The Ontario Energy Board will be responsible for enhancing current regulatory practices in several areas including transparency and stakeholder consultation in the near term. On October 1, the Ontario Minister of Energy, Northern Development and Mines, Greg Rickford, announced a series of instructions setting out directions for the OEB, the regulator of electricity and natural gas in Ontario. The instructions were contained in a mandate letter from the Minister to senior staff at the Board.
The Minister summarized his expectations saying, “prudent regulation of the energy sector is not only about setting fair rates and authorizing appropriate capital investment. It is also about serving Ontarians, protecting the interest of consumers, and ensuring the energy system remains sustainable and reliable. Those objectives are now more important than ever.”
In the Minister’s statement of “Priorities for a Modernized OEB” the first item on the list is “Promote openness and transparency, flexibility in approach, and responsiveness to input from stakeholder as key characteristics of the OEB’s organizational culture.” The list identified 17 additional priorities including the following:
• Develop a plan to enhance the efficiency, effectiveness, and independence of adjudicative processes.
• Define robust and outcomes-based Key Performance Indicators (KPIs).
• Review intervenor processes to identify opportunities for operational efficiencies, ensuring that intervenor processes provide substantive value while representing the views of affected consumers in OEB proceedings.
• Reform processes for rule- and code-setting to include a greater role for stakeholders, including consideration of a cost/benefit approach.
Paula Conboy of Sussex Strategy Group observed that “There are several references in the letter and the OEB Modernization Report on the importance of stakeholder engagement.” She cited the following in particular: “Stakeholder engagement is also important when it comes to setting rules and policies that incent or require certain behavior in the energy sector. The [OEB] cannot expect to succeed in its role if it does not have a clear sense of the challenges facing the sector, and developing this clear sense requires two-way communication with the regulatory community so that community concerns are understood”. (This is from the OEB Modernization Report, page 17.)
The Minister said his clarification of regulatory priorities is intended to promote good governance and performance in the following areas:
• Competitiveness, Sustainability and Expenditure Management,
• Transparency and Accountability,
• Risk Management,
• Workforce Management,
• Data Collection, and
• Digital Delivery and Customer Service.
He reiterated that “The OEB must focus on enhancing public trust, promoting transparency and accountability in decision making, reducing regulatory burden and delivering value for money for the people of Ontario while maintaining the integrity of the independent adjudicative process.”
Identifying steps to be taken in the short term, the Minister said, “[T]he early adoption of meaningful key performance indicators, effective stakeholder engagement, and the development of human capital plans could assist the Board of Directors in understanding the current operations of the OEB and in setting expectations as the OEB works towards a longer-term path for modernization.”
With respect to sharing updates on changes to the adjudicative process, the Minister’s letter said, “Stakeholders will also need similar updates and must be consulted in a meaningful way as the OEB goes about this work.”
In an appendix to the letter, the Minister provided more detail on additional “priorities for a modernized OEB.” In particular he said, “The OEB will also embrace the practice of consulting with stakeholders on an ongoing basis regarding all aspects of the OEB’s work. The OEB should ensure that stakeholders from both the electricity and natural gas sectors understand how the new governance structure will operate and should demonstrate that stakeholder input is a meaningful part of setting business plan priorities, developing OEB policies, and measuring performance.”
Both the Board’s plan and the Minister’s priorities draw on the findings of a pivotal report by Richard Dicerni who was recently appointed Chair of the OEB. The OEB Modernization Report was delivered in October 2018 and is available at this location (https://files.ontario.ca/endm-oeb-report-en-2018-10-31.pdf).
In terms of further instructions, the Minister said, “I will continue to use mandate letters to update you on the government’s priorities for the energy sector and my expectations for the OEB in the years ahead.”
Ms Conboy notes that “The OEB will be consulting with stakeholders in developing its Business Plan priorities for the 2021-24 planning period.”