Message from the Society President
April 27, 2012
Society to work with government to make sure members views are heard
On March 27th, the government unveiled its 2012 Provincial Budget. It's a wide-ranging plan aimed at balancing the budget by 2017-2018. In all, the government hopes to cut spending growth and contain costs by $17.7 billion over the next three years. Transformation of the public and broader public sectors is a cornerstone of the plan. And that means potentially major changes for OPG, Hydro One, IESO, OEB, ESA, Toronto Hydro and possibly Vertex, Inergi, and New Horizon System Solutions.
The government also introduced a number of other initiatives in recent weeks which will impact the electricity industry and members of the Society.
I want to share information about the key areas that will impact the Society, and what we here are doing to respond.
Under the External Affairs Portfolio, which I chair, we have established the following working groups to deal with the many issues before us.
1. IESO/OPA merger
The government is proposing to create a new entity which would bring together the Ontario Power Authority (OPA) and the Independent Electricity System Operator (IESO) into a single organization that they say would save ratepayers millions of dollars a year and better meet today's electricity supply needs.
Dave Brown (IESO LVP) and Scott Travers (past IESO LVP ) will lead a team that will provide input to the government to ensure that collective bargaining rights are safeguarded and that the move advances more evidence based planning and policy for the electricity sector.
2. OPG/Hydro1 review
OPG and Hydro One are both cited in the Budget for "aggressively driving greater efficiencies in their operations." The government proposes to initiate an independent review of OPG and Hydro One operations to determine further efficiencies and cost savings, and to benchmark the companies against comparable North American entities.
Keith Rattai (Hydro One LVP) will lead a working group to provide the government with insights on benchmarking initiatives. We will endeavour to find out exactly what is meant by benchmarking.
We've got tremendous expertise in the electricity industry and look forward to participating in any activity that leads to opportunities for improvements for ratepayers and our members.
3. Pension reforms
The government believes that single-employer public-sector plan members should share the ongoing cost of their pension benefits equally with the employer. It expects these plans will move to a 50-50 cost sharing formula for ongoing contributions within five years. Employers would continue to be responsible for plan deficits. The government intends to remove a barrier to the creation of new jointly sponsored pension plans specific to the electricity sector following consultation with stakeholders.
Leslie Forge (Executive Vice President, Policy) will be leading the society's review of government proposals and will participate in consultations to ensure our issues are properly considered. Paying more and receiving less is not a viable option. Leslie will lead the implementation of any required SEP actions.
4. Review of Ontario Distribution Sector
The government has appointed a panel led by Murray Elston with David McFadden and Floyd Laughren to consult with municipalities, LDCs, the Electricity Distributors Association and other energy experts, and look at a range of issues including:
- Potential long- and short-term financial savings associated with consolidation
- Benefits for ratepayers
- Long- and short-term operational efficiencies
- Potential risk
The Panel is to report back to the Minister of Energy within a year.
Keith Rattai (Hydro One LVP) will lead a group to investigate whether there can be real opportunities for efficiencies and economies of scale. The group will also advocate strongly against any further privatization of LDCs
The province has been without a long term energy plan since the early 1990s.
Mike Belmore (External Relations Society staff) will lead a group that will work with the government to ensure that the province has a long term plan which is sustainable, reliable and affordable.
6. New Build
Much has been said in recent months about the government's commitment to the refurbishment of Ontario's nuclear units.
What hasn't been talked about and what needs to be put on the government's agenda is the need for new build.
Joe Fierro (LVP OPG) will lead a team to develop strategies for getting the issue on the government's agenda.
7. OEB politicization
The Drummond Report recommended that the government should avoid intervening in Ontario Power Generation or Hydro One's rate filings for the purpose of delaying short term price increases. Too often this leads to greater costs down the road.
We will be impressing upon the government that when regulations or directives are required that impinge on normal utility business practices, the policy objectives being sought must be transparent.
I will be leading this initiative with assistance from the Society's government relations team.
8. Deep Geologic Depository
There is general agreement that the province needs to find a way to dispose of the waste created by our nuclear facilities.
Jose Freire-Canosa (LVP Nuclear Waste Management Organization) will lead a team that will support OPG's efforts to get approval to build a depository at the Bruce Nuclear site which will take medium and lower level waste.
It is vitally important that we be involved in all these processes so that you can be adequately represented and that your interests can be protected. This is especially important around the pension issues, the future of the LDCs and the issue of benchmarking.
I will provide future updates as we begin work on these initiatives, and on any other relevant items, as we gain a better understanding of the scope and path forward.
In the meantime if you have any thoughts or want to provide any input to any of the working groups please get in touch our Communications Officer Bob Kanduth at 416-979-2709 x 4002 or email@example.com