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## Distribution 

Our 2013 distribution capital investments increased by $2 million, or less than 1%, to $673 million, compared to 2012. Investments to expand and reinforce our distribution network were $235 million in 2013, representing a decrease of $49 million, compared to 2012. We experienced reduced expenditures related to some of our major projects, including the ADS Project, as we completed the deployment of our Distribution Management System within our Owen Sound pilot area in 2012, and the Smart Metering Project, as most of the network expansion work was completed in 2012. In 2013, we also experienced a lower demand for new customer connections and upgrades. These decreases were partially offset by increased work on upgrading and adding capacity to our system to enable new customer connections and timing of generation connection projects. Given that the OEB has assessed the prudency of the ADS Project, the next phase of this project is anticipated in 2014. 

Investments to sustain our distribution system were $324 million in 2013, representing an increase of $79 million, compared to 2012. The increase was primarily due to increased expenditures for replacements related to storm restoration work caused by major storms in 2013. We also experienced increased work within our wood pole replacement program and station refurbishment projects. Investments were also impacted by the timing of customer contribution payments received in 2012 relating to work for joint use and relocation of our lines. These increases were partially offset by lower work within our lines programs. 

Our other distribution capital investments were $114 million in 2013, representing a decrease of $28 million, compared to 2012. The majority of these expenditures were related to the Customer Information System (CIS) phase of our entity-wide information system replacement and improvement project, which was placed into service in May 2013. In addition to replacing end-of-life systems, this implementation will result in process improvements that are expected to provide many benefits including enhancements to customer satisfaction through reduced call times and first call resolution of issues given faster availability of information. Productivity savings are also anticipated to result from performance improvements, consolidation and/or decommissioning of legacy IT systems. In addition, we experienced decreased expenditures associated with IT initiatives, including our entity-wide SAP information system replacement and improvement project, and the timing of field facilities improvements, partially offset by an increase in fleet acquisitions and emergency flood restoration work at our Richview Transmission Station. 

## Future Capital Investments 

Our capital investments for 2014 are budgeted at approximately $1,600 million. Our 2014 capital budgets for our Transmission and Distribution Businesses are approximately $950 million and $650 million, respectively. Consolidated capital investments are expected to be approximately $1,600 million in each of 2015 and 2016. These investment levels reflect the sustainment requirements of our aging infrastructure. Our sustainment program capital investments are expected to be approximately $900 million in each of 2014, 2015, and 2016. Our development capital investments are expected to be approximately $450 million in 2014, $500 million in 2015, and $500 million in 2016. Our development projects include the inter-area network upgrades that reflect supply mix policies, local area supply improvements, the ADS, new load and generation connections and requirements to enable Distributed Generation (DG), and customer demand work. Other capital investments are expected to be $250 million in 2014, $200 million in 2015, and $200 million in 2016. This includes investments in operating infrastructure integration, IT, fleet services and facilities, and real estate. Our future capital investments amounts do not include future LDC acquisitions. 

## Transmission 

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Transmission capital investments are incurred to manage the replacement and refurbishment of our aging transmission infrastructure in order to ensure a continued reliable supply of energy to customers throughout the province. Our sustainment program future capital investments include the replacement of air blast circuit breakers and switchgear, high-voltage underground cables, and power transformers. These investments are necessary to ensure that we maintain our current levels of supply to our customers and continue to meet all regulatory, compliance, safety and environmental objectives. 

