Ontario Electricity Regulation Crisis Report Part 96: Regulatory Governance Update

After almost 40 months failing to comply with the Ontario Energy Board (OEB) Act, the Ontario government is finally moving to fill one of the Board’s major governance gaps, supporting the nomination of current full time OEB member Ken Quesnelle to the second vice-chair position at the regulatory agency.

Section 4.1.6 of the OEB Act requires the regulator to have a chair and two vice-chairs. These three positions constitute the management committee of the board — central to the administrative functioning of the regulator. Consistent with the government’s approach of weakening and controlling erstwhile independent public agencies that would otherwise have a role in protecting the interests of electricity consumers — including the Ontario Power Authority and the Independent Electricity System Operator — the government’s approach to regulatory governance has weakened the OEB. The second vice-chair position has been vacant since July 4, 2010.

As discussed in Part 32, Part 43 and Part 49, my thesis from the beginning of this series has been that Toronto Hydro’s CEO Anthony Haines has sought to exploit the weak, conflicted leadership at the Ontario Energy Board to further increase the utility’s delivery rates — already by far the highest of any urban utility in Ontario.

As discussed previously in this series, the current chair, Rosemarie Leclair was appointed to her current position by then Premier McGuinty while she was CEO of the regulated utility Hydro Ottawa and also a prominent member of the Electrical Distributor’s Association (EDA). Many regulatory reform priorities of the EDA have found their way into OEB initiatives since Ms. Leclair’s arrival, including weakening the role of consumer representatives active in Board processes. Among the regulatory reforms introduced by Ms. Leclair include her practice of explaining after the fact previous decisions of the Board and approving a rotating door policy of exchanging leadership between the regulator and regulated firms.

The current composition of the Board’s membership is determined upon the recommendation of the chair.

The number of part-time members on the Board exceeds the number of full-time members, not including the chair. Until Ms. Leclair’s arrival, the last time there were more part-time Board members than full-time Board members, excluding the chair, was during the 2001/2002 fiscal year.

Like the absence of a second vice-chair, weighting the Board complement toward part-timers increases the effective authority of the chair.

While Mr. Quesnelle’s experience as a full time member of the Board for 8 years is reassuring, his wider regulatory involvement raises questions.

Mr. Quesnelle is currently the Chair of Canadian Association of Members of Public Utilities Tribunals (CAMPUT). The annual conference of CAMPUT is the most important conference of the year for Canada’s regulated energy utilities. At the upcoming annual conference of CAMPUT in May, Anthony Haines, the CEO of Toronto Hydro and current chair of the Canadian Electrical Association, has been granted one of the coveted speaking slots.

Mr. Haines’ prominence in Ontario’s energy industry as the leader of a major utility and an enthusiastic booster of the Ontario government’s energy policies including electric cars, wind power, Smart Meters, and the Smart Grid might appear on the surface to recommend him for a speaking slot.

However, the documented record of Mr. Haines in taking actions that no regulator should countenance raises questions as to why CAMPUT would associate itself with him, let alone offer him a privileged position at the annual conference. Persistent perjury by Mr. Haines over a period of more than 20 year where he falsified his qualifications during expert testimony — this documented in this series starting at Part 68 and following. Summarized in Part 85, many postings in this series have documented Toronto Hydro’s approach of using outages as assets to promote rate increases.

The Ontario Legislature’s Standing Committee on Government Agencies has the authority to review proposed appointments to the Ontario Energy Board. Should he have an opportunity to appear, perhaps Mr. Quesnelle might clarify his views on the ethical standards regulators should require from regulated firms.

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