RFPOEBAHORPP01312018 - Audit of Hydro One Network Inc. (Hydro One) Regulated Price Plan (RPP)

Project Background
Audit and Investigations group is undertaking an audit of an electricity distributor's RPP settlement claim process with the IESO1•2 including the EG settlement.
 
The audit was selected based on the risk assessment following a review of the Global Adjustment (GA) Policies and Processes Sector Review prepared for the OEB by a consulting firm. The objective of the review was to better understand the GA and identify the underlying potential risks within various processes associated with the quantification of GA amounts or "quantum", and the "allocation" of those amounts for recovery from different customer classes. The result of the review informed the need for audits of RPP variances submitted by the distributors to the IESO on a monthly basis.
 
Purpose and Scope
The purpose of the RPP settlement audit is to ensure that the electricity distributor follows the proper RPP settlement claim process with the IESO, resulting in correct allocations of the RPP variances and the proper allocation of the settlement amount to Account 1588 and Account 1589 as at December 31, 2017. The RPP settlement audit also included an audit of the electricity distributor's process for EG settlement and GA allocations between Class A and Class B customers.
 
The scope of the audit is from January 1, 2017 to December 31, 2017.
 
Objectives
To conduct sufficient and appropriate audit procedures and prepare a final audit report

1. Establish an understanding of the internal controls in the RPP settlement claim  process
2. Examine the methodology and the underlying information (e.g. volumes and prices) for the determination of the monthly RPP settlement amounts and true-up amounts, including the EG variances.
3. Assess the compliance with the Ontario Energy Board Act, 1998 and regulations, guidelines from IESO for the RPP settlement claim process and Ontario's Fair Hydro Plan
4. Assess the  compliance  with  the  Accounting  Procedures  Handbook  for  Electricity Distributors (APH), effective January  1,  2012,  and relevant  OEB  guidelines  for the  purpose of Account 1588 RSVAPower3 (Account 1588) and Account 1589 RSVAGA4 (Account 1589)
5. Verify on a sampling basis the information submitted on the RPP forms and entries to Account 1588 and Account 1589