How Ontario Utilities Rationalize their Real Estate Assets

As an expert at the intersection of utilities and real estate, I thought it would be insightful to share how the rates customers pay are impacted by Ontario Utilities’ Real Estate Strategy.

To finance their operations and infrastructure, Ontario Utilities follow a process that involves setting customer rates and obtaining debt financing. Customer rates and debt financing contribute to day-to-day expenses and capital investments. This comprehensive approach ensures a stable financial foundation for Ontario Utilities.

Ontario Utilities justify their real estate facilities based on operational efficiency, proximity to key infrastructure, and regulatory compliance. They often emphasize the need for strategic locations to ensure timely response to service demands. Additionally, utilities consider the long-term benefits and cost-effectiveness of their real estate choices. This justification aligns with their commitment to providing reliable services while adhering to regulatory standards.

Approval for rate increases follows a regulated process governed by the Ontario Energy Board (OEB). The process involves submitting a comprehensive rate application to the OEB, outlining the reasons for the proposed increase, such as operational costs and infrastructure investments.

The OEB reviews the application, considering factors like efficiency, necessity, and the impact on consumers. Public consultations may occur, allowing stakeholders and the public to provide input. After thorough evaluation, the OEB issues a decision either approving, modifying, or rejecting the proposed rate changes. This regulatory process aims to balance the interests of both utilities and consumers.

The Utility practice team at Cresa Toronto assists utilities in developing strategic real estate plans that help support the funding, justification, and approval of their real estate assets.