On February 18, 2014, the Ontario Legislature Standing Committee on Government Agencies confirmed the appointment of Ken Quesnelle as a vice chair of the Ontario Energy Board. Mr. Quesnelle’s nomination was first reported in Part 96 of this series and further discussed in Part 106.
Although two vice chairs are required by the Ontario Energy Board, the Ontario government had left the second vice chair position vacant since July 2010.
Like the government’s prolonged period of non-compliance with the requirements of the OEB Act, the confirmation hearing helps to illuminate the feeble state of governance of Ontario’s energy system.
The NDP’s Monique Taylor started off her questioning with this gem, “I would love to know your thoughts on global adjustment, and if you could please let me know what global adjustment means.”
A simple Google search of the phrase “what is global adjustment” yields detailed explanations from the IESO and the OPA. The OEB has input into the global adjustment in the areas of conservation programs and OPG’s baseload generation. Both of those areas are worthy of examination, but Miss Taylor’s inquiry never penetrated beyond the level of fluffy confusion.
Asked several times to comment on rapidly escalating power rates, Mr. Quesnelle provided various replies, including this gem:
Again, in going back to my earlier explanation of the global adjustment, it’s as a result of the introduction of integrated power. Ontario certainly doesn’t stand out alone on that. My experience on a global basis is, that is something that’s being wrestled with on a global basis…People have attempted to come up with levelling plans on carbon pricing and what have you. So this is very much a global phenomenon.
Identifying the cause for rising rates as “the introduction of integrated power” is at best a euphemistic statement. Prior to the recent onset of compound annual rate increases running at many times the rate of inflation, Ontario did not have a disintegrated power system. If anyone cares to address the underlying causes for Ontario’s rapidly rising rates, they would need to address such factors as the politicization of power system investment decisions, the careless introduction of the so-called “smart grid”, Ontario’s Green Energy and Green Economy Act, wasteful conservation programs, bureaucratic bloat (including at the Ontario Energy Board), and the coal phase-out.
Mr. Quesnelle’s apologetics for Ontario’s rising rates, claiming that power rates are rising on a “global basis”, is bunk. Power rates for Ontario’s commercial and industrial competitors in the U.S. have been declining since 1998. Low interest rates, declining fuel costs, improved efficiency, and little or no load growth have delivered benefits for U.S. customers. During the same time period, Ontario’s rate increases have accelerated.
Another theme of Mr. Quesnelle’s response to general concerns over rising power rates was to focus on “rate mitigation, ensuring that there isn’t rate shock”. His focus on smoothing increases is exactly in accord with the boil-the-frog-slowly priority often presented by OEB chair Rosemarie Leclair in her public statements. Official Ontario’s orientation across the board is to avoid alarming consumers with lumpy rate increases.
There are so many issues that might have been explored by our parliamentarians. The OEB’s budget is rocketing upward. There are inconsistent standards of electricity service reliability, with consumers served by some electricity distributors getting poor service. The OEB sits idly by in the face of persistent perjury by Toronto Hydro’s CEO, a tolerance that diminishes the integrity of the regulator. As discussed in Part 106 of this series, the OEB’s recent reorganization directly violates the requirements of the OEB Act. None of these issues appear to interest our parliamentarians.
Mr. Quesnelle’s appointment review demonstrates the inability of Ontario’s current parliament to explore new thinking on regulatory governance or consumer protection.
Why did none of our political representatives think to ask Mr. Quesnelle about his before and after compensation and benefits, including pension?
Did none notice that Annual Reports for the Ontario Energy Board haven’t been published since F2010/11. What does Mr. Quesnelle know of why the OEB has failed to report its annual financial statements since the time the vice chair position was last filled?
Ontario’s citizens have been told that we now have a smart grid. On Feb 18, 2014 and in this specific hearing room, our political process showed little sign of smartness. Why didn’t one of your representatives ask, Are consumers better off now than when Mr. Quesnelle first joined the OEB in 2005? If not, what can be done to turn this around? With Mr. Quesnelle’s long experience in the power industry, his answer might have informed the debate on whether he is the right guy for a job with such significance for Ontario’s electricity future.