Company: ENBSF
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000895728-25-000012
Chunk: 1

Company: ENBRIDGE INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 2
Chunk 1
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 rate setting mechanism (Phase 2) to be used for the remainder of the IR term (2025–2028). A third phase (Phase 3) was established with the OEB in 2023. Phase 3 will address cost allocation and the harmonization of rates and rate classes and is anticipated to be completed in 2025.

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In December 2023, the OEB issued its Decision and Order on Phase 1 (Phase 1 Decision). Enbridge Gas Ontario filed a motion requesting the OEB review and vary the Phase 1 Decision with respect to two aspects: asset class average useful lives for depreciation purposes and the recoverability of integration capital. In October 2024, the OEB issued a decision on Enbridge Gas Ontario's motion and determined that only the issue of integration capital met the threshold to warrant a review. In April 2025 the OEB issued a decision denying Enbridge Gas Ontario's motion to vary the Phase 1 Decision which had disallowed recoverability of undepreciated integration capital. In January 2024, Enbridge Gas Ontario also filed a Notice of Appeal with the Ontario Divisional Court regarding various aspects of the Phase 1 Decision, followed by its  written submissions in March 2025. The OEB and any other intervening parties have 60 days to file their responding factums, after which the Ontario Divisional Court will schedule an oral hearing.

In November 2024, the OEB issued its Decision approving the Phase 2 Partial Settlement Proposal (Phase 2 Settlement). The Phase 2 Settlement establishes a price cap IR rate setting mechanism to be used for determining rates for 2025-2028. The price cap mechanism includes the continuation and establishment of certain deferral and variance accounts, as well as an earnings sharing mechanism that requires Enbridge Gas Ontario to share equally with customers any earnings in excess of 100 basis points over the allowed return on equity (ROE), and 90% of any earnings in excess of 300 basis points over the allowed ROE. Issues not addressed as part of the Phase 2 Settlement proceeded to hearing in December 2024 and a decision is expected in the second quarter of 2025.

In March 2025, the OEB released its decision in the Generic Cost of Capital proceeding. The OEB determined that Enbridge Gas Ontario’s equity thickness would remain at 38% as approved in the Phase 1 Rebasing decision. The OEB also revised the formula for calculating ROE by reducing flotation