Electricity distributors point to outdated rules as a barrier to
necessary repairs to the grid.
TORONTO, Jan. 12, 2012 /CNW/ - Ontario's electricity distributors are
concerned that a recent ruling by the Ontario Energy Board (OEB) in
which it refused to consider Toronto Hydro's electricity rate
application could affect all Ontario utilities' ability to make
much-needed repairs to the electricity system. Delaying repairs could
lead to longer and more frequent power outages for customers across the
"There is broad consensus within the industry that regulation in Ontario
is outdated, unnecessarily burdensome and costly, and ultimately
doesn't guarantee reliable service for our customers," says Jim Keech,
Chair of the Electricity Distributors Association and CEO of Kingston
The EDA has been calling on government decision-makers since last August
to make changes to the way the electricity industry is regulated. The
Association's August 2011 report sets out a series of recommendations
that if implemented would lead to better system reliability, lower the
cost of regulation and smooth out rate increases for customers.
Current regulatory rules are a significant barrier to utilities
receiving approval for multi-year repair and replacement programs.
Large pockets of Ontario's electricity distribution system, built in
the 1950s and 1960s, have already reached the end of their useful
"Regulatory change must come sooner rather than later," says Charlie
Macaluso, EDA President and CEO, noting that electricity distributors
aren't the only ones saying so. "Ontario's Auditor General recommended
in his 2011 Annual Report that the Board work with distributors to
address our concerns about the regulatory process. We're disappointed
that this recommendation is not yet resulting in meaningful change."
In its decision, the OEB ruled Toronto Hydro must use another process,
called the Incentive Regulation Mechanism (IRM), to apply for approval
to carry out only parts of its proposed infrastructure renewal program.
The Board justified its decision by noting that other utilities are
working within these rules.
"In developing our recommendations for regulatory reform, our members
across the province pointed to the IRM again and again as a key
obstacle to continuing to deliver electricity safely and reliably to
customers," says Macaluso. "The IRM process clearly needs to change,
and more importantly, utilities must have access to a more flexible
regulatory process, including a right to cost-of-service applications,
that takes major infrastructure renewal into account."
The full EDA report, The Case for Reform: How regulatory streamlining could benefit Ontario's
electricity consumers is available on the Association's website at www.eda-on.ca.
About the EDA
The Electricity Distributors Association (EDA) is the voice of all 78 of
Ontario's local electricity distributors, the publicly and privately
owned companies that safely and reliably deliver electricity to more
than 4.7 million Ontario homes, businesses and public institutions.
SOURCE Electricity Distributors Association
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