Bill 135 Deputation (Part 2)

What follows is an excerpt from the official transcript of my appearance before the Ontario Standing Committee on General Government, 2016-Feb-22 speaking to Bill 135, Energy Statute Law Amendment Act, 2016.

In the Part 1 post for my Bill 135 deputation, I commented on the alignment of views between the Ontario Society of Professional Engineers, Professor Winfield, energy lawyer George Vegh, and myself opposing the politicization and centralization of planning authority. Later on Monday, another deputant, Scott Travers, president of the Society of Energy Professionals, a large management union representing Ontario power system employees, made similar points. From Twitter, it appears that Greenpeace Canada, the Green Energy Coalition, and the Canadian Environmental Law Association with the support of the NDP made similar arguments on Wednesday, although transcripts are not yet available. Someone from this group has nicknamed Bill 135 as the “Energy Czar Act”. So true.

With Bill 135, the Ontario Liberals have managed to give common cause to a disparate group.

In response to questions from Liberal MPP Bob Delaney, I make a reference to the Canadian Industry Program for Energy Conservation (CIPEC) as an example of a successful voluntary program to promote energy conservation. Under cross-examination, the full name of the acronym disappeared from my mind.


The Chair (Mr. Grant Crack): Next, we have with us Mr. Tom Adams. Welcome, Mr. Adams. You have 10 minutes. We will begin questioning, following that, by Mr. Tabuns from the third party. Welcome, sir.

Mr. Tom Adams: Thank you, Mr. Chairman and members of the committee.

The main focus of my remarks today is to address section 1 of Bill 135″”that is, changes to the Green Energy and Green Economy Act.

That schedule of Bill 135 would empower the Ontario government, now or in the future, to order any customer of any size, from the largest manufacturer down to the smallest household, to use a government-approved consultant to report to government all of that consumer’s energy and water usage information.

Further, the legislation would arm government with powers to order targeted consumers to file with the government a conservation plan according to the government’s design. The government would be able to publish that consumer’s data.

Bill 135 does not include provisions for penalties for non-compliance, or penalties for consumers whose reported energy and water usage seems disagreeable to some government official, but it does not seem out of order to anticipate, if the Ontario Legislature continues in its current trajectory towards more central planning, that such penalties might be forthcoming.

After I published a review of Bill 135 in the National Post, presenting basically this gloss of the bill’s provisions, energy minister Chiarelli responded in the National Post. His letter, published in the November 18 edition of the newspaper, said of my column: “He disgraces these pages by torqueing what surely started as legitimate questions to new levels of paranoid hysteria.”

Minister Chiarelli’s letter does not contest any of my description documenting the new powers the government is granting itself, pursuant to the legislation. Rather, the thrust of his argument is that the new energy subpoena powers that the government is granting itself will only be used for good purposes. With overflowing confidence in the superiority of central planning, he asks, “Without these subpoena powers, how can we determine the most efficient route to get to tomorrow?”

Ontario’s skyrocketing power rates, ongoing purchases of even more intermittent take-or-pay power generation, export power giveaways that expand by the year, secrecy around amounts paid to generators to not generate, and low-value or no-value conservation programs all suggest that this government’s thinking about the most efficient route to get to tomorrow deserves reconsideration.

If the government’s conservation initiatives were actually as beneficial to consumers as the government continuously claims, energy and water conservation reporting and analysis programs could be based on voluntary participation. Bill 135 might be easily amended to make participation in resource use disclosure programs voluntary.

When the government presents legislation that could easily introduce voluntary disclosure measures but, instead, adopts aggressive new powers requiring compulsory reporting, I suggest that it is not paranoid hysteria that such powers might have the potential to be abused in the future.

Although I have focused on the coming changes to the Green Energy and Green Economy Act under Bill 135, I want to comment to the OEB Act and the Electricity Act as well.

Power system planning, right down to the level of distribution system planning, will now be completely and directly controlled by the minister. The learned energy lawyer George Vegh has recently comment that, if enacted, section 2 of the legislation would “effectively remove independent electricity planning and procurement authority from the IESO and transmission approval from the OEB.” I associate myself with Mr. Vegh’s critique.

For the purposes of a thought experiment, let’s agree that the current minister is possessed of profound wisdom in all matters related to correctly understanding and predicting the future of energy. But ask yourselves, what might happen if some future minister was appointed by a future Premier, and that future minister was unable to understand the profit or loss of export transactions, the impact of conservation programs on the recovery of overall revenue requirements in a power system during periods of vast excess supply and falling demand, or the impact of adding further intermittent generation as the marginal value of new intermittent generation already sinks? What would be the outcome then?

The Auditor General has found that over the course of many policy initiatives, including the smart metering plan and the 2010 and 2013 government-directed power system plans, the government ignored the advice of its own experts. Ongoing NAFTA arbitration initiated by the firm Windstream, claiming $475 million in damages against the Canadian government, highlights that politics, not professional advice, drove offshore wind power policy.


Over the course of all of this politicized decision-making, was the government rewarded for its impatience? Was the government’s instinct that it was doing the right thing at the time””how did that work out in hindsight?

The government has responded to the Auditor General’s most recent report on energy by claiming that Bill 135 would solve the governance deficiencies identified by the Auditor General.

Eliminating the last vestiges of independence, making the IESO and OEB extensions of the Ministry of Energy, exacerbate rather than mitigate the deficiencies identified by the Auditor General.

The government and its allies have worked hard over the last two months since the Auditor General’s report was issued to deprecate, depreciate and dismiss the Auditor General. I urge the members of this committee to set aside their partisan considerations and to look with fresh eyes specifically at the consequences that have arisen for ratepayers from decisions starting from the smart meter program forward, ignoring professional advice from the IESO and OEB and forcing those agencies to abandon professionalism in favour of passive obedience. Ask yourself: How is it all working out?

The Chair (Mr. Grant Crack): Thank you very much, Mr. Adams. We shall start with the third party. We will have Mr. Tabuns commence.

Mr. Peter Tabuns: Thank you, Tom, for being in here today.

Do you think that this new bill would prevent problems like the gas plant scandal or the””what can I say?””misplaced investment in smart meters?

Mr. Tom Adams: If this legislation passes as it’s written, we’ll lose some of the checks and balances that are in place in the existing system. I have my criticisms of the existing system, but losing those checks and balances would be a retrograde step. We need them. We need more sober second thought before we leap into multi-billion-dollar decisions.

Mr. Peter Tabuns: Which checks in particular are you concerned about?

Mr. Tom Adams: The original design of initially the OPA and now the IESO’s power system planning function anticipated that those power plans would be produced by the professionals and then subject to public review. That provides multiple levels of professional oversight and public participation. All of that is gone under the provisions of Bill 135. Those were valuable criteria in the original design of the hybrid market. Again, I have my criticisms of the hybrid market, but that design had an intelligent concept behind it. The combination of professional drafting of reports and then a public review by an expert administrative law body with specialized energy expertise and the ability to bring public involvement and have cross-examination of witnesses and the testing of evidence””that’s a valuable structure, none of which would apply in the post-Bill-135 world.

Mr. Peter Tabuns: I don’t have further questions. Thank you very much.

The Chair (Mr. Grant Crack): We shall move to the government. Mr. Delaney.

Mr. Bob Delaney: Can large building owners play an important role in reducing greenhouse gases?

Mr. Tom Adams: Yes.

Mr. Bob Delaney: Okay. Currently, many building managers don’t track or measure energy performance, and those building managers that do have no common standard on which to compare themselves across other companies. Should there be such a common denominator to enable companies to benchmark themselves based on a common standard?

Mr. Tom Adams: It would be up to those companies to decide how to allocate their resources in their analysis.

Mr. Bob Delaney: In other words, there should not be a common denominator to enable different companies to exchange information to determine whether they are ahead or behind the curve, above or below the average.

Mr. Tom Adams: We have precedents for companies co-operating in such arrangements; for example, CIPEC, a federally initiated program to encourage companies to share best practices on energy conservation. These are manufacturing and large industrial resource companies. That program has been operating now, I think, for something like 35 years. It has been tremendously successful. It operates on principles of volunteerism. Volunteerism can work. It doesn’t have to have the authority of the state behind it to make it happen.

Mr. Bob Delaney: Just for perspective on the comments that you made regarding the existing or potential motivation of the government, you are the Tom Adams that helped draft the PC energy white paper in the 2014 election?

Mr. Tom Adams: Yes.

Mr. Bob Delaney: Thank you. Thank you, Chair.

The Chair (Mr. Grant Crack): We shall move to the official opposition. Mr. Yakabuski.

Mr. John Yakabuski: Tom, thank you for joining us and for your submission today.

Let me get this clear: In spite of the fact that we’ve seen multiple ministerial directives during this government’s terms of office””more than any other government before, in an exponential way””interfering with the professionals who are supposed to be entrusted to make energy decisions, it’s your position that the provisions in this bill, specifically under the planning side of it, would actually set us up for more ministerial interference and a higher level of ministerial power, where they could simply take the recommendations of the IESO or the Ontario Energy Board and completely ignore them?

Mr. Tom Adams: In the existing system as it has evolved, the agencies are subject to directives but they still hold the pen. Now, under Bill 135, the pen shifts. It’s not even that the directives are necessary any longer; the function of directives in the Bill 135 world is just to ensure that the agencies implement the plan. The direct authorship now would reside with the minister.

Mr. John Yakabuski: So the IESO and the Ontario Energy Board would essentially become empty vessels, and the minister himself””he or she””it would be totally subject to them for the planning decisions.

Mr. Tom Adams: I believe that they become simply extensions of the Ministry of Energy. They have the same governance relationship with the minister, effectively, that the minister has with his own department.

Mr. John Yakabuski: How long have you worked in the energy field? How long have you been an energy analyst?

Mr. Tom Adams: Since the late 1980s.

Mr. John Yakabuski: Since the late 1980s. So we’re closing in on 30 years.

Mr. Tom Adams: Yes, it is closing in on 30 years.

Mr. John Yakabuski: Yes””certainly longer than the Minister of Energy; I’m sure of that.

Have you ever been diagnosed as being a paranoid person? I know I can’t ask you those medical record questions, but””

Mr. Peter Tabuns: Only informally.

Mr. John Yakabuski: Yes, only informally.

Mr. Tom Adams: I’ve been called a lot of names over the years.

Mr. John Yakabuski: So not only do you have more experience in the energy field””we certainly know that the Minister of Energy is not a medical doctor. He’s not capable of making those diagnoses.

Anyway, that is the concern that we continue to have as well: that a government that has controlled this sector with an iron fist, so to speak, which has driven up hydro rates by four times since they’ve gone into office””they’ve made a lot of wrong decisions, obviously. Now we’re actually going to make the individual minister more powerful that they are today if this bill is not amended.

Mr. Tom Adams: The action that’s going on at NAFTA right now, where the Windstream arbitration is being heard as we speak, illustrates beyond a shadow of a doubt the consequences of having a minister with such powers. The potential impacts on the public interest seem to be profound.

Mr. John Yakabuski: And it’s not only that; there’s more than one action at NAFTA as a result of this government’s””

Mr. Tom Adams: There’s a pending decision from another company called Mesa Power. The combined potential downside for the taxpayer is in a range exceeding $1 billion.

Mr. John Yakabuski: Wow.

The Chair (Mr. Grant Crack): Thank you very much. We appreciate it.

Thank you, Mr. Adams, for coming before the committee this afternoon.


  1. All the Hon. Bob Delaney had to say was that you, Tom Adams, wrote a paper for the PCs in 2014!

    Demonstrates the depth of knowledge that the Hon. Delaney has about these issues?

    • The Liberal questioners at all the Ontario legislative committees I have testified to over the last several years have all ask the same time-wasting question. In my non-professional life I often go through a similar experience. I have a dog that loves a good run. My old knees are not up for running anymore, but my kids taught me to unicycle. If surface conditions are good, I usually do more than 100 km per week. Riding a unicycle is weird enough that many people comment. Some are amused. Some express concern for my safety. Others are encouraging. However, a surprisingly large fraction of the comments repeat some version of the same snide remark, “Hey buddy, do you know you are missing a wheel?”

    • U.S. SEC, Form S-1, Filed Aug.9, 2013

      Proposed sale to the public, Class A common shares.

      Portfolio includes:
      St. Joseph, Manitoba, 138 MW
      South Kent, ON 135 MW

      P. 7
      Late in 2009 JV with “Samsung” to develop at least 1,000 MW of wind power in Ontario. > Search Edgar > enter Pattern Energy Group > Pattern Energy Group Inc.

      Go to 2013 filings.

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