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A review of the cost of regulation indicates that customers of small LDCs tend to pay more for the regulation of their utilities than customers of large LDCs. According to a 2011 report by Ontario’s Auditor General, the cost of filing a full Cost of Service (COS) rate application for many small and mid-sized LDCs ranges from $100,000 to $250,000.28 While the cost of filing a COS application for larger LDCs can be as much as $1 million or more,29 the cost per customer is actually much lower because of their larger customer base. The Auditor General’s report noted that the cost of regulatory scrutiny can consequently be as high as $40 per customer for smaller utilities, while it shrinks to about $1 per customer for the largest utilities.30
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