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Inergi Local: Briefing Notes

MPP Briefing notes

Society of Energy Professionals, Inergi Local, September, 2007

WHAT WE ASK:

Please stop the offshoring of electricity sector work. The government needs to protect the electricity sector jobs providing service to Hydro One by implementing a “no-offshoring” clause in their shareholder agreement or via other mechanisms available to them. In fact, the government should call for a “reintegration of the privatized functions” in order to address the challenges facing the electricity sector with the need to build new generation and distribution systems and the upcoming skills shortage as well as to ensure a safe and reliable electricity system for the ratepayers of this province.

WHY?

  1. Dwight Duncan, Minister of Energy remarks, Jan 29, 2007
    • “We believe Ontario’s energy sector agencies are too important to be anywhere but in public hands. These agencies exist to serve taxpayers, not Bay Street.”
    • “…we have a responsibility to make sure Ontarians are getting the most value for their money from our public energy system”.
    • “We want them to examine whether there are specific things we can do to make these agencies more effective.”
  2. Inergi was spun out of Hydro One and is now owned by the private sector.  This is contrary to the principles of our energy sector being in public hands as communicated by the Minister of Energy.
  3. The outsourcing of non-core services to Inergi LP was done in order to prepare Hydro One for privatization which did not occur.
  4. Inergi LP provides valuable information technology, finance, supply chain and other business process operation services to Hydro One, Ontario Power Generation Bruce Power and other Ontario Hydro successor companies
  5. As a result of these critical support functions for Hydro One being in the hands of the private sector whose only motivation is profit, they are at risk of being offshored. 
  6. Our own Auditor General, in his review of Hydro One highlighted the problems of outsourcing. The report shed light on some significant issues that need to be the focus of attention rather than shifting and compounding the problems by moving work overseas.
  7. The owner of Inergi LP is implementing their offshoring strategy and has informed staff that the early deal renewal with Hydro One will contain offshore components.  The members of the Society of Energy Professionals & employees of Inergi LP are concerned with the following impacts to our clients (Hydro One, OPG, Bruce, etc) and the ratepayers of the Province of Ontario:
    • reliability of the power system
    • responsiveness in the cause of a blackout
    • security of data
    • security of the power system
    • financial burden on electricity ratepayers
    • loss of professional jobs
  8. It is imperative to the province of Ontario and the electricity system that these services continued to be supplied on-shore – “made in Canada matters” and the continuation of a safe, reliable and secure electricity system is fundamental and better positioned to achieve using on-shore Canadian talent
  9. The electricity system is very complex and facing huge challenges.  We need these technical services to our energy system here in Canada as we work together to increase our generation and improve our transmission infrastructure
  10. While Capgemini cuts expert electricity staff to move work offshore, the electricity sector is facing a skills shortage that needs to be addressed. Ontario needs the technical expertise in-house, to ensure the long-term stability and reliability of Canada’s electricity industry. The Canadian Electricity Association and Human Resources Canada co-authored a study which identified the need for long term investment in our labour market and succession planning.
  11. Capgemini just completed offshoring 100 jobs from Inergi to INDIA. This is contrary to the OEB filing made by Hydro One regarding the objectives of the deal with Inergi /Capgemini. There have been no job opportunities. There have been no savings to the electricity ratepayers. In fact, exactly one year after this submission Cap Gemini offshored the Markham Accounting Centre to India. Please see excerpt from  OEB submission below:

Filed: August 17, 2005
RP-2005-0020/EB-2005-0378
Exhibit C1
Tab 3
Schedule 1
Page 29 of 68
 
In proceeding with its outsourcing initiative, Networks wished to achieve the following
objectives:

  • Defined service levels
  • Services at lower cost
  • Access to change management and intellectual knowledge that understands Networks business and can provide benefit to Networks operations
  • Improved career opportunities for transferred Networks employees, and
  • Reduced management distraction from operation and maintenance of the Transmission and Distribution system

(Improved career opportunities for transferred Networks employees have resulted  from Capgemini US transfer of its own back-office processing to the Markham  Accounting Centre (MAC). Sixty-eight (68) additional jobs have resulted for 1 the PWU membership; Eighty-nine (89) employees are located at the MAC. Of this total, Seventy-seven (77) were employees redundant to Inergi's needs. Capgemini is also in the process of investigating the movement of IT processing workloads from its US work centres to its newly established Data Centre location in Mississauga.)

Additional Notes of Immediate concern:

  1. The government should be very concerned with the recent news that Infosys Technologies (an Indian IT company) could be interested in bidding on Capgemini. (Reuters article attached below).
  2. Capgemini owns both Inergi LP and New Horizon System Solutions which were spun off from Hydro One and OPG respectively.  Inergi LP and NHSS provide valuable services to Hydro One, Bruce, OPG, and other Ontario Hydro successor companies.  If this bid is successful, many of the important services provided to maintain the reliability and security of the electricity system in Ontario could be in the hands of an owner overseas.  This is contrary to Energy Minister Dwight Duncan's remarks on Jan 29, 2007:
  • “We believe Ontario’s energy sector agencies are too important to be anywhere but in public hands. These agencies exist to serve taxpayers, not Bay Street.”
  • “…we have a responsibility to make sure Ontarians are getting the most value for their money from our public energy system”.

Given the demand on our system, the need for new supply, the results of the Auditor General Report on Hydro One, the skills shortage, etc, it is imperative that the government act to ensure the electricity ratepayers of this province are not left in the dark.  This is a wake-up call for our electricity system and there is a risk that needs to be mitigated.
I believe this matter calls for immediate consideration to re-integrating privatized functions.