subsequently reversed when the OEB approved the use of US GAAP for transmission rate-setting purposes beginning January 1, 2012. Consequently, the OEB approved a revenue requirement of $1,418 million for 2012, along with new 2012 UTRs, with an effective date of January 1, 2012. The new rates resulted in an approximate 8% transmission rate increase, or 0.6% when considering total bill impact, for a typical residential customer consuming 800 kWh per month. The adoption of US GAAP in lieu of modified IFRS as a basis for rate setting decreased the approved rates by approximately 15%. 

In May 2012, we filed a cost-of-service application with the OEB for our 2013 and 2014 transmission rates. The application sought OEB approval for revenue requirement increases of approximately 0.6% in 2013 and 9.1% in 2014, or estimated increases of 0% in 2013 and 0.7% in 2014 on an average customer’s total bill. In November 2012, we submitted a draft Rate Order, which included revenue requirements of approximately $1,438 million and $1,528 million for 2013 and 2014, respectively. For the transmission portion of the bill, this represents no change from existing 2012 OEB-approved rate levels in 2013 and a 5.8% increase in 2014. For a typical residential customer consuming 800 kWh per month, this represents increases of nil for 2013 and 0.5% for 2014. In December 2012, the OEB approved the 2013 and 2014 transmission revenue requirements of $1,438 million and $1,528 million, respectively, and the 2013 Ontario UTRs, which remained unchanged at the 2012 levels. 

On December 6, 2013, we submitted a draft Rate Order for our 2014 transmission rates. The 2014 revenue requirement has been increased to $1,535 million from the originally-approved revenue requirement of $1,528 million, primarily due to changes in the cost of capital parameters for 2014 released by the OEB in November 2013. On January 9, 2014, the OEB approved the draft Rate Order for 2014 transmission rates as filed. For the transmission portion of a customer’s bill, this represents an increase of 6.3% in 2014, or 0.5% when considering total bill impact, for a typical residential customer consuming 800 kWh per month. 

## Distribution Rates 

As a distributor, we are responsible for delivering electricity and billing our customers for our approved distribution rates, purchased power costs and other approved regulatory charges. Substantially all of our purchased power costs and other approved regulatory charges are settled through the IESO, which facilitates payments to other parties, such as generators, the Ontario Electricity Financial Corporation (OEFC), and itself. 

 Hydro One Networks elected to retain the same distribution rates for 2012 as approved by the OEB for 2011, with a revenue requirement of $1,218 million. 

 In June 2012, Hydro One Networks filed an IRM rate application with the OEB for 2013 distribution rates, to be effective January 1, 2013. In December 2012, the OEB issued a final Rate Order, which resulted in an increase in distribution rates of approximately 1.3% in 2013, or 0.4% when considering total bill impact, for a typical residential customer consuming 800 kWh per month. 

 On April 26, 2013, Hydro One Networks filed an IRM rate application with the OEB for 2014 distribution rates, to be effective January 1, 2014. On September 26, 2013, the OEB issued a partial decision, approving a rate rider to recover a 2014 revenue requirement of $29.3 million for operation, maintenance and administration expenses and in-service capital costs of the ADS Project, which will modernize our distribution system. On December 5, 2013, the OEB issued its final decision, which resulted in an increase of distribution rates of approximately 2.4% in 2014, or 0.85% when considering total bill impact, for a typical residential customer consuming 800 kWh per month. 

 On December 19, 2013, Hydro One Networks filed a 2015–2019 distribution custom rate application with the OEB, for rates effective January 1 of each test year. This application is a five-year custom rate application which is being submitted under the OEB’s Renewed Regulatory Framework for Electricity Distributors. It has been customized to fit Hydro One Networks’ specific circumstances, which necessitate significant multi-year investments. The submitted evidence includes the overall business plan, revenue requirements, and rate information necessary to support the issuance of a notice by the OEB. We are seeking OEB approvals for revenue requirements of $1,411 million for 2015, $1,515 million for 2016, $1,571 million for 2017, $1,615 million for 2018, and $1,666 million for 2019. If the application is approved as filed, the resulting change to the distribution portion of the average customer bill will be 

