Electricity Industry
IESO The Independent Electricity System Operator is responsible for day-to-day operation of Ontario’s electrical system. It operates the wholesale electricity market, forecasting demand and ensuring an adequate supply to meet that demand.
MDM/R The Meter Data Management and Repository system will store and manage consumption data received from Smart Meters, enabling time-of-use billing and the provision of consumption information to customers as part of the provincial Smart Meter Initiative.
OEB The Ontario Energy Board regulates the provincial electricity and natural gas industries in the public interest.
OPA The Ontario Power Authority is responsible for ensuring an adequate long-term supply of electricity for Ontario. It creates and implements conservation and demand management programs, ensures adequate investment in new supply infrastructure, performs long-term electricity system planning, and facilitates the development of a more sustainable and competitive electricity system.
Smart Meters Smart Meters measure and store data about when customers use electricity as the foundation for future time-of-use (TOU) billing.
TOU A time-of-use rate structure would charge customers higher rates for electricity used during peak times of the day, and lower rates for off-peak usage.
Internal Systems and Processes
GIS Geographic information systems capture, store, analyze, and display geographically referenced spatial information.
OMS The Outage Management System, when integrated with the GIS (see above) results in a single computerized map of the electricity distribution system to facilitate system planning and outage response.
SCADA Supervisory control and data acquisition refers to large-scale measurement and control systems used to monitor power generation and other distribution processes.
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Financial Reporting
AcSB Accounting Standards Board is an independent body with the authority to develop and establish standards and guidance governing financial accounting and reporting in Canada.
CICA Canadian Institute of Chartered Accountants represents the CA profession nationally. It supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government, and issues guidance on control and governance.
GAAP Generally accepted accounting principles are a common set of accounting principles, standards and procedures companies use to prepare their financial statements.
IFRS International Financial Reporting Standards are standards and interpretations adopted by the International Accounting Standards Board (IASB). All Publicly Accountable Enterprises in Canada, including Hydro Ottawa Holding Inc., will be required to report under International Financial Reporting Standards rather than GAAP (see above) for years beginning on or after January 1, 2011.
Earnings
There are a number of different ways of looking at how much a company earns. The most common is “net earnings” but other measurements, such as EBITDA, can be useful in judging the company’s ability to borrow and to expand its business.
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization is a measure of financial health that helps to show how much money a company generates to pay for its obligations (such as interest on money borrowed and taxes) and fund its future growth (through depreciation and amortization).
EBIT Earnings Before Interest and Taxes is the same as EBITDA, except that amounts for depreciation and amortization have been deducted in computing EBIT.
Net earnings This is what is left over after the company has met all its expenses and obligations.
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Cash Sources and Uses
While most companies are concerned about profitability, they also must ensure that they have enough cash to pay their expenses on a day-to-day basis.
Generated from operations Similar to EBITDA, this is the amount of money that Hydro Ottawa Holding produced during 2007, after all the expenses paid during the year and adding back non-cash “accounting” items such as amortization and depreciation. Essentially, it is net income adjusted for all expenses and revenues that do not include a cash outlay or receipt.
Capital Assets This is primarily the amount Hydro Ottawa invested across its transmission system in 2007 to improve and expand service and to ensure its reliability. The total also includes expenditures made at Telecom Ottawa and Energy Ottawa.
Financing The process that makes money available for projects and activities. Financing can come from many sources – from existing resources or corporate cash flow or from money raised in financial markets through bank loans or the issuance of bonds, debentures or shares, for instance.
Ratios
Managers and analysts use a host of ratios to help determine the financial health
of the company.
Working Capital This measure compares the company’s easy access to funds (through its cash, accounts receivables, inventories and other assets that can be readily turned into cash) versus its immediate liabilities (such as bank debt, accounts payable, etc.). Healthy companies have more current assets than liabilities, represented by a ratio greater than 1.0.
Debt to Equity This compares the two sources of investment to support the business. Equity is the money contributed in return for ownership of the company, as well as the accumulation of undistributed earnings, while debt represents the funds provided by financial institutions and investors. Too much debt can burden a business, but good businesses use a certain amount of debt to allow them to do more.
Miscellaneous
OMERS Ontario Municipal Employees’ Retirement System is one of Canada’s largest pension plans, providing pension services to 372,000 active and retired members and about 900 employers.