The Role of London Hydro
As a Local Distribution Company (LDC), our responsibilities are the distribution of electricity, customer billing, customer care, energy conservation and demand management programs, and energy-related services.
We are also regulated by the Ontario Energy Board (OEB), which controls the rate London Hydro charges for services provided. While we’ve always met our responsibilities and met or exceeded customer expectations, fulfilling our obligations within the current regulated framework is becoming a challenge.
Several recent studies and industry surveys have revealed 4 distinct themes emerging in the electricity sector. These themes are:
- increasing distributed energy resources (customer micro generation systems);
- technology disruption(digital tools, smart home innovation electric vehicles);
- flat energy demand (conservation and efficiency efforts); and
- changing customer needs (more access to information and control).
Yet, despite this changing nature of the sector, a 2016 World Energy Council study concluded that three core principles of supply security (reliability), affordability (cost control); and sustainability (environmental and social responsibility) still remain essential to the success of the utility industry.
Our Challenge Going Forward
Our Board and Senior Management developed the 2020-2024 Strategic Plan as a blueprint for continuing to meet our responsibilities as a LDC and addressing emerging trends in our industry while, at the same time, ensuring our electricity supply remains reliable, affordable and sustainable.
2020-2024 Strategic Plan
To reflect the new realities we face and reposition our utility in the marketplace, it was necessary to first refine our stated Purpose and Vision.
Six Key Long-Term Objectives
Based on our new Purpose and Vision, they are:
1. Maximize shareholder ROI by getting a new unregulated entity up and running.
2. Succeed in our 2022 rate application (95%+ approval of cost of service application) and maintaining profitability with a ROE of 7%+.
3. Provide safe and reliable energy solutions.
4. Realize more visibility and control of the grid, including Distributed Energy Resources (DER) and non-wire solutions included in the rate base.
5. Become an open and digital utility, both operationally and in customer service, using Green Button systems, online tools and mobile applications.
6. Be known as an employer of excellence in terms of attraction, retention and succession.
Five Short-Term Initiatives (2020-2022 timeframe)
To move forward toward our long-term objectives, in the near term (2020-2022) we will:
1. Pursue non-regulated business opportunities to increase market freedom, flexibility and revenue.
2. Realize a successful rate application in 2022, without an oral hearing, to achieve 95%+ of capital funding requirements, while holding electricity bill increases to a maximum of 10%.
3. Develop and leverage leading technology to continue the journey towards becoming a digital utility by using data analytics, artificial intelligence, smart home innovations and field automation systems.
4. Become a trusted consultant and industry partner as a way to increase revenue and strengthen commercial and industrial (C/I) customer relationships.
5. Enhance internal team capacity to ensure we’re ready for coming changes.