Tom Adams
September 16, 2002
Dear Friend:
Three years ago, when Enron tried to bring a California-style power system to Canada, Energy Probe, working with the Canadian regulatory system, stopped it dead in its tracks. That ended a risk of needless blackouts and bankruptcies that devastated the California economy.
Two years ago, Enron tried again to manipulate the power system’s rules to its own advantage, this time by trying to prevent Ontario consumers from having a choice in where they bought their power. Energy Probe, working with other groups, again stopped Enron, by winning our case before regulatory authorities.
Energy Probe advocates competition and private ownership in many areas now governed by Crown corporations, but we also know that competition cannot exist in monopolized markets, and that even competitive markets often cannot be fair without sound rules, strictly observed. Fair and free markets don’t exist in most areas of the economy and certainly not in energy markets. Power and natural gas systems can be manipulated with ease if corporations and politicians are allowed to become too cozy with each other. And then we get the CEO abuses – such as the $300,000 in limousine bills that Hydro One’s Eleanor Clitheroe foisted on consumers, and the sorry saga around Enron.
Scandalous behaviour isn’t limited to private companies like Enron, or to public ones hoping to become private, such as Hydro One. In the 1980s, we exposed free flowing expense accounts and other outrageous spending at public utilities like Ontario Hydro. Only through public disclosure – which we obtained at hearings before independent regulators such as the Ontario Energy Board – could we get at the truth. After we did, and companies knew that we would blow the whistle on irresponsible behaviour, many scandals stopped.
Then successive governments began stripping regulators of their powers. In Ontario, it started with the NDP under Bob Rae, and became worse with the Tories under Mike Harris.
The result? A utility like Hydro One that has run amuck, not only in lavish spending on its top brass but also in unaccountable empire building – all of it funded by taxpayers and captive consumers in a monopoly system. Other provinces may not have Clitheroe-scale CEO excesses but when it comes to empire building, they are often no better – and sometimes much worse – than Ontario.
To restore corporate accountability, we need strong regulation. There is no alternative to having sound rules that promote full disclosure, and there is no alternative to having a truly independent regulator – one beholden neither to government nor industry.
Sincerely,
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Tom Adams
Executive Director
P.S. The public is galvanized on the need for intergrity in business, and politicians are beginning to listen. Your generous support today for our campaign to promote strong regulation could tip the balance in favour of an accountable energy system for Canada.
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Energy Probe Sets the Regulatory No group in Canada has more regulatory experience than Energy Probe. Over the last 30 years, our staff has participated in approximately 500 rate hearings, Royal Commissions, environmental assessments, safety tribunals, and other regulatory proceedings across the country. Several of our staff _ both past and present _ have been regulators themselves, including the federal Director of the Office of Energy Conservation, a Vice Chair of Toronto’s Planning Board, and an Independent Director of Ontario’s Independent Market Operator, which along with the Ontario Energy Board, regulates Ontario’s electricity marketplace. 1970s The Berger Commission (also known as the Mackenzie Valley Pipeline Inquiry) was created after investigative work by Energy Probe and other environmental organizations. After years of challenging Ontario Hydro’s massive expansion program, both the Porter Commission and the Select Committee on Ontario Hydro Affairs accepted our forecasts over those of Ontario Hydro, which subsequently reduced its expansion program. 1980s The natural gas monopoly in Ontario was broken up, following Energy Probe’s arguments to the Ontario Energy Board. Consumers in Ontario thus became free to purchase natural gas from any supplier, ushering in a new era in cost savings and energy efficiency. Radiation safety standards were about to be relaxed in 1980, until Energy Probe and other intervenors convinced the Atomic Energy Control Board to tighten its proposed standards fourfold. 1990s Canadian utility regulators began embracing performance-based regulation, an innovation Energy Probe has long promoted to make sure consumers get the benefits and protections they deserve. Agreeing with most of Energy Probe’s arguments concerning radioactive waste, the Federal Environmental Assessment Review Panel rejected the nuclear industry’s ‘disposal’ plan. 2000s Energy Probe helped write the rules for Ontario’s "open market" power system, which allows for rigorous competition in a publicly owned system. NB Power is to be broken up after Energy Probe, almost singlehandedly, according to the Saint John Telegraph-Journal, exposed the utility’s waste and lack of accountability. Energy Probe was one of only two "pressure groups" cited by The Canadian Encyclopedia for being effective in influencing our country’s policies. |
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