TRANSMISSION ASSETS. Filed: September 12, 2006 EB Exhibit D1 Tab 1 Schedule 2 Page 1 of INTRODUCTION

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1 Filed: September, 00 EB Schedule Page of TRANSMISSION ASSETS.0 INTRODUCTION 0 Hydro One Networks Inc. is licensed by the Ontario Energy Board (OEB) to own, operate and maintain transmission facilities in the Province of Ontario. Hydro One s transmission system is one of the 0 largest in North America based on net book value and includes facilities that service customers province wide. It is comprised of high voltage assets that operate at 00kV, 0kV, kv, kv and kv and designed to transmit electricity to customer delivery points which include, Local Distribution Companies ( LDCs ), and End-use Transmission Customer ( ETC ) loads. At Dec., 00, the Company managed $. billion Net Book Value ( NBV ) of fixed transmission assets (as summarized in Figure ) to provide the safe and reliable transmission of electricity across the Province of Ontario. 0 In total, Hydro One manages approximately,000 circuit kilometers of high voltage transmission lines and transmission stations, and its Ontario Grid Control Centre. The major power system components include conductors, switches, transformers, circuit breakers, towers, insulators, reactors, capacitors, associated protection and control equipment, foundations, grounding systems and revenue meters. Hydro One also owns and manages an extensive telecommunication network for the monitoring, control and protection of the power system. The functional breakout of Hydro One s transmission asset base is shown in Figure below.

2 Filed: September, 00 EB Schedule Page of Figure Networks Transmission - Asset Composition (NBV %) Other % Lines % Stations % Note: Total Fixed Assets (at NBV) for 00 year end: $. billion..0 KEY CHARACTERISTICS OF THE TRANSMISSION SYSTEM 0 Hydro One s transmission system is interconnected with transmission systems in neighbouring provinces and states, specifically Manitoba, Quebec, Minnesota, Michigan and New York. Hydro One s transmission system is also connected to other licensed transmitters within Ontario, specifically Great Lakes Power, Canadian Niagara Power and Five Nations Energy.

3 Filed: September, 00 EB Schedule Page of Figure Existing Ontario Interconnections MANITOBA QUEBEC ONTARIO MINNESOTA NEW YORK MICHIGAN The key characteristics of the Hydro One Transmission system as of December, 00 are shown in Table and Table below. Table Connections to the Transmission Network Generating Stations End-use Transmission Customers ("ETCs") Local Distribution Companies (LDCs ) Interconnections

4 Filed: September, 00 EB Schedule Page of Fixed Assets (NBV Year End, 00) Table Hydro One Transmission System Assets At December, 00 $. Billion Operating Centres Transmission System Voltages (kv) 00,, 0,, Overhead Transmission Lines (circuit or, "cct" km) Underground Transmission Cables (cct km) 0 Transmission Stations Breakers, Step-down Power Transformers Auto-Transformers 0 Other Transformers. Transmission System The simplified representation of Hydro One s transmission system grid is shown in Figure below. Includes - and 0-cycle systems for transmission circuit kilometers. One Ontario Grid Control Centre ( OGCC ) and one Integrated Telecommunication Management Centre ( ITMC ). Transformer Stations and Switching Stations., LV breakers(<0kv) and, HV breakers (>0kV). Other Transformers include one frequency changer, five phase shifters, station service transformers, regulators and grounding transformers.

5 Filed: September, 00 EB Schedule Page of Figure Connections to () Other Transmission Systems within Ontario Local Distribution Companies Generators connected to Transmission Retail Load (End-Use Customers within LDC) Interconnections Manitoba Quebec USA Transmission End-Use Customers Hydro One s transmission system forms an integrated transmission grid that can be divided into four major component groups based on their function: 0 Integrated Network assets. Line Connection assets. Transformation Connection assets Wholesale Meter assets... Integrated Network The Integrated Network operates at 00kV, kv, 0 kv, kv or kv over long distances and links major sources of generation to transmission stations servicing load centers or ETCs. The integrated network is shared by all provincial customers. From a transportation perspective, network facilities are analogous to the 00 series of provincial highways and provide a high capacity transportation service across the province.

6 Filed: September, 00 EB Schedule Page of Network-based transmission stations are required to integrate the transmission lines into the network and are frequently located at points at which power from two or more transmission lines can be combined and transmitted in different directions. These stations include high voltage to high voltage power transformers (typically 00 kv or 0 kv), circuit breakers, high voltage switches, capacitor and reactor banks, protection and control systems, metering and monitoring systems, together with site infrastructures such as buildings, roads, bridges, drainages, etc. 0.. Line Connections 0 The Line Connection assets operate at 0kV or kv and link the integrated network to local generators and local load centers, such as LDCs and ETCs. Line connections comprise facilities linking network assets to delivery points, are analogous to main roads linking 00 series highways to different areas within a major urban center or to secondary highways linking 00 series highways to smaller urban centers and major industrial developments. The typical voltage levels of these line connections (also known as area supply lines) are 0 kv or kv. All of these lines are overhead with the exception of about 0 kilometers of underground cables located in some major urban areas... Transformation Connections Transformation Connection assets are comprised of transformer stations whose function is to step down electricity from the high voltage transmission level (greater than 0kV) to the low voltage level (less than 0kV) required for LDCs or to ETCs connected directly to Hydro One s transmission system. These assets are typically located near load centers, In accordance with historical reliability practices developed by Hydro One and predecessor

7 Filed: September, 00 EB Schedule Page of companies, delivery points with large loads are supplied by dual element transformation facilities to ensure that the failure of any one element will not result in a permanent loss of supply. For delivery points supplying smaller loads, a station design with a single element transformer facility is used. These transformer facilities contain low voltage transformer breakers and feeder breakers with related protective systems. Some of this equipment is owned by LDCs in accordance with historical ownership agreements... Wholesale Meters 0 Wholesale Meter assets are used for wholesale energy and transmission settlements in the IESO administered markets. The wholesale revenue metering assets inherited by Hydro One from the former Ontario Hydro were included in the transmission asset base as network assets. These assets comprise metering-related equipment that track electricity supplied to Market Participants from the IESO administered market for the purpose of settlement of energy and transmission charges. Although the assets are referred to as transmission meters they include equipment used for metering of wholesale energy supplied to: 0 Transmission-connected LDCs. Transmission-connected ETCs. Distribution-connected LDCs that are registered Market Participants in the IESOadministered market. Distribution-connected ETCs that are registered Market Participants in the IESOadministered market. In accordance with the Market Rules, Hydro One must provide meter service to these meter assets until the earliest seal expiry of the meters. Upon the seal expiry, the Market

8 Filed: September, 00 EB Schedule Page of Participant must assume accountability for the wholesale metering to comply with the Market Rules.. Transmission Customers Hydro One s transmission customer base is summarized in Table above. 0 Depending on the function, configuration and ownership of facilities, Hydro One provides these customers with one or more of the four main types of transmission service: Network, Line Connection, Transformation Connection and Wholesale Meter Service. The size and complexity of this customer base and the associated commercial agreements requires one-on-one customized management in the commercial relationship. The Customer Service Support function is described in Exhibit C, Tab, Schedule.