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.