OPG’s request for the interim order was part of its application filed November 30, 2007, seeking approval for increases in payment amounts for the output of its base load generating facilities.  The full amount OPG is requesting is $37.70/MWh for its regulated hydroelectric facilities, an increase of 14%, and $41.10/MWh for nuclear generation, plus a payment of $57.7 million per month for its nuclear facilities. Taken together, OPG is requesting a 14 percent increase in its rates, representing an increase of as much as 6 percent in total generating costs to customers, or $2.66 per MWh.

In its Decision, the Board expressed concern with the requested payment increase.  Mr. Gordon Kaiser, who presided over the hearing, explained “The main argument was not financial harm, which we often hear in these cases and is often the basis for interim rate increases.  Rather OPG seeks rate smoothing to avoid rate shock to consumers.”  He went on to say that “any concern with rate shock assumes that there will be some rate increase; otherwise smoothing is not necessary.  In the end, the Board believes that if smoothing is required, it can be achieved prospectively.  It is not necessary to do that by early rate implementation.”

AMPCO’s concerns were noted in the Board’s decision.  AMPCO presented three main points:  (1) that interim relief should not be granted when the increase sought relates to increased cost of capital, particularly return on equity, given the history of OPG’s assets; (2) customers should not bear the brunt of financial relief given that OPG has known about the April 1, 2008 date for years yet only filed an application for rate increases last November; and (3) the impact of the interim payments on an annual basis amounts to almost $50 million in extra costs to AMPCO members who cannot sustain any increase in rates.  AMPCO’s legal counsel, Mr. Mark Rodger, summed up this point at the hearing, “…the compact that AMPCO members understand is:  Rates would not be changed until the Board makes an order; and the Board wouldn’t make an order unless it heard evidence or unless OPG had passed certain tests, which we believe they have not done.”

Since a final decision of the Board could take as long as 6 months (and it is highly unlikely that any rate increases would be made retroactive) the Board’s decision to reject the interim rate increase effectively defers the implementation of higher rates. Such a deferral (of $2.66/MWh for 6 months) amounts to a $25 million savings to AMPCO members in 2008.