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Ontario regulator to review Hydro One revenue requirement decision

The Ontario Energy Board has granted Hydro One Networks Inc.'s motion for reconsideration to review its decision on the company's transmission revenue requirement and future tax savings from the transition to a public company.

The board issued its original decision on the Hydro One Inc. subsidiary's transmission revenue requirement in late September 2017 and "proposed a basis for sharing a portion of the tax savings" the company received by reducing the amount of cash taxes approved for recovery in its transmission rates.

The approved expenses included capital spending of C$950 million for 2017 and C$1 billion for 2018, reflecting a reduction of C$126.1 million in 2017 and C$122.2 million in 2018.

Hydro One's estimated tax expense was approved at C$58.1 million for 2017, for an estimated reduction of C$23.8 million, and C$63.6 million for 2018, an estimated reduction of C$26 million.

The case revolves around payments in lieu of taxes made by the company when it was fully owned by the provincial government. Under government ownership, Hydro One was not subject to federal or provincial taxes and used payments in lieu of taxes as a compensation mechanism for municipalities in its service area.

Hydro One Inc. is a subsidiary of Hydro One Ltd.