974 1 Technical Conference 2 RP-1999-0040 3 4 IN THE MATTER OF ss. 57 and 70 of the Ontario Energy 5 Board Act, 1998, S.O. 1998, c. 15, Sched. B; 6 7 AND IN THE MATTER OF a proposed Standard Supply Service 8 Code for electricity distributors. 9 10 11 12 13 14 15 16 17 TECHNICAL CONFERENCE 18 19 20 21 22 23 Hearing held at: 24 2300 Yonge Street, 25th Floor, Hearing Room No. 1, 25 Toronto, Ontario on Monday, July 19, 1999, 26 commencing at 9:00 a.m. 27 28 VOLUME 5 975 1 APPEARANCES 2 JENNIFER LEA Counsel, Board Technical 3 Staff 4 BRIAN HEWSON/ Board Technical Staff 5 UNA O'RILEY 6 JACK GIBBONS Pollution Probe 7 TOM ADAMS/ Energy Probe 8 MARK MATTSON 9 RICHARD STEPHENSON Power Workers Union 10 ROBERT POWER/ Various Intervenors 11 PETER BUDD/ 12 ALEXANDER GRIEVE 13 BRUCE MacODRUM/ Toronto Hydro Electric 14 MARK RODGER System Limited 15 ALAN MARK Municipal Electric 16 Association 17 TOM BRETT Independent Power Producers' 18 Society of Ontario, IPPSO 19 ELIZABETH DEMARCO Various interested parties 20 BRIAN McKERLIE Municipality of Chatham-Kent 21 ROBERT WARREN Consumers Association of 22 Canada. 23 DICK PERDUE Direct Energy and Enershare 24 Technology 25 DAVID POCH Green Energy Coalition, GEC 26 ZIYAAD MIA Coalition of Distribution 27 Utilities et al 28 976 1 APPEARANCES (Cont'd) 2 ALECK DADSON Enron Capital & Trade 3 IAN MONDROW Heating, Ventilation and Air 4 Conditioning Contractors 5 Coalition Inc., HVAC 6 Coalition 7 MARCEL REGHELINI Ontario Hydro Services 8 Company 9 ROGER WHITE/ Energy Cost Management 10 Incorporated, ECMI 11 RICK GROULX 12 MARK RONAYNE Competition Bureau 13 KEITH RAWSON TransCanada Power 14 ANDREW BARRETT/ Ontario Power Generation 15 SHANE FREITIG Inc. 16 RICHARD BATTISTA Union Gas Limited 17 BARBARA BODNER Enbridge Inc. 18 AMIR SHALABY Ontario IMO 19 DAN PASTORIC Energy Advantage 20 JIM RICHARDSON/ Upper Canada Energy Alliance 21 PAUL FERGUSON 22 MICHAEL JANIGAN Vulnerable Energy Consumers 23 Coalition 24 GRAHAM HENDERSON Ontario Hydro Services 25 Company 26 27 28 977 1 INDEX OF PROCEEDINGS 2 PAGE 3 Preliminary matters 978 4 Presentation by Mr. John Brooks 978 5 Presentation by Ms Paula Casciato 981 6 Questions of Mr. Brooks and Ms Casciato 990 7 Presentation by Mr. Jack Gibbons 1001 8 Questions of Mr. Gibbons 1008 9 Presentation by Mr. Keith Rawson 1011 10 Questions of Mr. Rawson 1013 11 Presentation by Mr. Al Barnstaple 1029 12 Presentation by Mr. Barry Chuddy 1036 13 Questions of Mr. Barnstaple and Mr. Chuddy 1037 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 978 1 Toronto, Ontario 2 --- Upon resuming on Monday, July 19, 1999 3 at 9:00 a.m. 4 MS O'RILEY: Welcome to the fifth day 5 on the Technical Conference on the Standard Supply 6 Service Code. The presenters this morning are Toronto 7 Hydro. 8 I wondered if there were any 9 procedural matters to be dealt with before we start 10 with them. 11 Second, if people haven't signed the 12 timesheets to indicate if they have questions for the 13 people in the lineup today, I would appreciate if they 14 could do that. 15 Mr. Rodger. 16 MR. RODGER: Thank you, Ms O'Riley. 17 Toronto Hydro has three presenters. 18 I will leave the introductions for Mr. Brooks. 19 I have just advised my friends here 20 that the prefiled alternative that Toronto Hydro 21 already submitted to the Board was dated July 5, 1999. 22 I believe everyone has copies of that. 23 With that, I will turn it over to 24 Mr. Brooks to make the introductions. 25 PRESENTATION 26 MR. BROOKS: Thank you, Mark. 27 I have with me Bruce MacOdrum, our 28 legal counsel. I am sure everybody knows who Bruce is. 979 BROOKS/CASCIATO, presentations 1 Also with me is Paula Casciato, one 2 of our energy procurement specialists at Toronto Hydro. 3 She has been a member of the MDC Retail Technical Panel 4 and a member of the Default Supply Subpanel and the 5 Licensing and Code Subpanel. 6 She is our expert up here. 7 I am here this morning to make a few 8 general remarks. I will turn over later the podium to 9 my colleagues to get into some more details on the 10 technical side of this question. 11 I did come here this morning because 12 I recognize the critical importance of the Standard 13 Supply Service Code to the future retail market on both 14 the supplier's side and the customer's side. 15 It is my belief that imposition of a 16 spot price pass-through for standard supply service 17 will ultimately jeopardize the credibility of the 18 entire effort to introduce competition to the 19 electricity market. 20 The Ministry intends to launch an 21 information campaign some time in the fall in an effort 22 to educate, to some extent, the electricity customer 23 about the coming competitive market. The main theme of 24 this campaign will be customer choice. Customers will 25 have lots of choices, which they have never had before, 26 and the freedom to choose their supplier will motivate 27 those suppliers to provide better prices and innovative 28 and improved services. This has been the rationale for 980 BROOKS/CASCIATO, presentations 1 the retail market since the MacDonald Committee Report. 2 Toronto Hydro, for one, has always 3 supported this concept. 4 I believe, as do most of us, that the 5 majority of customers will not want to be bothered 6 switching suppliers, and they will be assured in this 7 upcoming media campaign that they don't have to. 8 I also believe that most of those 9 customers will not be very happy that if they choose to 10 do nothing, they will be forced to accept a pricing 11 regime that could expose them to the volatility of the 12 spot market. 13 The City of Toronto has a great 14 number of low income and senior citizen residents whose 15 incomes do not have the flexibility to weather the 16 swings in electricity prices such as would have been 17 experienced in this province over the past six weeks if 18 there was already a retail market here. 19 I cannot imagine how I would explain 20 to these customers why their bills had jumped so 21 dramatically. How do you explain to the average 22 customer that they shouldn't worry; that the spot price 23 is ultimately the lowest price they could get, and that 24 it will average out over the long run, whatever the 25 long run might be. 26 People not associated with the 27 electricity industry aren't very clear as to why we are 28 doing this competition thing in electricity. I believe 981 BROOKS/CASCIATO, presentations 1 that it is critical for the industry's success that the 2 majority of electricity customers see retail 3 competition in a positive light, and they will only do 4 so if they are offered something as good as or better 5 than they have now. I don't believe that spot price 6 pass-through fits the bill. 7 Most of us electricity consumers -- I 8 presume all of us are, actually -- and I would 9 certainly urge everyone to remember that perspective 10 when it comes to determining what the ultimate outcome 11 of these hearings will be. All of the economic theory 12 and organizational theory aside, it ultimately comes 13 down to the customer. 14 I think those are the most important 15 people to hear from and ultimately will be the ones who 16 judge whether this is a success or not. 17 Those are my opening remarks. I will 18 now turn it over to Bruce MacOdrum to get into a 19 more -- or is Paula going to go first? 20 MS CASCIATO: Yes, I am. 21 MR. BROOKS: Paula is going to go 22 first. 23 PRESENTATION 24 MS CASCIATO: This presentation will 25 strengthen and support our written submission and will 26 examine the proposed SSS Code by addressing four 27 themes: one, risk management; two, facilitation of 28 competition; three, level playing field; four, what 982 BROOKS/CASCIATO, presentations 1 customers want. 2 I will begin with risk management. 3 Who should bear the price volatility 4 risk? Risk should be borne by those best able to 5 manage them. The proposed SSS Code, with a spot price 6 pass-through, provides no price certainty for SSS 7 customers. All customers are, by definition, SSS 8 customers until they select an alternative pricing 9 option. 10 In order for our customers to select 11 among alternatives, we want to help them gather 12 information and be able to make informed decisions. In 13 other words, we plan to work with our customers to help 14 them manage their risk by selling them power and by 15 educating and empowering them to understand their 16 options. 17 By imposing a spot price on a 18 customer in a new market with which they have no 19 familiarity or experience and likely little 20 understanding of even the components of the price of 21 electricity, we risk hurting support for introducing 22 competition to this industry in the first place. 23 Public support for competition itself will be at risk. 24 While rate changes annoy customers, 25 not being able to tell customers their rates can be 26 expected to annoy them more. We know this from our 27 recent experience in Toronto with our current rate 28 harmonization for residential customers. We have six 983 BROOKS/CASCIATO, presentations 1 rates for the former six municipal utilities, which are 2 being harmonized into uniform rates. Our customers 3 tell us, daily in fact, that they don't understand the 4 reasons for the changes. Our costs and our activity 5 level and, of course, the costs associated with 6 responding to this level of customer concerns imposes 7 real costs on our utility. 8 Now let's imagine that we have 9 implemented the SSS spot price methodology. We would 10 see different rates on every billing period. These 11 will likely be highest in summer and winter and lowest 12 and spring and autumn seasons. 13 Another complication is that we, like 14 all other utilities, send out bills daily. So, this 15 might mean that two neighbours living across the street 16 from one another might have the same energy consumption 17 in a billing period, but end up paying different rates 18 and total bills, depending on their billing cycles. 19 The wholesale spot market will clear 20 on an hourly basis according to bids and offers by 21 wholesale generators and purchasers. Generators' bids 22 assuming competition in the spot market will reflect 23 generating even at short-run marginal costs. This, of 24 course, assumes competition and generation, something 25 that we may only achieve in Ontario over the next 10 26 years. 27 The prices at which the spot market 28 clears will more likely be representative of OPGI, 984 BROOKS/CASCIATO, presentations 1 Ontario Power Generation Inc.'s, bidding strategy and 2 not competitive market prices. This strategy should be 3 based around recovering a maximum of revenue under the 4 revenue cap provisions of the MPMA or Market Power 5 Mitigation Agreement. At the same time, it may work to 6 deter new entry. The actual PGI's bidding strategies 7 that may result from these circumstances are impossible 8 to predict. 9 SSS customers, all customers 10 initially, will be subject to rates and price 11 fluctuations most directly influenced by OPGI. Small 12 customers have the least ability to understand the 13 market structure, the prices they will face in the spot 14 market and will not be able to measure whether 15 retailers' offers are likely higher, lower or 16 equivalent to the future average spot market price 17 corrected by an even more complicated MPMA and rebate 18 formula. This lack of understanding will lead to 19 numerous calls and complaints and, we believe, little 20 customer migration. 21 Under the proposed SSS Code, LDCs and 22 providers of the SSS are relieved of any risk if they 23 simply take power from the spot market and sell it to 24 customers at spot prices plus administration charges. 25 This proposed Code accomplishes the goal of risk 26 mitigation for the SSS provider. However, the question 27 remains: Is it appropriate to transfer this risk 28 entirely onto small customers? Our position is that it 985 BROOKS/CASCIATO, presentations 1 is clearly not appropriate. 2 I have already presented some of 3 Toronto Hydro's customers' reactions to our rate 4 changes due to amalgamation in the city of Toronto. We 5 cannot support a system that will add significant 6 uncertainty on the consumers' bills. 7 The price risks for participating in 8 a market should be borne by those who are best able to 9 manage them. Because of the extent of the industry 10 knowledge required and the costs and complexity of 11 hedging these risks, customers not able to should not 12 be expected to bear this burden. Customers will have 13 to learn about the new competitive electricity market, 14 compare effectively retailer offers, choose one and 15 sign a service contract. Experience in other 16 industries has shown that many customers are reluctant 17 to switch. This is compounded when the standard offer 18 with which to compare offers is based on a spot price. 19 Spot price standard supply service 20 does not allow for an apples-to-apples comparison of 21 retail price offers. The MPMA does not protect small 22 customers. There could be considerable monthly or 23 seasonal price volatility. Yet OPGI may still have an 24 overage price less than 3.8 cents. 25 Additionally, once the MPMA is no 26 longer in effect, which could be on market opening if 27 OPGI moves quickly to reach decontrol targets, there 28 will be no protection in place for small customers. It 986 BROOKS/CASCIATO, presentations 1 may well be that the Board will be in the position of 2 developing a new SSS methodology in the absence of the 3 MPMA to afford some level of customer protection and 4 price certainty. 5 Now on to facilitation of 6 competition. It is Toronto Hydro's position that a 7 spot price pass-through option will not facilitate the 8 creation of competitive retail markets. I will 9 reiterate some of the points raised by Mr. Adamson in 10 his paper entitled "Preliminary Critique of the Draft 11 Standard Supply Service Code", dated February 9th, 12 1999. 13 The weighted average spot price model 14 on which the SSS price is based will impose significant 15 and unnecessary risks on Ontario consumers, especially 16 smaller consumers. 17 We would like to point out again that 18 competition itself may be at risk. There exists a 19 danger that the public will have a bad taste in their 20 mouth for competition if they do not understand how 21 they are being billed if there is a very great 22 difference between what they are currently paying and 23 what they will be paying in a competitive market. 24 Further confusion will result with 25 billing-period-to-billing-period price variation. All 26 of this may cause a great deal of customer 27 uncertainties with respect to the new market. 28 There is potential for negative 987 BROOKS/CASCIATO, presentations 1 public reaction. SSS price will impede the development 2 of liquid financial intermediate markets. Without a 3 fixed price, new entrant generators will face a higher 4 cost of capital, if they can secure financing at all. 5 The fixed alternative is therefore 6 imperative for efficient risk sharing amongst 7 customers, retailers and generators. 8 Additionally, the spot price 9 pass-through pricing method proposed by the Ontario 10 Energy Board will impede the competitive position of 11 new entrants in the generation and retail markets. 12 I will now turn over the presentation 13 to Bruce MacOdrum. 14 MR. MacODRUM: Thank you, Paula. 15 Both the Market Design Committee and 16 Board staff have stated that its goal is to create a 17 level playing field, but we believe the effect of their 18 proposal is to place unfair burdens on local 19 distribution companies like Toronto Hydro. 20 The shareholder value of the business 21 corporations that were recently incorporated by the 22 City of Toronto on June 23rd will be based on an 23 assessment of the value of the businesses in which 24 Toronto Hydro is engaged today and those it will be 25 engaged in in the future. 26 Toronto Hydro's relationship with its 27 customers is an important ingredient in any 28 determination of shareholder value. 988 BROOKS/CASCIATO, presentations 1 Granted, this historic and valued 2 relationship that Toronto Hydro shares with its 3 customers is an advantage. Nonetheless, in our view it 4 is not an unfair advantage. 5 Of major consequence is the fact that 6 by the time competitive electricity markets begin in 7 the year 2000, Ontario's natural gas distributors will 8 already be at a significant advantage, having had 9 15 years to develop and realize separated monopoly and 10 competitive businesses from their former structured 11 integrated monopolies. 12 In summary, it is Toronto Hydro's 13 position that in order to establish a truly level 14 playing field it is necessary to allow municipal 15 electric utilities the opportunity to maintain its 16 relationship with its customers and a period of time to 17 complete the organizational and system changes 18 necessary to compete fairly in the unfolding Ontario 19 electricity market. 20 Finally, I would like to end on the 21 topic of what our customers want. Mr. Brooks has 22 already addressed this issue in some detail, but the 23 Board's solution is to place all the responsibility -- 24 or the Board's staff solution, I should say, Brian, is 25 to place our responsibility to accommodate price 26 volatility on the customer. 27 Toronto Hydro believes that its 28 customers and the taxpayers of Toronto expect Toronto 989 BROOKS/CASCIATO, presentations 1 Hydro to offer price offerings that mitigate risk and 2 that take into account their circumstances and their 3 requirements. Toronto Hydro's view is that the purpose 4 of the legislation is to provide customers with low 5 cost electricity, a choice of supplier, and to create a 6 competitive market while not exposing consumers to 7 excessive risk. 8 Accordingly, a standard supply 9 obligation should be met through an offering at a fixed 10 price in order to mitigate customer risks due to spot 11 market volatility. 12 The basic price for all standard 13 supply service customers could be set at fixed rates to 14 mitigate customer price risk due to spot market 15 volatility. 16 Our position is that the standard 17 supply customers should receive a fixed price offering 18 that is established locally by each local distribution 19 company. The fixed price should establish price 20 stability for end-use customers in a volatile commodity 21 market and should promote new entry and the offering of 22 new competitive products and services to standard 23 supply service customers. 24 The weighted average spot price model 25 on which the standard supply service price is based 26 will impose significant and unnecessary risks on 27 Ontario consumers, particularly smaller consumers. 28 The Government of Ontario promised 990 BROOKS/CASCIATO, presentations 1 customers competition in the electricity market, and by 2 promoting a fixed price option it is our view the 3 competitive market will develop more quickly than under 4 a spot price pass-through option. 5 All of these issues are, as 6 Mr. Rodger said, addressed in our submission of 7 July 5, 1999. 8 Thank you very much. 9 MS O'RILEY: Mr. Gibbons, do you have 10 any questions? 11 MR. GIBBONS: Yes. 12 John, I believe Toronto Hydro has 13 announced its plans to purchase cleaner electricity 14 from the Lakeview Generation Project and from the 15 Boralex Cogeneration Project? 16 MR. BROOKS: That's right. 17 MR. GIBBONS: How much electricity 18 would you be purchasing from those projects? 19 MR. BROOKS: The Lakeview Project 20 would be somewhere in the order of 250 megawatts; and 21 Boralex, that's similar, about a similar amount. 22 MR. GIBBONS: You have also announced 23 proposals to build two wind turbines on the lake front? 24 MR. BROOKS: Yes. 25 MR. GIBBONS: Those three or four 26 projects, what percentage of your power would come from 27 them? 28 MR. BROOKS: In total, no more than 991 BROOKS/CASCIATO 1 20 per cent. 2 MR. GIBBONS: Has your shareholder 3 expressed support for your endeavours to purchase 4 cleaner power? 5 MR. BROOKS: Oh, absolutely. They 6 are 100 per cent behind us, yes. That is certainly one 7 of the mandates we have been given by our shareholder. 8 MR. GIBBONS: Thank you. Those are 9 my questions. 10 MS O'RILEY: Mr. Power, do you have 11 questions for this presenter? 12 MR. POWER: I have just one, please; 13 open to the panel, I guess. 14 What affect will the Affiliate 15 Relationships Code 2.5.7 have on your intended business 16 operations? 17 MR. MacODRUM: Mr. Power, I'm not so 18 sure, under the issues list, how much the Affiliate 19 Code gets into this. We have obviously taken a close 20 look at the Affiliate Code. It is attached to our 21 distribution licence which we are operating under. We 22 certainly, in the time period afforded, are going to 23 want to have discussions with the Board exactly as to 24 how we deal with that. 25 I think some of our concerns are more 26 the timing of some of the provisions of the Code, but 27 we will be addressing that in another forum. 28 MR. POWER: Okay. Thank you. 992 BROOKS/CASCIATO 1 MS O'RILEY: Mr. Mark? 2 MR. MARK: No. 3 MS O'RILEY: Mr. Brett? 4 MR. BRETT: No. Thank you. 5 MS O'RILEY: Mr. Mia? 6 MR. MIA: No. Thank you. 7 MS O'RILEY: Is Mr. White or 8 Mr. Rawson -- 9 MR. RAWSON: I have no questions. 10 MS O'RILEY: I take it there are no 11 questions out there that I am not seeing? 12 I have a question, then. 13 On page 7 of the submissions from 14 Toronto Hydro, you talk about the need to establish a 15 transition period to a competitive market and compare 16 it to the sort of transition that was afforded natural 17 gas distributers. I wondered if you would elaborate on 18 what you would see in this transition? 19 MR. MacODRUM: I think the first 20 thing I would say is Toronto Hydro supports the 21 introduction of retail competition in 2000. We are 22 not, by suggesting that there should be a transition 23 period, in any way backing off from that support. 24 I think we do feel however that 25 certain of the elements -- and Mr. Power touched upon 26 this, certain of the requirements of the Affiliate 27 Code, perhaps even the initial form of the standard 28 supply obligation, some of the PBR requirements -- and 993 BROOKS/CASCIATO 1 I understand that, for example, the PBR requirements, 2 that there is intended to be a sort of three-year 3 initial PBR program and then look at it again and a 4 more complex -- so we are looking at phased 5 implementation of some of the regulatory requirements, 6 and we think that this is necessary both so that 7 consumers are brought along in understanding the 8 changes in our company but also so that the industry 9 can adapt. 10 Our analysis, for example, is that 11 there are a multiplicity of system changes that have to 12 be made. We are already in the process of integrating 13 many of our systems as a result of the amalgamation and 14 ensuring that they are Y2K compliant. There are 15 further system changes needed to facilitate the retail 16 market. These are going to take time and we feel, for 17 example, that their implementation to meet 18 requirements, such as some of the provisions of the 19 Affiliate Code, should be dealt with in a phased-in 20 period. 21 MS O'RILEY: There is I guess a sort 22 of recommendation on page 9 of your report, the "Basis 23 of the Plan", and it's recommendation number 4 that 24 suggests that a standard supply offer would be 25 submitted to the OEB for approval under section 78(3) 26 of the OEB Act, 1998, based on Toronto Hydro's proposed 27 Year 2000 rates. 28 I wondered if you could explain that 994 BROOKS/CASCIATO 1 in a little bit more detail, what that rate actually 2 is. 3 MR. MacODRUM: We are going to have 4 to be before the Board some time between, I believe it 5 is, November and May with our proposal for distribution 6 rates, in accordance with the timetable set out in the 7 proposed draft PBR handbook. 8 Resulting from that process will come 9 a rate order establishing the distribution rates. We 10 believe that the Board, when it exercises its 11 rate-making jurisdiction to do that, could also 12 exercise its rate-making jurisdiction to fix either a 13 standard supply rate or a standard supply methodology 14 for Toronto Hydro. 15 For example, it could put a price cap 16 on what the standard supply offering is. 17 We envisage it being done as part of 18 the rate-making process which the Board must already 19 undertake as part of their new rate-making 20 responsibilities, which we understand they intend to 21 do, in Toronto Hydro's case at least, in a PBR 22 framework. 23 I am advised that the PBR rate 24 handbook does envisage that information on the cost of 25 power has to be filed as part of the PBR application. 26 Therefore, it seems to us not to be an extensive 27 additional regulatory burden, to use a phrase that is 28 often referred to in this room in this proceeding. It 995 BROOKS/CASCIATO 1 is not a significant additional regulatory burden to 2 also include the consideration of a standard supply 3 price. 4 In our case, and I think in most 5 utilities' cases, there will be a series of prices 6 because of different customer classes -- commercial, 7 residential, general service -- or a standard supply 8 price methodology, again referring to something like a 9 price cap or something like that. 10 So that's about as far as our 11 thinking has gone at this stage, to the extent I am 12 aware of it. 13 MS O'RILEY: Just to clarify: Would 14 you see the price of power being in some way or another 15 indexed to the spot market? 16 The reason that I am asking this is 17 because although -- and I understand the argument for a 18 contract market, but there is really only at this 19 stage, given Mr. Jenkins' testimony or presentation on 20 Friday that it would take two years to build even the 21 plant at Lakeview, there is really just one contract, 22 one major retailer, and then a small amount of 23 independent power. 24 Do you see that as in some way 25 indexed to what the spot market would be doing, or just 26 a level that is established based on existing costs of 27 generation? 28 MR. MacODRUM: I would certainly not 996 BROOKS/CASCIATO 1 think it would be indexed to the spot level. I don't 2 think we would go to all the trouble we have been going 3 to in the past several days before this forum and then 4 come in with a standard supply price indexed to the 5 spot price. 6 We are looking at a fixed price. We 7 are looking for something that is a smooth transition 8 from our present rate levels and our present rate 9 structures, something that the customer can understand 10 and not only understands but understands it is 11 responsive to their needs and will generate support for 12 the changes that are taking place in electricity 13 markets in Ontario. 14 MS O'RILEY: I see Mr. Perdue has 15 joined us. 16 Do you have questions for these 17 presenters? 18 MR. PERDUE: No, that's fine; thank 19 you. I apologize for being late. 20 MR. HEWSON: I have just one quick 21 question. I am not sure how it falls into the issues 22 list. 23 You have a provision in your code 24 that you have presented, the alternative code, 2.7.2, 25 on page 20. I wasn't quite clear exactly what was 26 intended by that provision. 27 MR. MacODRUM: I'm sorry, what page? 28 MR. HEWSON: It's on page 20 of your 997 BROOKS/CASCIATO 1 submission, Bruce, and it is provision 2.7.2 that you 2 have inserted into the code. 3 I am curious as to what the intention 4 is behind that particular addition to the code. 5 MR. MacODRUM: We are having trouble 6 finding the author of this recommendation. I am 7 advised that it is not one of the three people on the 8 panel. 9 I think what -- and certainly, we can 10 get back to you with more details on the basic 11 understanding behind this. 12 When we saw the White Paper and when 13 we saw the legislation, what we understood was that we 14 had to separate our business into two separate 15 businesses. We had to separate it into a wires company 16 and a retail company. 17 In fact, the restructuring that the 18 City of Toronto has undertaking has established two 19 separate affiliates for the monopoly and the 20 competitive businesses. We view that the energy 21 commodity business would all be conducted by the retail 22 affiliate, including the standard supply business. 23 That affiliate would be able to buy 24 electricity, a portfolio of electricity which they 25 would make available to its customers, including the 26 standard supply customer, and the cost of that 27 portfolio to supply the standard supply customers would 28 be subject to scrutiny by the Ontario Energy Board, 998 BROOKS/CASCIATO 1 addressed in answer to an earlier question, as part of 2 our annual rate filing. 3 If that is the case, I think we 4 envisage that any communications to the customer and 5 the primary point of customer contact is going to be 6 the electricity retailer, our competitive business. 7 So it is appropriate that the 8 distributor should be able to arrange that the person 9 who is the primary customer contact could include in 10 the information that they share with the customer 11 information about the services that the distributor is 12 offering. 13 MS O'RILEY: I have one more question 14 for you, which is from Mr. Poch, on behalf of Green 15 Energy Coalition. 16 It is whether you think that section 17 2.7.3 of the draft code would interfere with DSM in 18 Toronto Hydro's opinion; i.e., while DSM has agreed to 19 be a distribution activity on the gas side, it might be 20 that the distributor is not obliged to send any 21 particular DSM-related bill stuffer. 22 The question is: Would Toronto Hydro 23 agree that DSM should be an option available to MEUs 24 and 2.7.3 should not restrict it? 25 --- Pause 26 MR. MacODRUM: I don't believe we 27 include 2.7.3 in our proposed code. 28 We propose the dropping of that 999 BROOKS/CASCIATO 1 provision from the Code. 2 I should say, though, about demand 3 side or energy conservation information, that we 4 believe that there are customers who are very 5 interested in demand side management option, and we 6 certainly intend to communicate to them about what 7 opportunities there are there and provide them with 8 services to do that, as we are at the present time. 9 MS O'RILEY: Mr. Brett. 10 MR. BRETT: I just have one question 11 for the panel. 12 I represent the Independent Power 13 Producers Society of Ontario. In our comments set out, 14 we make the point that we see the need for some sort of 15 restriction -- this is with respect to default supply 16 now -- on the degree to which a municipal distributor 17 would be able to purchase generation or power for 18 default supply from generation facilities which it owns 19 or in which it holds a beneficial interest. 20 We weren't thinking in terms of an 21 absolute prohibition, but we were thinking in terms of 22 some sort of limit placed on the amount of power, of 23 your own power effectively that you could purchase for 24 use in fulfilling your default supply obligation. 25 Do you have any comment on that or 26 reaction to that? 27 MR. MacODRUM: I think one of the 28 things, as we get into this new world, we constantly 1000 BROOKS/CASCIATO 1 remind ourselves that we have shareholders. We have a 2 single shareholder, and that shareholder will be making 3 the investment in our generating projects and 4 cogeneration projects that Mr. Brooks alluded to. 5 Certainly, we want to afford the 6 benefits of all of our customers who, in the case of a 7 municipally owned utility like Toronto Hydro are also 8 indirectly our shareholders, the benefits of those 9 investments. 10 We are not proposing any restriction 11 that would deny our customers the benefits of locally 12 produced power, green power, or other options. 13 Mr. Brooks may want to add to that. 14 MR. BROOKS: I will just add to that. 15 The whole purpose of our owning 16 generation is, to a large extent, is to hedge our 17 position and to mitigate risk. We need to be able to 18 move in and out of the market with our own generation 19 when things happen, such as have happened in the last 20 few months. 21 So it would seem to be kind of going 22 against that if we are prevented from using our own 23 generation. 24 MR. BRETT: Thank you. That is my 25 question. 26 MS O'RILEY: Is there anyone else 27 here now who has questions for these presenters? 28 Then, thank you very much. 1001 BROOKS/CASCIATO 1 Mr. Brett, is your panel here yet? 2 MR. BRETT: No, actually. I had them 3 coming for 10:30. I thought this would go somewhat 4 longer than it did. This is always the way with these 5 sessions. 6 It may be that you want to have 7 someone like Mr. Gibbons, who I know is anxious to get 8 on and off today, to step in at this point. 9 We will be ready to go at 10:30, but 10 probably not much before that. 11 MS O'RILEY: Thank you. 12 Mr. Gibbons, would you be willing to 13 present at this time? 14 MR. GIBBONS: Sure. 15 MS O'RILEY: Thank you. 16 --- Pause 17 PRESENTATION 18 MR. GIBBONS: Good morning. I am 19 Jack Gibbons, and I am here on behalf of Pollution 20 Probe. 21 The Ontario Medical Association has 22 issued a warning that air pollution is a public health 23 crisis in Ontario. According to the Government of 24 Ontario, 1800 people a year die as a result of air 25 pollution in this province. Hundreds of more suffer 26 asthma attacks which are triggered by air pollutants in 27 the air. 28 In fact, in Hamilton one out of every 1002 GIBBONS, presentation 1 five children suffers from asthma. The Ontario Power 2 Generation Company is a major source of Ontario's air 3 pollution and our public health crisis. To be 4 specific, OPG is the largest corporate source of 5 smog-causing nitrogen oxide emissions in Ontario. It 6 is also the largest corporate source of mercury 7 emissions and carbon dioxide emissions. OPG is the 8 second largest corporate source of our sulphur dioxide 9 emissions. 10 In its White Paper, the government of 11 Ontario promised that it would implement competition in 12 a way which would ensure that the province's 13 environmental protection record is maintained and 14 improved. To improve our environmental protection 15 record, we must reduce the emissions or 16 electricity-related emissions. 17 The Market Design Committee, in its 18 report, has made two recommendations which are of 19 special importance to this proceeding. First, the 20 Market Design Committee recommended the government of 21 Ontario should establish caps for all of Ontario's 22 electricity-related air pollutants. Second, the Market 23 Design Committee recommended that a smoothed spot price 24 pass-through should be the standard supply service 25 option. 26 Clearly, if the government of Ontario 27 does establish strict emissions caps for all 28 electricity-related pollutants before the market opens 1003 GIBBONS, presentation 1 in the year 2000, a smoothed spot price pass-through 2 will not jeopardize public health and the environment. 3 However, in the absence of such an environmental 4 regime, which is caps for all electricity-related air 5 pollutants, the Board staff's proposal to use a spot 6 price as the standard supply service option, will 7 exacerbate our air pollution crisis by increasing our 8 dependence on coal-fired electricity. 9 That will be mean more air pollution 10 for Ontario over time. Unfortunately, at this time, 11 there is no indication that the government of Ontario 12 is planning to establish strict emissions caps or even 13 emissions caps for all of Ontario's electricity-related 14 emissions. 15 So what should the Ontario Energy 16 Board do? The Board staff has proposed that the 17 standard supply service option should be the spot price 18 pass-through and, quite frankly, there are two very 19 powerful arguments in favour of this proposal. First, 20 for large industrial customers which have interval 21 meters, a spot price pass-through could play a very 22 powerful role in helping us to balance the supply and 23 demand for electricity on a daily basis. That could 24 help reduce peak demands, it could improve the load 25 factor of the electricity system, and reduce costs. So 26 that's one very powerful argument in favour of the 27 Board staff's proposal. 28 The other strong argument in favour 1004 GIBBONS, presentation 1 of their proposal is it will minimize regulatory costs. 2 The OEB's regulatory costs of ensuring that the 3 electricity commodity price is correct will be 4 essentially trivial. Nevertheless, I believe that a 5 fixed price option is the best option in the public 6 interest for the MEUs and Ontario Hydro Services 7 Company's residential and small commercial customers 8 for four reasons. 9 The first one is quite simply it's 10 what the customers want. We have seen significant 11 volatilities in the gasoline market and that creates 12 all kinds of public outrage, even though there is 13 absolutely no evidence the gasoline retailers are 14 making excess profits. We know an electricity spot 15 market will be volatile. Nobody knows how volatile it 16 will be, but we do know that a volatile electricity 17 spot market will create very significant public outrage 18 and it will reduce public support for the move to a 19 competitive electricity market. 20 The government of Ontario and the 21 Ontario Energy Board want to manage a smooth transition 22 to a competitive electricity market and volatile spot 23 prices which undermine political support for the move 24 to a competitive electricity market I do not believe 25 are in the public interest. 26 Now, a fixed price option, in 27 addition to solving the volatility problem, also 28 provides two very important additional benefits. The 1005 GIBBONS, presentation 1 fixed price option allows municipal electric utilities 2 to contract with other electricity suppliers for 3 supply. As we have seen, Toronto Hydro and Hydro 4 Mississauga have already announced proposals to 5 contract with new suppliers to bring new supply into 6 the electricity market and those new supplies are 7 absolutely essential to help reduce Ontario Power 8 Generation Company's market power. 9 We all know that if we were to have 10 the benefits of a truly competitive market, we would 11 have to reduce its market power and this is a very good 12 way to do that; by allowing the municipal electric 13 utilities to use their countervailing power to bringing 14 new supply and to challenge Ontario Power Generation 15 Company's dominant market position. So the fixed price 16 option allows us to help reduce market power and that 17 will reduce prices over time. 18 The fixed price option, by allowing 19 the municipal electric utilities to contract with new 20 suppliers for power, also can provide very large 21 benefits in terms of cleaner air. In this context, 22 it's very important to remember that the total power 23 consumption of the residential and small commercial 24 customers is more than two times the total output of 25 OPG's coal-fired power plants. So if the MEUs contract 26 with new cleaner supplies for only 50 per cent of their 27 power demand, we will be able to reduce the use of coal 28 in Ontario to zero. So there is potentially very 1006 GIBBONS, presentation 1 significant benefits from the MEUs contracting with 2 cleaner suppliers. 3 Allowing the MEUs to contract with 4 cleaner suppliers such as the Lakeview Project and the 5 Boralex Project are very much consistent with the White 6 Paper's objective of ensuring that competition is 7 brought in in a manner that leads to cleaner 8 electricity and it's also consistent with the purpose 9 section of the Ontario Energy Board Act. 10 The final reason why I believe that 11 the fixed price option is the best option for 12 residential and small commercial customers is that the 13 regulatory costs of this option need not be high, and 14 there are three reasons for that. The original fear 15 that the regulatory costs will be high, I think, was 16 provoked by the bogeyman of over 200 municipal electric 17 utilities, all with their own stand-alone supply 18 portfolios. If the OEB had to regulate over 200 supply 19 portfolios, obviously the regulatory costs would be 20 exorbitant. 21 But I don't think there is any 22 indication that that is likely to be the case. At the 23 maximum, it appears that Toronto Hydro is the only 24 municipal electric utility which would consider 25 purchasing their power on a stand-alone basis. Hydro 26 Mississauga, which is the second largest municipal 27 electric utility have already entered into a 28 consortium, the G6 consortium, to purchase power. 1007 GIBBONS, presentation 1 So I think if there is a fixed price 2 option, there will be a relatively smaller number of 3 consortiums that will do the power purchasing and, 4 therefore, there will be a relatively small number of 5 supply portfolios that the OEB will have to regulate. 6 So that's the first reason why I don't think the 7 regulatory costs will be high. 8 The second reason is that the logical 9 way for the Board to regulate these different supply 10 portfolios is to go to a PBR type of incentive 11 regulation, such as was outlined by Mr. Adamson. That 12 again, I think, can be implemented at a relatively low 13 cost. What you are doing is harnessing market forces, 14 you are harnessing the self-interest of the MEU's 15 shareholders to ensure that we get a price that is just 16 and reasonable. That is basically the beauty of PBR 17 incentive regulation is it reduces regulatory cost by 18 achieving a greater alignment between shareholder 19 interests and customer interests. 20 I think the third way that the Board 21 could ensure that the regulatory costs of regulating 22 the standard supply option are low is by simply, at the 23 end of the year, issuing a press release to all the 24 newspapers, all the daily papers in Ontario, and to 25 every mayor and city council in Ontario which ranks 26 each of the municipal electric utilities according to 27 their prices for their standard supply service option. 28 That kind of transparency and that kind of knowledge 1008 GIBBONS, presentation 1 will ensure that all the MEUs strive very hard to get 2 very just and reasonable rates. 3 In conclusion, I believe that the 4 Board should establish a fixed price SSS option for 5 residential and small commercial customers for four 6 reasons. First, it's what they want; second, it will 7 help the MEUs reduce the market power of OPG; third, it 8 will help the MEUs bring cleaner power to Ontario and 9 fulfil the objectives of the White Paper and the 10 Ontario Energy Board Act; and, fourth, there is no 11 reason why the regulatory costs of this option should 12 be high. 13 Thank you. 14 MS O'RILEY: Thank you, Mr. Gibbons. 15 Mr. Adams? 16 MR. ADAMS: No questions. 17 MS O'RILEY: Mr. Power? 18 MR. POWER: No questions, thanks. 19 MS O'RILEY: Mr. Rodger? 20 MR. RODGER: No questions. 21 MS O'RILEY: Mr. Mark? 22 MR. MARK: No questions. 23 MS O'RILEY: Mr. Mia? 24 MR. MIA: No questions. 25 MS O'RILEY: Mr. White? 26 MR. WHITE: No questions. 27 MS O'RILEY: Is there anybody I am 28 not seeing who has a question? 1009 GIBBONS 1 Mr. Poch has a question that he has 2 asked me to ask you, Mr. Gibbons. 3 If we have NOx and SOx limits 4 affecting OPG and we don't have carbon caps and 5 controls over mercury and toxics at market opening, 6 might OPG respond with capital investment and 7 scrubbers, et cetera, to run its coal plants harder, 8 thus increasing other emissions? 9 MR. GIBBONS: Yes, I think that's a 10 real possibility. If the government just regulates SO2 11 and NOx emissions, the least cost option for OPG to 12 respond may be to simply put on end-of-pipe scrubbers 13 to meet those emissions reductions and then run its 14 coal-fired power plants even harder to recover its 15 costs. So that's the real danger of not taking an 16 integrated approach to air pollution and just focusing 17 on two pollutants. You may choose an option which 18 doesn't solve all the air pollution problems and is not 19 the least cost. 20 If the government was to pursue that 21 option, then in a year or two it would have to deal 22 with the mercury issue, it would to deal with the 23 greenhouse gas issue, and then if it brought in caps 24 for mercury and greenhouse gas later, those caps would 25 presumably force a conversion to cleaner fuels like 26 natural gas and renewable energy and then you would 27 have stranded your investment on the SO2 and the NOx 28 scrubbers. 1010 GIBBONS 1 MS O'RILEY: I will ask a question 2 from Board staff. 3 One of the, I guess, arguments in 4 your paper is that if MEUs and OHSC are permitted to 5 have a fixed price and are permitted to contract for 6 power, they will contract with cleaner gas-fired plants 7 or cleaner water, those kinds of things. I was just 8 wondering if those aren't necessarily the cheapest 9 options about, if they could get cheaper dirty power, 10 would you think it's necessary for the Board to 11 establish a percentage of contracts that MEUs and OHSC 12 would have to enter into that would be clean contracts 13 or do you think it's more of a natural evolution? 14 MR. GIBBONS: I think certainly from 15 a public health and environmental point of view, if the 16 Ontario Energy Board also, in addition to establishing 17 a fixed price regime for the standard supply service 18 option, if it said that they had to buy a certain 19 percentage of their supplies from clear natural 20 gas-fired plants, that would certainly provide 21 additional public health and environmental benefits. 22 MS O'RILEY: I don't see any other 23 questions for this presenter. Thank you, Mr. Gibbons. 24 MR. GIBBONS: Thank you. 25 MS O'RILEY: I also don't see the 26 IPPSO presenters in the room. 27 Mr. Rawson, would you be willing to 28 make your presentation now? Then I think we would 1011 GIBBONS 1 probably have a break after that. 2 PRESENTATION 3 MR. RAWSON: One more time for the 4 record, my name is Keith Rawson, R-a-w-s-o-n, and I am 5 here on behalf of TransCanada Energy. We put a 6 submission in dated July 5th, so the details are in 7 that. I think it is four pages submitted on that date. 8 I am just going to touch on three 9 elements -- highlight three elements of that submission 10 this morning. The first is related to neutrality. 11 It's our position that the standard service supply 12 should neither unduly advantage nor disadvantage 13 default customers. The proposed spot price 14 pass-through will meet the neutrality test, but only 15 when there is sufficient competition so that the spot 16 price reflects a truly open market. 17 In the interim, until that market is 18 open, a fixed price of 3.8 cents per kilowatt hour is a 19 better neutral price signal. That would be a standard 20 offer-type fixed price. It would be backstopped by 21 Ontario Power again. 22 The second item I want to touch on is 23 uniformity. 24 It is our position that it is not 25 absolutely necessary that the standard supply price be 26 uniform across the province. However, in the absence 27 of compelling evidence that the neutrality objective is 28 best met by varying prices throughout the province, we 1012 RAWSON, presentation 1 must acknowledge that uniformity has inherent 2 advantages. 3 Since such compelling evidence of the 4 advantages by varying prices has not been presented, we 5 must believe, then, that uniformity is a desirable way 6 to set the spot price. 7 The third point I want to touch on is 8 assisting competition. Our view is that there are 9 numerous structural factors that will inhibit the 10 arrival of new entrants in Ontario, not least of these 11 is the price cap mechanism which sets a benchmark at 12 3.8 cents per kilowatt hour. 13 This price is below the all-in costs 14 of most new generation supply, and hence this 15 marketplace will be relatively unattractive to new 16 entrants, at least in the early days. 17 However, having said that, it is 18 possible that the standard service supply could be set 19 up in such a way as to assist competition. In 20 particular, we believe that setting a fixed price at 21 3.8 cents per kilowatt hour would limit the flexibility 22 of Ontario Power Gen and hence help competitors. 23 It would also ensure that small 24 customers would not pay more than 3.8 cents per 25 kilowatt hour, and this is something the price cap does 26 not do because it is quite possible that some customers 27 would do better than 3.8 cents per kilowatt hour. Some 28 customer classes in particular could do better than 1013 RAWSON, presentation 1 3.8 cents per kilowatt hour, at the expense of small 2 customers. 3 So we see that as being a significant 4 advantage in terms of small customers, and also an 5 advantage in terms of competition. 6 Those are the points I wanted to 7 touch on. 8 MS O'RILEY: Thank you, Mr. Rawson. 9 Mr. Gibbons? 10 MR. GIBBONS: No questions. 11 MS O'RILEY: Mr. Adams? 12 MR. ADAMS: I just have a couple of 13 questions. 14 You have proposed a uniform price? 15 MR. RAWSON: Three-point-eight cents, 16 uniform across the province, yes. 17 MR. ADAMS: I understand. 18 So would there be any need for a spot 19 market at all? Should there be an IMO spot market in 20 your proposal? 21 MR. RAWSON: I don't see the need for 22 a spot market being directly linked to standard supply. 23 The spot market would exist for a number of reasons 24 besides just standard supply. 25 So, yes, I see advantages in having a 26 spot market unrelated to standard supply. 27 MR. ADAMS: Do you see any advantage 28 in customers responding to price signals? 1014 RAWSON 1 MR. RAWSON: Yes, I do see an 2 advantage in terms of having customers respond to price 3 signals. 4 I see a major disadvantage in that 5 regard with regard to the price cap mechanism, which 6 inherently takes away those incentives by essentially 7 making the price something like 3.8 cents after the 8 fact, and so the responsiveness of customers is 9 somewhat moot. 10 MR. ADAMS: Let's take a hypothetical 11 situation where Ontario faces a capacity constraint for 12 some extended period of time. What would you expect 13 would happen to the price in the spot market? 14 MR. RAWSON: I think it has been 15 demonstrated in other jurisdictions that the spot price 16 tends to rise when the capacity is tight. I would see 17 that happening as well in Ontario. 18 MR. ADAMS: In this scenario we have 19 a high spot price and we have customers who have an 20 entitlement to power at 3.8 cents, right, under your 21 proposal? 22 MR. RAWSON: Under my proposal, and I 23 think under the market power mitigation price cap 24 mechanism pretty much the same thing, yes. 25 MR. ADAMS: Do you have a mechanism 26 in mind that could prevent customers from taking their 27 entitlement at 3.8 cents and reselling it at spot? 28 If I have an entitlement to something 1015 RAWSON 1 at 3.8 cents and it is selling for 15 cents, I might 2 take all I can get and resell it. What is preventing 3 me, under your proposal? 4 MR. RAWSON: That is not something 5 that I addressed in my submission. 6 I would believe that it would be 7 quite readily done to make that price only apply to 8 ultimate consumption, not for purposes of resale. I 9 think that would be a relatively easy addendum to the 10 proposal. 11 MR. ADAMS: How would you police it? 12 MR. RAWSON: I haven't, as I said, 13 addressed that particular item in the proposal. I'm 14 not sure how you would do that. It isn't certainly 15 something that I have covered off. 16 MR. ADAMS: Let's try another aspect 17 of this issue of the uniform price. 18 If the price were to jump up in a 19 situation of supply constraint another possible reason 20 for price to rise would be exercise of market power by 21 Genco -- or by OPG. Would you agree? 22 MR. RAWSON: It's not clear to me 23 that that kind of price increase that might result from 24 market power of Genco is the same kind of price 25 increase we were discussing when we were talking about 26 market forces. In fact, it is a totally different kind 27 of price increase consideration. 28 But yes, Ontario Power Gen, 1016 RAWSON 1 uncontrolled, could set prices wherever it wanted to. 2 MR. ADAMS: I apologize. That was a 3 messy question, but I think you understood what I was 4 asking. 5 Okay. So we have a situation where 6 OPG could exercise market power and increase price. If 7 customers could respond to that higher price, would 8 that demand response be some mitigation of OPG's market 9 power? 10 MR. RAWSON: To the extent that there 11 is a demand response. I'm not sure that there is going 12 to be a significant demand response evidence, because 13 to date there is very little demand that actually does 14 go off-line when the price is high. 15 But yes, there would be a minor, 16 minor response. Very minor, in my opinion. 17 MR. ADAMS: I can leave it for later 18 to examine the degree, but the direction of the 19 response would be to mitigate market power. Are we in 20 agreement on that point? 21 MR. RAWSON: Direction would be okay. 22 I'm not sure how much of a 23 counterbalance it really would be. 24 MR. ADAMS: Understood. 25 Okay. So we have looked at a 26 scenario where market price might prove to be above 27 your proposed uniform price. 28 I want to walk you through the 1017 RAWSON 1 implications of market price being below. 2 Let's imagine the scenario where we, 3 for some reason, do get new entrants and market price 4 for sustained periods of time is below 3.8 cents. You 5 have locked customers in at 3.8 cents under your 6 proposal. How are you going to explain it to 7 customers? 8 MR. RAWSON: One thing I didn't 9 mention this morning is that the proposal as outlined 10 in the submission is that the spot price go to -- I'm 11 sorry, that the standard price go to spot, in my 12 submission, at the end of the Market Power Mitigation 13 Agreement. However, the end of the Market Power 14 Mitigation Agreement was really no more than a stand-in 15 for forces of competition. 16 I would certainly have no difficulty 17 with the standard price reverting to spot should there 18 be, by some measure, sufficient competition that the 19 spot price is an open and competitive spot price. 20 MR. ADAMS: Thank you. 21 Those are my questions. 22 MS O'RILEY: Thank you, Mr. Adams. 23 Mr. Power? 24 MR. POWER: No questions. 25 Thank you. 26 MS O'RILEY: Mr. Rodger? 27 MR. RODGER: No questions. 28 MS O'RILEY: Mr. Freitig? 1018 RAWSON 1 MR. FREITIG: Good morning. My name 2 is Shane Freitig. I am appearing on behalf of Ontario 3 Power Generation. I am counsel to Ontario Power 4 Generation. 5 Mr. Rawson, I have a few clarifying 6 questions on the Market Power Mitigation Agreement. 7 I would refer you to your submission, 8 in particular the Executive Summary, clause 1.0. Also, 9 on page 3, the third bullet. Do you have those 10 references? 11 MR. RAWSON: I have them. 12 MR. FREITIG: Thank you. 13 There is a reference to a 42-month 14 period after the market opening in which a flat price 15 of 3.8 cents would apply. Do you have that reference? 16 MR. RAWSON: Yes. 17 MR. FREITIG: Just to be clear, are 18 you aware that the 3.8 cents price cap applies for a 19 period of 48 months, not 42 months? 20 MR. RAWSON: That's the first I have 21 heard. All the references I have seen it said 22 42 months, but if that is the case -- the 42 month is a 23 reflection of the Market Power Mitigation Agreement, in 24 particular the price cap. So the intention is to cover 25 that period. 26 If it's 48 months, fine. 27 MR. FREITIG: Would it be fair to say 28 that perhaps the 42 months more properly refers to the 1019 RAWSON 1 requirement to decontrol? 2 MR. RAWSON: The decontrol has two 3 aspects, one of which is the mandated reductions in 4 share of generation. The other, the price cap, and 5 I am particularly highlighting the price cap of 6 those two. 7 MR. FREITIG: Okay. 8 But in particular, the 42 months 9 really speaks to the requirement to get down to 35 per 10 cent. Is that correct? 11 MR. RAWSON: That wasn't what was 12 driving the material in the submission. 13 If the generation reduction decontrol 14 aspect were quicker than 42 or 48 months, whatever the 15 time period is, then along the lines of my response to 16 Mr. Adams, and subject to some test as to whether the 17 market is open and competitive, then perhaps you could 18 revert to the spot price sooner than later. 19 MR. FREITIG: Mr. Rawson, I'm not 20 arguing or even referring to your submission. I'm just 21 trying to clarify for the record. 22 Forty-eight months deals with the 23 price cap; 42 months deals with a requirement to 24 decontrol? 25 MR. RAWSON: Now perhaps I am 26 confused. 27 The particular item I was referring 28 to when I put that point in the submission was the 1020 RAWSON 1 price cap regime. That was what the 42 months was 2 referring to. 3 MR. FREITIG: If you were to refer to 4 the Market Power Mitigation Agreement and it indicated 5 that it was 48 months, would you agree that you would 6 have to modify your submission to indicate that the 7 price cap ends at 48 months? 8 MR. RAWSON: If it is in fact 9 48 months, yes, I would modify the submission to make 10 it 48 months. 11 MR. FREITIG: Thank you. 12 Now, on page 4 you have some further 13 discussion of the working of the Market Power 14 Agreement. I have a few questions on the points you 15 have raised there. 16 Are you aware that the Market Power 17 Mitigation Agreement imposes a 3.8 cent cap and rebate 18 only on OPG and not on any other supplier? 19 MR. RAWSON: Yes. 20 MR. FREITIG: Are you also aware that 21 the price cap of 3.8 cents applies to a predetermined 22 quantity of power equivalent to 90 per cent of OPG's 23 expected market share in Ontario? 24 MR. RAWSON: Yes. 25 MR. FREITIG: Would you agree that an 26 individual customer, because of its unique load shape, 27 could experience an average price above 3.8 cents, even 28 if the average price in the spot market was below 1021 RAWSON 1 3.8 cents? 2 MR. RAWSON: On that point, I am a 3 little less clear. I believe that possibility exists, 4 but I would have to understand the detailed mechanisms 5 of the price cap a little better than I do to be 6 absolutely certain about that point. 7 MR. FREITIG: Would you agree that 8 there is nothing in the market power deal that really 9 says that residential customer have to pay more than 10 3.8 cents and that industrial customers will pay less 11 than 3.8 cents? 12 MR. RAWSON: There is no explicit 13 reference that I am aware of in the price cap regime 14 that says what any individual customer will pay. 15 However, it is also quite clear to me 16 that the price cap regime would permit differences 17 between what customers pay for reasons other than load 18 shape. 19 MR. FREITIG: What would those 20 reasons be? 21 MR. RAWSON: Whatever actions Ontario 22 Power Generation decides to take with regards to its 23 customers. 24 MR. FREITIG: Would that be 25 unilateral actions on behalf of Ontario Power 26 Generation? 27 Would it not be fair to say that it 28 would be subject to discussions with customers and 1022 RAWSON 1 agreements with customers? 2 MR. RAWSON: I would very much doubt 3 that there would be many agreements between Ontario 4 Power Generation and individual small customers. There 5 might very well be discussions and negotiations between 6 Ontario Power Generation and large customers. 7 MR. FREITIG: Okay. 8 But doesn't it then follow that -- I 9 mean, the 3.8 cents, there is nothing that says for any 10 particular customer they have to pay either more or 11 less than 3.8 cents? 12 MR. RAWSON: As I said, I don't 13 recall any explicit reference to what any individual 14 customer would pay under the Market Power Mitigation 15 Agreement. 16 MR. FREITIG: Okay. 17 But there is nothing expressed in 18 there that says that they do in fact have to pay 19 3.8 cents? 20 MR. RAWSON: No, I agree. There is 21 nothing in there that says that the price would be, for 22 any customer, 3.8 cents or any other number. 23 MR. FREITIG: Thank you. 24 One last question. You have a 25 reference in the first bullet of the fifth paragraph of 26 page 4, the one that starts, "Developers of potential 27 new generation". 28 Would you agree with me that 1023 RAWSON 1 predatory pricing is an offence under the Competition 2 Act? 3 MR. RAWSON: I believe that to be the 4 case. However, it is not clear to me, with the Market 5 Power Mitigation Agreement, as it is presently put 6 forward, what role the Competition Bureau would play 7 with regard to Ontario Power Gen pricing. 8 MR. FREITIG: Is there anything 9 within the Market Power Mitigation Agreement that would 10 condone predatory pricing? 11 MR. RAWSON: I don't believe that 12 there is anything in there that would condone predatory 13 pricing, however, it's not clear to me that it prevents 14 it. 15 MR. FREITIG: Would it be fair to say 16 that the Competition Act is under the jurisdiction of 17 the federal government? 18 MR. RAWSON: Yes. 19 MR. FREITIG: Would it also be fair 20 to say that this Market Power Mitigation Agreement is 21 done within the ambit of the provincial jurisdiction? 22 MR. RAWSON: Yes. 23 MR. FREITIG: Would it be fair to say 24 that predatory pricing, because it is under federal 25 act, would take precedence over a provincial piece of 26 legislation? 27 MR. RAWSON: I don't know. 28 MR. FREITIG: Those are my questions. 1024 RAWSON 1 Thank you. 2 MS O'RILEY: Thank you. 3 Are there any other questions? 4 Mr. White? 5 MR. WHITE: If I can go back to some 6 of the early questions. 7 One of the comments made was the 8 concept of entitlement. Is there anything in your 9 proposal that gives the customer an entitlement to 10 energy, an amount of energy that could in fact be 11 resold? 12 MR. RAWSON: Nothing that would 13 specifically give them an entitlement for energy to be 14 resold, no. 15 MR. WHITE: Based on your 16 understanding of the Ontario Energy Board's powers 17 under Bill 35, would any resale of power require any 18 approval of the Board or a licence to do so? 19 MR. RAWSON: I don't know that 20 approval would be required, but certainly a licence 21 would likely be required. 22 MR. WHITE: Thank you very much in 23 that area. 24 In terms of the default supply or the 25 standard supply conditions, one of the specific things 26 contemplated is the advent of customers who may no 27 longer choose to opt for third party supply, who have 28 gone out to a third party and then may choose to return 1025 RAWSON 1 to the standard supply situation. Does your proposal 2 in any way require that those customers in that 3 situation face the same 3.8 cents as customers who are 4 initially in the standard supply situation? 5 MR. RAWSON: On that point 6 specifically, item 5 on page 5 suggests that going to 7 the fixed price standard offered spot would be a 8 one-time choice and they could only revert to standard 9 in the case of retailer failure. But should they 10 revert to standard, they would get the same standard 11 supply price as any other standard supply customer 12 would get at that time -- and depending on time, it 13 might be the 3.8 or ultimately the spot price. 14 MR. WHITE: Based on your knowledge 15 of market conditions, what kind of -- 16 --- Pause 17 MR. WHITE: I'm sorry. Let me 18 rephrase that. 19 What would be the result of 20 significant suppliers of energy defaulting in terms of 21 their ability to supply bilateral or other similar 22 contractual arrangements on the overall price? 23 MR. RAWSON: I'm not sure that if the 24 failure were of retailers, for example, who were 25 procuring their power from providers in the 26 marketplace, I'm not sure there would be any 27 significant impact. I would see more likely 28 significant impacts of failures of generators than of 1026 RAWSON 1 retailers, per se. 2 MR. WHITE: If we were to talk for a 3 minute about a hypothetical situation where we had some 4 large industrial customers who are in fact purchasing 5 from one or more generators who, for particular 6 reasons, end up in default, what influence would that 7 have on the price in the marketplace? 8 MR. RAWSON: These are large 9 industrial customers who contracted with alternative 10 generators, for example? 11 MR. WHITE: Yes. 12 MR. RAWSON: And those generators 13 fail to supply? 14 MR. WHITE: Yes. 15 MR. RAWSON: The impact would be, 16 directionally, less supply and demand showing up on the 17 remaining supply. There would be some tendency for 18 prices to increase. Again, how much of an impact would 19 be questionable. If it were a relatively small failure 20 compared to the size of the marketplace, it might not 21 be much of a change, but there would be a tendency for 22 prices to rise. 23 MR. WHITE: Is there anything within 24 your proposal that suggest how it might be possible for 25 an adjustment in the 3.8 cents in response to that kind 26 of condition? 27 MR. RAWSON: No. There is no 28 proposal for any change to the price for that reason, 1027 RAWSON 1 or, for that matter, for other market forces. 2 MR. WHITE: Thank you. 3 No further questions. 4 MS O'RILEY: Any other questions from 5 parties? 6 Mr. Hewson. 7 MR. HEWSON: Hi, Mr. Rawson. I just 8 had one question on your submission. 9 On page 5 where you are in your 10 conclusions, under 3.0, could you explain what you 11 intend by the suggestion that potential new suppliers 12 could bid to have the right to customers and the 13 proceeds from bidding would go to paying down stranded 14 debt? I don't quite understand that. 15 MR. RAWSON: The inherent supplier 16 for the standard at 3.8 would be Ontario Power Gen. 17 However, to the extent that other participants in the 18 marketplace wanted to have a standard supply assigned 19 to them so that they would take on the obligation of 20 supplying at 3.8, they would be entitled to do so 21 subject to a bidding mechanism where, in effect, they 22 would bid some amount of money for the right to have 23 standard customers priced at 3.8 cents a kilowatt hour. 24 MR. HEWSON: Then the amount they bid 25 in order to get the ability to charge only 3.8 cents 26 per kilowatt hour would go towards paying down the 27 stranded debt? 28 MR. RAWSON: Yes. There would be no 1028 RAWSON 1 other party who would get the benefit of that. It 2 would be essentially put to the stranded debt account. 3 MR. HEWSON: Who would this bid be 4 made to? 5 MR. RAWSON: I hadn't got to the 6 point of thinking through the mechanisms as to how that 7 would be conducted. It could be conducted perhaps 8 under the Ontario Energy Board auspices or perhaps even 9 some third party suitably charged to do it as well. 10 MR. HEWSON: Thank you. 11 MS O'RILEY: Thank you, Mr. Rawson. 12 I suggest that we take our break now 13 for 15 minutes and come back at 25 to 11:00. 14 --- Upon recessing at 10:20 a.m. 15 --- Upon resuming at 10:35 a.m. 16 MS O'RILEY: Could we resume now, 17 please. 18 Mr. Brett, do you have your panel 19 ready? 20 MR. BRETT: Yes, I do; thank you very 21 much. 22 With me today are Al Barnstaple, who 23 is President of IPPSO; and to his right as you are 24 looking forward, is Barry Chuddy, who is a Director of 25 IPPSO. 26 I will let them take it from there. 27 We have a brief statement to make, and then they will 28 be available for questions. 1029 RAWSON 1 PRESENTATION 2 MR. BARNSTAPLE: Thanks, Tom. 3 As Tom mentioned, I am Al Barnstaple, 4 President of IPPSO. For those of you who don't know, 5 IPPSO is the society that represents the interests of 6 the private power industry in Ontario. We have close 7 to 500 members at the current time. 8 We have been very active in the 9 restructuring activities in the province and have dealt 10 with the Board on a number of issues, including 11 generator licensing. 12 We appear here this morning to talk 13 about standard supply service. We feel this particular 14 aspect of the new market is going to be a critical area 15 for our members. We see it also interlinked with a 16 number of other areas in the new market. 17 Essentially, we are coming from the 18 standpoint that our members need to have as much access 19 through various market vehicles to the whole market, 20 including the default market, as possible. 21 We are starting out in Ontario next 22 year with a market that is largely lopsided, with the 23 presence of a dominant generator. It is very difficult 24 to attract new investment that will be necessary to 25 bring about supply change in the province and 26 eventually lower prices to customers, including the 27 default supply customer. 28 We are here today to give you our 1030 BARNSTAPLE/CHUDDY, presentations 1 views on default supply. We are putting forward in our 2 written submission, and we are prepared to talk today 3 about our written submission, several principles about 4 how the default supply should be structured. In 5 particular, we are coming at this from the viewpoint of 6 our members solely, so we haven't tried to address all 7 issues of standard supply service. 8 I would like to point out some 9 background that we see to this particular deliberation. 10 First of all, it seems to be that the 11 standard supply service customer is often portrayed as 12 a victim that is going to be on the horns of a price 13 dilemma. There are very different points of view as to 14 how the best interests of this poor victim should be 15 represented. 16 I think that is the wrong way to look 17 at the default supply. It is another group of 18 customers that, if the market unfolds properly, should 19 benefit as well as any other customer to a new and open 20 market that has a reasonable level of competition. The 21 need here is to ensure that competition comes into this 22 market early so that these customers are not victims of 23 predictions and rules that really may not turn out to 24 be in their best interest. 25 The principles that we have put 26 forward in our submission really talk about how our 27 members need to see the default market so they can 28 serve the interests of them, to increase competition in 1031 BARNSTAPLE/CHUDDY, presentations 1 the province and to make investment. Our members are 2 not of any particular entity or size. They are diverse 3 by nature. 4 Some of our members are companies 5 that would build small green projects, that generally 6 find it very difficult to compete in a marketplace, 7 particularly where there is a dominant generator that 8 is capped on price. At the other end of the spectrum, 9 our members are large companies that are capable of 10 investing in large facilities and even entering into 11 the merchant market in Ontario when that market appears 12 that it is justifiable to support that type of 13 investment. 14 We are here today to talk about how 15 the default supply needs to be structured so that all 16 of our members are capable of contributing to that 17 default supply and through their investments delivering 18 the benefits to all customers, including default supply 19 customers. 20 The first principle we have put 21 forward is that our members need to have a contract 22 access to default supply. That essentially means that 23 we don't want to depend solely on accessing that market 24 through the spot market, particularly in initial market 25 years when the spot market is going to be, we think, 26 very lopsided because of the presence of OPGI and the 27 provisions of the Market Power Mitigation Agreement. 28 So there is a need, we think, for a 1032 BARNSTAPLE/CHUDDY, presentations 1 contract path from our members through to the default 2 supply. Our paper talks a little bit about how that 3 default supply might work. 4 You have had some submissions, I 5 think, from others who talked about that type of a 6 contract path. 7 The second principle we have put 8 forward is that if we are going to have a contract 9 path, it is essential that there me an intermediates 10 market for mitigating risk for contracted entities, 11 both buyers and suppliers, and that that market 12 functions in as open a way as possible. 13 We have read some submissions that 14 lay out how that intermediates market would work, and 15 we generally are in support of those types of things. 16 Basically, you must have an 17 intermediate market so that the default customer is not 18 burdened solely with the risk of price on the market. 19 If you have an intermediate market, then price risk can 20 be offloaded to suppliers and retailers, to some 21 degree, and not have the customer exposed to that risk. 22 The other thing we see that is very 23 important is that because the default market will be 24 quite large in this province, it is important that that 25 market be accessible to provide price signals that 26 indicate the need for new supply in the province. If 27 you rely on the spot market to indicate when supply is 28 made through increased prices, you might be very light 1033 BARNSTAPLE/CHUDDY, presentations 1 in the cycle. 2 Generally, you don't get priced-up 3 spot market until you are very short on supply or 4 supply is getting very tight. Whereas in a contracted 5 market, because there are forward contracts in that 6 market, the parties to those contracts tend to worry 7 more about supply over a longer term than the spot 8 market outlook is. 9 So it is going to be very good for 10 this market if there is a contract path through to the 11 market, because that will provide early price signals 12 for investment. 13 The other area that is critical, as I 14 mentioned, a lot of our members are investors in small 15 facilities and operate small facilities, particularly 16 those based on renewable and high efficiency 17 cogeneration projects that range in size from a 18 megawatt up to, say, 100 megawatts, maybe 200 19 megawatts. They would be deemed small, I would think, 20 in the future market. 21 For those types of projects to be 22 financed efficiently, there needs to be some degree of 23 contracting for their output. And the default market, 24 because it is a large part of the initial market, will 25 require contract access to that market, as I have 26 pointed out. 27 The other thing that is very 28 critical, I think, before the Board here at this time 1034 BARNSTAPLE/CHUDDY, presentations 1 is that we are dealing with standard service supply 2 issue at the current time and the code for that. There 3 will be subsequently an OEB deliberation on 4 transmission tariffs, and it could be as a result of 5 the transmission tariff deliberations that we have a 6 transmission tariff structure and application for those 7 tariffs in the province that do give some pricing 8 advantage to small greener projects that are 9 distributor or imbedded out in loads. 10 These types of facilities, if they 11 have what we think will be fair transmission rates, 12 will be able to offer contracted power or surplus power 13 to the default market at prices that are less than the 14 spot market. In fact, I think you will see members 15 offering to contract for sales of power for such 16 facilities at a discount to the spot market. 17 It is important that the default 18 customer be able to access this type of low cost power, 19 which is really contingent on the outcome of the 20 transmission rate hearings. 21 What I am saying here is that that 22 hearing on transmission issues, the outcome of that is 23 tied in many ways to the deliberations here on standard 24 service supply. 25 The final point we make in our 26 principles is that there are already quite a number of 27 distributors in the province, and these companies are 28 capable, we believe, of being a party to the contract 1035 BARNSTAPLE/CHUDDY, presentations 1 pass-through to the default market and should be given 2 the flexibility to do that. 3 There are ways that have been 4 prescribed for providing for that. 5 So we fully support that the 6 distributors be capable of being a contract entity 7 between the generator and the default market. 8 Having said that, however, we have a 9 very critical point that we want to raise with the 10 Board. If distributors are part of the contract path 11 to the default market, we feel very strongly that they 12 need to be limited from self-dealing. 13 What that really means is if a 14 distributor is allowed to contract other than through 15 the spot market for supply to the default customer, 16 essentially being prohibited from supplying a large 17 portion of that supply from generating facilities that 18 he might have a beneficial interest in. 19 We haven't prescribed what the limit 20 might be. It might be zero; it might be 10 per cent; 21 it might be 15 per cent. That is up to the Board to 22 give consideration to. 23 But self-dealing of distributors who 24 are capable of contracting for default supply, it is 25 essential that they not be able to self-deal with 26 generation that they have an interest in. That would 27 be an anti-competitive activity that kind of flies 28 against everything else we are saying in the subject 1036 BARNSTAPLE/CHUDDY, presentations 1 area. 2 I will stop talking at this point and 3 ask Barry if he would like to add anything. 4 PRESENTATION 5 MR. CHUDDY: Sure. I would just like 6 to add one or two points based on an issue that Al 7 brought up. 8 Again, my name is Barry Chuddy, and I 9 have been a Director with IPPSO since the latter part 10 of last year. 11 On the point of why would generators 12 sell at anything less than spot, I guess the point I 13 would like to raise is that a number of our members do 14 have their own forecasts of what they believe the spot 15 market prices will be. When you layer on top of that 16 the likelihood of deemed profiling for residential 17 customers and the fact that it is fair to say that 18 because of that and the fact that there is expected to 19 be some volatility in pricing, based on different times 20 of day, times of the month, and times of the year, it 21 is unlikely that an average residential customer, for 22 example, would pay the annual average spot price. 23 There are those of our membership 24 that are looking at selling long and would like the 25 opportunity to sell long or sell into a longer term 26 agreement with customers that are purchasing for 27 default supply. We believe that we will be selling 28 those at a discount against the prices that customers 1037 BARNSTAPLE/CHUDDY, presentations 1 will be paying in that pricing regime, and also in some 2 cases against the prices that we believe will be 3 representative of the annual average spot price. 4 That point comes from the expectation 5 of fair degree of volatility over time in terms of what 6 that pricing will be. 7 It is fair to say -- again, just on 8 the heels of Al's point -- that our members believe 9 that there is a need to mitigate merchant risk in a 10 market, particularly in a market that has no history. 11 The only way to do that is to sell contracts forward 12 that would provide the opportunity to delivering power 13 that is cost effective to those customers that might 14 otherwise be paying spot prices. 15 That's the only point I would like to 16 make in support of Al's comments. I think we are 17 willing and ready to answer questions from the floor, 18 if that is the forum. 19 MS O'RILEY: Thank you. 20 Mr. Gibbons, do you have any 21 questions? 22 MR. GIBBONS: No. questions. 23 MS O'RILEY: Mr. Power? 24 MR. POWER: No questions; thanks. 25 MS O'RILEY: Mr. Rodger? 26 MR. RODGER: No questions. 27 MS O'RILEY: Mr. Mark? 28 MR. MARK: No questions. 1038 BARNSTAPLE/CHUDDY 1 MS O'RILEY: Mr. White? 2 MR. WHITE: No questions. 3 MR. POWER: A very intimidating 4 panel! 5 MS O'RILEY: Is there anyone I have 6 missed out there who has a question for this panel? 7 Well, just so someone asks you a 8 question -- 9 MR. CHUDDY: Don't feel you have to. 10 MS O'RILEY: You mentioned that your 11 members see a need for long-term contracts or some kind 12 of contracts in order to be able to enter the market in 13 at leat the near term. 14 Could you give us an estimate of how 15 long those contracts would have to be? 16 MR. CHUDDY: Let me start and then I 17 will defer to my esteemed colleague. 18 It is our view that the range of 19 terms of contracts will vary anywhere between a year or 20 two and twenty years, depending on the nature of the 21 contract and customer. 22 As Al very accurately mentioned, some 23 of the deliberations here are linked in many ways to 24 discussions that are expected to be coming up in the 25 latter part of the year concerning transmission tariffs 26 and how those will be structured. 27 I would endeavour to suggest that for 28 the contracts behind the fence, those will be longer 1039 BARNSTAPLE/CHUDDY 1 term; and the ones that will be done strictly on the 2 basis of market discussions will be shorter term. 3 Again, I see contracts from months to 4 a year to probably as long as five years. 5 MS O'RILEY: In terms of your comment 6 that municipal utilities shouldn't be self-dealing, 7 could you comment on some of the utilities that 8 currently own generation, specifically utilities such 9 as Orillia Hydro and whether under your alternative you 10 would see them selling that generation to either the 11 spot market or to other market participants. 12 MR. BARNSTAPLE: I don't think we are 13 particularly bothered with generation that's currently 14 in place and owned by utilities in the same way that 15 our members that have projects that are in the 16 province. What we are concerned with is a level 17 playing field for new investment. That's basically 18 what I am talking about here. 19 MR. O'RILEY: Thank you. 20 Mr. Hewson? 21 MR. HEWSON: I just have one question 22 for the panel. On page 4 of your -- I guess, some 23 principles of the paper that was filed the last week 24 and it's regarding point 3. I just wonder if you could 25 explain a little bit more this view that the fixed 26 price multi-year contract market will provide better 27 signals for the capacity than the spot market. 28 MR. BARNSTAPLE: I think what we are 1040 BARNSTAPLE/CHUDDY 1 getting at there essentially is when you enter into a 2 longer-term contract both parties make some assumptions 3 about the future. To make those assumptions, they 4 usually are fairly diligent in assessing what are going 5 to be the factors that can affect price in the future. 6 So normally you would look at the 7 overall demand/supply balance. If you see it 8 tightening two or three years down the road and you are 9 into, say, a five-year contract, you are going to try 10 to account for that somewhere in your pricing, 11 particularly if you are a supplier because you don't 12 want to give up opportunity that you might be able to 13 pick up if you were in the spot market. 14 What happens in the spot market is we 15 don't think the pricing in the spot market is 16 particularly responsive of demand/supply that is not 17 right in the immediate future. If there is a 18 demand/supply imbalance that appears to be rearing its 19 head, say, three or four years down the road, the spot 20 market probably will not react to that at all. 21 MS O'RILEY: Thank you for your 22 presentation. 23 MR. BARNSTAPLE: Thank you. 24 MS O'RILEY: Are there any procedural 25 matters that we should hear about before we adjourn? 26 MR. POWER: There are, indeed. Maybe 27 I can address that. 28 Firstly, for those who are following 1041 BARNSTAPLE/CHUDDY 1 through the transcripts, as well as for those of you 2 here, I am trying my darndest -- and I think I am 3 fairly close -- to getting not only the Notice of 4 Motion finalized, but the supporting materials. They 5 will be available today in the next couple of hours. 6 What we propose to do is, by fax to all intervenors, 7 fax out the Notice of Motion and the Affidavit. 8 As all the supporting materials have 9 already been previously supplied, we are going to ask 10 that people look to the transcripts and the Board's 11 notices, but if they need anything, we will have it. 12 This will save a pile of photocopying and bundling. 13 The Notice of Motion and Affidavit should be out this 14 afternoon. 15 Other matters are we have been asked 16 about the Ministry of Finance study that had come up 17 during the proceedings, so we will file that later 18 today. We have also been asked about Mr. Dewees' CV. 19 We will file that later today. As the Market Power 20 Mitigation Agreement seems to be a matter of some 21 discussion here, we will either file that or some 22 synopsis of it later today as well. 23 That's all, thanks. 24 MS O'RILEY: Thank you, Mr. Power. 25 The Board Secretary's office does 26 have copies of Mr. Dewees' r‚sum‚. 27 MR. POWER: If that's sufficient, 28 that's great by us. Thanks. 1042 BARNSTAPLE/CHUDDY 1 MS O'RILEY: Seeing no other matters 2 that need to be brought before us, I will adjourn the 3 conference. Thanks a lot. 4 --- Whereupon the hearing concluded at 10:55 a.m.