OEB Will Protect You, Right?

(What follows is my presentation to the Ontario Legislature Standing Committee on General Government this afternoon. My actual delivery might have varied from the text slightly. Transcript with comments on the questions I received added as a post script Nov.5)

Thank you, Mr. Chairman for an opportunity to comment on Bill 112. My name is Tom Adams. I am an independent energy researcher. My focus is changes to the Ontario Energy Board Act.

Members of the Committee, I hope you agree that effective public utility regulation is essential to balance the interests of utility investors and consumers in the long term public interest. Due process is the tried and true starting point for effective public utility regulation. There can be no due process without respect for the law.

What is the current state of due process at the Ontario Energy Board and how would Bill 112 affect due process in the future?

The government fails to comply with the governance requirements of the existing OEB Act. Since July 2010, the Ontario Energy Board has violated s.4.1(6), s.4.2, and s.4.16(5) of its own Act. These three sections are at the heart of the OEB’s governance rules. These say: the OEB must have two vice chairs, that these vice chairs must sit on a management committee with the chair to direct the board’s internal affairs, and that the OEB must have a chief operating officer. The 2014 Memorandum of Understanding between the OEB and the government and also the OEB’s Bylaw #1 both explicitly require this structure.

Why should we expect regulated entities to comply with the law when the regulator itself does not? How can the public interest be protected when the regulator flouts the law?

Rather than remedy any of this, Bill 112 continues a trend we have seen with both the Ontario Energy Board for the last 10 years and the National Energy Board since 2012 toward ever greater ministerial directive powers. Under Bill 112, the minister will have the authority to control consumer representation. The minister will be able to bypass OEB review for new transmission projects. Even more than is the case today, power rates will be guided by lobbyist intrigues around Queen’s Park rather than debated and decided in open public hearings.

Sections 71 and 73 of the existing OEB Act wisely prevent utilities from getting into unregulated businesses. Recognizing the perils to ratepayers of comingled unregulated and regulated costs and revenues, the Ontario Energy Board worked for about 10 years to strengthen regulation by developing rules to separate regulated from unregulated business. Utilities have lobbied energetically since then to reverse those constraints. Now, coincident with the sale of Hydro One, Bill 112 unwinds that hard won separation.

In response to public concern that the sale of Hydro One will make the power situation even worse, the government says don’t worry, the OEB will be the independent price setter. This claim is captured in the title of Bill 112 — “Strengthening Consumer Protection and Electricity System Oversight”. However, the Bill’s contents directly contradict its own title. The Bill shifts powers from the regulator to the Minister’s Office, gives the Minister puppet strings over consumer representation, does nothing to correct crippled regulatory governance, and weakens oversight by allowing regulated and unregulated business comingling.

Bill 112 in its current form may do far greater harm to the public interest than that described in the recent report of the Financial Accountability Officer.


Time didn’t permit a more detailed presentation, but this might also interest those following this issue. In 2004, the total expenses of the OEB were $12.9 million. In today’s dollars, that would have a value of $15.6 million. The Minister has approved a budget for next year at the OEB of $41.3 million — almost 3 times what it was 11 years ago. Feeling more protected?

The government is setting up to control consumer advocacy, along with all the rest of the power system. Section 4.4.1 requires the OEB to establish processes by which the interests of consumers can be represented in proceedings before the OEB “through advocacy and through other models”. Subsection (2) provides for the Lieutenant Governor in Council to make regulations that would govern these processes. OEB intervenors who legitimately represent consumers will now know they can be replaced by a gov’t-appointed public advocate at the discretion of Cabinet.

Post script November 5: Here is the transcript.

The most interesting questions of the day came from the NDP’s Peter Tabuns. He asked about alternatives to the current approach to consumer representation at the OEB. I pointed to the sad case of the government appointed consumer advocate in Newfoundland & Labrador, Tom Johnson. Here and here are reviews of Johnson’s record of promoting rate increases.

Folks who followed my appearance before the legislative committee that once studied the gas plant cancellation and recontracting scandal might notice that MPP Bob Delaney has not been able to come up with any new line of questioning since then.


  1. Tom, Nicely put. It’s too bad it will fall on deaf ears. With even more ministerial authority Bill 112 will allow the Minister of Energy to be badly influenced by the AGW religious zealots without proper oversight or debate/discussion. The obvious way the portfolio has been directed for the past decade is proof of the foregoing. Thanks for presenting a voice that truly reflects consumer’s concerns.

    • At least objections were raised about Bill 112 by a qualified person which is now on the record. Thanks Tom!

  2. Good for you Tom. You won’t need to keep that space on your mantel for a Christmas card from RL. Did you apply to appear or were you invited ?

    • I applied to through the clerk for an opportunity to appear. The committee members decide together who is allowed to appear but I am not sure how that works.

  3. Thank you for all of your time and effort. It is so disheartening that our elected are going ahead with this even tho it is going directly against what they are supposed to be doing, which is allowing the general population to have a life. I think we may have to try to do a conjoined massive take to the streets as some of the smaller countries are doing.

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