On December 2, 2015, Ontario’s Auditor General released her 2015 Annual Report. One topic within the report that has received a lot of attention from the media and commentators (see for example, here and here) is “Electricity Power System Planning.” The headlines have focused on costs to ratepayers from various Government policies and decisions. While these figures certainly attract attention, a key focus of the Electricity Power System Planning section of Auditor General Bonnie Lysyk’s report is on recommendations about how to improve the ways that Ontario manages long-term demand for electricity through various generation, conservation and transmission solutions.

There are five recommendations in the Electricity Power System Planning section of the Auditor General’s Report, including:

  • Having the Ministry of Energy comply with existing legislation to have a long-term energy plan (LTEP) prepared by the IESO and submitted to the OEB for approval. The roles of the IESO (as the technical expert) and the OEB (as the protector of consumer interests) should be clarified and enhanced.
  • Having the Ministry of Energy engage with the IESO and other technical expert advisors before issuing directives, and also requiring the Ministry to provide more public information identifying and explaining the directives that are issued.
  • Having the Ministry of Energy work with the IESO, OPG, Hydro One, local distribution companies and other technical experts to determine the optimal electricity supply mix for Ontario, and to evaluate different scenarios and to conduct cost/benefit analyses and consider consumer impacts of decisions to be made.

Immediately following each of the Auditor General’s recommendations in the Electricity Power System Planning section of the report, the Ministry of Energy has provided its response.

In each response, the Ministry states that it “agrees” with the Auditor General’s recommendation. In almost every response, the Ministry begins by suggesting that the recommendation is being addressed through the Energy Statute Law Amendment Act, 2015 (Bill 135). The Ministry asserts that Bill 135 (if passed) “would replace the current Integrated Power System Plan (IPSP) process with an enhanced Long Term Energy Plan (LTEP) process.” Among other things, the Ministry’s responses also note that the Ministry “recognizes IESO’s technical knowledge and expertise with respect to the electricity sector and is committed to maintaining an IESO role in the development of future energy plans”;  that the new LTEP process will involve extensive consultations; and that the LTEP will be cost-effective, because that is enshrined in Bill 135.

The Auditor General has not provided any commentary about the Ministry’s responses. The Auditor General acknowledges that “[m]ost of the responses to our recommendations refer to recently introduced draft legislation (Bill 135)”, but states that “[o]ur Office is not in a position to comment on the merits of this draft legislation, nor at this point in time can we assess whether the changes proposed in the draft legislation would meet the intent of our recommendations.”