Our development future capital investments include the Clarington Transmission Station Project to install additional auto-transformer capacity in  east Greater Toronto Area; the Guelph Area Transmission Refurbishment Project, an upgrade of a transmission line and transmission stations  in south-central Guelph; investments in ADS; requirements to enable DG; and up to four other transmission station upgrades, which when  combined with the new Hearn Switching Station, will collectively enable up to 600 MW of new generation capacity in the Niagara, Toronto  and Ottawa areas. In 2011, the OPA provided the scope and timing to increase short circuit and/or transformer capacity at ten of 15 transmission stations. Seven of these station upgrades have now been completed, and alternate solutions have been determined for the remaining three projects. The Lambton to Longwood Transmission Upgrade has a required in-service date of December 2014, and is included in our budgeted future  capital investments. This project is needed to satisfy government policy relating to the incorporation of 10,700 MW of non-hydroelectric  renewable generation resources by 2021. In August 2013, the OPA requested us to terminate work related to the Southwestern Ontario  Reactive Compensation Priority Project, and an OPA recommendation regarding the third priority specified transmission project, which was not included in the most recent LTEP, is not expected in the foreseeable future. Therefore, these two projects are not included in our budgeted  future capital investments. Based on the OEB’s framework for competitive designation for the development of eligible transmission projects, we did not include in our  budgeted future capital investments any projects that could meet the definition of expansions. We do not plan to undertake large capital  investments without a reasonable expectation of recovering them through our rates. The actual timing and investments of many development projects are uncertain as they are dependent upon various regulatory approvals,  negotiations with customers, neighbouring utilities and other stakeholders, and consultations with First Nations and Métis communities. Projects  are also dependent upon the timing and level of generator contributions for enabling facilities. Distribution capital investments include the sustainment of our infrastructure. Our core work will continue to focus on maintaining the performance  of our aging distribution asset base through renewal and refurbishment activities. Planned capital investments include the continued replacements  of equipment and components that are beyond their expected service life, as well as increased wood pole replacements and distribution station  refurbishments. Sustainment capital investments in the Smart Metering project will decrease through 2016.  Distribution development capital investments are expected to be relatively stable through 2016, with the exception of capital contributions for  capacity improvements at the Orleans Transmission Station in 2015 and the Hanmer Transmission Station in 2016. We will continue to make  investments required to connect new load and DG customers, as well as investments to ensure the system is capable of supplying customer  needs. During 2014 to 2016, a number of our projects will address local load growth issues. Generation connection investments will decrease  as the volume of connections is expected to decrease. The budgeted capital expenditures only reflect projects with FIT and Micro FIT Program  contracts from the OPA that are expected to connect to our distribution system. In 2014 and 2015, the ADS Project will continue to pilot various technologies and related capital investments will begin to decrease in 2016.  Pilot technologies include improvements to outage response management through more effective resource dispatch, automation to isolate faults  where needed, and the dynamic regulation of voltage to reduce losses.  There are no off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial  condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Off-Balance Sheet Arrangements Distribution 31 HYDRO ONE ANNUAL REPORT 2013 MANAGEMENT’S DISCUSSION AND ANALYSIS