1
    
 1                                            Motions Hearing
 2                                               RP-1999-0034
 3    
 4    
 5    IN THE MATTER OF ss. 19(4), 57, 70 and 78 of the
 6    Ontario Energy Board Act, 1998, S.O. 1998, c. 13,
 7    Sched. B;
 8    
 9    
10    AND IN THE MATTER OF an Ontario Energy Board
11    Staff proposed Electricity Distribution Performance
12    Based Regulation Handbook
13    
14    
15    B E F O R E :
16    R.M. HIGGIN                            Presiding Member
17    G.A. DOMINY                                      Member
18    
19    
20    Hearing held at:
21    2300 Yonge Street, 25th Floor, Hearing Room No. 2,
22    Toronto, Ontario on Tuesday, August 24, 1999,
23    commencing at 0902
24    
25    
26    
27    
28                            VOLUME 1

                                                            2
    
 1                           APPEARANCES
 2    JENNIFER LEA/              Board Counsel, Board
 3    KEITH RITCHIE/             Technical Staff
 4    JUDY KWICK
 5    ROBERT POWER               Power Budd
 6    DAVID POCH                 Green Energy Coalition
 7    ROBERT WARREN              Consumers' Association of
 8                               Canada
 9    RICHARD STEPHENSON         Power Workers Union
10    MARK MATTSON               Energy Probe
11    BILL HARPER                Ontario Hydro Networks
12                               Company
13    DAVID DEJONGH              Enbridge Consumers Gas
14    
15    
16    
17    
18    
19    
20    
21    
22    
23    
24    
25    
26    
27    
28    

                                                            3
    
 1                      INDEX OF PROCEEDINGS
 2                                                       PAGE
 3    Preliminary matters                                   5
 4    Submissions on Motion by Mr. Power                    6
 5    Administrative matters by Ms Lea                     29
 6    Short recess at 0958                                 47
 7    Upon resuming at 1029                                47
 8    Submissions by Mr. Poch                              49
 9    Submissions by Mr. Warren                            52
10    Submissions by Mr. Stephenson                        59
11    Submissions by Mr. Mattson                           64
12    Submissions by Mr. Harper                            68
13    Submissions by Mr. Dejongh                           71
14    Reply Submissions by Mr. Power                       72
15    Short Recess at 1430                                 83
16    Upon resuming at 1240                                83
17    Board ruling                                         85
18    Adjournment at 1245                                  85
19    
20    
21    
22    
23    
24    
25    
26    
27    
28    

                                                            4
    
 1                            EXHIBITS
 2    
 3    NO.                                                PAGE
 4    
 5    01                Excerpt from Administrative        29
 6                      Law in Canada by Sara Blake
 7    
 8    02                Excerpt from Administrative        30
 9                      Law in Canada by Sara Blake
10    
11    03                Document entitled "Background      30
12                      Material to Draft Rate Handbook",
13                      dated August 24, 1999 prepared by
14                      Board staff
15    
16    
17    
18    
19    
20    
21    
22    
23    
24    
25    
26    
27    
28    

                                                            5
    
 1                                           Toronto, Ontario
 2    --- Upon commencing on Tuesday, August 24, 1999,
 3        at 0902
 4                      THE PRESIDING MEMBER:  Good morning,
 5    everybody.
 6                      We are sitting today to hear a motion
 7    brought by Power Budd on behalf of a number of parties
 8    to the RP-1999-0034 proceeding, which is the proceeding
 9    regarding the Board Staff Draft Rates Handbook, that
10    proceeding.
11                      We are here to hear the motion. 
12    Before we get underway, could we start with
13    appearances, please, starting with the applicant.
14                      MR. POWER:  Yes, thank you.  My name
15    is Robert Power, P-o-w-e-r, appearing on behalf of the
16    clients identified in the Notice of Motion.
17                      MR. POCH:  Good morning, Mr.
18    Chairman, Mr. Higgin.  David Poch on behalf of the
19    Green Energy Coalition.
20                      MR. WARREN:  Robert Warren for the
21    Consumers' Association of Canada.
22                      MR. STEPHENSON:  Richard Stephenson,
23    counsel for the Power Workers Union.
24                      MR. MATTSON:  Good morning.  Mark
25    Mattson, Energy Probe.
26                      MS LEA:  Good morning. Jennifer Lea
27    for Board staff.
28                      MR. HARPER:  My name is Bill Harper. 

                                                            6
    
 1    I'm appearing on behalf of the Ontario Hydro Networks
 2    Company.
 3                      THE PRESIDING MEMBER:  Thank you.
 4                      MR. DEJONGH:  Good morning.  David
 5    Dejongh, D-e-j-o-n-g-h, on behalf of Enbridge.
 6                      THE PRESIDING MEMBER:  Any other
 7    appearances?  There being none.
 8                      The way we will proceed, as those of
 9    you who have been before the Board before will know, we
10    will start with the applicant bringing the motion. 
11    Then Ms Lea, on behalf of Board staff, will have some
12    comments to assist the Board and also the other
13    intervenors.  Those that see themselves as being in
14    substantial support of the motion will then follow,
15    those opposed, and finally the reply from the
16    applicant.
17                      Are there any preliminary matters
18    before we get underway?  Just to note, our time frame
19    for this proceeding is up until one o'clock.  Several
20    parties are scheduled to appear in the Consumers or
21    Enbridge proceeding next door at that time, so we would
22    like to try and be expeditious and have it completed by
23    that time.
24                      Thank you very much.
25                      Mr. Power.
26    SUBMISSIONS
27                      MR. POWER:  Thank you, sir.  Just by
28    way of background in terms of the materials before all

                                                            7
    
 1    of us, there is the affidavit of Alexander Grieve, the
 2    letter from Frontier Economics of August 18, the report
 3    of Frontier Economics entitled "Initial Critique of the
 4    Distribution of PBR Proposal in Ontario".
 5                      Then I have provided to each of you
 6    and Board counsel two brief excerpts from Blake
 7    Administrative Law in Canada.
 8                      This motion is primarily for an
 9    adjournment based upon two fundamental principles.  One
10    is the right to know the case to be met and, secondly,
11    a reasonable time to prepare prior to the proceeding
12    beginning.
13                      In our view, in the context of this
14    proceeding, the case to be met includes comments that I
15    will make on the draft PBR Handbook, the supplemental
16    materials that have since come out, comments regarding
17    underlying materials to both of those documents and,
18    finally, the fourth is the availability of Board
19    consultants or staff to answer questions in this
20    process.
21                      If I can start with the handbook by
22    way of context to its release this summer, it is by, I
23    think, everybody's agreement and recognition a very
24    complex document.  As we can see from a number of the
25    comments that have been made by the parties who will be
26    participating in the workshops and the documents that
27    they have filed, that document is incomplete and is
28    unclear in many different ways.

                                                            8
    
 1                      It's incomplete in that further
 2    information appears to be integral to the handbook and
 3    was not provided in it.  This has significantly
 4    hampered the analysis which has been undertaken to
 5    date.
 6                      Thus, if you read through a number of
 7    the submissions, you will see many caveats in there,
 8    particularly in the more detailed ones, that they
 9    couldn't complete their work because they didn't have
10    sufficient information or a lack of clarity in the
11    documentation provided.
12                      The supplemental materials were hoped
13    to be the answer to many of these concerns, but as we
14    have now just recently seen, supplemental materials are
15    actually very thin.  I believe it was released
16    essentially just last week on the Board Internet site. 
17    We are not certain of the specific date.  Although it's
18    dated earlier, I can tell you that we were only told of
19    it by circumstance last week.
20                      There was no notice of its
21    availability from the Board or the Board staff.  I can
22    tell you that as of yesterday we were speaking to
23    intervenors who had no knowledge that it had been
24    released.
25                      The web site, yes, it's there, but in
26    terms of people in this proceeding, there was no
27    knowledge of it.  The document hasn't been served and
28    people haven't had an opportunity to review it.

                                                            9
    
 1                      I can't help but note Board Rule 18,
 2    which I would think at least the principle should apply
 3    here, regarding the production of documents, of its
 4    relevant document.  The document should be served.  If
 5    it hasn't been served or at least notice given on where
 6    to find it, I think there is a high likelihood that one
 7    or more of the intervenors is going to be prejudiced in
 8    these proceedings.
 9                      I think for even those of us who
10    found about it last week, we are scrambling to try and
11    figure out whether it answers all of our questions. 
12    Our preliminary conclusion is that it does not.  I
13    think others are in a worse situation.
14                      At the end of the day, the
15    supplemental materials which everybody was hoping would
16    provide the majority of the answers are extremely thin. 
17    They don't answer a number of the questions that have
18    been expressly raised at the workshops which were held
19    by staff and which were useful, but which did not get
20    into many of the questions raised at that time, so we
21    are still left with a whole range of questions that we
22    suspect could be answered if the materials were more
23    complete.
24                      Unfortunately, this leaves us with an
25    impression that the document has been rushed out the
26    door last week, perhaps understandably, to help the
27    parties to be able to participate in this proceeding,
28    but, unfortunately, in a fashion which has not been

                                                           10
    
 1    helpful, at least to the people who are advising our
 2    various clients.
 3                      There appears to be, and I have had
 4    preliminary discussions with Board counsel, Ms Lea, a
 5    number of additional materials which had been relied
 6    upon by, I presume, the Board's experts.  Certainly in
 7    speaking with the experts and technical advisers that
 8    we have been chatting with, there is at least
 9    assumptions that there is considerable more
10    information.
11                      I am thankful that Ms Lea did provide
12    me this morning with a listing of documentation dated
13    August 24, 1999, which outlines the background
14    materials to the draft handbook.
15                      If you turn to the Frontier Economics
16    letter of August 18, which was provided with our
17    submission on behalf of our clients, in the August 18
18    letter, Frontier Economics there indicates that they
19    have only had an opportunity to do, in their words, a
20    high level discussion of the issues given the limited
21    amount of time to prepare and that there are two
22    important pieces of work left to do which may or may
23    not validate their high level assumptions, but until
24    they complete that work, they are not certain.
25                      First is a thorough and efficient
26    productivity analysis which is different than the one
27    undertaken by the Board's consultants as a check on the
28    methodology used there.

                                                           11
    
 1                      Second was simulation of the
 2    behavioural effects of this proposed sliding scale
 3    mechanism on the utilities themselves.
 4                      In the letter, they go on to explain
 5    the relationship to that, but you will see, beginning
 6    in the middle or the bottom of page 1, they would
 7    envisage that there's a database which includes a
 8    number of things.
 9                      They go on and list quite a category
10    of information which in their experience, and their
11    experience is considerable, they have advised a number
12    of regulators, industry and others on PBR related
13    mechanisms which, in their experience, this sort of
14    stuff is the norm.  They haven't seen it here.
15                      They wonder whether there is a
16    software model used in this.  They don't know.  I have
17    since, I think, been advised that there wasn't, but
18    they raise that question for your consideration.
19                      We are left in a position that in
20    addition to the documentation going into those
21    proceedings which is available, there is at least an
22    assumption by those who seem to have considerable
23    knowledge that there is either significantly more
24    information which you would normally rely upon in
25    developing a handbook such as the one that will be the
26    essence of these proceedings or, if there hasn't been
27    that information collected and analyzed in part of it,
28    then they should understand because obviously there are

                                                           12
    
 1    some gaps there that they think are important to know
 2    of.
 3                      I do understand that the Board
 4    consultants have taken the position that some data is
 5    confidential.  There is these various task forces that
 6    occurred over the earlier part of the year and I
 7    understand out of that process, or separately from it,
 8    a number of utilities participated in a questionnaire
 9    type format which provided information.
10                      The importance of this, as we
11    understand it, is that these utilities, I think some 40
12    out of the Province of Ontario that participated, had
13    been assumed to be representative of the utilities
14    across the province.  There are questions regarding,
15    you know, are they indeed representative.  If they are
16    representative, is it an appropriate sample size.
17                      Certainly, given the comments I have
18    heard, there is a lack of homogeneity amongst municipal
19    electrical utilities in the Province of Ontario.  So
20    how is that lack of homogeneity dealt with in that
21    sample size, its selection and the characterization and
22    the information from that.
23                      But perhaps more importantly is our
24    information that the information from that
25    questionnaire is generally publicly available
26    information.  I have only had the opportunity to speak
27    to one or two of the people.  We don't know who all
28    participated in it.  They have advised me that

                                                           13
    
 1    everything in there is publicly available through the
 2    traditional data which is collected by Ontario Hydro
 3    and through their own utilities and made public.
 4                      Now, I guess that means we could try
 5    and track down the 40 or whatever number there are and
 6    get that information from them independently and try
 7    and pull it together and assess the representative
 8    data.  But in these tight time constraints, that is
 9    just impractical to be honest.
10                      So in our view, that information,
11    from everything we have heard, is not confidential.  It
12    should be readily available, and in fact it is a
13    foundation piece of evidence that could be particularly
14    important to these proceedings.  Particularly because I
15    think one of the themes that you are going to hear
16    throughout this is that there is a significant lack of
17    homogeneity and we shouldn't be quick to over-represent
18    what we have learned from the study of some utilities
19    when applying it to other utilities.
20                      Now, if the Board's consultants are
21    going to continue to claim confidentiality, I have only
22    heard this as a general statement, I would suggest that
23    Board's Rule 13 applies here directly.  There should be
24    some explanation for the rationale.
25                      At a minimum, I think they should
26    turn their mind to what information is publicly
27    available and they should hand that over and what
28    information is truly confidential commercial

                                                           14
    
 1    information, identify that, give the rationale and then
 2    make the rationale publicly available.  In accordance
 3    with the Board's proceedings, we can have a look at
 4    that time and decide whether we have enough and we
 5    don't have to worry about this other information. 
 6    People may well be content and they can go away.
 7                      Or, if the feeling is it is critical
 8    information, in fact it is not confidential, or there
 9    is a public need to see that information that is
10    stronger than the importance of protecting this, then
11    the information should be made available.  But I think
12    we could streamline that fairly quickly if that
13    information was put in front of us with some rationale
14    for what is being held back.
15                      I don't know -- I would like to turn
16    my comments now to the availability of the Board's
17    consultants.  I don't know whether in the tight time
18    constraints of these proceedings we could do the
19    following, but it would be extremely helpful.  I think
20    this is one of these cases where matters are extremely
21    technical and have occurred very quickly and they have
22    occurred with a stakeholder group that has little
23    experience with the subject matter of the proceedings. 
24    So they are all at a disadvantage.
25                      That being said, since the PBR
26    Handbook has been released, people have been turning
27    their mind to it and getting up the learning curve as
28    quickly as they can.  If we had time, if I had my

                                                           15
    
 1    druthers, the Board's consultants would be made
 2    available, prior to any technical workshops or
 3    proceedings, to meet with the consultants and volunteer
 4    technical advisers of the other groups or that you can
 5    lock them in the room -- I am assuming a fairly small
 6    group of people -- for a couple of days.  Because I
 7    would expect or suspect that a lot of what is going on
 8    here is that the lack of information is creating some
 9    confusion that can be readily addressed.
10                      So if there is a way to help the
11    proceedings, if time permitted, I would suggest that
12    that might be a useful exercise of time and resources.
13                      I note that the presentations held by
14    Board staff across the province were a good start in
15    starting to raise the awareness level of people
16    generally and the affected stakeholders, but it was a
17    high-level presentation only.  I note that many of the
18    questions which were raised at that time during those
19    proceedings or those workshops have been unanswered.
20                      Now at the time, commitments were
21    made, which people had been relying on, that the
22    questions raised there would be answered in a timely
23    fashion.  The mechanism through which they would be
24    answered was the Board's web site.
25                      Now, if you go to the web site, which
26    a number of people have, you will note that a number of
27    these questions have not been answered, or if they
28    have, then it is not readily available for you to find

                                                           16
    
 1    them.  I just printed a couple of them here; one dated
 2    August 9th.
 3                           "When will the answers to the
 4                           questions asked of the OEB staff
 5                           be posted on the web site?
 6                           Important questions were asked
 7                           at the meetings and many of us
 8                           are awaiting the responses." (As
 9                           read)
10                      I mean there is a number of questions
11    on there that, from what we can tell, haven't been
12    answered which would be extremely helpful.  To be
13    honest, we were hopefully going to have them before we
14    would be here today.
15                      If Board staff or the Board
16    consultants are having difficulty answering these
17    questions, either because of their technical difficulty
18    or the time required to respond and they are the
19    keepers of the handbook so to speak and the concepts
20    behind it, you can only imagine the difficulty people
21    have who are relatively fresh to this in trying to
22    understand and get to the essential issues.
23                      So I can't help but note the
24    inability to get some of this information.  To me it is
25    indicative of the difficulty of the subject matter that
26    we are all grappling with, and weighs, I think, very
27    heavily in support of an adjournment of these
28    proceedings.

                                                           17
    
 1                      Now, I have talked predominantly
 2    about the issues surrounding the principle that you
 3    have a right to know the case to be met.  I have
 4    alluded to but I would like to talk briefly a bit more
 5    about the adequate time to prepare.
 6                      I think everybody in the industry is
 7    trying to do the best they can to meet the stated
 8    overall objectives of the province in trying to bring
 9    competition in next year.  I don't think there is any
10    foot dragging out there.  There are leaders and there
11    are followers but the industry is generally moving to
12    where it has to move and it knows that.
13                      As a result, there is a terrific
14    amount of pressure on the stakeholders in a variety of
15    fronts.  As you are probably well aware, there are
16    municipalities now who think they are owners and are
17    taking over the leadership of the utilities.  There are
18    questions as to who can now make corporate decisions. 
19    There are questions as to who gives instructions and
20    who you take instructions from now and a variety of
21    corporate culture changes that are occurring in a
22    number of these.  All of them have the resources
23    stretched very thin trying to understand the magnitude
24    of the changes that are coming down the pipe.  It is
25    fair to say that just about every aspect of every
26    operation is going to be affected.
27                      PBR is going to be fundamental to the
28    wire side of the operation.  It literally affects every

                                                           18
    
 1    job in every utility.  Every employee in every utility
 2    is extremely aware of the impact of this new commercial
 3    regulated world that is coming down the pipe.  As a
 4    result of that, I can assure you there is no lack of
 5    top-down awareness in the importance of this handbook. 
 6    So people want to get on to it and they want to
 7    understand it and they want to understand it as quickly
 8    as possible.
 9                      But given the constraints that I have
10    just outlined before, I think it is not unreasonable to
11    appreciate that there is no time to properly prepare,
12    to turn up at the proceeding next week and truly
13    understand the issues that are going to affect your
14    utility moving out over the next two, three, four
15    years.
16                      If the handbook is deficient, 
17    supplemental materials, many parties don't know of
18    them, they are fairly thin, there appears to be more
19    information available and the questions and answers on
20    the web site aren't answered, I don't know how there
21    can be time to get all that out between Friday and have
22    people prepared for next week.
23                      Add to that the practical stream in
24    all the project management issues that we all face of
25    hiring consultants, getting them on budgets.  Their
26    budgets are based on an understanding of how much
27    information is available that they have to review.  If
28    you are working with multi-parties trying to get

                                                           19
    
 1    sign-off from everybody and if the Board wants
 2    multi-parties to work together, there has to be some
 3    recognition of the time that it takes to get all these
 4    people to sign off and come together.
 5                      We had it all Friday.  I think there
 6    is still insufficient time to digest the information
 7    which is available and I can't help but note, as many
 8    parties have, this is the peak holiday season, which
 9    has not helped.
10                      In our case, Mr. Adamson has had
11    long-standing family commitments over the last couple
12    of weeks.  We haven't had the benefit of him.  The
13    other consultant that we have been relying on,
14    unfortunately has gone on holidays last week and he
15    took the same position Mr. Adamson, which is, in our
16    business, August, early September is the standard time
17    in the regulated world when you have time off.  Most
18    people plan around that.  It has not been helpful in
19    terms of the timing of this on top of everything else.
20                      I had the difficulty of not knowing
21    whether I have our expert, who we paid to do the work,
22    to even attend next week at the proceedings.  That is a
23    very fundamental practical problem.
24                      In summary, a little bit more time I
25    think would resolve a number of those questions.  I
26    think it would also enable us, as the intervenors to
27    these proceedings, to have a fair amount of time to
28    read the other submissions that have come in and find

                                                           20
    
 1    some commonality and end up in front of the technical
 2    proceedings, and ultimately in front of you in a much
 3    better position than if we simply race into this next
 4    week and then do an oral submission, as I understand
 5    the process to be fairly mealy on the heels of that
 6    before even half of the key client representatives are
 7    back and some of the consultants and technical advisors
 8    are back.
 9                      I just note for your information, I
10    don't know whether you have had an opportunity to go
11    through the submissions, but I will just highlight a
12    number of the comments I picked up last night.  From
13    the MEA there are a number of errors and omissions in
14    the PBR Handbook.  It is an extremely tight time frame. 
15    They have had an inability to consult with their
16    stakeholder group.  The number of initiatives over the
17    summer have stretched the resources.  In their view the
18    task force consensus is unclear at best.  As a result,
19    they are only in a position to give you a preliminary
20    analysis because the information is incomplete. 
21    Ontario Hydro Servco:  more information required to
22    fully assess.  Toronto Hydro:  incomplete
23    understanding, more details required, several items
24    that require further detail and elaboration.  Upper
25    Canada:  time constraints artificial, the process is
26    rushing to arbitrary goals.  Ottawa Hydro:  the degree
27    of uncertainty makes it difficult to comment on the
28    impact of rates and disadvantages for efficient

                                                           21
    
 1    utilities.  Halton Hills:  summer vacation, the short
 2    time frame makes it unable to obtain from instructions. 
 3    They can only therefore merely list the issues.  No
 4    detailed analysis can be done at this time.  There is
 5    some comments on the other ones.
 6                      There is a theme that is woven
 7    through all the submissions, particularly the more
 8    detailed ones, the ones who have actually tried to do
 9    the most work to understand the issues.  The more work
10    they do the more they understand that we are in a
11    deficiency in terms of the information.
12                      It is clear that there is a serious
13    prejudice to these intervenors if the process as we
14    understand it is that the technical workshops begin
15    next week.  There are only four days.  It is going to
16    be extremely tight.  People will be unprepared.  On the
17    basis of that record only we then appear before the
18    Board in the short time frame thereafter and make oral
19    submissions on a record which is deficient.  I don't
20    think you can reach any other conclusion than that
21    there is going to be serious prejudice to the
22    intervenors.
23                      But perhaps more importantly, I would
24    have hoped that what we want on PBR is a reasoned
25    debate, a well thought-out debate, because it is going
26    to fundamentally affect how utilities govern
27    themselves, and perhaps more importantly how their
28    municipal owners view them, because they can tell you

                                                           22
    
 1    there is some utilities out there that as a result of a
 2    PBR Handbook now believe they have lost one in excess
 3    of $100 million to their value.  Their municipal owners
 4    are now asking whether you are going to be able to
 5    operate at that efficiency level.  Does it make sense
 6    or should we simply sell you off to somebody who says
 7    they can run you better?  I mean, if you are advising
 8    municipal councils on the future and what they should
 9    do, these are basic business questions that you have to
10    address and different municipal councils are going to
11    take different positions on them.
12                      If I could, that is an overview of, I
13    guess, the concerns, if I may, that we have heard and I
14    bring to you.
15                      I would just like to touch on some of
16    the principles from Sara Blake's "Administrative Law in
17    Canada" that you have there before you.  On the one
18    marked No. 1, it talks about some of the principles of
19    the disclosure, the case to be met.  I have highlighted
20    some relevant sections there.  This is really just an
21    overview:
22                           "Fairness requires that a party
23                           to be affected by a decision
24                           have an opportunity to make
25                           representations.  To do so, the
26                           party must first be informed of
27                           the case to be met.  Without
28                           knowledge of the matters at

                                                           23
    
 1                           issue one cannot effectively
 2                           exercise one's right to be
 3                           heard.  An opportunity which
 4                           cannot be used is no opportunity
 5                           at all.  In particular, a party
 6                           is entitled to be informed of
 7                           any information that is relevant
 8                           and prejudicial to the party's
 9                           interests.  Any information that
10                           might work to the prejudice of
11                           the party must be disclosed to
12                           that party.  Actual prejudice
13                           need not be established.  If
14                           there is a reasonable likelihood
15                           of prejudice the information
16                           must be disclosed."
17                      Down below there:
18                           "A prudent tribunal would
19                           disclose any information it has
20                           in connection with the matter,
21                           irrespective of whether it will
22                           be taking it into account in the
23                           decision.  By doing so it would
24                           offset any allegation that it
25                           considered undisclosed
26                           information in making its
27                           decision."
28                      Then at the tail-end of that

                                                           24
    
 1    particular excerpt:
 2                           "A tribunal may not be expected
 3                           to disclose confidential
 4                           information such as information
 5                           involving prison security, the
 6                           identity of informers, business
 7                           secrets [which is the relevant
 8                           issue here] or medical files of
 9                           psychiatric patients.  However,
10                           information may not be withheld
11                           solely because it is a type of
12                           information that is generally
13                           regarded as confidential. 
14                           Specific information should be
15                           protected only if harm would be
16                           caused by disclosure of its
17                           contents and only to the extent
18                           necessary to avoid the harm. 
19                           Because this is an exception to
20                           the general rule requiring
21                           disclosure, it should be
22                           cautiously considered.  The
23                           general rule of full disclosure
24                           should be followed as far as
25                           possible.  Statutory provisions
26                           that expressly exempt
27                           information from being disclosed
28                           are strictly construed. 

                                                           25
    
 1                           Information may be revealed
 2                           without disclosing the names of
 3                           the informants [in different
 4                           contexts]."
 5                      Down below:
 6                           "If valid reason exist for
 7                           refusing to disclose information
 8                           to a party, counsel representing
 9                           the party may be permitted to
10                           peruse the information on an
11                           undertaking not to disclose any
12                           information to the client and to
13                           use the information only for the
14                           purpose of the proceeding."
15                      In this case, I would read in there
16    that the consultants or technical advisors to parties
17    should have the right to peruse the information.
18                      On the back, the last page there:
19                           "Disclosure should be timely. 
20                           There should be sufficient time
21                           after disclosure to permit the
22                           party to review the information
23                           and to prepare its case to meet
24                           the newly disclosed information. 
25                           An adjournment may be necessary
26                           for this purpose.  Waiver of
27                           disclosure may be impossible
28                           because one cannot waive without

                                                           26
    
 1                           knowing what one is waiving. 
 2                           The failure of a party to
 3                           request particulars does not
 4                           relieve a tribunal of the duty
 5                           to provide particulars."  (As
 6                           read)
 7                      That is an overview of the basic
 8    principles regarding the case to be met and the
 9    importance of it.
10                      In the second excerpt there, Miss
11    Blake provides some of the principles regarding
12    adjournments.
13                      On the first page there:
14                           "Although adjournments are
15                           within the discretion of the
16                           tribunal, a tribunal should
17                           grant an adjournment when
18                           necessary to ensure a fair
19                           hearing.  A requirement that a
20                           decision be rendered within a
21                           specific time limit does not
22                           prevent the tribunal from
23                           adjourning a proceeding to
24                           secure a fair procedure.  A
25                           tribunal ought not to insist on
26                           meeting all time limits or
27                           unfairness to a party would
28                           result.  An adjournment is

                                                           27
    
 1                           typically granted where has a
 2                           party has received short notice
 3                           or late disclosure of the case
 4                           to be met."  (As read)
 5                      On the next page she highlights the
 6    various factors to consider:
 7                           "Various factors are relevant
 8                           when considering whether to
 9                           adjourn.  The most important is
10                           the requirement to a fair
11                           hearing.  This requirement may
12                           be balanced against the
13                           tribunal's statutory duty and
14                           the need to resolve disputes
15                           expeditiously and to avoid
16                           delay.  There may be a greater
17                           need for an adjournment in a
18                           complex case [which is what we
19                           have here] requiring additional
20                           time for preparation than in a
21                           case where the issues are
22                           simple.  Greater weight may be
23                           given to the interests of a
24                           party whose livelihood is at
25                           stake than to those of an
26                           intervenor."  (As read)
27                      Of course, what PBR is all about is
28    certainly the livelihood of the utilities and their

                                                           28
    
 1    employees in the new world.
 2                      In closing, the Notice of Motion lays
 3    out the relief that we have sought.  To be honest, when
 4    we first considered it we actually would have liked to
 5    not have to file submissions until October because the
 6    preliminary thoughts amongst the group is that until we
 7    get the consultants back and obviously the ability to
 8    get instructions is going to take a couple of weeks. 
 9    When we had drafted September 3rd in there for the
10    filing of submissions by the intervenors, I must say
11    that is extremely aggressive.  Now, I understand one of
12    our other consultants is unavailable to us and I don't
13    know how the other parties are affected, but I might
14    modify this.  In fact, I would suggest modifying the
15    Notice of Motion and suggest about a week after
16    September 3rd for the filing of submissions and we
17    could live with the rest of the dates in there.
18                      But I think the key to this --  we
19    learned this from the standard supply code
20    proceedings -- is getting as much thought in advance of
21    going into the technical workshops.  The value really
22    came around the germination process that goes on in
23    ruminating through the data, coming to your position
24    and having it attacked by your stakeholder group to
25    make it better and more accurate and stuff that they
26    can live with.  So you get a position of the full group
27    brought forward rather than formulating it as you go
28    through the proceedings.

                                                           29
    
 1                      Mr. Chairman, those are all my
 2    comments.
 3                      THE PRESIDING MEMBER:  Thank you.  We
 4    hold most of our questions until later, I think, but a
 5    couple of clarifications.
 6                      You are then in essence suggesting
 7    that ground No. 2 be amended to September 10th?
 8                      MR. POWER:  Yes, sir.
 9                      THE PRESIDING MEMBER:  For the filing
10    of submissions and the rest of your proposed schedule
11    of relief should stand?
12                      MR. POWER:  Yes, sir.
13                      THE PRESIDING MEMBER:  Okay.  Thank
14    you.
15                      We will go to Ms Lea and have some
16    comments from her on behalf of --
17                      MS LEA:  Thank you.
18                      I would like to begin with a couple
19    of administrative matters.  I don't think we have an
20    exhibit list prepared for this motion, but I would like
21    to just create one now, if it please the Board.  The
22    excerpts that Mr. Power has provided, I think the first
23    one he read from labelled "1" should be Exhibit 1.
24                           EXHIBIT NO. 1:  Excerpt from
25                           Administrative Law in Canada by
26                           Sara Blake
27                      MS LEA:  The second excerpt which he
28    has labelled "2" should be Exhibit 2.

                                                           30
    
 1                           EXHIBIT NO. 2:  Excerpt from
 2                           Administrative Law in Canada by
 3                           Sara Blake
 4                      MS LEA:  The document prepared by
 5    Board staff, which is dated August 24, 1999 and is
 6    entitled "Background Material to Draft Rate Handbook",
 7    copies of which are on the windowsill, I would ask that
 8    that be made Exhibit 3 in these matters.
 9                           EXHIBIT NO. 3:  Document
10                           entitled "Background Material to
11                           Draft Rate Handbook", dated
12                           August 24, 1999 prepared by
13                           Board staff
14                      MS LEA:  Now, does the Board have
15    copies of two letters which we have received, one on
16    behalf of the Upper Canada Energy Alliance which has a
17    North Bay Hydro logo at the top?  If you already have
18    had it I don't think we need to make that an exhibit,
19    but I can offer my copy to parties to look at.
20                      THE PRESIDING MEMBER:  We have that
21    one.
22                      MS LEA:  Thank you.
23                      Do you have a document which we
24    received this morning from the Municipal Electric
25    Association, dated August 23, 1999?
26                      THE PRESIDING MEMBER:  That's the one
27    signed by Jerry McIntyre?
28                      MS LEA:  That's correct.

                                                           31
    
 1                      THE PRESIDING MEMBER:  We have that.
 2                      MS LEA:  I don't know whether that
 3    one has been provided to parties.  I know Mr. Power did
 4    not have it.  Just for expediency I think I will read
 5    it into the record if that's acceptable.  It reads:
 6                           "Re Notice of Motion on
 7                           Performance Based Regulation
 8                           Rate Handbook Proceeding.
 9                           With respect to the Notice of
10                           Motion filed by a group of
11                           intervenors represented by the
12                           firm of Power Budd, dealing with
13                           procedural matters related to
14                           the PBR Rate Handbook
15                           Proceeding, the MEA would like
16                           to express its support for this
17                           motion in order that more time
18                           be available to carry out
19                           further analysis on the issues
20                           identified in the MEA's August
21                           18th submission and to review
22                           any reports, studies and
23                           background materials relied upon
24                           by the Board's consultants in
25                           formulating their input to the
26                           Rate Handbook which may be made
27                           available." (As read)
28                      I have no other documents before us

                                                           32
    
 1    that I think need to be recognized at this time.
 2                      THE PRESIDING MEMBER:  There is a
 3    letter from Miller Thompson --
 4                      MS LEA:  I don't think I have seen
 5    that one.
 6                      THE PRESIDING MEMBER:  He says:
 7                           "Please be advised that Miller
 8                           Thompson LLD, will not be
 9                           entering an appearance in
10                           respect of the above referenced
11                           motion.  Please be further
12                           advised, however, that Miller
13                           Thompson LLD, on whose behalf it
14                           has intervened in the above
15                           proceeding to force the
16                           positions taken by Power Budd in
17                           their motion." (As read)
18                      Signed by Adrian Phillips.
19                      MS LEA:  Dated?
20                      THE PRESIDING MEMBER:  Dated August
21    23rd.
22                      MS LEA:  Thank you.
23                      Can you tell from that letter, sir,
24    who they are representing?
25                      THE PRESIDING MEMBER:  I can't tell
26    from the letter.  I would have to look at the list of
27    intervenors.
28                      MS LEA:  All right.

                                                           33
    
 1                      Just in a general sense, but --
 2    --- Pause
 3                      MS LEA:  Thank you.  I have the
 4    letter.
 5                      If the information is not readily
 6    available, sir, I can certainly look at it later.  It
 7    is not something I have to have now.  Thank you.
 8                      THE PRESIDING MEMBER:  I just haven't
 9    been able to identify all the intervenors.
10                      MS LEA:  We have a list too that we
11    can look up.  Thank you.
12                      I would like to put a few comments on
13    the record that in part explain I think the Board's
14    staff and its consultant's views on these matters, and
15    deal with some of the suggestions that we both make and
16    seek regarding this proceeding.
17                      I would like to first deal with the
18    question of information provided to parties.  As you
19    will see from the list that we have provided,
20    "Background Materials to the Draft Rate Handbook",
21    nearly all of the information relied upon by the
22    consultants, I am advised, has been publicly available,
23    much of it on the Board's web site.
24                      These documents that are listed in
25    this background materials document, I am informed, are
26    everything the consultants relied upon, with the
27    exception of one series of items that I will discuss in
28    a moment.

                                                           34
    
 1                      Just to draw a couple of items to
 2    parties' attention, if you look at Item No. 16, which
 3    is the first one on the second page, "The Productivity
 4    and Price Performance for Electric Distributors in
 5    Ontario", that document contains in Appendix A
 6    aggregated data for utilities and also the data for one
 7    particular utility in a spreadsheet.
 8                      Now, Mr. Power's consultant talked
 9    about computer programs.  As far as I am aware, there
10    is no computer program.  There is a spreadsheet, an
11    Excel spreadsheet, however, that was used in
12    calculations.  In Appendix A to document 16 there is a
13    complete calculation which demonstrates exactly how
14    that spreadsheet works and uses actual data from one
15    utility that consented to the data being used for that
16    purpose.  You may find that document helpful.
17                      Document No. 19, the Ontario Hydro
18    statistical yearbook, contains much of the data that I
19    believe Mr. Power's consultant is seeking.  It contains
20    detailed data for utilities in Ontario, and that
21    document in combination with the spreadsheet may be
22    sufficient, I don't know, Mr. Power and his consultant
23    may have to help me, may be sufficient to give them the
24    information they need.  So, I would recommend that
25    document to Mr. Power and other intervenors' attention.
26                      Documents 26 and 27 are also
27    spreadsheets.  You can see the references there to
28    where they can be found.  These spreadsheets were

                                                           35
    
 1    developed during the Task Force Report and certain
 2    stakeholders, including clients of Mr. Power and others
 3    here, have been involved in those task forces and have
 4    access to those spreadsheets.  So, we would recommend
 5    Nos. 26 and 27 also particularly to parties' attention.
 6                      Please let us know if there are other
 7    background materials that we have not listed here that
 8    we believe have been used.  We believe we have
 9    presented you with a complete list there.
10                      It is obviously not Board's staff or
11    its consultant's intention to hide anything from
12    anyone.  We didn't realize there was any confusion as
13    to what had gone into the background materials in
14    preparation because so much of it had been publicly
15    available.
16                      Now, there is also some data that was
17    collected by Board staff's consultant from utilities
18    which is utilities specific data -- data of the nature
19    that is referred to in the consultant's letter that Mr.
20    Budd has -- pardon me, Mr. Power has put before us. 
21    I'm sorry, I am so used to dealing with your partner in
22    these matters, Mr. Power.  The letter of August 18 from
23    Frontier Economics.  Some of that data, as I said, you
24    will find in the Ontario Hydro yearbook.
25                      We also collected from a number of
26    utilities the utilities specific data.  At the time
27    that it was given to us, it was given to us on the
28    condition that it would be kept in the strictest

                                                           36
    
 1    confidence and be disclosed to no one.  Some of the
 2    utilities consider this data very commercially
 3    sensitive, especially at this time when the purchase
 4    and sale of utilities, the electric utilities, is being
 5    considered.
 6                      So, we cannot agree to disclose that
 7    data because it is not up to us to waive that
 8    confidentiality.  It is not our information.  We don't
 9    want to break our promise to those utilities.
10                      If, however, those utilities consent
11    to it being put on the record, we have no problem with
12    that at all.  So, it's not the consultants or Board
13    staff that are seeking to keep this information
14    confidential.  We are attempting to keep our promise. 
15    We said that it would be disclosed to no one.
16                      So what I would suggest is that if
17    Mr. Power is aware that certain utilities consent to
18    the release of this data we don't have a problem with
19    it.  Also, it may be possible for Mr. Power and
20    ourselves or whoever, if Mr. Pastini wants to suggest,
21    may be able to figure out a way to get him the
22    information he needs.  We don't want to hide anything. 
23    We merely want to keep confidential what we promised we
24    would do.
25                      I would ask Mr. Power, actually, to
26    assist us.  How much data would your consultant need? 
27    Would your consultant need data from every utility in
28    Ontario, from the 40 we surveyed, from as many of the

                                                           37
    
 1    40 that would consent to its disclosure, and how long
 2    would it take to do the work that is mentioned?  When
 3    we read the Frontier Economics letter, the first two
 4    paragraphs, it looked to us like it would take a long
 5    time, in excess of a month or two, but perhaps you can
 6    enlighten us further.
 7                      So it would be helpful for us then to
 8    understand exactly what you need and we can very
 9    probably help you get it.  Of course, any information
10    that is obtained by way of this process would, of
11    course, be disclosed to everyone involved in this
12    proceeding.  It is not merely an information for Mr.
13    Power.
14                      There is also, I would ask parties to
15    consider and comment on, if they choose to do so, Rule
16    47 of the Board's Rules of Practice and Procedure,
17    which does allow for some in camera proceedings. 
18    Again, the consultants and Board staff cannot consent
19    to disclose any data that we have collected in
20    confidence.
21                      If, however, the utilities consent to
22    some of this data being released, but not publicly on
23    the record, Rule 47 could be considered for that
24    purpose.
25                      Mr. Power mentioned the questions
26    that were asked during the July sessions and have not
27    yet been answered.  I can only say that those are being
28    worked on and we expect to release them very shortly.

                                                           38
    
 1                      Whether that will satisfy what Mr.
 2    Power and his clients believe are gaps in the PBR
 3    Handbook, we, of course, don't know and it may be
 4    necessary to discuss that further also with Mr. Power
 5    and any other intervenors that have those questions.
 6                      I believe that the intention is that
 7    the Board staff consultants will be available for
 8    questioning during the technical conference, although I
 9    take Mr. Power's point that some preparatory
10    information or access may be desirable, but certainly
11    the intention was to allow questioning at the technical
12    conference of those folks.
13                      Turning to the question of the timing
14    of this proceeding, then, the driver of the timing of
15    this process, as I understand it, is the market opening
16    in the year 2000.  I do not think anyone knows when
17    this is intended to happen, but I understand that the
18    Board staff figured that we needed to have rate orders
19    made on unbundled rates by October of 2000.
20                      To get this done for all the
21    municipal electric utilities, we proposed filing
22    deadlines in the rate handbook of May 1, for the large
23    municipal electric utilities, and August 1, for smaller
24    utilities.  Of course, anyone can file earlier and we
25    understand that some utilities are, in fact,
26    contemplating filing as early as January 1, 2000.
27                      So we would request assistance, then,
28    from parties here, particularly those intervenors that

                                                           39
    
 1    are representing utilities.  How much time do the
 2    utilities need to prepare their filings?  What is the
 3    latest date that this handbook should be finalized in
 4    order to allow these filing dates to be complied with?
 5                      Now, we would consider that we would
 6    need to get this handbook out by the end of this
 7    calendar year.  I don't know, is a later date going to
 8    cause great inconvenience to those who have to file?
 9                      If, in fact, this handbook needs to
10    be out by the end of this calendar year, even the
11    timing that is presently proposed for the technical
12    conference and the oral submissions is extremely tight
13    for the Board.
14                      The Board has to have time to
15    consider submissions, decide on what should be in the
16    handbook, revise it and draft the final rate
17    methodology that is to be applied in the licences of
18    these municipal electric utilities.  So I would say
19    that the timing is already extremely tight with no
20    further delay.
21                      I would also point out that an early
22    resolution of uncertainty resulting from the absence of
23    a regulatory framework, early resolution of that
24    uncertainty is desirable for utility planning and for
25    all stakeholders.
26                      So I think a lot of the drivers of
27    the timing from our point of view is let us get this
28    handbook out so people can file in time, let us get the

                                                           40
    
 1    handbook out to reduce regulatory uncertainty.  We
 2    would invite comments from people here today,
 3    stakeholders, as to how important those goals are to
 4    the utilities that we are attempting to regulate and to
 5    other stakeholders in the process.
 6                      I would also like to make some
 7    remarks about the good questions Mr. Power has raised
 8    about notice of the case you have to meet, knowledge of
 9    the case you have to meet and so on.
10                      First, with respect to the timing, it
11    appeared to me from some of Mr. Power's remarks that,
12    and certainly from his original motion record that was
13    filed, that that motion ignored the procedures that
14    have been ongoing since the fall of 1998.  About a year
15    ago or a little less than a year ago, work on this
16    project began.
17                      In terms of the timing, I believe
18    that there was some discussion of the timing of when
19    this consultation process, that is the technical
20    conference and so on would occur, in the task force
21    reports that were issued May 18th.
22                      The implementation task force report
23    talked about a summer consultation period.  Certainly,
24    some municipal electric utilities were involved in that
25    task force.  The difficulty is that everybody was
26    working on the assumptions that this had to get done
27    quickly.  So as early as last May it was under
28    discussion that the public consultation process at the

                                                           41
    
 1    Board would be held during this summer.
 2                      In the letter of June 23, which is
 3    listed in the Notice of Motion that is before us today,
 4    at that time that letter set the date for the receipt
 5    of submissions by intervenors of August the 3rd and
 6    also mentioned that the technical conference would be
 7    held, I believe the words with were, "in early August". 
 8    So, as of June 23, parties to this proceeding were
 9    aware that it was contemplated that in early August, a
10    technical conference would be held.
11                      The distribution rate handbook, which
12    was released June 30 and probably received around July
13    2, or slightly later, reiterated this proposed timing: 
14    August for the technical conference.
15                      So that, in late June, those parties
16    who wished to retain experts were aware, I would
17    suggest, that a technical conference was contemplated
18    in August.
19                      In the month of July, regional
20    seminars were held throughout the province asking
21    stakeholders in various locations about the draft rate
22    handbook and also attempting to get questions,
23    understand what gaps there were for people in their
24    understanding of the rate handbook.  Some of those
25    questions were answered at the time, some are still
26    awaiting answers, as Mr. Power points out.  Those will
27    be delivered shortly.
28                      Procedural Order No. 1 extended the

                                                           42
    
 1    date for submissions in response to concerns from
 2    stakeholders and this date for submissions was further
 3    delayed to August the 18th by Procedural Order No. 2 to
 4    the chagrin of some of the participants, I should
 5    indicate.
 6                      I agree that it is very important for
 7    stakeholders to know the case to be met and to have a
 8    reasonable opportunity to prepare and address it, but
 9    there has been a cooperative process ongoing for nearly
10    a year now which has given people some opportunity to
11    understand the issues involved.  Stakeholders to this
12    proceeding, particularly some of the municipal electric
13    utilities, have, in fact, contributed to the case that
14    is to be met here.  They have participated on the task
15    force and attended meetings and their comments have
16    been taken into account.
17                      If I can just take an example of
18    that, there was extensive consultation since the fall
19    of 1998, and there was a task force working on a
20    yardstick approach, for example, to the PBR scheme
21    here.
22                      The report of that task force was
23    released May 18.  In that task force report, they
24    indicated that they did not recommend a yardstick
25    mechanism for the first generation PBR, but for later
26    generation.
27                      So as of May 18, there was, I think,
28    some indication from those who were contributing to the

                                                           43
    
 1    case to be met that a price cap mechanism would be used
 2    and not a yardstick mechanism.
 3                      The point I am trying to make here is
 4    there has been some indication here all along of the
 5    sorts of issues that are involved, the sorts of
 6    positions that would be taken in the proposed rate
 7    handbook and the sort of timing that people would have
 8    to face.
 9                      Now, in my submission, the Board has
10    to balance a number of factors in making its
11    determination in this motion.  There is the need for a
12    timely decision on the rate methodology, as I pointed
13    out, and people acknowledge.  There is the
14    inconvenience to stakeholders who have scheduled
15    themselves around this technical conference date of
16    August 31.  But there is also the desire of the Board
17    and its staff to have a full and helpful discussion of
18    the issues as prerequisite to that is, indeed, that the
19    intervenors have adequate notice and time to prepare so
20    that they can give high quality submissions and
21    assistance to the Board in coming to its determination
22    on the PBR Handbook.  So these factors have to be
23    balanced.
24                      In a sense, we are asking for your
25    assistance in how to balance those difficult and
26    possibly competing factors.
27                      I have some practical suggestions
28    which I would ask people to comment on because it may

                                                           44
    
 1    be that we can work out some dates or come to some way
 2    to strike this balance appropriately.
 3                      Now, one suggestion is to start the
 4    technical conference as planned on August 31st, so as
 5    to accommodate those parties who have already planned
 6    their time around that.  I understand the intention is
 7    that Board staff consultants would be the first panel
 8    to be available for questioning at the technical
 9    conference, but that the consultants from Power Budd,
10    if they are in a particular difficulty, that they
11    approximate be put at the end of the technical
12    conference and in no case take the stand, if I can put
13    it that way, before September the 7th or 8th.  So that
14    it would be in that first week of September.  That is
15    one suggestion.
16                      This suggestion may not help anyone
17    else, and, in fact, may disadvantage others.  So we
18    invite folk to address that idea; is that helpful to
19    you at all.
20                      Also, the idea of moving the
21    technical conference, if the Board is considering that,
22    the consultants that Board staff has used are not
23    available the week of the 7th of September.  That is
24    the week immediately following Labour Day.
25                      So after the 31st, then the next week
26    that we could begin would be September the 13th.  As I
27    understand it, the consultants are available the week
28    of September 13.

                                                           45
    
 1                      I understand that on Mondays, one of
 2    them is not available, so we would have to start on
 3    Tuesday the 14th.
 4                      I believe, also, that they are
 5    available the week of the 21st, but I would like to
 6    just check that.  In any event, if the Board is
 7    contemplating moving the technical conference, the
 8    Board staff consultants are not available the week of
 9    the 7th.
10                      Another constraint which I understand
11    is present is that, due to other commitments, I
12    understand, that sufficient board members are not
13    available to hear this matter in the last three weeks
14    of October; that is, the weeks of October 11th, 18th
15    and 25th.  So one of the constraints that we were
16    trying to work within was to get the oral submissions
17    phase completed by October the 8th.  Given the number
18    of parties here, we wondered whether that meant that
19    had to begin around the 28th or 29th of September.  We
20    would ask you to turn your minds to that also.
21                      Another suggestion was made that
22    would it be of assistance to have a written submission,
23    say, to follow the oral submissions.  That is, once
24    oral submissions are completed, parties could draw
25    together all the information that they have heard or
26    brought forward in a final written brief to the Board
27    to assist it with its decision-making.
28                      I recognize that that last suggestion

                                                           46
    
 1    does not assist those parties who are trying to
 2    scramble to get consultants ready to go for the
 3    technical conference.  However, it may be of some
 4    assistance also.
 5                      I wonder if parties could then assist
 6    us by, first, helping us with this balancing act we are
 7    trying to do here and, secondly, practical suggestions
 8    as to dates and timing, if parties are suggesting that
 9    the 31st for a technical conference is not possible.
10                      I would like to reiterate, though,
11    that although I'm not aware that anyone here is going
12    to make this representation, we are aware that there
13    are a number of stakeholders who have scheduled their
14    immediate future around an August 31 start date of that
15    technical conference and we are reluctant to
16    disadvantage them to advantage others.
17                      One moment, please.
18    --- Pause
19                      MS LEA:  I think subject to any
20    questions, those are our comments.
21                      THE PRESIDING MEMBER:  Thank you, Ms
22    Lea.
23                      I think in view of all those
24    suggestions the Board would feel that it is a good idea
25    to stand down for a number of minutes to give the
26    parties leave to dwell on those, maybe discuss them
27    and, therefore, that would be perhaps productive and
28    shorten things later.

                                                           47
    
 1                      Why don't we say 25 minutes for a
 2    stand-down for that discussion and return at 1025.
 3                      There is just one item I think the
 4    parties should have and that is the letter that
 5    solicited the information from the municipal electric
 6    utility dated January 22.
 7                      It's obvious that somehow they don't
 8    seem to have that letter.  It sets out the request and
 9    the basis the request was made and also the information
10    that was requested.
11                      Can I just ask the staff to make
12    copies of this letter relevant to that information
13    request available in the break as well.
14                      With that, we will stand down and
15    come back at 1025.  Thank you.
16    --- Short recess at 0958
17    --- Upon resuming at 1029
18                      THE PRESIDING MEMBER:  Okay.  Could
19    somebody inform us where we are with the discussions
20    during the half hour or so that has just passed and
21    whether we have some straw man compromise or something? 
22    Anyone?
23                      MR. POWER:  I'm not certain who
24    should be responding to that, but I will give it my
25    best crack.
26                      My impression of the room was
27    everybody went off in small little groups and chatted
28    about what might work for them or not.  Perhaps the

                                                           48
    
 1    responsibility is on me to suggest the straw man.  That
 2    might be helpful, but I'm not suggesting that my
 3    colleagues are in agreement with it.
 4                      Is that useful?
 5                      THE PRESIDING MEMBER:  That might be
 6    useful, but you may wish to just listen to what
 7    everybody else says.  That's your alternative.  I leave
 8    that with you.
 9                      MR. POWER:  I will follow your advice
10    then.  Thank you.
11                      THE PRESIDING MEMBER:  Okay.  So then
12    we are going to hear what everybody else has to say.  I
13    think just out of deference to people who want to get
14    back in the other room should this thing drag on longer
15    than we thought, we should give them some priority over
16    anybody -- who needs to go back or get ready for the
17    Consumers' proceeding?
18                      Mr. Poch, are you in there?
19                      MR. POCH:  I need to be there, but
20    not until one o'clock, so that shouldn't be a problem.
21                      THE PRESIDING MEMBER:  You don't need
22    to do anything.
23                      Does anybody else need to do work
24    before going in?  Are you all right, Mr. Warren, or do
25    you have to do work before you --
26                      MR. WARREN:  I'm okay, Mr. Chairman. 
27    I would make my submissions and then withdraw.
28                      THE PRESIDING MEMBER:  That's fine.

                                                           49
    
 1                      We will just go in order then if
 2    there's no pressing.
 3                      Mr. Poch then, please.
 4    SUBMISSION
 5                      MR. POCH:  I will be brief, Mr.
 6    Chairman.  I was intending simply to send a letter
 7    today.  As circumstances have it, I am in Toronto for
 8    the Consumers' matter that was held over, so I have the
 9    pleasure of being in front of you this morning.
10                      Mr. Chairman, just so you understand
11    where we are coming from, we were involved in the
12    Standard Supply proceeding, as you will be aware.  You
13    may recall from your read of the transcript that that
14    proceeding started with some gripes on the record about
15    the nature of the process.
16                      A few days later we were delighted to
17    receive the procedural order which no longer referred
18    to oral submissions, but then instead spoke of a
19    subsequent hearing in this matter to be held.  We were
20    going to have an opportunity to put in submissions and
21    the Board was going to strike an issues list and then
22    there was going to be what was referred to in the
23    procedural order as a hearing.
24                      We perhaps mistakenly took that as
25    the Board's recognition of the concerns that had been
26    put on the record in the other proceeding.  Then, of
27    course, in Procedural Order 2, our interpretation of
28    events was abruptly changed.

                                                           50
    
 1                      In the intervening days, I cobbled
 2    together a brief submission to file here, thinking that
 3    its purpose was simply to get our item on the issues
 4    list, not to be full elaboration of either the concern
 5    or the solution.
 6                      We are here to support the motion,
 7    particularly in its amended form.  In fact, I think
 8    only in its amended form does it really help us.  I in
 9    fact just spoke to my expert.  What we would like to be
10    able to do is have leave to make a supplementary filing
11    as soon as possible.  We are targeting, I guess, a week
12    less a day from today or the Monday of not next week,
13    but the week after.  We think we could have something
14    in and out, folks.
15                      A delay in the hearing to our experts
16    available for a technical conference after September
17    9 -- as of September 9 and thereafter, so I don't think
18    we have any problem making someone available to answer
19    questions in any of the time frame, that there is going
20    to be a delay in any time frame that appears to be
21    being discussed here today.  I don't know if this is
22    realistic for the Board or not.
23                      I think that it needs to be said that
24    the Board is perhaps making some of its most important
25    decisions in the context of this proceeding and the
26    accompanying ones.  It's a cruel irony that just when
27    the Board is most stressed by its workload and the time
28    constraints are so tight, and it seems to me a shame

                                                           51
    
 1    that the process be sacrificed in any way, given the
 2    importance of those decisions.
 3                      I think the draft handbook, the
 4    inertia that that has picked up is amplified by the
 5    tight schedule we have heard discussed this morning. 
 6    It is a somewhat uphill battle, even though I'm sure
 7    the Board has every intention of having an open mind on
 8    these matters.  It's simply that time constraints make
 9    it such that any real change to that proposal is an
10    added burden for the Board.
11                      I think it becomes incumbent upon us
12    who would propose additions or amendments that we try
13    to flesh them out a little better than at least I was
14    able to in my brief submission to be of assistance to
15    the Board.  I think that a delay in the process to
16    enable that should help serve the Board in responding
17    to such suggestions.
18                      Again, we support the motion.  We
19    understand the time constraints.  Our expert is on
20    standby at this point.  We would appreciate the
21    opportunity to make a further supplementary filing and
22    be able to have our experts attend.
23                      THE PRESIDING MEMBER:  Thank you, Mr.
24    Poch.  Just to clarify then.  You could undertake a
25    supplementary filing in, you said, about two weeks. 
26    That would take to September 7.
27                      MR. POCH:  That's the Monday.  I
28    think we could do that.

                                                           52
    
 1                      THE PRESIDING MEMBER:  No.  The
 2    seventh is the Tuesday after Labour Day.
 3                      MR. POCH:  Okay, yes.
 4                      THE PRESIDING MEMBER:  Then you said
 5    your expert would be available from the ninth.
 6                      MR. POCH:  After the ninth, yes.
 7                      THE PRESIDING MEMBER:  Okay, after
 8    the ninth.
 9                      MR. POCH:  I'm uncertain about that
10    particular day, but certainly as of the tenth.
11                      THE PRESIDING MEMBER:  Okay.  Thank
12    you.  Just to clarify that.  Thank you.
13                      Okay.  Let's move on then.  Mr.
14    Warren, please.
15    SUBMISSION
16                      MR. WARREN:  Thank you, Mr. Chairman.
17                      My submissions on this can be briefly
18    stated.  In our respectful submission, what this case
19    is about, this application is about, is simply a
20    request for more time because the experts need more
21    time to put in a paper.
22                      The difficulty we have with the
23    motion is not the relief requested, but that there is
24    some suggestion that there's a flaw inherent in the
25    process, that there's something insidious in the
26    process, that there has been a failure to disclose
27    information and that, frankly, is what troubles us
28    about it.

                                                           53
    
 1                      We don't need to characterize what
 2    has gone on this, as I would say facetiously, like some
 3    kind of an Oliver Stone movie.  In my experience with
 4    this Board, if people want information, all they have
 5    to do is pick up the phone and ask Board staff for the
 6    disclosure of the information.  There is nothing in Mr.
 7    Power's material that suggests that any information has
 8    been refused, that any information has been withheld.
 9                      The issue, in our respectful
10    submission, is whether or not the time frame needs to
11    be extended in order to allow the Board to have the
12    fullest possible information available.
13                      Now, I have what I would describe,
14    frankly, as a kind of a moron brief today.  That is
15    predicated on the assumption, frankly, that we misread
16    the process.  That is not the fault of the Board.  It
17    is not the fault of the Board staff.  It is the fault
18    of us.  We thought that the process was exactly
19    analogous to the SSS process in that we would file
20    brief comments followed by the distillation of an
21    issues list and then a written submission.
22                      But as I say, the Board has been
23    crystalline in its clarity about what was intended and
24    we simply misread it.  Now in our respectful submission
25    -- so we wanted to let the Board know that if the Board
26    did extend the time for the filing of materials we
27    would file materials.  We would like -- we are in the
28    process of trying to get Dr. Bauer to see if he is

                                                           54
    
 1    available and we would like to file material from Dr.
 2    Bauer.
 3                      I want to emphasize that if the Board
 4    extends the time for filing it, I would ask the Board
 5    to make it clear that there is nothing implicit in that
 6    finding that there has been something wrong with the
 7    process.  Ms Lea has said correctly that this has been
 8    a very open, democratic process in which a lot of
 9    people have been involved for a long time, an
10    opportunity for everybody to say what they wanted about
11    it, and I can't imagine that there is any subject in
12    the world that has been poured over, albeit it is
13    incredibly dense in arcane details, than PBR in the
14    last year.
15                      With respect to the principles that
16    inform this process, in my respectful submission, the
17    notion that there is a case to be met is not one that
18    fits with this.  This is not a discipline test.  This
19    is a public process in which the Board is trying to
20    come up with the best available public policy, and to
21    characterize this as a case of somebody having --
22    needing information to know the case to be met,
23    mischaracterizes the process and puts a darker hue on
24    it than is really required.
25                      The principles in our respectful
26    submission, the overriding principle should be the full
27    disclosure of all of the various positions that parties
28    take on the issues.  If more time is needed to do that,

                                                           55
    
 1    and I stress that this is -- I say this for selfish
 2    reasons -- if more time is needed to do that, then in
 3    my respectful submission the Board should accede to
 4    that.
 5                      With respect to the timing issues
 6    that Ms Lea has talked about, my respectful submission
 7    is that the technical conference, first of all, the
 8    Board should allow parties to make further submissions
 9    if they want.  When I say "further submissions," those
10    who have not made submissions should be allowed to make
11    submissions, written submissions based on the
12    disclosure of the information that is now available.
13                      A technical conference scheduled then
14    for September 14th or 21st and then I would suggest,
15    with respect, that we skip the oral submission stage. 
16    Because the oral submission stage -- I acknowledge that
17    it may be helpful for the Board to direct pointed
18    questions.  But the oral submission stage takes up the
19    most precious resource that there is in the process and
20    that is your time listening to folks like me talk. 
21    That, I think, on the whole is not a productive use of
22    time.
23                      If there is a technical conference,
24    then parties should have a subsequent opportunity to
25    make another submission in writing, which would allow
26    them to do two things.  Number one, they could -- those
27    who have made written submissions that have complained
28    that there are defects in the record could correct

                                                           56
    
 1    those defects in the second submission.  For example,
 2    the MEA could say, "I am now seized with the
 3    information I need and I am going to plug the holes in
 4    my first draft."
 5                      The second value of the written
 6    submissions is that all of us would have had the
 7    benefit of reading everybody else's submission and
 8    could comment on it.  So that at the end of the day the
 9    Board would have the benefit of full submissions from
10    all of the parties and an opportunity to comment on one
11    another's so that there is full disclosure of the
12    competing values, the competing technical positions. 
13    What the Board misses in that process is the oral
14    stage, which in my respectful submission, isn't all
15    that helpful.
16                      What the Board needs at the end of
17    the day is the benefit of the fullest submissions and
18    everybody knowing what everybody else is saying.  If
19    the Board extends the time and follows the process
20    which I have suggested, you will have accomplished that
21    value.  Surely, after a year of all of these
22    discussions and then that exchange of information, no
23    one can complain that they haven't had the fullest
24    opportunity to make their views known.
25                      I should apologize to the Board.  We
26    misread the process, and I would urge the Board not to
27    make an order simply to correct for our mistake.  But
28    the larger principle is to allow everybody the fullest

                                                           57
    
 1    opportunity to make submissions.
 2                      Those are my submissions and thank
 3    you for allowing me to make them.
 4                      THE PRESIDING MEMBER:  Thank you, Mr.
 5    Warren.
 6                      MEMBER DOMINY:  Mr. Warren, I just
 7    wanted to ask you a question of clarification with
 8    regard to written submissions.
 9                      My understanding as you say, have
10    another technical conference and then allow parties to
11    make written submissions after that and that is the
12    final submission?
13                      MR. WARREN:  That would be the final
14    submission.
15                      MEMBER DOMINY:  Not an opportunity to
16    reply submission after that?
17                      MR. WARREN:  No.  No.  The final
18    process, sir.  The virtue of it is that in a technical
19    conference people will -- first of all, there will be
20    now a disclosure, whatever information Mr. Power's
21    client needs presumably can be found.
22                      Now, they get that information, they
23    make their and we would make a written submission. 
24    There has been a technical conference where all of the
25    missing information can be determined and an
26    understanding can be arrived at what is the basis for
27    parties' positions.  Then there would be a written
28    submission in which, for example, the MEA could say,

                                                           58
    
 1    "We want to comment on what Mr. Powers experts have
 2    said or what CAC's experts have said, and we also want
 3    to take this opportunity to correct what we thought
 4    were the gaps in our first paper."
 5                      But that is the end of the process. 
 6    What is skipped in it is the oral phase.
 7                      MEMBER DOMINY:  Thank you, Mr.
 8    Warren.
 9                      THE PRESIDING MEMBER:  Just to
10    comment on the oral phase as you participate in the SSS
11    proceeding, did you find that it was helpful to
12    intervenors just from the intervenors perspective, and
13    if so, why?
14                      MR. WARREN:  Purely from a selfish
15    point of view, it was, Dr. Higgin.  It allowed me to
16    respond to some question of yours, to crystallize the
17    thought I had been trying to formulate for some time
18    about one of the essential policy questions arising out
19    of the legislation.  There is no question that you lose
20    that if you don't have that exchange between where the
21    Board focuses on what it believes, on the information
22    it wants and gives an opportunity to respond to it.  So
23    it is important.
24                      But we have to make choices.  The
25    choice to disregard -- to drop the oral phase, as
26    regrettable as that might be, seems to me is overborne
27    by a process which meets the basic time requirements
28    that Ms Lea has outlined and allows people an

                                                           59
    
 1    opportunity to make full submissions.
 2                      THE PRESIDING MEMBER:  Thanks so
 3    much, Mr. Warren.
 4                      Mr. Stephenson.
 5                      MR. STEPHENSON:  Thank you.
 6    SUBMISSION
 7                      MR. STEPHENSON:  I also support the
 8    motion and let me just say with respect to my client,
 9    that support of the motion arises more from a matter of
10    principle in terms of what we believe this process and
11    similar processes should look like and operate rather
12    than an assertion by us of particular prejudice in the
13    circumstances of this particular hearing.
14                      We have made a submission.  The
15    issues that are of concern to Mr. Power and his clients
16    are not of particular concern to us in the sense we are
17    not making a submission on those items or those issues
18    at this particular time at least.  So we don't rely on
19    any particular prejudice as it affects us specifically.
20                      However, we do think there is an
21    important issue that is raised by the motion and we do
22    agree indeed that accommodation should be made.  Let me
23    just go back to the issue about the importance of
24    process and the role of process here.
25                      I don't think it is useful or
26    productive for the Board to engage in an examination of
27    the principles of administrative law as they apply to a
28    particular proceeding, and I echo, to a very large

                                                           60
    
 1    degree, the submissions of my friend, Mr. Warren, about
 2    the notion of the case to be met.  I don't think the
 3    Board here is or is purporting to or has to or is
 4    legally required to or in any sense is holding an
 5    adjudicative hearing in the sense of, as Mr. Warren
 6    says, a discipline case.  I concur with Mr. Warren in
 7    his characterization about what the Board's function is
 8    here.
 9                      So in terms of looking at
10    administrative law, principles about what kind of
11    process is required and the nature of the hearing, and
12    for the latin lovers in the room, audi alterum partem,
13    and all of that stuff.  Frankly, I don't think any of
14    that is terribly productive for the purposes of this
15    consideration.
16                      What I do think is productive is that
17    from a very practical perspective the Board, I think,
18    has a real interest in making the best policy
19    determination that it can make in all of the
20    circumstances and given the time constraints and so
21    forth.  One of the ways that it can make the best
22    policy determination that it can make is to obtain the
23    best kind of input from the various stakeholder groups
24    that are appearing here.  The only way that it is going
25    to be able to do that is if the stakeholders are able
26    to participate in an informed way and to provide
27    alternatives that are well thought out and informed. 
28    It is particularly important in the context of this

                                                           61
    
 1    kind of hearing that is -- or the subject matter of
 2    this particular proceeding.  I am loathe to use the
 3    word "hearing" because again, I don't think getting
 4    into those issues about what kind of protections are
 5    legally required is helpful.
 6                      But in this proceeding we are dealing
 7    intrinsically with this PBR issue.  On the basis of
 8    everything I understand about PBR it is an
 9    intrinsically front-end loaded process, that the goal
10    is to establish a framework that is workable.  The goal
11    is to establish incentives, a scheme that is workable,
12    and then more or less you go on automatic pilot for a
13    few years and that the Board is not going to be
14    engaging in intrusive probing about 250 LDCs on an
15    annual basis, that the scheme is going to be set up and
16    it is going to run.  There is a cost for that and the
17    cost is you have got to spend time up front to get the
18    scheme right and get the incentives right.
19                      Now, the Board has gone an awful long
20    way to doing that and they have set up -- we all know
21    about the processes, about the educational seminars and
22    the task force and so forth that my client was involved
23    in those task forces.  But I think this process is
24    important as well and sometimes it is only when the
25    Board -- that there is a well thought-out fully-fleshed
26    proposal out there that people can comment upon, that
27    relevant critiques, well thought-out critiques, can be
28    made and improvements in the process can be made.  So I

                                                           62
    
 1    think that if the Board wants to, as it must, come up
 2    with the best proposal, that it is going to be in place
 3    in effect for a period of time several years at least,
 4    that it is a small investment to make to ensure that it
 5    gets the best possible input.
 6                      So therefore, very pragmatically
 7    speaking, we think that it is clear that there has been
 8    informational issues about what all the information is
 9    required.  I think there is a general principle, and
10    perhaps if I can leave nothing more than this, in this
11    kind of proceeding that for people to make informed
12    input they have to know the information that was relied
13    upon in terms of the creation of the proposal.  That is
14    how they can test the proposal and make the best input.
15                      The kind of material that Ms Lea has
16    provided today in her October -- sorry -- August 24th
17    background materials is important.  It is really vital
18    to know and now, somebody in fact is going to have to
19    go back and look at these sort of things and then see
20    how they fit into the proposal.  Indeed, I think that
21    is something -- the fact that we have got this now on
22    August the 24th is something again which tends to
23    militate in favour of a reasonable accommodation having
24    to be made.
25                      So I think that for those reasons
26    that it is imperative that people understand the
27    material that was relied upon on the proposal, that the
28    accommodation in terms of the time frame that is being

                                                           63
    
 1    requested strikes me as being reasonable in those
 2    circumstances.  The point raised by my friend
 3    Mr. Warren in terms of if something you have got to
 4    give in terms of making the schedule work, that the
 5    oral hearing be the thing to go, I see considerable
 6    merit in that.  I don't think I can necessarily improve
 7    upon Mr. Warren's rationale for that, but it seems to
 8    me that there is some considerable merit on that issue
 9    and we would be looking at then setting up some kind of
10    a reasonable time frame between the conclusion of the
11    technical conference on the one hand and the filing
12    deadlines for the final written submissions on the
13    other.  The Board is obviously familiar with the kinds
14    of time lines that may be reasonable there.  So I think
15    there is some considerable merit on that.
16                      Let me just leave with just perhaps
17    this thought.  The reason that this is important is
18    because clearly the Board is getting into these kinds
19    of non-traditional hearing forums, you know not as
20    strictly an adjudicative forum that it is used to. 
21    These determinations must have legitimacy for the
22    stakeholders.  Whether or not the legal niceties would
23    allow somebody to challenge something the Board does,
24    frankly is to me very, very low on the priority scale
25    and bordering on completely irrelevant.  The key is to
26    create a process that can be seen to be appropriate,
27    reasonable and fair given the nature of the
28    determination that has to be made.  That very practical 

                                                           64
    
 1    concern leads me to suggest to you that number one, the
 2    information to be relied upon must be available and
 3    number two, a reasonable accommodation with respect to
 4    timing must be made.
 5                      So those two things strike me as
 6    reasonable and we support the motion to that extent. 
 7    In terms of the particular date I can't assist you in
 8    particular about that, but the dates that have been
 9    bandied about so far do not strike me as jeopardizing
10    the long-term timetable and objectives.
11                      Thank you.  Those are my submissions.
12    --- Pause
13                      THE PRESIDING MEMBER:  Thank you,
14    Mr. Mattson, are you ready, sir?
15                      MR. MATTSON:  Thank you,
16    Mr. Chairman.  Hopefully I can be as brief as those
17    before me.
18    SUBMISSION
19                      MR. MATTSON:  My client cannot take
20    issue with the request in the motion to seek more time
21    so that the clients of Power Budd may have a reasonable
22    opportunity to review the material and make
23    submissions.  If they say to the Board today as they
24    have that they need more time, we are not in a position
25    really to take issue with that or to object to that. 
26    Of course, it creates some inconveniences and it is
27    very important in terms of the Board and Board staff
28    that their overall priority with respect to efficiency

                                                           65
    
 1    and time limits be met.  However, we are not going to
 2    take issue with that request.
 3                      Our concern, as I think the prior two
 4    speakers to you, Mr. Chairman, goes to the grounds that
 5    my friends have put forward as the reason for the
 6    request for the adjournment.  It strikes me that, and
 7    it may harken back to some of my submissions in the SSS
 8    hearing, but it strikes me that the Board and Board
 9    staff are trying to fulfil two roles here.
10                      One, you have the obligation, and the
11    responsibility has been given to you by the
12    legislation, to oversee what has been a blue ribbon
13    panel of experts, Board staff, public input.  You have
14    travelled around the province, made it known and
15    publicized the hearings.  You have received incredible
16    comments and input.  You have included all the
17    stakeholders, public interest groups, governments.
18                      As Ms Lea pointed out today, it has
19    been I believe almost a year-long process since the
20    original material went out on October 2nd, a draft
21    policy of performance-based guidelines.  That went out
22    to all interested parties in the province.  I know my
23    clients -- I mean, there have been so many consultative
24    processes going on but we have had to make incredible,
25    incredible sacrifices to participate and make sure that
26    our views were known and as in the SSS process we are
27    completely satisfied with the policy-making process
28    that the Board has engaged in.

                                                           66
    
 1                      However, if the reasons for this
 2    adjournment or if Mr. Budd -- or if Mr. Power -- brings
 3    forward reasons that seem to us to begin to rely on
 4    legal requirements, to rely on a different model, not a
 5    policy-making model, which ultimately as you know is
 6    not legitimate and I don't accept my friend's comments
 7    as to the legal niceties being irrelevant -- but the
 8    legitimacy of your decision making isn't based on legal
 9    requirements, but it is based rather on your
10    accountability to government and your performing a role
11    for government.
12                      This is going to be a policy that
13    government will ultimately be accountable for.  This is
14    not binding arbitration.  Your decision ultimately will
15    be in accordance with and will be the responsibility of
16    the government.  If you begin now to try and fix that
17    somehow to isolate government accountability by trying
18    to turn this into a legal process or meet
19    administrative law principles and guidelines by
20    seeking, for example, to allow Mr. Power's client to
21    meet the case before them, we begin to get into what --
22    I don't see it as a balancing.  I see it as a monstrous
23    hybrid where we are borrowing principles from one model
24    and principles from another model and bringing them
25    together and creating, as I have indicated, a hybrid. 
26    I believe it can be monstrous because it no longer is
27    clear who is responsible for the decision.  It is no
28    longer clear what the rules are and it becomes confused

                                                           67
    
 1    in terms of who ultimately will be accountable for the
 2    decision and who ultimately makes the final decision.
 3                      So this process so far has been one
 4    of consensus, of incredible input, of incredible public
 5    involvement, and at this point my client has no
 6    difficulty with the process and we have participated in
 7    it fully.  We hope that it will be cooperative to the
 8    end and that it will save a lot of time and money and
 9    will serve the public interests as well as the vested
10    interests well.
11                      However, if we begin again to get
12    into the situation where the consensus disappears, the
13    parties begin to argue issues and want someone to
14    decide issues for them, say there is two right ways to
15    do it, is it a right way and a wrong way and someone
16    needs to decide what is the right and what is the wrong
17    way, and I don't think Mr. Power at this point is
18    saying that, but if we get to that point I think it is
19    at that time where the Board really needs to decide
20    which process it is proceeding with, whether or not you
21    are using your policy-making -- you have your
22    policy-making hat on and you are basically making
23    policy or whether you have your adjudicative hat on and
24    you are making decisions about contested facts and
25    contested issues.
26                      At this point I think we are still
27    within the policy-making form.  I believe the parties
28    have been given every opportunity to participate.  I

                                                           68
    
 1    think that there has not been any objection to date
 2    with respect to the recommendations of the panel or of
 3    the Board's staff from the handbook.
 4                      All Mr. Power is indicating is that
 5    he needs more time.  He needs his consultants to have
 6    time to review it, but the PBR Rate Handbook at this
 7    state, as I understand it, is still a viable option and
 8    it may in fact ultimately not be a contentious issue.
 9                      So with respect to the motion then,
10    we would support or at least not object to Mr. Power's
11    request and defer to his judgment on that.
12                      However, we would urge the Board to
13    be very careful about moving from a policy-making
14    process into an adjudicative process and accepting some
15    of the grounds my friend has put forward for his
16    motion, as we think that that would begin then to
17    confuse the role of the Board and confuse the process
18    and ultimately may slow this process down in the long
19    term and maybe confuse it in the long term.  Certainly,
20    my client has no interest in seeing that happen.
21                      Those are my submissions.  Thank you.
22                      THE PRESIDING MEMBER:  Thank you, Mr.
23    Mattson.
24                      Mr. Harper, do you wish to make a
25    submission?
26                      MR. HARPER:  Thank you, Mr. Chairman. 
27    I will be very brief.
28    SUBMISSION

                                                           69
    
 1                      MR. HARPER:  First, I would like to
 2    note for the Board that OHSC did file comments on the
 3    OEB's Stats Proposed Distribution Rate Handbook on
 4    August 12 on a range of issues, including the balance
 5    of benefits, sharing between shareholders and
 6    ratepayers and the duration of the PBR period and the
 7    uncertainty concerning the method of rebasing, and that
 8    we are fully satisfied with about ability to comment on
 9    those issues and with the process that led up to that.
10                      With respect to the motion, OHSC does
11    support the request for the fullest disclosure possible
12    of the data and the supporting analysis underlying the
13    development of this historical productivity factors
14    used in the staff's proposal.  In fact, we requested
15    the same in our August 12 submission.
16                      Our prime use in doing so is to
17    ensure that all participants have a chance to test the
18    calculations and be in a position to fully debate the
19    proposal and any potential alternatives and to test the
20    recommendations through questioning of Board staff and
21    their consultants during the Technical Conference.
22                      We believe that this is very
23    important, since it is intended that all the electric
24    distribution utilities in Ontario be bound by the final
25    version of the handbook.  All reasonable steps should
26    be taken to allow for a full understanding of the
27    proposal and a fully informed debate on all the
28    alternatives.

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 1                      In fact, this is the same expectation
 2    that participants would have had if the proposal had
 3    been put forward by a specific utility.
 4                      To the degree that more information
 5    requires additional time for analysis, we do not find
 6    the request for a delay in the start of the Technical
 7    Conference to be unreasonable.  It would allow parties
 8    sufficient time after the release of information to
 9    review materials and share their views with the Board
10    and other participants.
11                      In short, the process for the
12    development of the draft handbook has been a good one
13    to date and granting the motion's request for release
14    of data and the delay, in our view, can only serve to
15    improve the overall regulatory process and perhaps lead
16    to a better overall proposal.
17                      Those, Mr. Chairman, are my
18    submissions.  Thank you.
19                      THE PRESIDING MEMBER:  Thank you, Mr.
20    Harper.  Just one moment.
21                      Just a question, whether you wish or
22    you think you want to avail yourself of an opportunity
23    for a supplementary submission or you have made your
24    submission, apart from the final submissions which we
25    have heard about.
26                      MR. HARPER:  The only area where we
27    would see ourselves availing ourselves of the
28    supplementary submission would be in terms of looking

                                                           71
    
 1    at any additional data that may be provided by the
 2    Board consultants, specifically around the calculation
 3    of the productivity factors and our submissions would
 4    be limited strictly to that.
 5                      THE PRESIDING MEMBER:  In timing of
 6    that do you wish that submission to be incorporated
 7    into your final submission, or would you wish an
 8    opportunity to file it earlier?  That's the question.
 9                      MR. HARPER:  I think clearly it would
10    be nice to sort of pilot it earlier.  I think we could
11    sort of work through questioning at the Technical
12    Conference and bring out what our issues were and sort
13    of incorporate our comments in the final submission, if
14    that was what was necessary to meet the Board's
15    schedule.
16                      THE PRESIDING MEMBER:  Thank you very
17    much.
18                      Thanks for your submission.
19                      Mr. Dejongh from Consumers Gas, do
20    you have a submission, sir?
21                      MR. DEJONGH:  Yes.
22                      THE PRESIDING MEMBER:  Please come
23    and have a microphone and go for it.
24    SUBMISSION
25                      MR. DEJONGH:  Enbridge actually takes
26    no position with respect to the motion, but will try
27    and do what is best to work within whatever reasonable
28    time lines are decided upon.

                                                           72
    
 1                      THE PRESIDING MEMBER:  Thank you very
 2    much, sir.
 3                      Are there any other submissions from
 4    parties here?  No?  Then we will turn to Mr. Power then
 5    for his response.  Thank you.
 6    REPLY SUBMISSION
 7                      MR. POWER:  Thank you very much.
 8                      My response will only be to some of
 9    the points raised by Ms Lea.  It seems I am in a rather
10    unique position of having the support of everybody
11    around me.  I am enjoying it for the moment.  But she
12    did raise some good questions on the record and I just
13    thought I would provide some feedback on that.
14                      I would start off by saying as an
15    aside that it is very helpful to get that list today as
16    a few others indicated.  I would suggest if we have
17    another proceeding of this nature, something like that
18    at the start which provides that easy reference that, I
19    will be honest, people like myself who have not been
20    involved in proceedings and some of our clients have
21    been involved in parts of the proceedings, nobody has
22    an overview of all of this.  This has given us a
23    significant jump forward and I thank you for that and
24    it will be quite helpful in the future.
25                      There is a question raised about the
26    information which was gathered in the strictest of
27    confidence.  I note two things, one is that I don't
28    pretend to know the insides and the outsides of the

                                                           73
    
 1    rate filings, but the majority of it looks to me like
 2    exactly the same information that utilities are going
 3    to have to file as part of the rate applications are
 4    the PBR process.  I don't know, but I can't tell of any
 5    difference.
 6                      So I really question the suggestion
 7    that there is confidentiality when within eight months
 8    the major utilities are going to have to file it and I
 9    suspect others are filing sooner, as we have heard.  So
10    I think this is a bit of a red herring.
11                      Now, however, I respect the fact that
12    an undertaking has been given by Board staff to people
13    who have participated in the process and you don't
14    lightly do a 180-degree turn on that, but I think there
15    is a practical solution to it.
16                      I would suggest it would be fairly
17    easy to get a letter out to the parties who
18    participated with follow-up phone calls, indicate the
19    request for the information.  If my assumption is
20    correct, that letter should outline that this very same
21    information is likely going to be required within a
22    very short period of time as part of the PBR filings or
23    whatever filing there is for the rate application.
24                      That, in fact -- now that people have
25    been through the process, they should have the
26    confidence of it and there is no great concern.
27                      However, because I don't know what
28    was filed on those applications, if somebody has

                                                           74
    
 1    something unique or novel in that application which
 2    goes beyond the generic information that was requested
 3    and is of a highly confidential nature, then I think
 4    they should have the opportunity to indicate that that
 5    aspect of their application is highly confidential. 
 6    But the rest of the information is generic and should
 7    be made available.
 8                      I would be surprised that if this is
 9    not properly and fairly communicated you would have any
10    difficulty achieving substantially all of the waivers
11    of this confidentiality or the acceptance of the
12    importance of this process.  So I think there is a
13    relatively easy administrative solution to this.  If
14    that doesn't work, we can revisit it down the road, but
15    I think it is worth trying.
16                      Ms Lea asked the question how much
17    data is required, you know, is it all the utilities in
18    the Province of Ontario or something less?  Certainly
19    what I understand to be the 40 utilities that
20    participated in the process are the essence to
21    understanding some of the thinking behind the proposal.
22                      We have obviously obtained data from
23    other utilities and we are working it through on a
24    comparative basis, but we don't need everything under
25    the sun.
26                      In terms of the timing, I am told by
27    the consultants if we have this information within two
28    weeks of having the information they will burn the

                                                           75
    
 1    candle night and day and they could have their work
 2    done within two weeks.
 3                      Now, my hope is that it is good
 4    quality work because you don't know what you are going
 5    to get at the end of it and then we could have it
 6    polished up and out the door within 12 to 14 to 16
 7    days.
 8                      So, if this information or
 9    substantially all that could be released on Friday of
10    this week or Monday of next week, within two weeks
11    thereafter, I have got a commitment from the
12    consultants that they could have their work done and
13    some sort of a draft report prepared in any event. 
14    It's not that long.  It's not that major an
15    undertaking, but they need the information.
16                      The comment about the Board staff's
17    work from the July sessions and the answers, I find it
18    a bit ironic.  I mean it is helpful to know that it's
19    coming.  I can't imagine why we haven't got it here
20    today, to be honest, although I know that there are
21    many constraints on Board staff, but I think they are
22    the same constraints that our clients are under.
23                      It would be very helpful if we could
24    get that on Friday or Monday at latest, so that we have
25    a complete package of information.
26                      The appropriate contact people to
27    follow up and that sort of thing would be helpful too.
28                      It would be quite helpful, and I am

                                                           76
    
 1    going to get to a proposed schedule here, if within the
 2    next two weeks or within about ten days after that
 3    information is released, that some sort of a
 4    consultants' workshop could be held where the technical
 5    people, I will be honest, I think the technical people
 6    could really benefit from a few hours of face-to-face
 7    time.  They could probably resolve a lot of the
 8    uncertainties and make for a much better proceeding. 
 9    It would be very helpful and supportive if that could
10    be fitted into the process.
11                      Ms Lea made a number of comments
12    about the process over the last eight to ten months or
13    so and the task force.  We had a brief discussion
14    during the break about how fair it is, I guess, to look
15    to that process as a major part of the solution and
16    rationale for where we are in that and that it was good
17    process.
18                      I think we both agree and everybody I
19    talked to agreed that that process was extremely
20    rushed.  It was not completed in all circumstances and
21    I would be surprised if the consultants would take any
22    other position.  I suspect they would take the same
23    position they took at the MBC, which was they were
24    given very limited focus to get a major job done as
25    quickly as possible and I cannot blame them for that.
26                      I hesitate and would suggest that we
27    should not put the consultation process of the last
28    several months up on too high a pedestal, bearing in

                                                           77
    
 1    mind that the people entering into that would have come
 2    in with limited knowledge and would have learned about
 3    many of these things as it unfolded and the process was
 4    not complete.
 5                      Has it helped?  Yes.  But I would
 6    hate to think that somebody would suggest that, as a
 7    result, everybody can come to this proceeding next week
 8    fully knowledgeable of all of the issues to give you a
 9    meaningful technical conference and submission.  We are
10    just not there yet.  That will unfold, I think, in the
11    couple of weeks going into the hearing as it always
12    does when people intentionally get into it and have all
13    the information.
14                      A couple of other brief things.  I
15    cannot help but note the irony of the Board's
16    consultants unavailability during the week of September
17    7th.  I asked Ms Lea about that and she indicated that
18    one of them will be off in the U.K. working and I could
19    not help but guess and I understand that some of them
20    have prior holiday commitments.  What is sauce for the
21    goose is sauce for the gander and I would hope that if
22    we are going to be bound by some process, they would
23    equally be bound.
24                      On a more practical approach to all
25    of this, a possible solution would be, in light of my
26    comments above, if we can get all of the data or
27    substantially all, and I recognize that some of it has
28    to come in in dribs and drabs afterwards by this

                                                           78
    
 1    Friday, because it should all be in a readily available
 2    format, or Monday latest, by the 10th, supplementary
 3    materials could be filed, which would give people
 4    enough time to think things through and produce quality
 5    work.  By the 21st, I think you could have the
 6    technical conference.
 7                      Then, as I understand it, the major
 8    time problem on the back end is Board unavailability in
 9    early October.  What I would suggest is there is some
10    merit to the oral submissions in that you could proceed
11    with the oral submissions first on the 28th, with the
12    view that written submissions and detail could follow
13    after.
14                      The purpose of the oral submissions
15    would be only to highlight some key issues to each of
16    the parties rather than trying to canvass everything
17    under the sun and trying to keep matters focused in
18    that way.  But in this way, you can get the benefit of
19    the oral submissions and you can also get the benefit
20    of having that cleared out of the way before you go on
21    to your October commitments and knowing that some
22    detailed reports are following shortly thereafter.
23                      Of course, you will also be able to
24    use the oral process to raise questions on the record
25    that intervenors may choose to respond to in writing
26    and, therefore, give you more considered thought on
27    your questions.
28                      A last point, I guess, is I am very

                                                           79
    
 1    reluctant, on behalf of my clients and everybody else
 2    who is going to be hit by the handbook, that we end up
 3    with a rushed handbook that is going to be incomplete. 
 4    I would rather that of we take the time that it be
 5    complete that it is readily understandable and that
 6    people can go forward and make decisions.  There is
 7    some risk right now that that handbook will either be
 8    unclear or incomplete, and then that is it.  Everybody
 9    has to rely upon a flawed product.  I think it is well
10    worth your time to get the product right first so that
11    people can then make the business decisions and move
12    forward with some confidence.
13                      Those are all my submissions.  Thank
14    you, Mr. Chairman.
15                      THE PRESIDING MEMBER:  Thank you, Mr.
16    Power.  One minute, please.
17                      Okay.  Just to try and better
18    understand what you would like to see in the process,
19    Mr. Power, you would like to see whatever information
20    can be made available by the end of the week.  I
21    presume, then, that you would like to see a
22    postponement of the technical conference, but you did
23    have a suggestion that there would be a workshop,
24    perhaps, as opposed to a technical conference or of the
25    technical consultants, so we will call it a kind of
26    technical exchange discovery type of thing.  You would
27    like to see that?
28                      MR. POWER:  Yes, that would be

                                                           80
    
 1    helpful, sir.
 2                      THE PRESIDING MEMBER:  Then you said
 3    you wanted an opportunity to file supplementary
 4    materials about September 10th, correct?
 5                      MR. POWER:  Yes, sir.
 6                      THE PRESIDING MEMBER:  Then you
 7    suggested that the tech conference proper would then
 8    convene about September 21?
 9                      MR. POWER:  Yes.
10                      THE PRESIDING MEMBER:  Then the oral
11    submissions would be, at least a few days later but
12    perhaps into the end of the month, the beginning of
13    October and then followed by final submissions, is that
14    practically what you would like to suggest?
15                      MR. POWER:  Yes.
16                      THE PRESIDING MEMBER:  Okay.  Thank
17    you.
18                      MS LEA:  I have one question arising
19    out of that, if I may.
20                      Mr. Power, in attempting to
21    understand the, I guess, the technical exchange or
22    discovery, did I understand correctly from you that
23    your consultants were not available for that purpose
24    until what date?
25                      MR. POWER:  It is a question of
26    which.  I am hoping one is going to be available by
27    Monday, but I have not got that confirmed.  The other
28    one will not be back until the 7th.  So I can at least

                                                           81
    
 1    try to get somebody involved with this sooner than
 2    later, and the other can be here by the 7th, I
 3    understand.
 4                      MS LEA:  So it is your proposal,
 5    then, that this exchange, if it takes place, would
 6    precede supplementary submissions on the 10th?
 7                      MR. POWER:  Ideally, yes.
 8                      MS LEA:  Thanks, now I understand.
 9                      THE PRESIDING MEMBER:  Right.  Are
10    there any other comments, any other matters?  Okay. 
11    Mr. Dominy?
12                      MEMBER DOMINY:  I was just going to
13    ask a question.  The is the technical conference not
14    presently scheduled to begin on the 31st of August; is
15    that the plan?
16                      MS LEA:  It is presently scheduled to
17    begin on the 31st of August.
18                      MEMBER DOMINY:  Would there be any
19    advantage in proceeding with that conference and then,
20    perhaps, having a second, subsequent conference as a
21    result of the discovery that takes place with that?
22                      MS LEA:  I understood that people
23    needed to get ready for the technical conference with
24    the detailed information that they are seeking to
25    obtain.  In other words, I am not sure that they would
26    be ready to question our consultants if they did not
27    have the material that they were requesting.  That is
28    what I understood the submission to be.

                                                           82
    
 1                      THE PRESIDING MEMBER:  I think that
 2    is what I think was the question.  However, there could
 3    be a workshop type format that might assist that
 4    process.  That could be held earlier, you know, like in
 5    that first week time-frame.
 6                      MR. POWER:  If the suggestion is we
 7    can substitute next week with the techies, talking to
 8    the techies in a more informal atmosphere, assuming
 9    that Mr. Adamson is available, we would be willing to
10    proceed with that.  In fact, it would be quite helpful,
11    because it would make us, obviously, give us more time
12    to think this through for any supplementary
13    submissions.
14                      THE PRESIDING MEMBER:  Yes, that is
15    what I think it would not be a technical conference, we
16    would call did a technical workshop exchange or
17    something that might be convened roughly in that
18    time-frame.
19                      All right.  So the Board will reserve
20    on the motion.  We will try and consider now some
21    issues around scheduling and also some issues with
22    respect to the disclosure you have requested on
23    information, your information request.
24                      We will try and address these issues
25    and I would like very much to come back in about an
26    hour's time with a proposal that the Board finds
27    acceptable, if possible.  So we will have to advise
28    you.

                                                           83
    
 1                      I know that the other proceeding is
 2    starting at 1 o'clock.  So we will try to do that, come
 3    back in about an hour, we will say 12:30 and if we can,
 4    we will give a ruling.  If we cannot, we will tell you
 5    that we cannot, all right.  Thank you.
 6    --- Short recess at 1130
 7    --- Upon resuming at 1240
 8    BOARD RULING
 9                      THE PRESIDING MEMBER:  The Board has
10    considered all of the submissions we received on the
11    matters raised by the motion.
12                      First of all, the Board finds that
13    the Board staff PBR policy development and consultation
14    process has been a comprehensive public process with an
15    opportunity for full exchange of information from Board
16    staff to participants.
17                      Second, the issues raised by the
18    motion in substance are the availability of data, which
19    would allow participants to do additional analysis and,
20    second, the process and time frame to allow
21    participants to complete their analysis and
22    submissions.
23                      On the issue of the availability of
24    data, the Board will ensure that all data will be made
25    available subject to present confidentiality
26    commitments.
27                      The Board finds that a technical
28    workshop on data availability and analysis methodology

                                                           84
    
 1    would be useful.  This should be held on September 2/3,
 2    1999.  The matter of a request for release of
 3    information from the authorities will be clarified at
 4    that meeting.
 5                      With regard to process, the technical
 6    conference scheduled for August 31, 1999, is postponed. 
 7    The opportunity for supplementary submissions shall be
 8    afforded to participants with a deadline of September
 9    14, 1999.  The technical conference will be scheduled
10    with a tentative date of September 21, 1999.  A
11    procedural order on these dates will be issued by the
12    Board as soon as possible.
13                      The final phase of this proceeding
14    will be held at a date to be advised, about the end of
15    September 1999.
16                      Thank you.  That is the Board's
17    ruling.  If you have any questions of clarification,
18    now.
19                      MR. POCH:  Mr. Chairman, I noted your
20    phrase "the final phase".  Do I take it from that the
21    Board has yet to decide whether it will be oral or
22    written or some combination?
23                      THE PRESIDING MEMBER:  I think that's
24    the implication we have.
25                      MR. POCH:  Thank you, sir.
26                      THE PRESIDING MEMBER:  We will decide
27    having heard some submissions on that today.
28                      Thank you, everyone, for your

                                                           85
    
 1    attendance.  The Board will issues its procedural order
 2    requesting that.
 3                      Thank you.
 4    --- Whereupon the hearing adjourned at 1245