20180126Avista to Staff_DR_208(H1) Attachment C.PDF

   
REVIEW OF ALLOCATION OF 
COMMON CORPORATE COSTS 
(DISTRIBUTION) – 2016 
BLACK & VEATCH PROJECT NO. 188588 

PREPARED FOR 
Hydro One Networks Inc. 
December 21, 2016 
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Filed: 2017-03-31
EB-2017-0049 Exhibit C1-4-1
Attachment 1 Page 1 of 28
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Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
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Table of Contents 
Table of Contents ........................................................................................................ 1 
I. Summary ............................................................................................................... 2 
A. Background................................................................................................................... 2 
B. Hydro One Organization ......................................................................................... 3 
C. Functions And Services In Common Corporate Costs ................................. 3 
D. Black & Veatch’s Assignment ................................................................................ 4 
E. Overview Of Methodology ...................................................................................... 5 
F. Scope Of Work ............................................................................................................. 6 
G. Conclusions And Results ......................................................................................... 6 
II. Statement of Approach .................................................................................... 8 
A. Evaluate Cost Allocation Methodology ............................................................. 8 
B. Review Application Of Cost Allocation Methodology .................................. 8 
C. Principles Of Cost allocation .................................................................................. 9 
D. Cost Drivers .................................................................................................................. 9 
E. Types of Cost Drivers ............................................................................................... 9 
III. Evaluate Cost Allocation Methodology ................................................ 10 
IV. Review Application of Methodology to BP 2018‐2022 .................. 11 
V. 2015 Time Study .............................................................................................. 15 
List of Tables 
Table 1 ‐ History of Black & Veatch’s Cost Allocation Reviews for Hydro One ... 2 
Table 2 – Hydro One Business Units ..................................................................................... 3 
Table 3 ‐ Functions and Services in Common Corporate Costs ................................. 4 
Table 4 ‐ Distribution of Annual Common Corporate Costs ....................................... 7 
Table 5 ‐ Direct Assignments and Cost Drivers for Common Corporate Costs . 13 
List of Exhibits 
Exhibit A‐ Functions and Services in Common Corporate Costs 
Exhibit B‐ Types of Cost Drivers 

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Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
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I. Summary 
A. BACKGROUND 
Black & Veatch Canada Company (“Black & Veatch”) is pleased to submit to Hydro One Networks
Inc. (“Hydro One”) this Report which describes our Review of Allocation of Common Corporate
Costs (Distribution)‐ 2016 (“2016 Review”).
In 2004, Black & Veatch was engaged by Hydro One to recommend a best practice methodology to
distribute Common Corporate Costs to Hydro One and its subsidiaries and partnership (identified
in Table 2). Common Corporate Costs are the costs to provide certain functions and services
(identified in Table 3), including those performed by Inergi LP, to Hydro One and its subsidiaries
and partnership. Black & Veatch recommended, Hydro One adopted, and the Ontario Energy Board
(“OEB”) accepted, a methodology to distribute those costs, as described in our Report on Common
Corporate Costs Methodology Review dated May 20, 2005 (“2005 Common Costs Report”).
The OEB‐accepted methodology has been applied to Hydro One’s Business Plans, and reviewed by
Black & Veatch with subsequent reports issued, as follows:
Table 1 ‐ History of Black & Veatch’s Cost Allocation Reviews for Hydro One 
BLACK & VEATCH 
REVIEW 
BUSINESS 
PLAN 

BLACK & VEATCH REPORT 
2006 Review BP 2007‐
2011 
Report on Implementation of Common Corporate Costs Methodology
dated May 31, 2006 
2008 Review BP 2009‐
2013 
Report on Implementation of Common Corporate Costs Methodology
dated September 10, 2008 
2009 Review BP 2010‐
2014 
Report on Shared Services Costs Methodology dated June 29, 2009
2010 Review Updated BP  
2010‐2014 
Report on Shared Services Costs Methodology –2011 dated February 26, 
2010 
2012 Review BP 2012‐
2016 
Review of Shared Services Cost Allocation (Transmission) – 2012 dated 
February 1, 2012 
2013 Review BP 2014‐
2019 
Review of Allocation of Common Corporate Costs (Distribution  –2013
dated September 19, 2013 
2014 Review BP 2014‐
2019 
Review of Allocation of Common Corporate Costs (Transmission) –2014
dated March 17, 2014 

2015 Review BP‐2017‐
2018 
Review of Allocation of Common Corporate Costs (Transmission) –2015 
dated May 4, 2016 

The OEB‐accepted methodology to distribute the Common Corporate Costs has been applied by
Hydro One to its Business Plan for 2018‐2022(“BP 2018‐2022”) data. This Report describes the
“2016 Review” that Black & Veatch performed, at Hydro One’s request, of Hydro One’s application
of the methodology to its BP 2018‐2022 in connection with its 2018‐2022 Distribution rates
application, and presents Black & Veatch’s conclusions. The methodology remains the same
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between the Transmission case filed in May 2016 with this Distribution case; albeit the results vary
slightly due to the regular updating of inputs and costs drivers that incorporate current
information.
B. HYDRO ONE ORGANIZATION 
Hydro One Inc. operates through the wholly‐owned subsidiaries and partnership listed in Table 2.
The OEB regulates, separately, the business units identified as such in Table 2. Each regulated
business is required to account separately for its assets, revenues and costs, for both regulatory and
financial accounting purposes.
Table 2 – Hydro One Business Units 
SUBSIDIARY BUSINESS 
UNIT REGULATED DESCRIPTION 
Hydro One 
Networks Inc. 
Distribution Yes 
Owns and operates a distribution system which spans 
approximately 75% of Ontario and serves approximately 
1.3 million customers. 
Transmission Yes Owns and operates substantially all of Ontario’s 
electricity transmission system. 
Hydro One 
Remote 
Communities Inc 
Remotes Yes 
Owns, operates, maintains and constructs generation and 
distribution assets used to supply of electricity to remote 
communities in northern Ontario. 
Hydro One 
Telecom Inc. Telecom No 
Sells high bandwidth telecommunication services to 
carriers, Internet service providers, and large public and 
private sector organizations. 
Hydro One Inc. Holding Yes Subsidiary of Hydro One Ltd.  Acts as the holding 
company of Hydro One’s rate regulated businesses. 
Hydro One Ltd. Holding No 
Public company that owns Hydro One Inc. for the 
transmission and distribution rate regulated businesses 
and Hydro One Telecom Inc. for non‐regulated business 
activity.  Hydro One Ltd. is owned by public shareholders 
as well as the Province of Ontario.  
B2M Limited 
Partnership 
B2M 
Transmission 
Line 
Yes 
Continuous transmission line between the Bruce Nuclear 
Power Development and Hydro One’s Milton Switching 
station. 

C. FUNCTIONS AND SERVICES IN COMMON CORPORATE COSTS 
Hydro One provides the functions and services identified in Table 3, to the businesses identified in
Table 2. Exhibit A further describes the functions and services provided. The BP 2018‐2022
includes 2018 Common Corporate Costs totaling approximately $312 million incurred to perform
the relevant functions and services; and the annual total Common Corporate Costs are presented in
Table 4.
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Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
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Approximately 3.72% of the Common Corporate Costs are incurred under an outsourcing
arrangement with Inergi LP (“Inergi”). Common Corporate Costs includes the cost included in BP
2018‐2022 for sustainment activities outsourced to Inergi services pertaining to finance, accounts
payable, and human resources, and pay services.
Table 3 ‐ Functions and Services in Common Corporate Costs 
Hydro One Inc. Corporate Office 
 President/CEO Office 
 Chair 
 CFO’s Office 
 Treasurer's Office 
 Board of Directors 
 Corporate Secretary ‐ General Counsel 
 Pension Cost 
 Donations 
 Ombudsman Office 
 Investor Relations 
 EVP Strategy Office 
Shared Services and Finance
 Real Estate 
 Value Growth
 Treasury 
 Corporate Controller 
 Taxation 
 Regulatory Affairs 
 Business Planning & Decision Support 
 Outsourcing Services 

Operations 
 Distribution Asset Management (Note 1) 
 Planning and Optimization (Note 1) 
 Reliability, Strategies, and Compliance (Note 1) 
 System Planning (Note 1) 
 Network Connections and Development (Note 1) 
 Network Operations (Note 1) 
 Transmission Asset Management (Note 1) 
 VP Planning (Note 1) 
 EVP Office – Operations (Note 1) 
 Strategic Services 
 Key Account Management (Note 1) 
Customer and Corporate Relations 
 Customer Care Services (Note 1) 
 Customer Strategy and Conservation (Note 1) 
 Customer Program Delivery (Note 1) 
 VP Customer Service (Note 1)
 Meter to Bill (Note 1) 
 Corporate Affairs 
 First Nations and Métis Relations
 Bad Debt and Goodwill
 SVP Customer and Corporate Relations
Information Services 
 Corporate Projects 
 Information Technology 
 Security Operations 
Inergi LP (outsourced services) 
 Finance 
 Human Resources ‐ Pay Services 
 Accounts Payable 
People and Culture General Counsel & Secretariat 
Audit VP Chief Risk Officer
Note 1‐ Department participated in 2015 Time Study; see Section V. 
D. BLACK & VEATCH’S ASSIGNMENT 
For the 2016 Review, our assignment was to:
a. Evaluate whether the existing Common Corporate Cost Allocation Methodology
continues to be appropriate for Hydro One, and identify changes that are necessary or
desirable.
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b. Review Hydro One’s application of the OEB‐accepted Common Corporate Cost Allocation
Methodology to the BP 2018‐2022, in connection with its 2018‐2022 Distribution rates
application.
The organization presented in Table 3 reflects the creation of new departments, realignment of
departments among groups, and realignment of functions among departments, that Hydro One
believes will allow it to serve its customers most effectively and efficiently, based on the current
business and regulatory environment.
The Common Corporate Costs Model for BP 2018‐2022 reflects these organizational changes. Black
& Veatch reviewed the cost driver for each activity to determine its continued applicability, and
where necessary, the development of the cost driver was updated to reflect the organizational
changes.
Concurrently with this 2016 Review, Black & Veatch reviewed and issued reports on Hydro One’s
Overhead Capitalization Rate methodology, Common Assets allocation and Allocation of Common
Corporate Costs to the Bruce‐to‐Milton (B2M) Limited Partnership.
E. OVERVIEW OF METHODOLOGY 
The Black & Veatch methodology for allocating the costs of Hydro One’s Common Corporate Costs
was designed to address the following considerations:
 Compliance with OEB precedent including Docket RP‐2002‐0133 (In The Matter Of The
Ontario Energy Board Act, 1998)
 Compliance with relevant provisions of the Affiliate Relationships Code for Electricity
Distributors and Transmitters (“Code”)
 Cost incurrence‐ Are the costs needed to perform services required by the business
units?
 Cost allocation‐ Are costs appropriately allocated among business units, based on the
application of cost drivers /allocation factors supported by principles of causality?
 Cost/benefit‐ Do benefits received equal or exceed the cost?
An overview of the Black & Veatch cost allocation methodology is described below:
 Identify the functions and services included in Common Corporate Costs.
 Identify activities that are performed to provide those functions and services.
 Based on time and/or cost studies, distribute the annual departmental costs in the BP
2018‐2022 among the activities performed by that department in providing the
functions and services.
 Distribute the cost of each activity among the business units based on direct
assignment when possible, and based on cost drivers when direct assignment is not
possible.
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 The guiding principle used by the Black & Veatch methodology to assign cost drivers is
cost causation.
A cost driver is a formula for sharing the cost of an activity among those who cause the cost to be
incurred. Cost drivers are discussed in Section D. The different types of cost drivers are described
in Exhibit B.
F. SCOPE OF WORK 
Consistent with Black & Veatch’s standard practice for consulting assignments, we relied on the
genuineness and completeness of all documents presented to us by Hydro One, and we accepted
factual statements made to us by Hydro One (e.g., headcount, budgeted amounts) subject only to
their overall reasonableness and factual accuracy, but without our independent confirmation. All
dollar amounts in this Report are stated in Canadian dollars.
G. CONCLUSIONS AND RESULTS 
Black & Veatch believes that Hydro One’s current cost allocation methodology continues to be
appropriate for Hydro One because it achieves the purposes for which it was designed (to
distribute costs in a manner that is consistent with OEB precedent and regulatory practice) and
promotes transparency and efficiency.
Based on our review, Black & Veatch concludes that the results of Hydro One’s application of the
Black & Veatch Common Corporate Cost Allocation Methodology to its BP 2018‐2022 data reflects a
cost causation‐based distribution of the Common Corporate Costs and conforms to the OEB‐
accepted methodology. The annual results for years 2018‐2022 are shown in Table 4.
Black & Veatch also notes that Hydro One management believes that the existing methodology is
appropriate for the company, the cost allocation process receives strong support from Hydro One
management and is well integrated into the budgeting process and the Common Corporate Costs
Model is updated periodically to reflect current information.
Table 4 presents the results of Hydro One’s distribution of the Common Corporate Costs in BP
2018‐2022, annually for 2018‐2022, among its Distribution, Transmission and Other businesses.

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Table 4 ‐ Distribution of Annual Common Corporate Costs 

Business 2018 2019 2020 2021 2022
($ Millions)$$$$$
Transmission  $                         153   $                  153   $                  153   $                  155   $                  158 
Distribution  $                         143   $                  141   $                  142   $                  143   $                  145 
Other  $                           16   $                    16   $                     16   $                     17   $                    17 
Total  $                         312   $                  310   $                  312   $                  315   $                  320 
(% of Total) %   %   %   %   % 
Transmission 49% 49% 49% 49% 49%
Distribution 46% 46% 46% 45% 45%
Other 5% 5% 5% 5% 5%
Total 100% 100% 100% 100% 100%
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II. Statement of Approach 
This section presents the approaches used by Black & Veatch to evaluate whether the existing
Common Corporate Cost Allocation Methodology continues to be appropriate for Hydro One, and to
review Hydro One’s application of the methodology to the BP 2018‐2022 costs of providing the
functions and services included in Common Corporate Costs.
A. EVALUATE COST ALLOCATION METHODOLOGY 
The Common Corporate Cost Allocation Methodology was first applied to Hydro One’s Business
Plan 2018‐2022. Hydro One requested that Black & Veatch evaluate whether the methodology is
still appropriate, and what changes, if any, could be considered. Black & Veatch’s approach is
discussed in detail in Section III.
B. REVIEW APPLICATION OF COST ALLOCATION METHODOLOGY 
In preparing the 2016 Review, Black & Veatch performed the following tasks:
Task 1. Reviewed Hydro One’s current organizational structure and identified departments that
perform the functions and services included in Common Corporate Costs.
Task 2. Identified the activities performed by each department in order to provide the functions
and services identified in Task 1.
Task 3. Determined the Common Corporate Costs in BP 2018‐2022 to perform the functions and
services in Task 1.
Task 4. Identified the business units that use the functions and services included in Common
Corporate Costs.
Task 5. Distributed Common Corporate Costs (time for labour resources and cost for non‐labour
and Inergi resources) reflected in BP 2018‐2022 for departments identified in Task 1,
among the activities identified in Task 2.
Task 6. Directly assigned activity costs to business units where a direct relationship exists.
Task 7. For activities where less than all of the BP 2018‐2022 costs were directly assigned to
business units in Task 6, assigned a cost driver that reflects cost causation.
Task 8. Populated the cost drivers.
Task 9. Reviewed the 2015 Time Study.
Task 10. Computed total Common Corporate Costs allocated to each business unit.
Task 11. Performed analytical review of results.
Task 12. Reviewed the Common Corporate Costs used to perform the computations.
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C. PRINCIPLES OF COST ALLOCATION 
There are two methods to allocate or distribute shared costs among a utility’s business units –
Direct Assignment and Allocation. Direct Assignment is used when it can be reasonably determined
that all or a portion of an activity is performed for a particular business unit. Direct Assignment is
completed through the use of time studies or time surveys; where participants either fill out a daily
time sheet or provide an indication of how their time is spent throughout the year. Approximately
70% of Common Corporate Cost in the BP 2018‐2022 was assigned directly to one or more of
Hydro One’s business units.
Allocation is used when more than one business unit uses an activity, but the portions of the activity
that each uses cannot be directly established through a time study or time survey. In this case, a
cost driver must be assigned to distribute the costs of the activity. A cost driver is a formula for
sharing the cost of an activity among those entities that cause the cost to be incurred. The
principles used by Black & Veatch to assign cost drivers are discussed in Section II.D below.
D. COST DRIVERS 
As stated above, a cost driver is a formula for sharing the cost of an activity among those entities
that cause the cost to be incurred. The guiding principle that Black & Veatch uses in assigning cost
drivers is cost causation. Cost causation means that there is a causal relationship between the cost
driver and the costs incurred in performing the activity. In some cases, cost causation cannot be
easily implemented or established, in which case selecting cost drivers based on benefits received is
a fair alternative treatment.
Other factors considered in assigning cost drivers include:
 Practicality – The cost driver should be understandable, obtainable at reasonable
cost, and objectively verifiable in the initial year as well as in subsequent years.
 Stability – Cost driver values should be reasonably stable from year to year. When
estimates are used, the cost driver should be able to be estimated with reasonable
accuracy, and estimates should be unbiased.
 Materiality – When choosing between cost drivers, small differences can often be
ignored in favor of Practicality and Stability (see above).
E. TYPES OF COST DRIVERS 
Cost drivers can be classified as External or Internal. External drivers are based on data that are
external to the cost allocation process, such as physical units or financial amounts.
Internal drivers are based on values computed as an integral part of the cost allocation process. For
example, the cost of a supervisor’s salary might be allocated in the same proportion as the salaries
of the people being supervised, and the cost of general departmental expenses might be allocated in
the same proportion as the specifically assigned departmental activities. Exhibit B further
describes the different types of cost drivers.
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III. Evaluate Cost Allocation Methodology 
The Common Corporate Cost Allocation Methodology was first applied to Hydro One’s BP 2006‐10.
Black & Veatch has also reviewed the application of the methodology to subsequent business plans,
as listed in Section I.A. The purpose of this portion of the 2016 Review was to evaluate if the
methodology is still appropriate, including reviewing changes that were recommended in the past.
Based on our discussions with Hydro One personnel and review of the Common Corporate Costs
Model, Black & Veatch determined that the cost allocation methodology continues to be appropriate
for Hydro One because:
 It meets best practices since it distributes costs based on cost causation, including
the use of direct assignment when possible, and then through the use of cost drivers.
 It has been accepted by the OEB.
 It has the support of Hydro One management, and is understood and accepted by the
Hydro One business units.
 It allows the business units to determine precisely what amounts they are charged
by department and by activity within the department; this transparency provides a
basis for understanding the nature of the charges and value of the services received.
 It is well‐integrated with Hydro One’s annual Business Planning process and
produces reasonably stable results over time.
 It accommodates changes in Hydro One’s organization, and the Common Corporate
Costs Model can be adapted easily to reflect those changes.
Black & Veatch believes that the current cost allocation methodology continues to be appropriate
for Hydro One, because it achieves the purposes for which it was designed (to distribute costs in a
manner that is consistent with OEB precedent and regulatory practice), and promotes transparency
and efficiency.
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IV. Review Application of Methodology to BP 2018‐2022 
In this Section we will discuss each of the Tasks performed in the Scope of Work, as stated in
Section B. This includes the purpose of the Task, the steps performed, the source of the
information, and the results.
Task 1. Reviewed Hydro One’s current organizational structure and identified departments 
that perform the functions and services included in Common Corporate Costs. 
The purpose of this Review was to evaluate the allocation of the Common Corporate Costs among
the businesses that use the functions and services.
The organization of Hydro One Inc. is described in Section I.B. The functions and services support
the Distribution business and the Transmission business, and the other businesses listed in Table 2.
The departments that perform the functions and services in Common Corporate Costs are listed in
Table 3. Exhibit A further describes the functions and services. This information was provided by
Hydro One in discussions and documents.
Task 2. Identified the activities performed by each department in order to provide the 
functions and services identified in Task 1. 
The purpose of this task was to identify the activities that are performed in order to provide each of
the functions and services.
Functions and services (identified in Task 1) are performed for the benefit of the business units.
Activities (discussed in this Task 2) are the tasks performed in order to provide the functions and
services. Activities are measured in the amount of resources used.
To distribute the resources required to provide the functions and services included in Common
Corporate Costs among the business units on the basis of cost causation, the activities performed
were identified and described by Hydro One to Black and Veatch.
Task 3. Determined the Common Corporate Costs in BP 2018‐2022 to perform the functions 
and services in Task 1. 
In this task, we obtained the BP 2018‐2022 costs for the departments that provide the functions
and services included in Common Corporate Costs. Hydro One provided to Black & Veatch the
labour and non‐labour portions of the BP 2018‐2022 for each of these departments, as well as
descriptions of major non‐labour cost items.
Task 4. Identified the business units that use the functions and services included in Common 
Corporate Costs. 
The business units that use the functions and services included in Common Corporate Costs are
listed in Table 2. The information was provided by Hydro One and confirmed by the service
recipients.
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Task 5. Distributed Common Corporate Costs (time for labour resources and cost for non‐
labour and Inergi resources) reflected in BP 2018‐2022 for departments identified in 
Task 1, among the activities identified in Task 2. 
The purpose of this task was to distribute the resources (time for labour and costs for non‐labour
and Inergi) required for each of the functions and services identified in Task 1, among the activities
identified in Task 2. In subsequent tasks, the cost of each activity was either directly assigned to
one or more business units or allocated using cost drivers.
Labour costs 
To distribute budgeted labour costs, Hydro One department managers determined the portion of
annual time spent by the personnel under their supervision on each of the activities identified in
Task 2. Some managers based their estimates on concurrent time records that they maintain, some
conducted interviews with their personnel, and some used their informed judgment. Some of the
holding company’s labour cost was allocated consistent with previous rate filings. The information
provided by the managers was reviewed by Hydro One and Black & Veatch and was found to be
reasonable and consistent with prior distributions of resources.
Non‐labour costs 
Budgeted non‐labour costs items were examined and distributed based on direct assignment or
allocation; this amount includes non‐labour costs of departments in the 2015 Time Study. This
included OEB invoices, communications programs, insurance costs and claims, human resources
programs, labour relations programs, actuarial consultants and audit fee. The balance of non‐
labour costs includes items such as training and development, non‐specific expenses and general
expenses.
Inergi costs 
The Common Corporate Costs representing functions and services provided by Inergi were
distributed among the activities, based on information provided by Hydro One, assignments and
allocations by Hydro One and Black & Veatch, and the application of judgment by Hydro One and
Black & Veatch. The approach for each of the functions and services provided by Inergi is described
below. Exhibit A describes these services in greater detail.
 Finance – Costs were assigned among activities based on estimated portion of total
amount paid to Inergi to perform the function. Activities were allocated among the
business units based on chosen cost drivers that relate to each activity (e.g., Fixed
Asset Accounting activity was allocated on Gross Utility Plant).
 Human Resources – Costs were assigned among activities based on estimated effort
by Inergi. All activities were allocated among the business units based on headcount.
Task 6. Directly assigned activity costs to business units 
The purpose of this task was to assign, among the business units listed in Task 4, the resources
(time for labour resources and costs for non‐labour and Inergi resources) for each activity listed in
Task 2. This task was performed concurrently with Task 5 – Distributed Common Corporate Costs
(time for labour resources and cost for non‐labour and Inergi resources) reflected in BP 2018‐2022
for departments identified in Task 1, among the activities identified in Task 2.
Staff_DR_208(H1) Attachment C Page 13 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Review Application of Methodology to BP 2018‐2022  13
For the activities listed in Task 2, Hydro One’s departmental managers distributed the resource
costs among one or more business units, based on the business units that caused the costs to be
incurred. When possible, all or a portion of costs were assigned to a specific business unit.
Task 7. Any portion of an activity that was not assigned to a specific business unit due to its 
generalized nature was allocated among business units using cost drivers, as 
described in Task 7. Assigned cost drivers 
As discussed above, the costs of activities were directly assigned to business units when possible.
The purpose of this task was to select cost drivers for the portion of costs which were not directly
assigned in Task 6.
The principles that Black & Veatch used to assign cost drivers are discussed in Section II.D‐ Cost
Drivers. Black & Veatch selected cost drivers based on applying the principles discussed above, its
experience in performing cost allocation studies, consultations with Hydro One as to the nature of
each activity, and industry practices and regulatory requirements.
Section II.E Types of Cost Drivers describes the types of cost drivers.
Table 5 summarizes the direct assignments and types of costs drivers used to distribute the
Common Corporate Costs among the business units. Amounts include the Inergi charges.
Table 5 ‐ Direct Assignments and Cost Drivers for Common Corporate Costs 

Task 8. Populated cost drivers 
The purpose of this task was to determine the values of each cost driver that are attributable to
each business unit in order to distribute the costs of each activity among the business units. The
supporting information was provided by Hydro One.
Task 9. Reviewed 2015 Time Study 
This Task is discussed in Section V.
Task 10. Computed total common corporate costs for each business unit 
The purpose of this task was to distribute the total cost of each activity among the business units.
The amount distributed was the sum of the amounts directly assigned in Task 6, and allocations
based on the cost drivers identified in Task 7.
For allocations based on the cost drivers, the amount allocated to each business unit was computed
by multiplying the activity cost to be allocated by the cost driver value for the business unit.
TYPE 2018 2019 2020 2021 2022
(% of Total)%%%%%
Direct Assignment 58.56% 57.79% 57.76% 57.63% 58.54%
Physical 13.03% 13.27% 13.52% 13.57% 13.75%
Financial 20.76% 21.10% 21.39% 21.52% 21.83%
Internal 7.65% 7.84% 7.33% 7.29% 7.33%
Total 100.00% 100.00% 100.00% 100.00% 101.44%
Staff_DR_208(H1) Attachment C Page 14 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Review Application of Methodology to BP 2018‐2022  14
Task 11. Performed analytical review 
The purpose of this task was to compare the results of the distribution of the BP 2018‐2022
Common Corporate Costs among the business units to the results in the previous 2014 Review, and
to understand the differences.
The proportions of the total cost distributed to each business unit have been reasonably similar
over time and differences are explained by additions and removal of departments from the
Common Corporate Costs (i.e., the 2016 Review included Bad Debt and Goodwill which is 100%
Distribution, for the first time), changes in allocations of time, changes in allocator values and
changes in departmental functions and activities.
Task 12. Reviewed Common Corporate Costs Model 
The purpose of this task was to review the Common Corporate Costs Model that Hydro One has
developed for allocating the Common Corporate Costs, to determine if it properly reflects and
models the OEB‐approved cost allocation methodology for those costs included in the BP 2018‐
2022.
Black & Veatch first reviewed Common Corporate Costs Model in connection with our 2008 Review,
and has reviewed the model for each of the subsequent reviews performed, including this 2016
Review. The model is updated periodically to reflect organizational changes; Business Plan costs;
additions to and deletions of departmental activities; time and cost distributions among activities;
assignments of allocators; and cost driver values.
The Common Corporate Costs distributes departmental costs among activities (Task 6) and then
distributes the cost of each activity based on direct assignments or cost drivers (Task 10).
Based on Black & Veatch’s review, the Common Corporate Costs properly implements the OEB‐
accepted methodology for distributing the costs of corporate functions and services in the BP 2018‐
2022, and continues to produce a cause‐based allocation of costs.
Staff_DR_208(H1) Attachment C Page 15 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | 2015 Time Study  15
V. 2015 Time Study 
Hydro One employees representing approximately $105 million of annual labour costs participated
in a time study for the four‐week period ending June 12, 2015 ( “2015 Time Study”).
The departments that participated in the 2015 Time Study are identified in Table 3 (designated by
Note 1 next to the department name). The responsibilities of these departments are included in
Exhibit A.
The personnel in these departments are able to determine with reasonable accuracy, on a current
basis, the time they spend on Distribution Operations and Maintenance, Distribution Capital
Projects, Transmission Operations and Maintenance and Transmission Capital Projects because the
programs and projects on which they work are clearly defined.
A properly performed time study measures cost causation and is widely accepted as a basis for
assigning costs. Hydro One personnel administered the 2015 Time Study using the same design
and communication material designed by Black & Veatch and utilized in the time study that
occurred in 2013. Black & Veatch’s responsibilities included reviewing time study results and the
consolidation of the results, and confirming the completeness of the time study and its consistency
with the study design. The methodology was the same as used in prior time studies conducted by
Black & Veatch for Hydro One.
It was not practical to perform a full‐year study, but we believe the results for a four‐week period
are representative of the full‐year. To support this judgment, Black & Veatch reviewed the previous
Hydro One time studies, which were completed at different times during the year, and found that
the results were reasonably similar to the 2015 Time Study results.
Black & Veatch found that the 2015 Time Study was appropriately designed and completed, the
results were correctly compiled, and the methodology was the same as for prior Hydro One time
studies performed in connection with Black & Veatch’s previous cost allocation reviews. Therefore,
Black & Veatch concluded that the 2015 Time Study results were a proper basis for assigning the
costs of the departments included in the study between Hydro One’s Distribution and Transmission
business units.

Staff_DR_208(H1) Attachment C Page 16 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit A  A‐1
Exhibit A: Functions and Services in Common Corporate Costs 
FUNCTIONS AND SERVICES DESCRIPTION 
Hydro One Inc. Corporate Office (HOI) 
President / CEO Office 
Leadership of the staff of the Corporation to ensure that their culture 
and behaviours lead to achievement of its strategic objectives.  Develop 
and update strategy and establishes performance targets to assess 
progress towards the goals and objectives defined by the strategy. 
Chair Strategic direction, implementation and results for Hydro One Inc. and 
for each subsidiary. 
CFO’s Office 
Provide Hydro One and subsidiaries with strategic review and approval 
for all financial and investment decisions.  Review policies and 
procedures, treasury operations and tax planning, financial control and 
reporting. 
Treasurer’s Office Debt and equity issuance, capital structure management and oversight 
of Finance‐ Treasury function. 
Board of Directors Strategic direction, implementation and results for Hydro One Inc. and 
for each subsidiary. 
Corporate Secretary 
Provide direction and analysis in areas of: Board and Committee(s); 
Office of Chair and Board members; Code of Business Conduct; 
Community Citizenship; Freedom of Information and Privacy, Corporate 
Archives, Corporate Records, Corporate Secretariat. 
General Counsel Oversee and support Law, Regulatory and Corporate Secretariat General 
Counsel functions. 
Pension Cost Pension fund contributions.
Donations 
Includes donations to support injury prevention, corporate donations 
(e.g. Salvation Army), energy education, United Way and local 
community causes.  Costs are directly assigned to Shareholder only. 
Ombudsman Office 
The Ombudsman Office commenced activity following the Initial Public 
Offering, in order to address complaints escalated from the Customer 
Service .  Prior to that, the Province of Ontario’s Ombudsman had 
authority to investigate issues related to Hydro One customers. 
Investor Relations 
Investor Relations commenced activity following the Initial Public 
Offering, in order to communicate with Shareholders and potential 
investors and address their concerns. 
EVP Strategy 
Supports the executive team by identifying strategic opportunities
and developing related initiatives, including mergers and
acquisitions and non-regulated strategy work. 
Shared Services and Finance 
Real Estate 
Manage and acquire rights of way and easements; manage property 
taxes; manage SLU revenue programs; manage Employee Relocation 
Program. 
Staff_DR_208(H1) Attachment C Page 17 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit A  A‐2
FUNCTIONS AND SERVICES DESCRIPTION 
Value Growth 
Seeks ways to leverage Hydro One’s core competencies to increase 
overall value and drive down average cost to serve.  Costs are directly 
assigned to Shareholder only. 
Treasury 
Risk management including insurance purchasing; insurance claims 
settlement; financial risk management; cash & banking operations; debt 
management‐prospectus, debt issuance, borrowing, maintain 
relationship with shareholders; funds management; investor relations‐ 
shareholders, creditors, equity analysts & rating agencies; support 
business activities; project management. 
Corporate Controller 
Corporate Accounting & Reporting; Revenue Management; Financial 
Modeling & Analysis; Accounting Policy; Internal Control; IFRS / US 
GAAP; Inergi Finance; Bill 198; Corporate Compliance. 
Taxation 
Meet internal and external tax compliance requirements and reduce 
overall corporate tax liability through tax planning for current and new 
businesses, acquisitions and dispositions, special projects, tax 
compliance (including income tax, HST, and DRC returns for all entities), 
tax accounting, lobbying for legislative tax changes and government tax 
audits. 
Regulatory Affairs 
Coordinate applications with OEB; compliance with OEB orders; design 
and implement regulatory policy; manage relationship with OEB.  Tasks 
include: cost allocation and rate design for regulated Tx and Dx, 
especially rate structures and rates for Tx and Dx tariffs; implement 
approved rates; support transmitters’ representative on IESO Technical 
Panel; manage MV Star to support settlement.  Includes: Direct billed 
OEB costs for Tx and Dx; Direct billed NEB costs for Tx; Costs of Rate 
Hearings before the OEB for Tx and Dx. 

Business Planning and Decision 
Support 
Financial modeling & analysis; corporate planning & reporting; 
regulatory finance; decision support to the lines of business 
Outsourcing Services Manage overall business relationship between Hydro One and Inergi LP.
Operations 
Distribution Asset Management 
Create prioritized, defensible distribution system investment strategies 
and plans to meet Hydro One's Corporate Strategic Objectives including 
promoting innovation and automation of our grids consistent with 
maximum customer value. This includes the Distribution Technology 
roadmap and smart meter deployment including communications 
infrastructure. 
Planning and Optimization 
Coordinate the investment planning and investment approvals 
processes for projects and programs issued to the lines of business from 
the Planning Business Unit. The investment plan is developed and 
maintained through the use of various tools, reports and LoB 
interaction. 
Staff_DR_208(H1) Attachment C Page 18 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit A  A‐3
FUNCTIONS AND SERVICES DESCRIPTION 
Reliability, Strategies, and 
Compliance 
Promote and facilitate Hydro One’s engagement and participation in the 
development of reliability standards and related IESO Market Rules; 
Develop, communicate and assist with the implementation of policies, 
directives, procedures, and processes to ensure an enduring compliance 
posture with reliability standards. 
System Planning 
Develop and commit prioritized, defensible transmission development 
plans, consistent with corporate strategy, to meet government policy, 
OPA plans, customer needs, regulatory requirements and industry 
standards. Conduct Regional Infrastructure Planning to meet OEB 
requirements and to develop regional plans to meet regional supply 
needs. 
Network Connections and 
Development 
Facilitate the connection of new load and generation customers to 
Hydro One’s transmission network, supporting customers’ objectives 
while respecting Hydro One’s strategic objectives and resource 
requirements. 
Network Operations 
Operates the largest electricity delivery system in Ontario and one of 
the largest in North America for the needs of the Province of Ontario.  
Hydro One has a highly skilled and experienced workforce using first‐
class operating systems located in a state‐of‐the‐art Control Centre.  
Hydro One is a team working together and safely to ensure Ontario has 
a safe, reliable supply of electricity. 
Transmission Asset Management 
Provide asset strategies, investment plans and work definition for the 
sustainment of the transmission grid to enable safe, reliable, efficient 
and cost effective delivery in a customer‐focused commercial culture 
that increases enterprise value for our shareholder that provides 
increased value to our customers. 
VP‐ Planning 
Oversees Distribution Asset Management, Transmission Asset 
Management, Planning and Optimization, Network Connections and 
Development, System Planning, and Reliability, Strategies, and 
Compliance. 
EVP Office‐ Operations Oversight of Operations group.
Strategic Services 
Supports the executive team by advancing key strategic initiatives and 
interfacing with Lines of Business to assist in the implementation of 
these initiatives, coordinating the development of processes to ensure 
alignment within the Company and a focus on our key priorities, and 
providing support to the President and CEO and the Leadership Team. 
Information Services 
Corporate Projects 
Deliver the projects necessary to maintain and enhance the core 
services Hydro One provides to its customers across the province. 
Project delivery is completed by leveraging both internal and external 
expertise to design and construct using standard and repeatable 
methods that lead to safe, reliable and cost effective operations of 
those assets.   
Staff_DR_208(H1) Attachment C Page 19 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit A  A‐4
FUNCTIONS AND SERVICES DESCRIPTION 
Information Technology 
Information technology security; Enterprise IT architecture; Service 
delivery; Technology services; Governance of IT architecture, Business 
analysis and information management, Project management; Inergi & 
Telecom services management. Applications; Compliance security; Data 
services; Information services; IT operations; System architecture. 
Security Operations 
Incident reporting and security awareness; Threat intelligence 
gathering; Physical security and asset threat and risk assessments; 
Investigations; Theft of electricity consultation and detection; 
Workplace violence prevention and response; Contract security 
procurement assistance; Overall security and asset protection advice; 
Security infrastructure Capital and OM&A investment planning and 
project management. 
Customer & Corporate Relations 
Customer Care Services 
Service the approximately 1.1 million distribution customers. Improve 
customer satisfaction through strategic system and process 
enhancements, effective services contracting, proactive communications 
and quality programs.  Service programs include meter reading, billing, 
settlements, customer contact handling and collections.  Project work 
includes regulatory compliance initiatives and service enhancements. 
Customer Strategy and 
Conservation 
Design and deliver energy conservation and demand management 
incentive based programs; Leverage Smart Grid investments to provide 
customer enablement of new technologies for energy management; Co‐
ordinate Greener Choices program; Provide input to Corporate Strategic 
Plan and develop recommendations on emerging strategic opportunities. 
Customer Program Delivery 
Supports Customer Service and Corporate Relations with five year 
business plans and the associated three year Dx Rate Filings with the 
OEB.  Includes the Credit & Collections team is focused on reducing 
arrears and bad debt for both active and final‐billed accounts, while 
working with customers on a variety of payment options to increase 
customer choice and provide more payment flexibility.    Also included is 
the new Conservation and Demand Management team that delivers 
province‐wide programs in order to meet multi‐year targets aimed at 
reducing energy peaks and the overall consumption on the electricity 
grid. 
Key Account Management 
Manage relationships with Hydro One's large customers including over 
90 Transmission‐connected Industrials, 79 LDCs and 33 Transmission‐
connected Generators, representing almost 70% of Hydro One's 
revenues.  Includes Operating Support; Account Executives; Contract 
Management; and Customer Programs. 
VP Customer Service 
Oversees Customer Service group, which has overall accountability for
relationship, affordability and value proposition for products and services 
provided to customers.  Includes bill management, major accounts and 
value‐added services (e.g. conservation).  Customer Service also 
Staff_DR_208(H1) Attachment C Page 20 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit A  A‐5
FUNCTIONS AND SERVICES DESCRIPTION 
responsible for Advanced Distribution System Project and Smart Meters.
Meter To Bill 
Focused on providing clear, accurate, and timely bills to customers.  This 
includes validation of meter reading data, bill calculations, exception 
handling, retailer transactions, bill creation, bill insertion, and bill 
issuance. 
Corporate Affairs 
Support all external and internal communications initiatives.  Interact 
with most other Hydro One departments; special focus on Customer 
Service.  Support major projects including: development of partnership 
activities; coordinate with external energy agencies (e.g. OPA, IESO), 
Ministries in Ontario Public Service and internal Hydro One resources.  
Participate in pre‐public consultations with municipalities and First 
Nations.  Support customer strategy, rate strategy, distribution 
generation strategy; develop working relationships with customers, 
regulators, shareholder, lenders; labour relations; corporate culture. 

Includes SVP Customer & Corporate Relations ‐ Oversees the entire 
Customer Service organization as well as the old Corporate Relations 
group, including Corporate Affairs, First Nations and Metis Relations and 
Key Account Management. 
First Nations and Métis Relations 
Provide First Nations and Métis consultation advice and support;  Advise
re First Nations and Métis HR strategies; Provide strategic advice to 
Remotes with respect to First Nations and Métis issues. 
Bad Debt and Goodwill Bad Debt related to Distribution service.  Allocated 100% to Distribution.
SVP Customer and Corporate 
Relations 
Oversees VP Customer Service, Key Account Management, Corporate 
Affairs and First Nations and Métis Relations. 
Inergi LP (outsourced services) 
Finance and Accounting Services 
Accounts Payable; Accounts Receivable (non‐energy); Fixed asset and 
project cost accounting; general accounting and planning, budgeting 
and reporting 
Human Resources‐ Pay services Payroll and related services
Accounts Payable Invoice processing and payment
People and Culture 
People and Culture 
Primarily employee‐related services, including administer compensation 
& benefits programs; decision support for business units; talent 
management (hiring, succession, development, coaching; high potential 
employee assessments); recruitment and diversity (diversity programs, 
grad program, student/co‐op, line of business resourcing); data 
administration; consulting support to LOBs and corporate functions; VP 
Human Resources.   

Provide full‐scale service pertaining to bargaining, Ontario Labour 
Relations Board hearings, grievance and arbitration hearings, advice and 
Staff_DR_208(H1) Attachment C Page 21 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit A  A‐6
FUNCTIONS AND SERVICES DESCRIPTION 
guidance, plus training to all levels of Hydro One management.  Involves 
interaction with 21 unions and 24 collective agreements. 
Audit 
Audit 
Provides assurance that internal controls continue to operate 
effectively, identification and recommendations for areas where 
controls can break down or need improvement to meet corporate 
objectives.  This includes the VP Chief Risk Officer. 
General Counsel & Secretariat 
General Counsel & Secretariat 
Provides legal advice to all business units, acting as an internal “law 
firm” for the Corporation on most aspects of law affecting it, and is also 
well acquainted with day‐ to‐day requirements of the Corporation. 
Telecom Services 
Telecom Services 
Provides telecommunications infrastructure across the Province, 
including both voice and data.  Links staff and business applications at 
Trinity, Richview TS, Markham and London Call Centers, Mill Creek data 
centre, 125 field offices (400 total sites including stations) and 
customers via Call Centres and Web sites. 
VP Chief Risk Officer 
VP Chief Risk Officer 
The VP Chief Risk Office group creates an enterprise‐wide 
comprehensive and uniform approach to anticipate, identify, prioritize, 
measure, treat and report on key business risks impacting our 
organization. It puts in place the policies, common processes, 
competencies, accountabilities, reporting and enabling technology to 
execute that approach successfully.

Staff_DR_208(H1) Attachment C Page 22 of 28
Hydro One Networks Inc. | COMMON CORPORATE COSTS (DISTRIBUTION) ‐ 2016 
 BLACK & VEATCH | Exhibit B   B‐1
Exhibit B: Types of Cost Drivers  
TYPE DESCRIPTION EXAMPLES 
External Cost Drivers 
Physical Physical units; usually objectively 
determinate but often require estimates 
Headcount (of employees), number of workstations,
invoices to vendors 
Financial Financial information from accounting or 
management reports, budgets or projections 
Capital expenditures, Net utility plant, Program 
Project Costs, Total capital, Total revenue 
Blended Weighted combinations of other drivers, 
used when one or more drives are applicable 
and none is clearly preferable; weights 
determined by judgment 
Non‐energy Rev_Assets Blend = 50% weight for Non‐
Energy Revenue and 50% weight for Assets 
Driver 
xBusiness Unit 
Any driver may be modified by excluding one 
or more business units to which the activity 
does not apply 
Cost driver for Business Process Improvements is 
Operating Maintenance Capital, but Telecom and 
Remotes business units do not use the shared 
service, therefore activity cost driver is called Oper 
Maint Cap xTxR (i.e., Gross Utility Plant excluding 
Telecom and Remotes) 
Internal Cost Drivers 
All Internal 
Cost Drivers 
Use the result of previous allocations as the 
basis for further allocations 
Cost of general departmental expenses might be 
allocated in the same proportion as the specifically 
assigned departmental activities 

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Ex ert Evidence Statement from Blac & Veatch Canada Com an   

This Statement is provided in compliance with Ontario Energy Board (“Board”) Rule
13A, regarding the reports listed below (“Reports”) dated December 21, 2016, prepared
by Black & Veatch Canada Company (“Black & Veatch”).

Reports:
 Review of Allocation of Common Corporate Costs (Distribution) – 2016
 Review of Shared Assets Allocation (Distribution) – 2016
 Review of Overhead Capitalization Rates (Distribution) – 2018-2022

Consultant:
Black & Veatch Canada Company
11401 Lamar Avenue
Overland Park, KS 66211

Black & Veatch, and its affiliate Black and Veatch Management Consulting LLC, provide
strategic, economic and management consulting specializing in energy matters, in areas
such as utility cost allocation and ratemaking, economic analysis, strategy development,
operational assessment, industry restructuring support, litigation and regulatory support,
and technical analysis.

Qualifications:
The lead experts on this project were:

David DesLauriers
Mr. DesLauriers is a highly experienced Director in Black & Veatch’s Rates &
Regulatory Services group and specializes in regulated interstate transmission pricing
and wholesale electric market policy matters. He delivers a unique blend of regulatory
policy acumen and practical rate setting experience to provide highly effective and
supportable ratemaking and regulatory solutions to his clients. Mr. DesLauriers has
advised numerous midstream energy utilities on rates and regulatory policy for the past
24 years. His areas of expertise include: electric transmission cost of service and rate
design, wholesale electric market design policy and operational topics, Federal Energy
Regulatory Commission (FERC) policy matters, regulatory due diligence (M&A) and
compliance with FERC regulation. His clients include Regional Transmission
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Ex ert Evidence Statement from Blac & Veatch Canada Com an   
Organizations and Independent System Operators, transmission owning energy
companies (regulated and non-regulated) and industry stakeholder groups involved in
FERC regulatory policy. Mr. DesLauriers led the common cost allocation study
conducted for Kinder Morgan Inc. in 2009-2010 timeframe and testified before FERC on
common cost allocation (IS09-437).

Russell Feingold
Mr. Feingold leads Black & Veatch’s Rates & Regulatory Services group and has over
40 years of experience in the utility industry, the past 37 years of which have been in the
field of utility management and economic consulting. Specializing in the utility industry,
he has advised and assisted utility management, and industry trade and research
organizations in matters pertaining to costing and pricing, competitive market analysis,
regulatory planning and policy development, gas supply planning issues, strategic
business planning, merger and acquisition analysis, corporate restructuring, new product
and service development, load research studies and market planning. He has prepared
and presented expert testimony before numerous utility regulatory bodies, including the
Ontario Energy Board, and has spoken widely on issues and activities dealing with the
costing, pricing, and marketing of utility services. Mr. Feingold has led cost allocation
review projects for Hydro One Networks Inc. related to the allocation of common
corporate service costs, for Union Gas Limited and Enbridge Gas Distribution related to
their regulated and unregulated underground storage operations, and for Union Gas
Limited related to its Dawn to Trafalgar gas transmission system, and its corporate
shared services functions.

John Taylor
During his 12 year career as a consultant to utilities Mr. Taylor has supported projects
involving financial analysis, regulatory support and strategy, market assessment,
litigation support, and organizational and operations reviews. Mr. Taylor’s work often
involves providing support for regulatory proceedings by conducting various studies and
analyses related to revenue requirements, affiliate transactions, class cost of service, and
cash working capital studies. He also has experience in asset and corporate valuation,
the application of real options analysis, and various risk management techniques. Mr.
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Ex ert Evidence Statement from Blac & Veatch Canada Com an   
Taylor has also been involved in the sale of generating assets, supporting due diligence
efforts and regulatory approval processes. He has filed testimony as an expert witness
on class cost of service studies and on the appropriate use of statistical analysis during
audit testing.

Instructions Provided:
The instructions provided to Black & Veatch in preparing the Report were:

 Recommend a best practice methodology to distribute Hydro One Inc.’s
Common Corporate costs among the business units that use the functions
and services. This recommendation could include the continuation of the
existing methodology, the continuation of the existing methodology with
modifications or the proposal of a new methodology.
 Prepare a Report of the recommended Common Corporate Costs
Methodology to be used in future rate applications. This report will include a
conclusion, definitions, a summary of every factor used in the methodology
and the proposed methodology.
 Identify the functions and services included in the Common Corporate costs.
 Identify activities that are performed in order to provide the functions and
services included in the Common Corporate costs.
 Determine which Common Corporate functions can distribute cost directly,
which units can have cost distributed using time studies and which units
require allocations using drivers and why.
 Propose and analyze all drivers used for allocation.
 Propose, analyze and perform all time studies required.
 Distribute the annual budgeted costs for years 2017-2021 to perform each
function and service among the activities required to perform it, based on
time and/or cost studies.
 Distribute the cost of each activity among the business units based on direct
assignment when possible, and based on cost drivers when not.
 Prepare responses to Interrogatories from Interveners during a rate application
relating to the proposed Cost Allocation methodology.
 Be available to testify to the proposed methodology during a future rate
application.
 Prepare final reports for Common Corporate Costs allocation reflecting the
current Business Plan and including both the Distribution and Transmission
businesses, to be submitted in Cost of Service applications.
 In support of the successful Proponent’s work, Hydro One’s management
will respond to all requests for basic information and/or supporting
documentation.

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