February 7th, 2013
On January 16, 2013, I received an anonymous email from “Joe Citizen”. Subject of email, “Enersource OEB Ruling”. He requested that I consider printing his comments and having him as a guest blogger.
So today inside Mississauga Council Chambers I made time to videotape his Enersource OEB Ruling letter and YouTube it. For the record.
As always, the video, complete with video transcript.
ENERSOURCE Ontario Energy Board Ruling –email alert to Mississauga ratepayers from “Joe Citizen” (12:08 min)
[VIDEO TRANSCRIPT BEGINS]
MISSISSAUGAWATCH reading email sent by “Joe Citizen”, Mississauga Council Chambers, February 6, 2013
It is Wednesday, February 6, 2013. I’m here at Mississauga Council. Council has gone in-camera, and in-camera is opposite of what you really think it is. They are going out of camera range and in closed session.
And what I want to do now is take the time to read an email that was sent by “Joe Citizen”. And he asked me if I would publish his letter on my blog.
And I found that kind of strange because my blog is really obscure and there’s, to my knowledge, few readers.
However, I said I would do that. And what I want to do is read the two emails that he wrote me. And this is just for the record.
And he writes —the topic from “Joe Citizen” is “Enersource OEB Ruling” and I’m not even sure —I think OEB stands for Energy, Ontario Energy Board, but let me read it:
I am disenchanted with Enersource, the City of Mississauga, and city council. I love your website and find it very comforting to know there are others out there who question what the city does and tells us.
I am looking for a way to vent about the OEB ruling on Enersource’s rate application and their response to it (as found in the Mississauga News). I would like to remain anonymous though. I was wondering if you might consider printing my comments below. Maybe I could be a guest blogger!?
Anyways, I hope you’ll consider it.
And I’ll show it right there. Okay, so there’s the email.
And in all honesty, while I did videotape all of the Enersource meetings, most of the debates the City had on Enersource between 2006 to current —and have them on hard drive, and everything else, Enersource was not one of my areas of research.
I was more interested in ethical issues.
So I can’t really —I can’t know, the degree to which this letter is actually accurate. And as a result I’m going to read it and produce it verbatim as a guest blog.
Anyway, “Joe Citizen” writes:
I’d like to comment on the recent articles about the OEB’s decision on Enersource Hydro Mississauga’s rate increase application, and the response from Enersource, as reported in the Mississauga News. But before beginning, I’d like to set up the two sides so that the public can get a better perspective.
On one side, we have Enersource Hydro Mississauga. This is a corporation that is owned 90% by the City of Mississauga. The Board of Directors at Enersource includes the mayor, Hazel McCallion, and ward 6 councilor Ron Starr. Hazel McCallion of course was the subject of a judicial inquiry into an aborted land deal that cost Mississauga taxpayers millions, money which went to a company headed by the mayor’s son. Had the deal gone through, it would have netted McCallion junior much more money. The mayor also played dumb on how a 10% owner of the utility, Borealis, got veto power on all decisions related to Enersource. Ron Starr, endorsed by the mayor in the last city election, is no stranger to controversy either. Starr was charged in 2000 with fraud for allegedly mismanaging funds at a children’s camp. The charges were dropped the following year. So right from the top, we have some shady characters.
The Ontario Energy Board (OEB) is an independent, self-financing Crown corporation. The OEB regulates the province’s electricity and natural gas sectors, in the public interest. With regards to the electricity sector, their job is to approve and set delivery rates for electricity distribution and transmission. They also set the price of electricity for certain consumers under the Regulated Price Plan and Time-of-Use plan.They are the industry watch dog, with the public’s interest at heart. It should be noted that the OEB isn’t just a handful of government drones making rulings. They appear to use a variety of outside groups to assist with comparisons and discussions. In the Enersource ruling, it appears the following groups/entities were involved: Energy Probe Research Foundation, Vulnerable Energy Consumers Coalition, Consumers Council of Canada, School Energy Coalition, and the Association of Major Power Consumers in Ontario.
Once I saw the article in the media and Enersource’s response, I headed for the Ontario Energy Board website and downloaded a copy of the actual decision. I would recommend one to do so to get a better understanding of the OEB’s decision. There were essentially three findings that they came down with. The first has been well documented by the media regarding the purchase of the new building and the resulting excessive space that Enersource now finds itself with. Enersource counters by saying that this building was the lowest cost option available. One has to assume that this case was presented to the OEB, and they rejected the argument. In fact, the OEB ruling seemed to indicate Enersource did not provide enough evidence to support a lot of their rate application, much less their building argument. In many cases, it seemed the OEB was doing Enersource a favor and making some comparisons on their behalf.
At face value, the response by Enersource to the public seems valid, but only with regards to the building. The rest of their response seems to be “we have the lowest rates, we know what we are doing, … trust us”. Getting back to the building, one has to believe that either this fact about the new building being the cheapest option was not presented to the OEB, or if it was, it was not sufficient. Perhaps the OEB is saying that even if the new building was the lowest option available, Enersource should have considered options for recouping some money for all of the excessive space they now find themselves with. If it was the lowest option, is it still fair to force that cost on ratepayers? Shouldn’t the utility look into options to mitigate that burden on ratepayers?
On a side note, perhaps Enersource should have considered moving into a better location after the train derailment in 1979. Having the head office for an essential service located right next to a railroad line was probably not a good idea. To remain there after a train actually derailed is an even worse idea.The second point made by the OEB was that Enersource was unable to provide examples of cost/benefit analyses that it had used when deciding whether to proceed with particular projects. They give two examples in the report, but there are sure to be others that weren’t in the report. Only minor items are usually put forth to watch dog entities. With conflict of interest allegations dogging members of the board, are we really to believe that there are no conflict of interest situations going on within Enersource? Why do projects with no apparent benefit go forward? Either for image, or, … somebody is making money in the project.
The third and most troubling finding to me from the OEB report was Enersource’s repeated resistance to the suggestion that it should look to other utilities to assess its own level of efficiency and to examine whether more efficient approaches are available. From the report: “the Board as an economic regulator acts as a proxy for competition, and therefore it is not surprising that comparative analysis would play a part in the Board’s analysis. Enersource maintained that it could demonstrate its level of efficiency by comparing its own performance over time, and the Board agrees that this is one approach to examining efficiency; however, it says nothing about whether the company is as efficient as it could be. For that type of analysis, some form of external comparison or external analysis is required. The company repeatedly stated that it did not compare itself to other distributors when assessing its operations for efficiency.”. The OEB found that Enersource is clearly lagging its peers on OM&A (operating and maintenance costs) measures. The OEB essentially said that Enersource should consider comparing itself with its peers in the industry using common metrics in order to find efficiencies internally before looking to burden ratepayers with cost increases. Enersource seems to refuse this thinking.
[MISSISSAUGAWATCH interrupted by City of Mississauga Corporate Security] Okay. Oh. You mean I gotta go.
MISSISSAUGAWATCH reading email sent by “Joe Citizen” at the “Rogues Gallery”(aka Citizens of the Year), February 6, 2013
No surprise. Security kicked me out. So I’m here in the Rogues Gallery. There are the people who made MYTHissauga, MYTHissauga. So I’m just going to continue reading this last paragraph. Hopefully I’ll be successful.
Okay. Here we go:
This is the key finding for me. One needs only look at the executive parking lot at Enersource to see where they might want to start looking for deficiencies. Is it really necessary for any executive of a public utility to drive a luxury vehicle? Wouldn’t an electric vehicle be a great signal to Mississauga residents? Was it really necessary for Enersource to re-brand itself with a new logo and colors? It’s not like residents have options with regards to electricity. We have to take it from Enersource, at the rates determined by the OEB. A shiny new logo (at whatever cost that might have been) won’t decrease our rates, but only increase them. And along those lines (that we really have no choice), do we really need to follow Enersource on Twitter and Facebook? Other than appearing hip, again, what cost savings do those initiatives provide?
I would strongly urge the ratepayers of Mississauga to do themselves a favor and read the OEB ruling, and like Enersource’s motto says, demand “more”.
And that’s the last of the thing here.
[VIDEO TRANSCRIPT ENDS]
“OMERS CEO Michael Nobrega and Mississauga Mayor Hazel McCallion in congratulatory hug after the televised Enersource public meeting January 22, 2009
Mississauga Councillor Katie Mahoney’s 2010 Financial Statements reveal both Michael Nobrega and David O’Brien donated $750.00 (maximum allowed) to her 2010 re-election campaign.