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History

Hydro One Remote Communities

Service Territory

Hydro One Remote Communities Inc. is an integrated generation and distribution company licensed to generate and distribute electricity within 21 isolated communities in northern Ontario.

We are 100% debt financed and operate as a break-even company. We manage a complex business under challenging circumstances. We continuously look for efficiencies in how we manage our business and have been successful in several areas, particularly in reducing our environmental liabilities.

The communities we serve are isolated and are scattered across the far north of the province. Thirteen of these communities are not accessible by year-round road and can be accessed only by aircraft, winter road or, in case of one community, by barge as well. The size and isolation of our service territory also means that the transportation of staff, fuel, and equipment is a key driver in our costs. The use and viability of winter roads to reach these communities is a major cost variable within Remotes' operations. If a winter road cannot be built, fuel prices, equipment costs and overall maintenance costs will increase.

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Generation

Due to the lack of grid connection, we generate electricity within each community. Diesel generation is the prime source of electricity, but we also own and operate two run of the river mini-hydro and four demonstration project windmills. The feasibility of using further renewable technologies is continually examined as new technologies evolve, but diesel is currently the most reliable technology.

Our diesel generators range in size from 65kW to 1250kW. Most stations have three generators, sized to meet community load at different times of the day. Automated operation ensures that the generation units are run to maximize efficiency, by matching the generator size to the community load. Depending on electrical demand, Remotes handles 14 to 17 million litres of fuel each year.

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Distribution

We operate 19 isolated distribution systems to serve the 21 communities. Within each system, we are responsible for transformation, voltage regulation, delivery and metering of power. Because the communities are far from each other, the distribution systems are isolated, distinct and stand-alone. These distribution systems operate at distribution voltages ranging from 4.8kV to 25kV. Billing meters are used to measure energy consumption at customer supply points.

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Fuel Management and Storage Facilities

We have fuel storage tanks ("tank farms") within each community to ensure adequate diesel fuel supply. Tanks are equipped with measurement and alarm devices to reduce the risk of fuel spills and to enhance fuel control measurement. Most tanks are double-walled to enhance containment.

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Staff Facilities

Due to the high cost of transportation to the communities, our staff generally stay in the communities while undertaking planned and unplanned maintenance. We have staff houses and trailers at 12 sites. Bell facilities and motels are used at other sites.

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Environmental Management System

We developed an Environmental Management System (EMS) in 1999 to help address a history of spills and poor environmental performance. The objective of the EMS program is to develop and implement an EMS that will be supported by all staff from the shop floor to the President; to provide a vehicle for the improvement of environmental performance; and to add value to our business.

In the course of its development and implementation, we have transformed ourselves into environmental leaders, and have been recognized provincially and nationally for our environmental record. In 2001 we were awarded the Canadian Council of Ministers of the Environment national Pollution Prevention award for small business in Canada. In 2002, we achieved ISO 14001 registration for our EMS. This international registration is in addition to the significant environmental improvements achieved since implementing the EMS.

We have also achieved operating efficiency improvements through installation of automated PLC controls, SCADA systems, upgraded engines and re-designed generating and fuel-handling software to support its PLC programs, all of which have resulted in improved efficiency, reduced use of diesel fuel and lower atmospheric emissions.

In 2003, we developed and adopted an Emission Reduction Strategy and submitted an application and Action Plan for Reducing Greenhouse Gases to the Environment Canada Voluntary Challenge Registry. Our 2003 report received the "Best New Submission" award and we have achieved “Gold Level” reporting status in every year since then.

In 2004, we received Terrachoice EcoLogo Certification for its mini-hydroelectric facility at Deer Lake, recognizing its environmentally friendly characteristics.

We take a holistic approach to environmental management, including maintaining good customer relations. We have developed and fostered strong relationships with several First Nation organizations and businesses, and have developed commercial agreements for the supply of diesel fuel (up to 15 million Litres/year), passenger and freight air service, maintenance, service and construction work. We have installed demonstration wind turbines and operate two full-service mini-hydroelectric facilities to offset its use of diesel fuel, and reduce spill risk and emissions.

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Government Regulation and Remote Community Rates

Most customers within our service territory pay rates below the cost of service. Rates for Residential and General Service customers are financially supported in three ways: through a cross-subsidy from government customers within Remotes who pay rates above cost (Standard A Rates); through capital contributions from INAC and from provincial customers; and through Remote Rate Protection, which is a fund established by the provincial government and administered by our Regulator, the Ontario Energy Board.

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