Ontario’s Electricity Regulation Crisis Report ““ Part 30: Ratepayer/Taxpayer Impacts of Management’s Hissy Fit at Tony’s Hydro (Formerly Toronto Hydro)

Reports continue to roll in indicating that management at Tony’s Hydro is swinging a wrecking ball inside the utility in its obvious effort to foment its management-created conflict with the Ontario Energy Board. Yesterday, I received notice of seven people working in audit and legal at the utility’s head office were terminated. Today I received a report of 50 more people were terminated, although I have no details yet on the work areas affected.

As I have previously noted, Toronto citizens as both ratepayers and taxpayers will pay dearly for management’s tantrum at Tony’s Hydro under the leadership of rogue CEO Anthony Haines. The financial impacts I have addressed previously are higher borrowing costs and settlements for broken contractor agreements.

Another area of crisis-induced extraordinary expense Torontonians shell out for is the extra legal costs caused by the wild legal moves the utility is now pulling. Yesterday the utility filed this letter (EB-2011-0144_THESLAbeyanceLetter_20120206) with the OEB indicating its intention to pursue an application based on the OEB’s incentive ratemaking mechanism (IRM) while it still keeps alive a motion for review of the Board’s decision on its cost of service (COS) application. I am pretty sure that there is no precedent for a utility in Ontario pursuing both COS and IRM applications for the same rate period simultaneously.

Another area of crisis-induced extraordinary expenditure Torontonians are covering is the cost the utility is incurring to fire staff. In recent years, the Ontario Energy Board has approved a significant increase in funding for training and work force renewal programs. Many of the vacancies being created by the ongoing firings are likely to need filling once orderly management is in place at the utility. Expanded hiring and training initiatives will likely be required. I am very concerned that ongoing apprenticeships could be disrupted by the chaos.

Severance settlements associated with the mass firing going on are likely to be substantial. One particular element of these settlements that I am particularly concerned about is the use of  non-disclosure agreements (NDAs) to conceal from the public information about the what is going on. NDAs are normal business practice in competitive businesses but are easily abused in monopoly environments. Perhaps some more knowledgeable reader might offer some examples, but I am not aware of any precedent in utility regulation in Ontario where regulatory scrutiny of NDAs has been required. It now appears that an extraordinary number of severance settlements are happening. Effective regulatory action is required to ensure that ratepayer funds are not be abused through NDAs.

Here are some of the questions that the utility and the shareholder’s representatives at City Council should have to answer:

What is the number and cost of severance settlements and NDAs agreed since the OEB’s decision of January 5th?

What is the terms of all NDAs issued since January 5th?

What was the number and cost of severance settlements and NDAs in previous years? What terms applied to NDAs?

Why are Toronto City Council  and the Board of Directors of Tony’s Hydro allowing this damage to continue?

At Tony’s Hydro, where outages are an asset, management’s focus on media manipulation continues. As I noted here, the utility continues to issue a barrage of press releases trumpeting its outages. The utility has set up a website to help fuel its campaign against the Ontario Energy Board. One of the claims that has appeared on this site was the assertion that the vast bulk of rate increases consumers have experienced since 2005 has been due to Ontario Power Generation. The claim is false and has since been removed from the Tony’s Hydro site.


  1. Has there been any noise out of City Council on this hydro file?

    I wrote my Councillor…haven’t heard anything.

    Unfortunately, THydro has become full back burner material with the recent developments on transit and before that, the CUPE 416 negotiations.

    I hope the matter stays alive in the media.

  2. It’s time for refunds
    and credits when there are power outages. We’ve had two that infringed on the
    so-called ‘off-peak’ period. That robbed us of the ability to use this time for
    essential activities around the house. And why are we paying these high rates to
    subsidize Toronto’s ‘green initiatives’ with such things as coupons for
    discounts on clotheslines, power cables, bulbs, cold water detergent. Then
    there’s the software app they want you to use to monitor your daily use online
    and the promotional material mailed several times to customers going on to
    time-of-use metering. How much money was spent on that? My usage costs are below
    the ‘add-ons’ on the bill. Then, on top of it is HST.

    Toronto Hydro Corp. Has Lost All The Trust From Their Customers (what a shame)

    Toronto Hydro Corp, Needs to Fire All The Current VP’s and CEO, and look into cutting at least 25% of the current CUPE Local One Clowns! and the New Toronto Hydro Corp, will need to start farming out work to Private Contractors do get the job done right and at a lower cost

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