Ontario Electricity Regulation Crisis Report Part 126: Toronto Hydro’s CEO’s Spectacular Year

Entrusted by Toronto Council to manage the city’s electricity distribution system, Toronto Hydro’s CEO Anthony Haines had another spectacular year in 2015 in both operations and compensation.

Mr. Haines dodged accountability for the Union Street blackout in April 2014, securing the support of the City of Toronto’s ombudsman. Last week, the city’s ombudsman’s office issued its conclusion of the investigation sought first by Toronto Hydro retirees David Grant and Paul Kahnert, and later by myself. Those complaints and the supporting mountain of documentation demonstrating negligence are documented here and here. After months of effort on my part and over a year of effort by Grant and Kahnert showing the ombudsman where to look, Toronto Hydro skated away with this conclusion:

“In 2016, Toronto Hydro began providing the Ombudsman’s Office with quarterly updates on its ongoing progress.”

As he has since 2013 when I started reporting on his CV, Mr. Haines also continued to dodge accountability for falsifying his educational credentials in sworn regulatory testimony over a period of about 20 years using a variety of false claims.

In a decision issued December 29, 2015, Toronto Hydro secured support from the Ontario Energy Board for almost all of its plan to hit customers with another series of massive rate increases — a 22% increase in distribution rates for households was implemented March 1 — on top of rates that were already by far the highest of any urban utility in Ontario.

The OEB also approved a continuation of Toronto Hydro’s massive and wasteful capital spending boom, effectively locking in future rate increases. 50% of Toronto Hydro’s incentive pay plan for executives is indexed directly or indirectly to the rate of capital spending.

As noted when I reported on Toronto Hydro’s gold-plated garbage cans, in 2007, Haines testified to the Ontario Energy Board that the utility suffered an infrastructure deficit, but that by increasing the rate of spending from about $100 million per year to $140 million per year, the deficit could be erased in 10 years. Spotting the opportunities signalled by the Ontario government’s Green Energy and Green Economy Act, he changed tactics in 2008, discovering new infrastructure deficiencies. For the time period 2015 through 2019, OEB-approved capital spending will be between $420 million and $478 million on capital each year. Here is a guest column by energy lawyer Jay Shepherd analyzing the prospects for consumers in light of recent developments at the Ontario Energy Board.

I have previously documented examples of the so-called “infrastructure deficit” that are simply phony,including the Union Street overhead rebuild that precipitated the Union Street blackout.

Here is a new, ongoing example of another phony “aging infrastructure” project. The pole shown here is being ripped out as part of the $1.68 million Scarlett – St. Clair Overhead Rebuild. Some of that project is focused on ripping out brand new equipment and replacing it with identical equipment, like this pole, photographed this February and March.

Toronto Hydro pole replacement - Pasadena Gardens Mar 2016

Toronto Hydro pole replacement - Pasadena Gardens Feb 2016

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The pole stamp indicates that the replaced pole was Western Red Cedar, butt treated with pentachlorophenol, and produced by the manufacturer Stella-Jones in 2010. Normal Ontario utilities manage to keep this type of pole in service for between 30 and 60 plus years. These figures include all poles removed from service, including any damaged by vehicles or animals. (Toronto Hydro’s contractor Valard had notified consumers in the area that a planned outage would be required to shift power from the old circuit to the new circuit, then sent around a notice indicating that no outage would be required, and then blacked out the neighborhood with no notice.)

As OEB Chair Rosemarie Leclair testified March 23 at the Public Accounts Committee when questioned by NDP MPP Peter Tabuns about utility oversight, “The OEB is not an auditor.” The “Strengthening Consumer Protection and Electricity System Oversight Act, 2015” (Bill 112), signed into law in December last year, empowers the Minister of Energy to replace whatever independent consumer scrutiny utilities might be exposed to in OEB processes with a government-appointed consumer representative. Here is my analysis of Bill 112, presented in testimony to the legislative committee considering the Bill.

Mr. Haines has also stayed active at Queen’s Park. No utility executive in Ontario joins the Premier and the Energy Minister in more photo ops than Mr. Haines. As frequently as possible, he sports his camera-ready hi vis fashion accessories. For example in March last year, Mr. Haines (lacking hi vis this time) hosted Energy Minister Chiarelli’s announcement of his plan that is now shifting a portion of the provinces’ social assistance liabilities over to electricity ratepayers. Throughout 2015, Toronto Hydro continued to play a leading role supporting the provincial government’s conservation, energy storage, and smart grid spending sprees.

His remarkable abilities and record-breaking compensation — breaking through the psychological $1 million barrier in 2015 ($1,007,970) before his counting spectacular post employment gains — make him the envy of Ontario’s utility world. In 2014, Anthony Haines was awarded the Canadian Energy Council’s “Energy Person of the Year” recognition. He completed his third and final year as Chair of the Canadian Electricity Association Board of Directors in 2015 and, in September, became the Ontario Energy Association’s vice-chair. Over the year, he continued to be called upon for major speaking gigs, including at the Toronto Board of Trade and Ontario Energy Network.

With the City of Toronto ombudsman now managed, Toronto City Council conflicted by Toronto Hydro’s dividend payments, the City’s auditor general apparently disinterested, the OEB busy pleasing Queen’s Park, and Queen’s Park looking for support, 2016 has the prospects to be yet another spectacular year of gains for Anthony Haines.

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  1. Pingback: Documenting Toronto Hydro's wasteful infrastructure spending | Tom Adams Energy - ideas for a smarter grid

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