TORONTO - Ontario's energy regulator has ordered Hydro One to cut $30 million over two years from its administrative budget, saying ratepayers shouldn't foot the bill for higher pay for senior staff.

In a recent ruling, the Ontario Energy Board rejected a Hydro One request to increase its administrative costs and spend more on capital projects.

The OEB decision comes as part of a review of a 2016 rate hike request from Hydro One which, if approved, would see rates jump by 0.5 per cent in 2017 and 4.8 per cent in 2018.

Hydro One says it will review and respond to the OEB's orders and rates will be set later this fall by the regulator.

The OEB also rejected a proposal to give all of the tax savings generated by the 2015 initial public offering of the partially-privatized company to shareholders.

The regulator instead mandated shareholders receive 71 per cent of the savings while ratepayers receive the remaining 29 per cent.