07/04/2012

The Ontario Distribution Sector Panel is conducting a review of the Province's electricity sector to improve efficiencies including local distribution company consolidation.

The Ontario Distribution Sector Panel (ODSP) is currently conducting a comprehensive review of the Province's electricity sector focusing on options to improve efficiencies including local distribution company (LDC) consolidation.
 
AMO’s submission is based upon the following three key principles:
  1. Since distribution only represents a maximum of 20% of the bill, regulatory and governance reform would yield far greater savings than mere consolidation.

  2. Efficiency gains from merging municipal LDCs are dwarfed by the potential that exists within Hydro One— Hydro One is the least efficient LDC in the Province (in terms of operating, maintenance and administrative costs) and must be part of the equation if a meaningful review is to occur.

  3. LDCs are assets (mostly) owned by municipal governments. Any change must be  driven by clearly identified business principles and if consolidation is deemed to create efficiencies, it must be led and facilitated, not mandated.
Our paper is organized around three key sections: Governance and Regulatory Reform, Consolidation and Conservation—which AMO believes should be a cornerstone of energy policy in this Province but is in danger of being ignored in favour of flashier, more expedient issues. The Panel must look to the most appropriate policy responses to the properly defined problem statements.
 
AMO has set out a number of recommendations in this paper based on the belief that the efficiency of a given LDC must be balanced with its effectiveness, as well as its contributions to the overall energy system and the community that it serves. The aim is to create a new relationship between the Province, its regulatory agencies, utilities and municipalities that is based on better collaboration and a recognition that we all have to think differently and operate more efficiently.