Capacity Allocation Model (CAM)

The Capacity Allocation Model (CAM) is a framework that ensures the costs of new electricity system expansions are shared fairly among all customers and developers who benefit from them.

A CAM may be used for large, multi-year expansions in a defined development area. Unlike the standard evaluation, the CAM prevents “first movers” from bearing the full cost of new infrastructure. Instead, each developer contributes their share of the upstream expansion based on their requested load.

Capital costs are planned and recovered over a horizon of up to 15 years. Developers who join later pay a financing charge, and all agreed capacity must be backed by a financial commitment.

Please note, the CAM is not applicable to any system expansion to only accommodate a single customer connection that will be completed in a single year.

Here you’ll find explanations of key terms, how the model works, examples of customer scenarios, and frequently asked questions.

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Definitions

Here are simple explanations of key terms used in the Capacity Allocation Model (CAM).

Agreed Committed Capacity: Means capacity allocated to customers who have not fully paid the capital contribution amount determined under a capacity allocation model, but have provided binding financial commitments, such as agreements, letter(s) of credit from a bank as defined in the Bank Act, S.C. 1991, c. 46 or surety bond(s), to commit to their future capital contributions.

CAM Term: This is the length of time over which customers are expected to make payments toward their share of expansion costs.

• It starts when construction on the expansion begins.
• It ends when the final capital contribution payment is made.
• The maximum CAM term is 15 years.

Capacity Allocation Model: Means a model established in accordance with the methodology and requirements set out in Appendix I to allocate capacity and costs associated with system expansions to accommodate multiple residential subdivisions and other customer connections in a qualifying development area.

Constructed Capacity: Means the total capacity that will be built by the distributor under a capacity allocation model, excluding any capacity that is considered an enhancement as described in the Distribution System Code.

Paid Committed Capacity: Means capacity allocated to customers who have fully paid their applicable capital contribution amount as determined under a capacity allocation model.

Qualifying Development Area: Means an area that meets the following criteria:

a) Significant Residential Load Growth: The distributor forecasts, based on information from a municipality’s Official Plan and/or an applicable Official Plan Amendment (or Secondary Plan) and the distributor’s distribution system plan for the area, that significant residential load growth will occur in the area;

b) Planned Capacity: The distributor intentionally plans and constructs more capacity than the capacity required to accommodate the paid committed capacity and agreed committed capacity for the initial customer(s) requesting connection(s) for the purpose of accommodating the significant residential load growth in the area; and

c) Paid Committed Capacity and Agreed Committed Capacity: A significant portion of the constructed capacity consists of paid committed capacity and/or agreed committed capacity.

Uncommitted Capacity: This is the portion of system capacity that is still available for future customers. It has not yet been reserved or paid for.

• It covers capacity that no one has committed to through payments or agreements.
• It also includes customer connections that weren’t forecasted when the expansion was planned.

CAM Explained: How It Works and Your Responsibilities

The Capacity Allocation Model (CAM) sets out how new electricity system capacity is shared and paid for in growing communities. It ensures that costs are fairly divided among developers and customers who benefit from system expansions, such as new transformer stations or distribution lines. Below, you’ll find an overview of how the CAM works, along with the key requirements you need to know if your project is part of a qualifying development area.

Eligibility for a CAM Project

For a development to qualify as a CAM project, it must meet the OEB’s requirements of a “Qualifying Development Area”. InnPower will also consider the following:

1. Primarily residential area – The project must be a new, large residential development (with possible schools, parks, or small commercial spaces to serve the community).
2. Multiple developers and long-term buildout – More than one developer is expected to connect over several years (up to 15 years), based on municipal growth plans.
3. Sufficient planning maturity – Development plans must be advanced enough (e.g., draft site plans, road layouts, or civil infrastructure designs) so the distributor can begin planning the electricity system.
4. Significant system expansion needed – Large infrastructure investments, such as new transformer stations, distribution stations, or long feeder lines, must be required.
5. Financial security provided – Developers must submit a significant portion of their committed financial security (e.g., a letter of credit).

Please note, the Capacity Allocation Model (CAM) is applied at the discretion of the distributor. Each potential CAM project is carefully assessed to protect ratepayers and manage financial risks. The distributor may determine eligibility and the scope of a CAM based on the unique characteristics of the development area, including the level of customer commitment, the pace of growth, and the certainty of future connections.

Not sure if your project qualifies for the CAM? Reach out to our Engineering team at systemplanning@innpower.ca— we’re here to help you understand the requirements and next steps.

Scope of the CAM

• The scope of the CAM can be determined based on paid committed capacity, agreed committed capacity, and the distributor’s planned constructed capacity under a CAM.
• Depending on the situation, the distributor may set up one CAM for the entire development area or separate CAMs for different parts of the area.

How Costs Are Shared

The cost of building new system capacity is shared among three groups of customers:

1. Paid committed customers – These are customers who have already paid their full share of the expansion costs (capital contribution) under the CAM.
2. Agreed committed customers – These are customers who have not yet paid their full share of the expansion costs but have provided binding financial commitments in respect of their future capital contributions.

• They may spread their payments out over time instead of paying everything up front.
• All outstanding payments must be made before they connect to the system.
• All payments must be completed within the CAM term (a maximum of 15 years).

 3.  Future (uncommitted) customers - These are customers who are expected to connect in the future but haven’t yet reserved or paid for capacity.

• They are part of the distributor’s forecast for new connections (other than a and b) during the CAM term.
• Before they can connect to the system, they must pay their share of the expansion costs.

For customers in categories b) and c) above, the distributor will initially finance the unpaid costs of the expansion.

What You Pay Toward System Expansion (Capital Contributions)

How your capital contribution is calculated
Your share of expansion costs is based on a formula:

What’s included in the total cost
The cost includes everything needed to build, operate, and maintain the expansion over the CAM term (up to 15 years), using a Net Present Value calculation. In some cases, line length may also be considered when dividing costs.

Alternative bid option
If you are part of a CAM, you may choose to hire an Innpower approved contractor to complete certain construction work (known as the “alternative bid option”). If you do, the distributor will still include these costs in the total CAM calculation.

The requirements of section 3.2 of the DSC, including, without limitation, the distributor’s obligation to identify work for which the alternative bid option is available, will apply to alternative bid work proposed and undertaken in respect of a CAM expansion with any necessary modifications. The cost of the alternative bid work will be considered in determining the total cost of the CAM expansion, consistent with the approach to alternative bid work in section 3.2 of the DSC.

How capacity is estimated
Your requested capacity is calculated using the number and type of homes or buildings in your project, along with typical demand values published by the distributor (e.g., detached homes, townhouses, commercial buildings). This ensures consistency in cost-sharing forecasts.

Please note, the demand values (kW) posted on this website are estimates only and are intended to provide developers with a general starting point for planning purposes. Actual demand requirements for a development may vary based on building type, design, and other technical considerations.

Because a Capacity Allocation Model (CAM) is a complex, long-term project, developers must go through the formal application process with the distributor. During this process, the distributor will work with the developer and/or their consultant to confirm the detailed capacity requirements for the project. Final demand values and contributions will be determined as part of that process.

CAM phases and payment options
If your CAM projects are built in multiple phases, you may:

• Pay your full capital contribution upfront (for all phases), or
• Pay as each phase is connected.

If you choose to pay later, financing charges will be added.

Guarantee of capacity
Once you commit to your capacity needs (i.e., payment or financial commitment), the distributor guarantees that this capacity will be available for you.

Requesting extra capacity later
If you need more capacity later (uncommitted capacity):

• Uncommitted capacity requests are processed on a first come, first served basis.
• If space is available, you’ll pay a capital contribution and financing charges based on your share of the remaining capacity.

If space is not available:

• Additional system expansion work will be required. The distributor will follow the rules in Chapter 3 of the Distribution System Code (DSC) and calculate your capital contribution based on Appendix B of the DSC or the distributor may also establish a new CAM for the additional expansion.
• The timing of this additional work will be set according to the distributor’s forecast of future connections.

• What this means for you as a future (uncommitted) customer:

• You may still connect to the existing CAM expansion while the distributor builds the extra capacity needed for committed customers with future connections.
• Because the cost of future expansion can only be estimated at first, you will need to provide a deposit. This deposit protects against differences between the estimate and the actual cost once the expansion is built.

Combining CAM and non-CAM expansions
If your project includes both CAM-related expansions and separate expansions, you can request that costs be calculated together. If calculated separately, any surplus revenues from the non-CAM portion may be credited toward your CAM payment.

Finance Charge

If you decide to delay paying your capital contribution until after the first year of the CAM term, extra financing charges will be added.

• These charges cover the distributor’s cost of borrowing the money to fund the expansion until your payment is made.
• The amount is based on your share of the project and includes the distributor’s average cost of capital plus any applicable taxes (Payment-in-Lieu of Taxes or corporate taxes).
• In short, paying later means you will pay more overall, because of the added financing cost.

Offers and Agreements

Individual Agreements
Each customer under the CAM will receive their own offer or agreement that sets out the terms of their contribution and connection.

Final Cost Adjustment
If your initial CAM offer was based on an estimate, a final calculation will be done once the expansion is complete and in service.

• If the actual cost is higher, you may need to pay the difference.
• If the actual cost is lower, you will receive a credit or refund for the difference.

No Adjustment for Lower Connections
If your project ends up with fewer homes or less demand than originally estimated, your contribution will not be recalculated—you are still responsible for the amount agreed to for your committed capacity.

What the CAM Means for You: Step-by-Step Examples

1. Paid Committed Customer

Example: A developer is building a subdivision of 100 homes.

• At the start of the CAM, they confirm their capacity needs and pay their full capital contribution up front.
• Because they have paid in full, the distributor immediately assigns their requested capacity and guarantees it for them.
• Once the expansion facilities are energized, a reconciliation is performed to determine whether actual capital costs are lower or higher than estimated – a payment or credit may be required. If fewer homes than expected are ultimately built, the contribution will not be recalculated.
• Start to finish: Pay in full → Capacity reserved → Connect when ready → Reconciliation of payments.

2. Agreed Committed Customer

Example: A developer plans a 200-home subdivision but decides not to pay the entire contribution at once.

• They sign an agreement and provide a binding financial commitment (i.e., letter of credit) confirming their share of costs, with payments scheduled over the CAM term.
• Once this agreement is in place, the distributor reserves the requested capacity for them.
• Before each phase of the subdivision connects, they must pay the outstanding balance for that phase.
• If they delay payment beyond the first year, financing charges are added.
• Start to finish: Sign agreement and provide financial commitment → Capacity reserved → Make staged payments (with financing charges if delayed) → Connect when ready.

3. Future Uncommitted Customer

Example: A new commercial plaza developer approaches the distributor five years into the CAM term. They were not included in the original planning.

• The CAM still has unused capacity available. The developer must pay a capital contribution (including financing charges) before connecting, based on their share of the remaining capacity.

If there isn’t enough capacity left, the distributor must complete additional expansion work. In this case:

• The customer may still be able connect to the CAM expansion.
• They must provide a deposit toward the estimated cost of the future expansion to cover the risk that actual costs may be higher.

• Start to finish: Request to connect → Pay contribution (and deposit if needed) → Capacity added if available or new expansion built → Connect once requirements met.
  
  

Downloads & Resources

Please refer to the following resources for additional information:

• Appendix I – Full CAM Methodology PDF CAM Appendix_20250417 (3).PDF
• OEB Distribution System Code Distribution System Code (DSC) - October 1, 2022

Contact & Support

Dedicated customer support area:

Email: systemplanning@innpower.ca