0 14.2 8.6 6.6 8.3 3.7 4.7

Minor Fixed Assets Program 6.8 8.8 14.6 13.2 8.6 8.0 3.7 3.5

Development Projects 7.1 8.2 10.8 12.5 116.3 31.8 59.7 17.9

TOTAL 14.6 20.0 39.6 34.3 131.5 48.1 67.1 26.0

Table 3Total IT Capital Expenditures ($ Millions)

Historic Test Years Allocated to Transmission

Filed: September 12, 2006 EB-2005-0501 Exhibit D1 Tab 3 Schedule 5 Page 6 of 35

Software Refresh and Maintenance includes costs related to upgrading existing operating 1

systems. 2

3

MFA includes desktop computing equipment, field tablet computers, mainframe and storage 4

systems, servers, and peripherals and telecommunication infrastructure including PBX’s, 5

computerized telephony interfaces etc. Other capital items include systems applications and 6

operating systems required to operate the IT and telecommunication infrastructure hardware. 7

8

Development projects include the cost for new applications or the replacement of exiting 9

applications which are at end of life. 10

11

The following architecture principles underlie IT strategy and planning and as such will guide 12

the required application upgrades that will take place over the next 5 years: 13

14

• Applications will be “off the shelf” with built-in protocols (tested and generally used 15

throughout like industries). 16

• The system architecture will be on an open standards platform allowing systems to run on 17

any hardware platform. 18

• Middleware, interfaces and hubs, will be used as appropriate to facilitate application 19

interconnectivity. 20

• Systems architecture and chosen applications will be: 21

• robust (generally understood to mean unlikely to fail, but rapid response if it does) 22

• secure (generally understood to mean 3-tiered, fire-walled and password protected) 23

• flexible service oriented architecture (generally accepted as the most appropriate and 24

efficient IT strategy). 25

• System hardware will be upgraded as required to support the new application. 26

• Costs will be managed on a total cost of operations basis. 27

28


In support of new and planned applications the current hardware infrastructure will be upgraded 1

and designed to: 2

3

• improve disaster recovery processes; 4

• improve system security; 5

• facilitate the increased application of mobile technologies; 6

• continue the transition to storage area networks that benefit from generally accepted industry 7

practices; 8

• secure improved functionality from new and expected technology. 9

10

IT capital project spending increases significantly from 2002 through 2008 and beyond as 11

existing enterprise applications are upgraded and replaced. The larger number of smaller projects 12

which had been undertaken in 2003 through 2006 will decline and be replaced by a phased series 13

of large projects. 14

15

Within projects and programs is work described as “Impact of Capital Projects”. This work is 16

included under the OM&A category called Impact of Capital Projects as discussed under Exhibit 17

C1, Tab 2, Schedule 5, Section 4.3.2. Work in this category includes business process re-18

engineering costs, such as training and change management costs required to implement and 19

train field staff when new capital IT projects are introduced, are captured and reported as OM&A 20

expenditures. These costs vary with each capital project. In accordance with Hydro One 21

accounting practices, the cost associated with this work is not capitalized. 22

23

The major planned capital projects that will be funded in 2007 and 2008 are described below. 24


2.2. Software Refresh and Maintenance Program Capital Expenditures 1

2

Table 4 lists the capital expenditures for the software refresh and maintenance program. 3

4

5

6

Hydro One utilizes just over 700 commercial software programs in order to equip its employees 7

with the required technologies to perform their tasks efficiently and safely. The software refresh 8

and maintenance program provides the needed software vendors’ releases, periodic version 9

upgrades, and replacements of applications that meet the total capital threshold of $2 million 10

aggregated. 11

12

Applications are replaced or upgraded with the line of business involvement to address their 13

business needs and to ensure that applications remain compatible with current IT platforms and 14

other interfacing applications. In this manner, vendor support is maintained to help fix 15

breakdowns or other issues that may occur with the applications. Funding decisions are made 16

based on software lifecycles, vendor schedules, reliability requirements, and experience with 17

similar initiatives/projects. 18

19

In 2005-2006 work was undertaken to upgrade the Microsoft Windows operating system 20

technology from Windows NT and Windows/Office 98 to Windows XP and Office 2003 for all 21

users operating on the Hydro One system. In addition to upgrading the desktop operating system 22

Bridge

2003 2004 2005 2006 2007 2008 2007 2008

Software Refresh & Maintenance Program 0.7 1.7 2.6 1.0 6.6 6.4 3.7 3.6

Windows (O/S) 0.0 1.4 11.6 7.6 0.0 1.9 0.0 1.1

TOTAL 0.7 3.0 14.2 8.6 6.6 8.3 3.7 4.7


Table 4Software Refresh and Maintenance Program Capital Expenditures ($ Millions)

Description


and e-mail application the platform was simplified and consolidated to improve system 1

reliability, redundancy and to ensure better security. Coincident with the XP software investment 2

in 2005/2006 a significant increase in MFA investments for computers, servers and storage was 3

required to replace those operating on the old Windows NT/98 platform to retain functionality in 4

the XP/2003 environment. 5

6

The 2006 capital expense level includes the carry-over of Windows XP work related to affected 7

applications as well as the capitalization of previously accrued charges for the Windows XP 8

Upgrade. 9

10

In 2008, a further upgrade from XP/2003 to the Windows Vista application is planned. In 11

accordance with Microsoft’s planned application release schedule, the intent will be to upgrade 12

server functionality. With a significant investment already made in Windows XP and in the 13

2003 infrastructure, Hydro One’s intent is to maintain the operating systems in a current state. 14

Current indications from Microsoft are that the upgrade to the new operating system will be less 15

complex than the upgrade to XP. Even so, single point applications used in the business 16

operations will still have to be tested to ensure they are supported by the new operating system. 17

18

Other expenditures identified for 2007 and 2008 include an upgrade to the Open Market Systems 19

to utilize the functionality of the existing Company hub technology, virtualization of the Storage 20

Area Network to improve data retention and stabilize storage costs, and a number of other 21

technology investments related to intrusion detection, firewalls, and to a greater use of portal 22

technologies. 23

24


2.3. Minor Fixed Assets 1

2

Table 5 lists the capital expenditures for IT Minor Fixed Assets. 3

4

5

Minor Fixed Asset investments are for IT hardware and include specific programs to refresh 6

older hardware such as computers. Equipment refresh is planned to ensure that if system 7

upgrades or applications are added over the life of the hardware that the system will continue to 8

be functional with only a minimal upgrade being required. This strategy minimizes the costs of 9

ownership, ensures operational risk is kept at an acceptable level, and maintains functionality. 10

Planned funding is based on equipment lifecycles. This work is broken down into the categories 11

discussed below for the expenditures shown in Table 5. 12

13

2.3.1 MFA: IT Mainframe, Servers and Storage Sustainment program 14

15

This investment in servers and mainframe computing capability is an ongoing infrastructural 16

obligation for Hydro One information technology. 17

18

The majority of the costs in the MFA category in 2006 were spent on replacement of UNIX 19

servers and on Windows servers. The UNIX server replacement cost has been brought forward 20

from future years to ensure improved system reliability and to respond to and manage projected 21

Bridge

Description 2003 2004 2005 2006 2007 2008 2007 2008

IT Mainframe, Servers, and Storage Program

4.7 1.8 5.9 4.7 3.9 2.7 1.7 1.2

IT Desktops, Laptops, Tablets, Printers & Plotters

2.2 5.0 6.9 5.9 3.9 3.9 1.7 1.7

Telecom Networks & PBX/Voicemail 0.0 2.1 1.7 2.5 0.8 1.4 0.3 0.6

TOTAL 6.8 8.8 14.6 13.2 8.6 8.0 3.7 3.5


Table 5IT Minor Fixed Assets Program Capital Expenditures ($ Millions)


annual growth in demand for additional IT processing and storage capacity. The replacement of 1

the UNIX servers with more modern and efficient equipment addresses the end of life issues, 2

which the Company would face with some of the existing UNIX servers. 3

4

Included in the 2006 and 2007 work program are improvements to the current Disaster Recovery 5

(DR) strategy and processes. The DR program allows for the recovery of critical Hydro One 6

systems in the event of a major technology disruption. The DR project will take advantage of the 7

replacement of a number of existing UNIX servers and storage devices by transferring the 8

replaced units to the recovery and back-up role. 9

10

UNIX and Windows servers are used to run business applications, networks, web services and 11

email. Data storage devices are used by business applications and email to store and retrieve 12

data. In assessing when to replace or add additional servers and storage devices vendor’s end-of-13

support-life, capacity requirements, maintenance costs, and systems criticality are assessed. 14

Hardware upgrades are ongoing costs and are needed to maintain reliable service for business 15

applications. 16

17

The funding for the mainframe, servers and storage refresh program varies year to year 18

depending upon hardware lifecycles and business requirements for increased processing 19

capacity. A number of e-mail exchange and file servers were replaced in 2005 and 2006 20

coincident with the Windows XP/2003 project. The costs reflected in 2007 and 2008 work 21

program are indicative of the ongoing required sustainment spend needed to address end of life 22

and capacity issues. 23


2.3.2 MFA: IT Desktops, Laptops, Tablets, Printers, and Plotters Sustainment Program 1

2

Desktop and laptop computers are used by most Hydro One staff for office productivity 3

applications (email, word processing, spreadsheet, presentation, and personal databases) and for 4

business applications such as PassPort, ArcFM and PeopleSoft among many others. Rugged 5

tablet computers are used by field staff using Geographical Information System (“GIS”) based 6

applications for doing system design and asset condition assessments. Printers and Plotters are 7

used by most Hydro One staff throughout the company. 8

9

Hardware upgrades are required to accommodate new software processing requirements, to 10

replace end of life equipment and to maintain reliability. Properly programmed equipment 11

refreshes can maintain or reduce maintenance costs. Hardware maintenance and capability costs 12

tend to increase with aging hardware that is no longer under vendor warranty. Hydro One’s 13

intent is to replace desktop computers every four years, laptops every three years, and printers 14

and plotters every four to five years. This is consistent with industry practice and ensures that 15

spares which are maintained by service technicians are consistent with the computer population 16

at Hydro One. 17

18

Hardware and support service pricing combinations are compared in the market regularly and at 19

times of major purchases in line with corporate procurement policies. 20

21

The funding for desktops, laptops, tablets, printers, and plotters varies year to year depending 22

upon hardware lifecycles and business needs. Funding costs in 2005 and 2006 reflect the 23

acceleration in the laptop and desktop refresh program whereby 2,100 and 2,382 desktop/laptop 24

units respectively were replaced. This was required largely as a result of the Microsoft XP 25

deployment. Tests using XP applications on existing laptop computers, which had been 26

enhanced with additional memory, did not result in acceptable performance. The cost of 27

enhancing the existing equipment combined with the still suboptimal performance of the 28

equipment when XP software was installed, and then combined with the hardware’s end of life 29


issues, negated any business benefit that might have been achieved by delaying the full 1

replacement of the equipment. Therefore, the decision was made to purchase new hardware that 2

met current needs and standards. Ongoing sustainment funding for laptop and desktop equipment 3

replacement, consistent with the refresh objectives noted above, is reflected in the cost 4

projections for 2007 and 2008. 5

6

2.3.3 MFA: Telecom Networks and PBX/Voicemail Sustainment Program 7

8

The telecom assets of Hydro One are many and have a large variety of install dates, lifecycles, 9

and capacities. Data and voice hardware is improved or replaced over time as part of ongoing 10

program management. Continuous initiatives are undertaken to improve data and voice 11

communication efficiency across the wide area networks, the local area networks, the virtual 12

private networks and to ensure systems are supported by third party vendors. 13

14

The telecom MFA program includes the work to rewire local area networks, replace end of life 15

data network switches and routers, upgrade telephone PBX switches, and replace un-interruptible 16

power systems (UPS). Work in this category includes the replacement of end of life hardware 17

and software in the Internet Security Node which is used for authenticating Market Open 18

business to business transactions and for internet access to Hydro One Networks Inc. 19

applications. 20

21

The Telecom MFA program is needed to maintain reliable telecommunications availability plus 22

capacity as well as network security against intrusions by computer hackers, viruses and worms. 23

IT will replace telecommunications hardware facilities that are at end of life, no longer able to 24

meet changing function, capacity or performance needs, and/or expensive to repair and 25

unreliable because they are no longer supported by vendors. 26

27

The telecommunication hardware includes wiring, switches, and routers used to provide local 28

area network (“LAN”) and wide area network (“WAN”) services to offices throughout Ontario. 29


The business telecom network is used to transmit data required to run business applications, for 1

email, and for web sites. 2

3

PBX/Voicemail hardware includes private branch exchange (“PBX”) and key set telephone 4

switches, and voice mail equipment used to provide business telephone services to Hydro One 5

employees at central and field locations throughout the province. 6

7

Within the Hydro One voice and data network there are more than 500 routers/switches and hubs 8

that connect to 70 PBX’s and 35 smaller multi-line office sets. A majority of the routers/switches 9

and hubs are reaching end of life. 10

11

The investment in business telecommunications Networks and PBX/Voicemail is undertaken to 12

replace end-of-life assets and to maintain service reliability and security. The strategy is again to 13

replace equipment that is no longer supported by vendors. For network equipment the refresh 14

occurs about every five years and about every ten years for PBX/Voicemail equipment. 15

16

The funding for business telecommunications Networks and PBX/Voicemail varies year to year 17

depending upon hardware lifecycles, business needs for increased bandwidth and availability of 18

resources. Changes to business applications and work methodologies may require the upgrades 19

to occur more frequently. 20


2.4. IT Development Projects Capital Expenditures 1

2

Table 6 lists the capital development project expenditures of IT. 3

4

5

6

The following IT Capital projects are active in the Bridge year 2006 and/or are planned for the 7

Test years 2007 and 2008. 8

9

2.4.1. Cornerstone Project 10

11

The major software applications used by Hydro One consist of Peoplesoft (Finance and HR), 12

Passport (Supply Chain, Procurement, Accounts Payable) and Customer One (CIS: Customer 13

Information System). These systems were implemented in anticipation of the de-merger of 14

Ontario Hydro and to address Y2K concerns. The applications were modified extensively 15

following their implementation to provide the required business functionality. Functionality of 16

these core systems was also enhanced by the addition of some 700 separate applications, which 17

allow the field and head office staff to complete their work. 18

Bridge

Description 2003 2004 2005 2006 2007 2008 2007 2008

Cornerstone – Phase 1 0.0 0.0 0.0 0.0 102.0 28.0 57.0 15.8

CIS/CSS Hybrid Upgrades 0.0 0.0 0.0 0.4 9.3 0.0 0.0 0.0

CTI Upgrades 0.0 0.0 1.5 3.3 0.0 0.0 0.0 0.0

ArcFM 2.7 6.3 0.0 0.0 0.0 0.0 0.0 0.0

APCi/WEP 0.0 0.9 8.7 8.0 0.0 0.0 0.0 0.0

IREIS 1.4 0.3 0.0 0.0 0.5 0.0 0.3 0.0

PeopleSoft Upgrade 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Mobile IT 0.6 0.6 0.0 0.0 2.9 2.9 1.6 1.6

Asset Data Collection and Data Mart 1.6 0.0 0.6 0.6 1.5 1.0 0.8 0.5

TOTALS 7.1 8.2 10.8 12.5 116.3 31.8 59.7 17.9

($ Millions)


IT Development Projects Capital ExpendituresTable 6


1

These core systems are aged and beyond economical maintenance. They no longer efficiently 2

fulfill the Company’s growing needs for information management and reporting. The PassPort 3

system has been the daily source of asset and work information since its inception in the de-4

merger days of the late 1990’s. The financial system, Peoplesoft, uses PassPort information and 5

derives financial reporting information. The CIS system is used for billing and collections and by 6

customer service representatives to address customer inquires on a daily basis. The systems have 7

limited interconnectivity, which has resulted in the requirement for manual input duplication or 8

other workarounds. Bridging of data and the development of workflow between systems is costly 9

and complex. 10

11

All three of these extremely critical systems have been customized and altered to varying degrees 12

to meet the current needs of the Company, over the past several years. Vendors are unwilling to 13

support these older applications and have been unable to help with add-on customized changes 14

that have been initiated. As software vendors for these applications are moving to new 15

architectures, support for these older applications is being phased out. This leaves the Company 16

with the option of continuing with these applications and developing its own support expertise or 17

migrating to more current versions, or potentially replacing the existing applications with a more 18

integrated and current application platform. 19

20

Continuing with these applications however limits the company’s ability to employ current 21

technology, to make use of mobile business solutions, and to address evolving business needs 22

and processes. Even if the Company were to support its own legacy applications, the risk with 23

the business systems would increase as the existing hardware would also require replacement 24

with more modern systems. These more modern systems might not be able to operate the older 25

applications. 26

27

This investment, which addresses replacement of the core business systems, in a phased 28

approach, positions the company on a robust, secure and flexible enterprise base and will allow 29


the replaced applications to be upgrade on a continual basis, without the cost of a significant one 1

time upgrade. 2

3

The Cornerstone name and concept has been adopted inside the company to assist in 4

communicating with every employee the ‘how’ and ‘when’ of changes that will benefit them 5

throughout the conversion. 6

7

The Cornerstone Project envisions four staged replacements of core applications which are 8

scheduled to occur between 2006 and 2011. Hydro One intends to retain outside consultants and 9

software application vendors, through a competitive bidding process, to assist it with its 10

replacement program. 11

12

The capital work program for Cornerstone will commence in 2007 following completion of the 13

preliminary research that took place in 2006. 14

15

The four phases of the Cornerstone Project are: 16

17

Phase 1 – EAM (Enterprise Asset Management) Core Functionality (Target In-Service Q2 2008) 18

19

The EAM initiative has an estimated capital cost of $130 million in the period from 2007 to 2008 20

and will replace the existing Passport applications with modern EAM solution. The result will be 21

an integrated EAM application which will allow for more effective information transfer within 22

the Company and provide the basis for connectivity with the other core systems as they are 23

replaced or upgraded. 24

25

The first part of Cornerstone is to replace the current installation of PassPort 6. The current 26

version, which supports work management, supply chain and certain asset management 27

processes is old, unsupported, and has been heavily customized since its installation in 1998 and 28

has been “locked down” since 2004. 29


1

PassPort 6 is no longer supported by the software vendor, Indus. This means that the vendor will 2

not provide ongoing application fixes for the application and may not be able to fix the 3

application if it breaks. Additionally the continuous customization which was undertaken to 4

extend the life of the Version 6 now significantly complicates upgrading the current application 5

and requires the system be replaced. 6

7

In replacing the PassPort application with a more current application, Hydro One will be able to 8

take advantage of new functionality inherent in the application, without having to make further 9

customizations. This will enable Hydro One to maintain reliable asset and work information 10

readily available to all stakeholders on a current software platform, which can be upgraded and 11

maintained. Having access to available vendor support will allow the Company to take advantage 12

of leading industry practices, and ensures it has forward compatibility with newer operating 13

platforms, existing and future hardware, other applications and improves system reliability and 14

recovery in the event of a system problem. 15

16

The EAM application upgrade will be an “off the shelf” software solution, provided by a leading 17

T&D utility software vendor. Hydro One will work with the systems integrator and software 18

vendor to follow current best practices for implementing software applications. The Company 19

will rely on the application vendor to enhance the application’s standard functionality, rather 20

than customizing the application to meet only Hydro One’s needs. 21

22

The application replacement is also needed to provide increased automation and functionality to 23

meet changing business needs in the areas of supply chain management and to continue to 24

provide more efficient compliance with Ontario Bill 198 for financial controls and reporting. 25

26

PassPort 6 has numerous "bolt-on" applications and point-solutions, many of which were 27

custom-built thus creating additional costs and efforts to maintain. A major objective of the first 28


phase of Cornerstone is to bring together various asset data and to thereby eliminate duplicate 1

versions of data. 2

3

Phase 1 has been approved by the Hydro One Board of Directors and the IT Steering Committee 4

of the Board and is moving forward toward implementation. This follows an exhaustive selection 5

and discovery process undertaken in 2006 and early 2007 to confirm cost and scope. A similar 6

exercise has not been completed for future phases and the costs associated therein are to be 7

reviewed at an appropriate point prior to final approval. Therefore, the following discussion 8

herein on Phases 2, 3 and 4 does not include cost estimates. As well, costs for Phases 2 through 9

4 are not reflected in the 2007 and 2008 revenue requirement. 10

11

Phase 2 – Enhanced EAM Functionality 12

This phase is intended to enhance the functionality and information available to the Asset 13

Manager. Key deliverables for Phase 2 include: 14

15

• the release of the additional functionality offered by the system replacement implemented in 16

Phase 1 (EAM-Core) 17

• replace most of the existing end-user applications with the EAM solution or with specialized 18

packaged point solutions designed to integrate with the EAM, especially focused on Asset 19

Management capabilities 20

• enhance reporting capabilities 21

• integrate the asset repository with Geospatial Information Systems and technology. 22

23

24

Phase 3 – Upgrade PeopleSoft – HR and Finance Functionality 25

26

The PeopleSoft financial and HR modules were installed in 1998 and the HR module was 27

upgraded in 2002 and subsequently customized. PeopleSoft has been purchased by Oracle, and 28


support for older versions of the PeopleSoft applications will be phased out as PeopleSoft moves 1

to an integrated platform with Oracle applications. 2

3

As in Phase 2, the main objective is not only to install an off-the-shelf solution, but also to adopt 4

industry-standard practices that are enabled by the off-the shelf packages. 5

6

Integration of the new financial and HR application with the modules installed in Phase 1 and 2 7

will enhance financial reporting capabilities. 8

9

Phase 4 - Replace Customer Information System Functionality 10

11

The Customer Information System known as CSS or Customer -1 was purchased in 1997 from 12

Andersen Consulting. The application has undergone significant modifications in order to 13

address the changes in the Ontario regulatory environment and to meet OEB requirements. This 14

is an extensively customized product which is very costly to maintain and very costly to modify 15

to meet new business needs. 16

17

The Hydro One IT strategy is to make modifications to the existing system to extend its useful 18

life and to address known regulatory and business requirements. The system itself is robust but 19

difficult to work with. Improvements to the system, which are discussed below, are intended to 20

stream line work processes, provide additional functionality and to make changes to the 21

application less costly. 22

23

To obtain full functionality with the newer systems, and to improve workflow and improve 24

customer satisfaction the intent of Phase 4 is to replace the existing Customer -1 system with a 25

more integrated application which would interface with the application suite implemented in 26

Phases 1-3. 27

28


Andersen Consulting no longer supports the application and Hydro One is part of a user group 1

who continue to maintain the core functionality of the Customer -1 application. The number of 2

users in the user group, who support the application, is however declining, as more of the utilities 3

using the Customer-1 application are switching to newer integrated CIS applications. 4

5

Inevitably, the Customer -1 application will have to be replaced. 6

7

Updated Cornerstone Estimate 8

9

The preliminary high-level Planning estimates for Phase 1 were included in the material filed 10

with the OEB in September of 2006. The Planning estimates was based on information 11

provided by independent consultants who were asked to provide preliminary estimates for a 12

more narrowly defined replacement of just the present Passport V6 application and current 13

functionality. The estimates were treated as indicative of what the project costs might be and 14

were used as a preliminary Planning estimate to be confirmed through the RFP process and 15

Discovery stage. 16

17

During the summer of 2006, a public RFP document was issued and qualified vendors were 18

selected through a competitive process. This included the selection of a Systems Integrator 19

(Accenture) and an enterprise software application (SAP). The RFP was designed to meet Hydro 20

One’s desire to implement a proven, widely-used, off-the-shelf application or applications which 21

provided the required functionality applicable to a T&D utility environment. 22

23

OM&A costs were incurred in 2006 related to the RFP and the vendor selection process as well 24

as the first part of the Discovery stage. The purpose of the Discovery stage was to establish an 25

appropriate scope, to confirm planning and resourcing and to provide a detailed estimate for 26

project approval, implementation and monitoring. 27

28


In 2006 the Hydro One Board of Directors established an independent committee of the Board to 1

review the Cornerstone Project and to act as an advisor and overseer to the project Steering 2

Committee and to the Cornerstone Project. The IT Committee of the Board has been involved 3

with the project since its inception and has provided an independent review mechanism for the 4

project. 5

6

The Discovery stage took the ’off the shelf’ SAP enterprise asset management application, 7

infrastructure and systems and identified the likely complexity of implementing the solution and 8

the process changes required within the Hydro One environment. The Discovery stage allowed 9

Hydro One to assess the Accenture High Performance Utility Model (HPUM) templates used at 10

other utility companies and to consider and more fully understand the implementation of the 11

required process changes to accommodate the HPUM practices with a non-customized SAP 12

application. HPUM practices as discussed more below. 13

14

Hydro One management has recommended, and the Hydro One Board has approved in February 15

2007, after extensive review and discussion with the IT Committee of the Board, proceeding 16

with Phase 1 of the project for a capital cost of $130 million for the period 2007 and 2008. 17

18

These project costs represent higher estimates than those originally filed in 2006. The following 19

reasons explain the change: 20

21

• The preliminary Planning estimates were provided at an early stage in the Planning 22

process. These estimates were provided prior to selection of an integrator or product and 23

prior to the more detailed Discovery stage which was conducted in the second half of 24

2006. 25

• Initially, the team viewed the project as a simple “like for like” replacement of end – of 26

- life systems. However, during Discovery, the view of the potential for the project 27

changed such that it was viewed as a key enabler of productivity through adoption of 28


more efficient, standardized business processes in areas served by the existing PassPort 1

application. This revised view meant Phase 1 became more extensive, complex and 2

transformational. Rather than a simple IT system replacement, the executive team 3

decided to take advantage of the project to change the way we do work in many areas 4

and to address shortcomings in our existing processes. Changes included the 5

advancement of new and simplified business processes, better understanding of data 6

requirements, and a solution which while more complex would be more advantageous 7

than a straight application replacement. In turn these changes drove an increased 8

hardware complexity, increased reliance on external support for the solution 9

implementation, more accurate license counts, a better understanding of the nature of the 10

licenses that would be required, and increases to contingency and overhead amounts. 11

• The Hydro One IT area has embraced the strategy of integrating off-the-shelf products 12

rather than employing custom applications. Adopting the principle of “no 13

customization” of software makes it necessary to undertake extensive business process 14

changes, which the business units agree are required. Adhering to this principle with the 15

selected software has resulted in more change management and business process change 16

than what was originally envisioned in the planning estimate. 17

• More extensive data conversion work and costs to prepare the data required for the new 18

SAP system 19

• Costs for interest, overheads and taxes consistent with Hydro One’s guidelines for 20

capitalization of projects have increased commensurately with the increase in the core 21

project cost. 22

• Project contingency costs estimated at 20% of total costs are higher largely resulting 23

from the increase in core project costs. 24

25

Phase 1, with the selection of the SAP application, establishes the financial footprint and 26

financial application structure required which had earlier been forecast for Phase 3. Bringing this 27


partly forward into Phase 1 also allows the Phase 2 application to be more effective and 1

beneficial to business reporting and decision making earlier. 2

3

Adopting the Accenture HPUM will require the business to make fundamental changes to how it 4

operates. These changes are intended to allow Hydro One to operate more effectively with the 5

existing staff that it has and to partially address expected staffing losses due to retirements. 6

7

The HPUM process will standardize business processes across the organization, collect and 8

centralize corporate knowledge and improve the efficiency of existing business processes. Use of 9

the SAP application and associated utility asset management applications will allow the Hydro 10

One asset management organization to better align its asset management decisions with the goal 11

of improving or maintaining system efficiency in an investment effective manner. 12

13

2.4.2 CIS/CSS Hybrid Upgrade Project 14

15

The Customer Information System is the term given to a suite of billing and customer 16

applications. To improve their existing performance Hydro One intends to make a series of 17

investments in the applications ($0.4M in 2006 and $9.3M in 2007) to improve current 18

performance and reliability. 19

20

Some aspects of previously planned work to update applications in Customer Care will be 21

become part of the Cornerstone project. 22

23

This project is allocated 100% to distribution account categories. The upgrade is labeled as 24

“hybrid” because some components will be upgraded and others will not, rendering the resultant 25

configuration as a hybrid application, rather than a replacement or upgrade. 26

27


The Customer-1 application is the predominant part of the Customer Information System (“CIS”) 1

suite of applications. It provides the technology backbone for billing, customer care, field 2

services, and open market services to customers and key constituents. 3

4

The upgrading of the CIS platform that started in 2006 and carried into 2007 will improve the 5

operational efficiency of this aging system by reducing the time and effort required to maintain 6

and make changes to the system. The project also consists of the creation of a Customer Data 7

Mart which will result in a new customer information repository. This will allow for the more 8

cost efficient use of customer information for managing assets, outages, work programs, and 9

reporting. 10

11

Undertaking the Hybrid project will enable the CIS application to remain functional until its 12

upgrade or replacement in 2011. It is expected through investment in a Hybrid program, rather 13

than in replacement of the existing CIS application at this time, that Hydro One will maintain 14

flexibility and have a number of options available to it in light of the Government’s smart 15

metering program. 16

17

2.4.3 CTI Upgrades 18

19

This project completes the work begun in 2005 to upgrade the contact centres’ applications 20

required for the computer-telecom-interface (CTI) technology which enables contact centre 21

agents to handle customer inquiries in a variety of media, such as telephone calls, emails, faxes 22

and posted letters. These changes will provide for the requisite flexibility to meet growing and 23

changing customer needs going forward. This project is allocated fully to Distribution accounts. 24


1

2.4.4 ACPi/WEP Project 2

3

This project will complete the IT provisioning for work planning, crew scheduling, dispatching 4

and time recording functions to the Lines of Business users such as Customer Operations, Grid 5

Operations and E&CS. The result will be the Work Planning and Reporting System (WPRS). 6

7

This will be achieved by leveraging the system integration tool that is being delivered through 8

the ACPi (ArcFM, CSS, Passport integration) project. The WEP project will add work planning 9

and crew scheduling plus the application to view assigned activities for time capture and job 10

status. New applications will be utilized by Customer Operations regarding the dispatch of the 11

high-volume of short duration jobs. 12

13

While the project's main function is to deliver the integrated tools mentioned above, the business 14

benefits also include process alignment between the LOBs to plan work and schedule crews 15

between their organizations more effectively. This will facilitate program management in the 16

future once the businesses have completed their transitional learning curve. 17

18

There is a wide range of benefits for this project including efficiency in resource utilization by 19

organizing work orders by geographical area and better tracking of resource assignments. There 20

are additional benefits for Finance in the areas of time capture and up front time approval. 21

22

The WEP application will interface with the Cornerstone solution through the use of hub 23

technology developed in the ACPi project. 24

25

2.4.5 IREIS Project 26

27

This project converts and stores geospatial information data, which will be accessed through the 28

Integrated Real Estate Information System. 29


1

2.4.6 Mobile IT Project 2

3

Mobile IT ($2.9 million in each of 2007 and 2008) will equip field forces with the tools required 4

to access current and planned asset data applications when in the field. This project also 5

supports the Company’s response to staff and vehicle location safety needs, Smart Network 6

preparedness and Smart Metering initiatives. The project will utilize the functionality made 7

available through the Cornerstone project. This investment provides additional commercial 8

software products, enhancements to existing software products and the installation, configuration 9

and integration of those products along with associated hardware (database and application 10

servers and upgraded hand-held devices). This project will permit field management and staff 11

access to critical systems and information regarding work crew projects, field assets and optimal 12

scheduling as part of work management processes. 13

14

2.4.7 Asset Data Collection and Data Mart Project 15

16

Work related to converting older drawings to digital files has resulted in portions of the project 17

being postponed into 2007. 18

19

Through the use of handheld tablets system information data is being collected on the current 20

state of the Distribution system. Project costs of $0.6 million in 2006 concludes the work to 21

enhance existing software applications used to collect and store information on the location, 22

condition, and connectivity of distribution line assets in the field. The scope of the project 23

provides software to analyze the information and allow it to be transferred and used in the 24

corporate Geographical Information System (GIS). The information will assist in the efficient 25

expansion, operation, and maintenance of the distribution system. 26

27


3.0 FACILITIES & REAL ESTATE 1

2

This section addresses the capital expenditures that are required to acquire (own or lease) and 3

maintain Hydro One Networks Inc.’s workspace (office space and service centres). The 4

transmission facilities represents approximately $3.8 M of overall capital estimated spending in 5

2007 and $4.1 million in 2008, as illustrated in Table 7, below. 6

7

Table 7 8

Total Real Estate Capital Expenditures ($ Millions) 9

10

Historic Bridge Test Years Allocated to

Transmission

Description 2003 2004 2005 2006 2007 2008 2007 2008

Major 2.3 5.1 2.6 3.0 6.8 7.3 3.8 4.1

MFA 0.5 0.8 0.0 0.6 0.4 0.4 0.2 0.2

Total 2.8 5.9 2.6 3.6 7.2 7.7 4.0 4.2

11

3.1 Major Capital 12

13

The Real Estate major capital program allows for the provision of workspace of head office 14

facilities, including Ontario Grid Control Centre – Barrie, field administrative & service centre 15

facilities, and other work locations such as the London call centre. 16

17

The capital program focuses on undertaking critical component replacement work on a priority 18

basis (e.g. roof replacement). As a result of the planned and corrective replacement of these 19

critical components, the amount of capital spent varies year over year. Contracted facility service 20

providers conduct regular inspections of administrative and service centre sites across the 21

province to ensure critical building/site components are inspected regularly and major structural 22

and related problems are identified. Maintaining building and site assets in a condition that 23


ensures their longer-term viability, while meeting the workspace needs of employees on a day to 1

day basis, is critical to the successful completion of a variety of corporate work activities. 2

Equally important is ensuring that employee workspaces are consistently maintained to a 3

standard that meets current work requirements and complies with all corporate, legislative and 4

other related safety and environmental regulations. This program also considers the facilities 5

portfolio accommodation strategy in terms of facility improvements, building additions, and new 6

facilities in line with the Company’s changing operational requirements. 7

Key Program work activities include: 8

9

• Replacement of major building components including roof structures, windows, heating, 10

ventilating and air conditioning (HVAC) systems and other structural elements and building 11

systems; 12

• Dealing with environmental issues that may arise such as mould; 13

• Water treatment upgrades to improve quality and reliability of water supply, including 14

conversions to municipal supply; 15

• Facilities Improvements: Service, Administrative Centres; and 16

• Head Office and Administrative Facilities - New/ Additional workspace demand – 17

accommodation planning. 18

19

The level of funding in the bridge period and test years provides for facilities improvements, 20

resulting from assessments of aging facilities infrastructure across the Province. The facilities 21

infrastructure base is comprised mainly of aged buildings, legacy building systems and 22

components, many of which are reaching the end of their asset life cycle. 23

24

3.2 Minor Fixed Assets (MFA) 25

26

As noted in Table 7 above, spending on MFA is generally less than $1 Million each year and is 27

spent on replacement of furniture. 28

29


4.0 TRANSPORT AND WORK EQUIPMENT (TWE) 1

REPLACEMENT PROGRAM 2

3

This section identifies the TWE capital expenditures for the period 2003 to 2008. The increase 4

in capital expenditures is directly related to the increase in work programs. Fleet capital 5

requirements are primarily based on industry standards (manufacturer’s recommendations) for 6

life cycle expectancy, the remaining capital value, and operating cost drivers which are then 7

linked to the Business Plan and Work Programs. Light vehicles are replaced after 6 years or 8

180,000 km, service trucks are replaced after 6 years or 200,000 km, and work equipment is 9

replaced after 8 to 10 years or 230,000 km. 10

11

Table 8 12

Capital Expenditures From 2003 – 2008 ($ Millions) 13

14

Historic

Bridge

Test Years

Allocated to

Transmission

2003 2004 2005 2006 2007 2008 2007 2008

Total Cost 53.5 13.5 40.5 41.2 43.5 40.6 10.4 9.7

15

The objective of the TWE Replacement Program is to promote an orderly system of purchasing 16

and funding a standardized fleet replacement process and to plan for future transportation 17

requirements. The TWE Replacement Program annually analyzes 5-year cycles for capital 18

investment requirements and maintains a safe and efficient fleet. It is critical to evaluate and 19

forecast spending requirements to minimize fluctuating spending patterns and to stabilize long 20

term capital investment. The fleet capital program, on an annual basis, is evaluated against the 21

business plan and is subject to the work program prioritization and forecasting process. 22

23

Business cases for the program are prepared and approved and the equipment is strategically 24

procured through a tendering process. 25


The TWE Replacement Program reviews: 1

2

• Equipment capital forecast; 3

• Equipment productivity, functionality, and future requirements; 4

• Equipment standards, equipment age, mechanical condition, kilometers traveled and cost per 5

kilometer, downtime, and repair time; 6

• Safety/risk; 7

• Work programs, evaluating staff and equipment complement; 8

• Tendered procurement process; 9

• Fleet's Original Capital Value and Net Book Value; 10

• Historical and future utilization; 11

• Strategic procurement; and 12

• Cost versus 5-year business plan. 13

14

The guidelines for vehicles considered for replacement are based on vehicles meeting 15

predetermined criteria including, but not limited to: manufacturer’s life expectancy, average cost 16

per kilometer, regulated maintenance standards, safety/risk, and beneficial purchasing cycles. As 17

vehicles reach the targeted criteria, a vehicle maintenance evaluation is performed and, in some 18

cases, the unit may be reassigned to other functions with “low usage” requirements. The 19

replacement program measures the age and value of the fleet and meets the requirements and due 20

diligence of a typical Utility fleet. 21

The benefits of our replacement program include: 22

23

• Maximum safety, productivity and utilization; 24

• Minimum downtime, repair time, and fleet complement; 25

• Reduced operating costs. 26

27


4.1 2003 to 2008 Period Analysis 1

2

Hydro One Networks Inc. Fleet Operations has increased its yearly capital expenditures 3

significantly in order to replace its aging equipment. 4

5

Over the 2003 to 2008 period, the Sustainment, Development, and Operations work programs 6

have grown by over 70% and is aligned with the growth of the TWE replacement program. 7

8

$20 million of planned capital was brought forward to 2003 from 2004 based on the substantial 9

increase in the work program for 2004 and 2005. This advancement was justified and approved 10

to allow for the equipment to be manufactured and available for January 2004. This reduced the 11

requirement for high cost short-term rentals and took advantage of 2003 strategic procurement 12

contracts. This resulted in totals of $53.5 million in 2003 and $13.5 million in 2004. 13

14

As noted in Exhibit C1, Tab 4, Schedule 1, the overall size of Hydro One Networks Inc.'s fleet 15

was adjusted to 4,522 vehicles and other equipment in 2005 to match the work programs. New 16

vehicles costs were $41.2 million in 2006 and are forecast to increase in 2007 ($43.5 million), 17

then decrease into 2008 ($40.6 million) based on the number of vehicles required to execute the 18

planned work programs. The peak in 2006 and 2007 is primarily related to specialized 19

equipment supporting the expanded capital work programs. 20

21

4.2 Capital vs. Operating Leases 22

23

The evaluation of leasing as a financial alternative to the approved capital program was 24

evaluated during the 2003 strategic sourcing initiative. The evaluation included the review of 25

both capital and operating leases and the total operating costs. The risks and benefits generated 26

by leasing were evaluated and it was decided the risks outweighed the modest benefits. The 27

results therefore indicated that leasing was not cost effective. 28

29


The requirement for short term rentals (as distinct form long term rentals) is recognized and is 1

included with our operating expenses in Exhibit C1, Tab 4, Schedule 1. 2

3

4.3 Procurement Initiatives 4

5

Fleet Services follow capital procurement objectives for material and service, listed below, to 6

achieve cost reductions over the next five years: 7

8

• Profile the commodities, collect and analyze cost drivers; 9

• Analyze the supply market; 10

• Develop a strategy for sourcing; 11

• Select the suppliers through a rigorous RFP process; 12

• Conduct negotiations. 13

14

These procurement initiatives have allowed Hydro One Networks Inc. to lock in pricing for 3 15

year terms with preferred vendors. 16

17

5.0 SERVICE EQUIPMENT 18

19

Table 9 below identifies the expenditures for Service Equipment for the 2003 to 2008 period. 20

21

Table 9 22

MFA Service Equipment 2003 – 2008 ($ Millions) 23

24

Historic Bridge Test Years Allocated to Transmission

2003

2004

2005

2006

2007

2008

2007

2008

Total Cost 6.4 4.9 3.1 3.9 7.3 6.5 3.1 2.8

25


Minor fixed assets for service equipment represents capital items ≥ $2,000 required by our staff 1

to carry out the construction and maintenance work programs. Capital items < $2,000 are 2

expensed to OM&A. Minor fixed asset expenditures for service equipment are required to 3

replace end of life service equipment, replace technologically obsolete service equipment when 4

new standards and safer work practices come into effect, and provide for sufficient levels of new 5

service equipment consistent with work program expansion. 6

7

Purchases in this category include specialized transportation equipment for off-road work sites 8

and mobile equipment required to carry out a variety of work. 9

10

Specialized transportation equipment includes equipment such as all terrain vehicles, boats, 11

barges, snowmobiles and related accessories. 12

13

Mobile equipment includes oil tankers, degassifiers, and dry air machines required for 14

transformer maintenance, SF6 gas carts required for the maintenance of SF6 breakers, and a 15

variety of other miscellaneous equipment necessary to analyze, test, and carry out the 16

construction and maintenance of the transmission work program. 17

18

Year over year changes in spending are the result of end-of-life replacement of specific large 19

equipment. For example, oil tankers, degassifiers, and air supply equipment used to overhaul and 20

maintain large power transformers and manage the related oil requirements. Spending in 2007 21

and 2008 is focused on additional service equipment required to accommodate the growth in the 22

work program. 23

24


6.0 OTHER SHARED SERVICES 1

2

Table 10 3

Other Shared Services Capital ($ Millions) 4

5

Historic Bridge Test Years Allocated to Transmission

2003

2004

2005

2006

2007

2008

2007

2008

Total Cost (0.1) (2.2) 3.1 6.1 0 0 0 0

6

Other costs comprise a variety of minor element costing. 7

8

2003 to 2005 costs represent an (over)/under recovery of burdened rates which were assessed to be 9

attributable to the capital program, but not applied back to specific programs; as well as other 10

adjustments to capital projects. 11

12

The 2006 other costs represent capital contribution adjustments in accordance with OEB 13

compliance bulletins. 14

15

Documents

D1-3-5 - Shared Services and Other Capital · 3 through 2008, highlighting the total capital spending for Shared Services and Other Capital, as 4 well as the portion allocated to