Borrowing will provide the leverage to complete capital works without increasing rates beyond what has already been announced or approved.
The $10 million will add to PUC’s ongoing efforts to upgrade the city’s electrical distribution grid including replacing poles, switches and substations.
“Over the past decade we have been working to gradually increase the amount of infrastructure renewal done each year. This increasing annual investment in the electric distribution system will provide long -term tangible benefits for PUC customers.” says, PUC President Dominic Parrella. “In 2013 thirty-five percent of power outages in the city were due to the failure of aging electrical equipment such as switches and substation equipment. An investment like this will lead to a more reliable electrical system” says Parrella.
“We must be proactive in addressing the issues associated with the city’s aging electrical system or there will be growing problems in supplying this essential service to our customers”, said Parrella.
The PUC president also said that fifteen electrical substations will need to be replaced over the next 20 years at a cost of approximately $3 million each.
Ontario’s regulated electric distribution rates are not structured to cover all capital costs annually for electric utilities across the province. The regulated rate structure is designed by the Province to include borrowing in order to finance capital needs each year.
“We understand our customers are concerned about rates.” says Terry Greco, Vice President of Finance. “This investment in the electrical distribution system falls within the current distribution rates approved by the Ontario Energy Board.” says Greco
More information on this capital funding request can be found by visiting www.ssmpuc.com.