1
    
 1                                            Motions Hearing
 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                         MOTIONS HEARING
18    
19    
20    
21    
22    Hearing held at:
23    2300 Yonge Street, 25th Floor, Hearing Room No. 1,
24    Toronto, Ontario on Wednesday, July 28, 1999,
25    commencing at
26    at 9:01 a.m.
27    
28    

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 1                           APPEARANCES
 2    STEVE McCANN               Board Counsel
 3    ALAN MARK/                 Municipal Electric
 4    KELLY FRIEDMAN/            Association
 5    TONY JENNINGS
 6    ROBERT WARREN/             Consumers' Association
 7                               of Canada
 8    DAVID BROWN                Direct Energy and Enershare
 9                               Technology and Ontario
10                               Natural Gas Association
11                               (ONGA)
12    MURRAY KLIPPENSTEIN        Pollution Probe
13    ZIYAAD MIA                 Coalition of Distribution
14                               Utilities et al
15    MARK MATTSON               Energy Probe
16    ROBERT POWER/              Various Intervenors
17    ALEXANDER GRIEVE
18    
19    
20    
21    
22    
23    
24    
25    
26    
27    
28    

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 1                      INDEX OF PROCEEDINGS
 2                                                       PAGE
 3    Preliminary matters                                   5
 4    Motion by Mr. Mark                                   13
 5    Questions of Mr. Mark                                44
 6    Motion by Mr. Power                                  58
 7    Questions of Mr. Power                               75
 8    Submissions by Mr. Klippenstein                      83
 9    Submissions by Mr. Mia                               87
10    Submissions by Mr. Warren                            88
11    Submissions by Mr. Brown                            104
12    Submissions by Mr. Mattson                          115
13    Luncheon recess at 12:50 p.m.                       125
14    Upon resuming at 2:10 p.m.                          125
15    Submissions in reply by Mr. Mark                    126
16    Submissions in reply by Mr. Power                   138
17    
18    
19    
20    
21    
22    
23    
24    
25    
26    
27    
28    

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 1                                           Toronto, Ontario
 2    --- Upon commencing on Wednesday, July 28, 1999,
 3        at 9:01 a.m.
 4                      THE PRESIDING MEMBER:  Thank you. 
 5    Please be seated.
 6                      Good morning, everybody.  My name is
 7    Roger Higgin and with me today is my boss, Floyd
 8    Laughren, Chair of the Board.
 9                      We are sitting here today in the
10    Board's RP-1999-0040 proceeding on the Electricity
11    Standard Supply Service Code, otherwise called the SSS
12    Code, to hear a motion brought by a number of parties
13    as represented by Power Budd and also by the Municipal
14    Electric Association.
15                      Without any more ado, could we have
16    appearances starting with the Applicants?  I ask that
17    you please speak clearly so we can get the names down,
18    because that is the only way we can do it is to write
19    quickly, and, secondly, to spell any names that there
20    may be any doubt about for the court reporter.
21                      So could we have appearances, please?
22                      MR. POWER:  Certainly.  Thank you,
23    Mr. Chairman.  My name is Robert Power, P-O-W-E-R.
24                      MR. GRIEVE:  My name is Alexander
25    Grieve, G-R-I-E-V-E.
26                      MR. MARK:  Mr. Chairman, my name is
27    Alan Mark, M-A-R-K, appearing for the Municipal
28    Electric Association.  With me is my associate Ms Kelly

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 1    Friedman, F-R-I-E-D-M-A-N, and Mr. Tony Jennings, of
 2    the MEA.
 3                      MR. WARREN:  Robert Warren for the
 4    Consumers' Association of Canada.
 5                      MR. McCANN:  Steve McCann, Board
 6    counsel.
 7                      MR. BROWN:  Good morning, Mr. Higgin,
 8    Mr. Chairman.  I am David Brown.  I will be making
 9    submissions today on behalf of Direct Energy and
10    Enershare Technology, and as well submissions on behalf
11    of the Ontario Natural Gas Association, ONGA.
12                      THE PRESIDING MEMBER:  Good morning,
13    Mr. Brown.
14                      MR. KLIPPENSTEIN:  Good morning, Mr.
15    Chairman and Mr. Laughren.  It is Murray Klippenstein,
16    appearing for Pollution Probe.
17                      THE PRESIDING MEMBER:  Mr.
18    Klippenstein.
19                      MR. MIA:  Good morning.  I am Ziyaad,
20    Z-I-Y-A-A-D, last name Mia, M-I-A.  I am here on behalf
21    of the Coalition of Distribution Utilities, including
22    Brampton Hydro, Cambridge and North Dumfries Hydro,
23    Guelph Hydro, Niagara Falls Hydroelectric Commission,
24    Oakville Hydro, Pickering Hydro, Richmond Hill Hydro
25    and Waterloo North Hydro.
26                      THE PRESIDING MEMBER:  Good morning.
27                      MR. MATTSON:  Good morning, Mr.
28    Chairman, Mr. Laughren.  I am Mark Mattson, and I am

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 1    counsel to Energy Probe.
 2                      THE PRESIDING MEMBER:  Good morning,
 3    Mr. Mattson.
 4                      Next?  Any other appearances?
 5                      It seems not.  Thank you.
 6                      Moving on then to the next part, just
 7    to give people an idea of how we will proceed today,
 8    when I have completed the opening remarks, the Board
 9    solicitor, Mr. McCann, will make some introductory
10    comments, and then following any preliminary matters we
11    will proceed with the hearing of the motion.
12                      In accordance with the Board's Rules
13    and prior practice, the order of submissions on the
14    motion will first be the bringers of the motion.  Next,
15    Board counsel may ask questions of clarification on the
16    motion.  Next will follow submissions from parties in
17    substantial support of the motion, followed by parties
18    who are substantially opposed to the motion and others;
19    and, finally, the reply from the bringers of the
20    motion.
21                      The Board Panel may ask questions of
22    clarification of any party during or following their
23    submissions.  We ask, in the interests of efficiency,
24    that all counsel avoid plowing the same ground as
25    parties on the same side who have preceded them.
26                      We also note for everybody that there
27    is indeed a time frame here.  We have quite a time
28    deadline for dealing with this motion in order to

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 1    maintain the schedule for the main hearing.  I will
 2    speak a little later, having seen how things go,
 3    regarding the schedule for the main hearing as we
 4    complete today's proceeding.
 5                      So those are my comments and I would
 6    like to turn over now to Mr. McCann for his comments
 7    and any preliminary matters.
 8                      Mr. McCann?
 9                      MR. McCANN:  Thank you very much, Mr.
10    Chair.  I am going to be very brief.  There is just
11    some preliminary remarks I wanted to make on some
12    issues that really appear on the face of the Notice of
13    Motion and are of some concern to the Board or at least
14    the Board will require to be addressed at some point in
15    the proceeding.  I want to flag them now so that
16    everybody has an opportunity to think about them and
17    address them at the appropriate time rather than any
18    appearance that may come by surprise later on.
19                      There is just two issues.  The first
20    one arises with regard to the relief that is sought in
21    paragraph 1(i) of the motion, which is where the Board
22    is requested to make an order amending the issues list
23    to add the following issue:  The Affiliate
24    Relationships Code, section 2.5.7 and the transfer of
25    customers to affiliates.
26                      The issue here is simply that the
27    transitional distribution licences that were recently
28    issued by the Board have within them provisions for

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 1    amendment to the various codes, including the Affiliate
 2    Relationships Code and, in particular, they provide for
 3    certain notice provisions where an amendment is
 4    contemplated or made.
 5                      I would refer to paragraph 17.5 of
 6    the transitional distributor licence, which provides
 7    that the Ontario Energy Board may make amendments to a
 8    code, but where the amendment would materially change
 9    the code, the Board shall not make the amendment until
10    it has provided notice to those persons identified by
11    the Board and invited to make written submissions. 
12    Sorry, persons must be identified to whom notice has to
13    be given and those persons have to be given an
14    opportunity to make written submissions.
15                      So I would just ask parties to
16    comment at some point, if they feel it necessary, on
17    when and how such notice could be carried out if the
18    Board were of the mind to add this issue to the issues
19    list and if the result of that were to be contemplation
20    of an amendment to the Affiliate Relationships Code.
21                      The second issue that the Board will
22    require some comment on arises in relation to
23    paragraphs 3, 4, 5, and 6 of the Notice of Motion,
24    which asks for various relief from the Board by way of
25    order in relation to Putnam, Hayes, Bartlett, PHB, as I
26    am sure they will be referred to today, and Board
27    staff.
28                      I simply note that those paragraphs

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 1    do not name any person who is a party to this
 2    proceeding.  So the Board will need to hear from the
 3    proponents of the motion against whom it is proposed
 4    the Board's order would be made, if, indeed, the Board
 5    decides that an order should be made under these
 6    paragraphs.
 7                      Now, that is all I have by way of
 8    preliminary remarks.  There is one more thing.
 9                      A number of letters have been
10    received, and I am just going to refer briefly to them. 
11    There is a letter dated July 27, 1999, from Mr. Michael
12    Janigan, who is counsel for VECC, Vulnerable Energy
13    Consumers Coalition.
14                      There is a letter signed by Daria
15    Babaie on behalf of DTE Probe and Energy Solutions, and
16    I believe their client is Sault Ste. Marie.
17                      There is a letter dated July 27th
18    signed by Mr. Roger White, President of Energy Cost
19    Management Inc., and he submits a document on behalf of
20    a number of utilities.
21                      There is another letter dated the
22    27th of July from the Windsor Utilities Commission
23    commenting on the motion and a letter from Port Hope
24    Hydro, signed by Mr. John D. Fraser, the General
25    Manager and Secretary, also commenting on the
26    proceeding.
27                      I believe there is another letter,
28    which I don't have a copy of at the moment, but we are

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 1    getting that and we will ensure that it is available to
 2    all parties and to the Board.
 3                      These are letters commenting on the
 4    motion from parties who, for one reason or another,
 5    couldn't be here.  I would ask that these be entered in
 6    the record of the proceeding for the moment.  I am just
 7    going to give them Exhibit Nos. 1 to 5, but we will
 8    give them proper exhibit numbers when I can with Board
 9    staff.
10                      THE PRESIDING MEMBER:  Can I just
11    clarify that, indeed, the Board did receive by fax a
12    letter from Mr. Laurie Hebert on behalf of Northwest
13    Energy Association, which states that they support
14    Power Budd in their Notice of Motion in this
15    proceeding.  That was by fax of July 23rd this year, of
16    course, and that would be number six.
17                      MR. McCANN:  That is fine.  We will
18    ensure that copies of that are available to all
19    parties.
20                      Thank you very much, Mr. Chair.
21                      THE PRESIDING MEMBER:  Thank you, Mr.
22    McCann.
23                      Are there any other preliminary
24    matters?
25                      Mr. Power or any of the other
26    counsel, preliminary matters?
27                      MR. POWER:  There is none that I am
28    aware of, sir.

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 1                      THE PRESIDING MEMBER:  That is what
 2    we like.
 3                      Mr. Warren?
 4                      MR. WARREN:  Mr. Chairman, I wrote to
 5    the Board, having taken a preliminary view of Mr.
 6    Grieve's Affidavit and indicated that I wanted to
 7    cross-examine on it.  I got a letter back from Mr.
 8    Power saying, in effect, I was not allowed to.
 9    Notwithstanding Mr. Power's letter, I do not intend to
10    cross-examine him, having re-read the affidavit, again.
11                      I will make submissions in the course
12    of my argument about the adequacy of the factual basis
13    for the relief requested, but I do not need to
14    cross-examine in order to do that.  Thank you.
15                      THE PRESIDING MEMBER:  Thank you, Mr.
16    Warren.
17                      Any other preliminary matters from
18    any other counsel?  No.
19                      Very well, then, Mr. Power, over to
20    you.
21                      MR. POWER:  Thank you, sir.  What I
22    would like to do is outline how the orders in this
23    motion might be addressed and it will be divided
24    between myself and Mr. Mark.
25                      If you look under tab 1, the Notice
26    of Motion sets out the relief sought.  Under 1.1, I
27    will address the issue of amending the issues list to
28    add the section 2.5.7 of the Affiliate Relationships

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 1    Code.
 2                      Mr. Mark will address 1(2), which is
 3    the amending and procedural orders 1 and 2, Mr. Mark
 4    will address point 2, I will address 3, 4 and 5 on the
 5    next page, and Mr. Mark will address the issue raised
 6    under point 6.  In terms of the presentation to you in
 7    trying to keep it orderly, we will each sort of go in
 8    turn and put those issues in our own fashion.
 9                      What I would like to do is turn it
10    over to Mr. Mark to start off and address his issues
11    and when he is done, then I will complete, if that is
12    okay.
13                      THE PRESIDING MEMBER:  Mr. Mark?
14                      MR. MARK:  Thank you.
15                      It is worthwhile at the outset to
16    review, if I could, the genesis of the issues we have
17    here today and how we get here and what the concerns
18    are.
19                      Everyone is, of course, well aware by
20    now, if they were not before, of the significance of
21    the Standard Supply Service Code to the future of the
22    electricity industry in Ontario.  Whatever view one
23    might take of the various positions which have been --
24    advanced throughout the debate, I think it is
25    abundantly clear that the outcome of the Board's
26    deliberations on this issue are going to be
27    fundamentally significant to the electricity market in
28    Ontario not just at the retail level, but it is clear

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 1    from the evidence that is before the Board that the
 2    structure of the SSSC will have a fundamental impact on
 3    the wholesale market and on the question of new entry
 4    into the generation market.
 5                      I remind the board that if we cast
 6    our collective minds back to the beginning of the
 7    debate on the restructuring of the electricity industry
 8    in this province, it was fundamentally on the
 9    generation issue that the restructuring was intended to
10    impact.  It was perceived that that was the aspect of
11    the industry which was most substantially in need of
12    restructuring.
13                      The evidence in this proceeding makes
14    it abundantly clear that the structure of the SSSC has
15    very significant potential to dramatically affect
16    whether that restructuring of the generation side are
17    will be successful or unsuccessful.
18                      In that context, while I understand
19    that at this point the Board is of the view that this
20    is a matter of a structuring of a code -- as I
21    understand what has been told to me from Board staff
22    counsel, the Board's view of the matter that this is
23    code making.  Whatever view one takes of it, it is
24    beyond dispute that the impact of this will be
25    fundamental and beyond what is generally considered to
26    be the impact of the structure of a code.
27                      Now, in terms of the process and how
28    we get here, let me say at the outset, the Municipal

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 1    Electric Association -- I suppose all intervenors are
 2    sympathetic to the fact that in this case, as in most
 3    cases, the Board has a number of competing objectives
 4    that it has to balance in determining an appropriate
 5    procedure.
 6                      There is the issue of having a full
 7    and proper record, there is the issue of making sure
 8    that all potential intervenors in the proceeding have
 9    access to the proceeding.  That may include
10    considerations of funding, that may impact on the
11    Board's decision as to process.  The Board is also,
12    rightly, to be concerned with the issue of expedition
13    and the issue of the cost of the proceedings.  But
14    fundamentally, at the end of the day, the Board has to
15    adopt a proceeding which is properly constituted and
16    properly authorized by the governing legislation.
17                      This proceeding was commenced by
18    Notice of Hearing, which was issued, I believe, in June
19    of this year, and that is the Notice of Hearing which
20    was dated June 14, 1999.  That document is clear in
21    conveying that it was the Board's intention to hold a
22    public hearing.  In the first sentence, it says:
23                           "The Ontario Energy Board, on
24                           its own motion, will hold a
25                           public hearing under section
26                           19(4) of the Ontario Energy
27                           Board Act."  (As read)
28                      Now, the reference to 19(4) of the

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 1    Act is significant because it reinforces the view that
 2    certainly we took, and I expect a number of intervenors
 3    took, that when the Board said it was holding a public
 4    hearing, it was holding a public hearing with all of
 5    the necessary implications of that terminology.  If one
 6    looks at 19(4) of the Ontario Energy Board Act -- does
 7    the Board have copies of the Act?
 8                      If you look at section 19 of the
 9    Energy Board Act, it deals with powers of the Board
10    clearly in relation to hearings.  For example, section
11    19(1) says:
12                           "The Board has, in all matters
13                           within its jurisdiction,
14                           authority to hear and to
15                           determine all questions of law
16                           and fact."  (As read)
17                      That is, essentially, a reference to
18    the Board's power in exercising any power of decision
19    that it makes.
20                      If you look down at (4), which is the
21    one we are particularly concerned with, it says:
22                           "The Board of its own motion
23                           may, and if so directed by the
24                           Minister under section 28 or
25                           otherwise shall, determine any
26                           matter that under this Act or
27                           the Regulations it may, upon an
28                           application, determine."  In so

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 1                           doing, the Board has and may
 2                           exercise the same powers as upon
 3                           an application."  (As read)
 4                      So what the Board has clearly invoked
 5    here is the authority it has to hold a hearing, hold a
 6    proceeding with respect to a matter which would
 7    otherwise be the subject of an application.
 8                      If a matter were the subject of an
 9    application, in my submission, it is clear that the
10    Board would be required to hold a hearing, unless there
11    were specific provisions in the Act on the consent of
12    the parties for the Board to dispense with the hearing
13    and certain specified conditions, none of which apply
14    in this case.
15                      If you look back at section 19(2),
16    this notion is reinforced by the mandatory obligation
17    on the Board to issue an order in this proceeding. 
18    Section 19(2) says:
19                           "Subject to subsection 127(2),
20                           the Board shall make any
21                           determination in a proceeding by
22                           order."  (As read)
23                      So the starting point, in my
24    submission, is that the Board, by referencing its
25    jurisdiction under section 19, has clearly invoked a
26    process, which, in its nature, is in a hearing, which
27    must result in an order and, in my respectful
28    submission, of course, requires procedures and

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 1    safeguards which, if not strictly in accordance with
 2    the Board's Draft Rules, must provide the fundamental
 3    protections of fairness and natural justice that the
 4    law requires.
 5                      If one now looks at section 21(2)
 6    dealing further with the Board's powers with respect to
 7    proceeding, it says:
 8                           "Subject to any provision to the
 9                           contrary in this or any other
10                           Act, the Board shall not make an
11                           Order under this or any other
12                           Act until it has held a hearing
13                           after giving notice in such
14                           manner and to such persons as
15                           the Board may direct."
16                           (As read)
17                      The key phrase that I want to focus
18    on is "the Board shall not make an order under this or
19    any other Act until it has held a hearing".
20                      So, in my submission again, the Board
21    has, by its reference to section 19, clearly invoked a
22    process which must result in an order, and by section
23    21, prior to making that order, the Board must hold a
24    hearing.
25                      MR. WARREN:  Mr. Chairman, I hesitate
26    to interrupt Mr. Mark, but I wonder if -- I am troubled
27    by the direction of this because what it has is -- I
28    think where Mr. Mark seems to be going is a request for

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 1    a relief that the Board reconstitute this as a full
 2    hearing or somehow change its procedures and I don't
 3    see that prayer for relief in the Notice of Motion.
 4                      I have no difficulty with Mr. Mark
 5    making those submissions in the appropriate
 6    circumstances; but I have no notice that that is the
 7    relief he wants.  If I don't have any notice, I don't
 8    have an opportunity to prepare.  That is, to use the
 9    phrase he has just used, a matter of fundamental
10    fairness.
11                      I am very troubled by this.  If he
12    wants to talk about reasons for decision, which is in
13    the prayer for relief, I have no difficulty with that,
14    but if he is talking about reconstituting this as a
15    hearing, then that is a different prayer for relief for
16    which we, I say with respect, should have been given
17    notice.
18                      MR. MARK:  I don't intend to ask for
19    that relief.  I thought the Notice of Motion was clear
20    in specifying the relief.  I am going through the
21    background, as I said I would at the outset of my
22    submissions, as to how we get here.
23                      THE PRESIDING MEMBER:  The intent is
24    to get to the specific relief that -- and this is by
25    way of background.  We have read the transcript for the
26    technical conference in which you have raised some of
27    these issues.
28                      MR. MARK:  I understand that and I

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 1    think you will understand from that, Mr. Higgin, in
 2    fact the analysis I am doing now is expanding upon that
 3    because I did not deal with these specific sections.
 4                      THE PRESIDING MEMBER:  Given that and
 5    there is no other relief being requested other than the
 6    motion, then...
 7                      MR. MARK:  Thank you, sir.
 8                      That is to explain where at least
 9    some intervenors thought we were going in this
10    proceeding when we convened for the technical
11    conference.
12                      When we raised the questions about
13    procedural safeguards at the technical conference,
14    Board staff advised -- and I won't take you to specific
15    references, I can give you the page numbers -- at page
16    20 of the transcript of the technical conference, Mr.
17    Hewson of Board staff was clear in stating that the
18    Board was not holding a hearing, and those were his
19    words.
20                      At page 39 to page 40 of the
21    transcript, Ms Lea, counsel of Board staff, was equally
22    clear in making certain that everyone understood that
23    the Board was not holding a hearing, that the Board was
24    not exercising a statutory power of decision, and that
25    the Board did not intend to issue an order at the
26    conclusion of these proceedings.
27                      So you will understand how, at that
28    point, at least some of the intervenors had some

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 1    confusion about exactly what the nature of the
 2    proceeding was.  It is in that context that we raised
 3    again the concern for some procedural safeguards.
 4                      Frankly, Mr. Chairman, whether we are
 5    right or wrong about the technical analysis of whether
 6    this is a full hearing or some other consultative
 7    process that the Board is conducting with an oral
 8    submission component, if one looks, in my submission,
 9    at the substance of what the Board is doing in this
10    proceeding, it is clear that there should be some
11    safeguards in the proceeding which at least resemble
12    those one would have in a hearing.
13                      The Board references in its Notice of
14    Hearing, of course, sections 57 and 70 of the Ontario
15    Energy Board Act, which are the licensing provisions. 
16    Section 57 requires a licence to conduct certain
17    activities, Section 70 is the section which allows the
18    Board to attach conditions to any licence it issues.
19                      Section 70 specifically permits the
20    Board to attach as a condition to a licence a code of
21    conduct, and it seems to be accepted.  Board staff
22    certainly took the position that the Board was
23    intending this proceeding to be for the purpose of
24    settling a code which would be attached as a condition
25    under section 70 to any licence issued under section
26    57.
27                      Notwithstanding that that process, if
28    that is what it was, may not require a hearing, in my

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 1    submission it is clear that the substance of what the
 2    Board is doing is more substantial than that.  As I
 3    indicated at the outset, there can be no dispute that
 4    the nature of the proposals under consideration by the
 5    Board for the SSSC will fundamentally shape the market. 
 6    So even if it is a code matter, even if you could
 7    exercise jurisdiction in that way, the importance of
 8    the Board's determination in this matter to the future
 9    of the electricity restructuring cannot be overstated.
10                      Indeed, in my submission, if you look
11    at section 78 of the act, it is clear that it was
12    always the intention of the legislature that when an
13    order is made -- when the determination is made by the
14    Board to fix the rates which will be made available
15    under section 29 of the Electricity Act, the
16    legislature intended that that would be by way of an
17    order and that the proceeding in which those rates
18    would be set would be a hearing, of course, subject to
19    dispensing with the hearing with appropriate consents,
20    et cetera.  But it is clear that the regime set out in
21    the Act requires a hearing for that ultimate
22    determination of rates.
23                      So when one puts together the
24    practical significance of the task we are engaged in
25    with the statutory imperative to have a hearing in
26    connection with the ultimate rates, it becomes clear
27    how significant the process is to the determination of
28    these issues.

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 1                      I think we can all be frank about it. 
 2    If the Board accepts the mechanisms set out in the
 3    draft SSSC that was put forward by technical staff for
 4    consideration, that is going to be de facto, if not de
 5    jure, dispositive of the issue of what section 29 rates
 6    will be in this province.
 7                      While there may be a technical
 8    jurisdiction left for the Board to carry out under
 9    section 78 in making an order fixing the rates, it is
10    clear that the determination of what those rates will
11    be and what is just and reasonable -- because 78 is
12    where the Board is to apply the just and reasonable
13    criteria.  But it is clear that if the draft Code is
14    adopted, the Board will be applying its judgment as to
15    what is just and reasonable in this proceeding.
16                      So when one looks at it in that
17    context, in my respectful submission, it is clear that
18    there ought to be in this proceeding, whatever its
19    technical jurisdiction, some process and safeguards
20    which at least resemble those in a hearing.  There must
21    be procedures which give the parties who are vitally
22    interested in the process some reasonable protection, a
23    process which is fair and which they have an
24    opportunity to have their interests properly regarded
25    and fairly protected is inherent in the process.
26                      The concerns about fairness were
27    enhanced -- and I say this with all due respect to
28    Board staff -- by the nature of Board staff's role in

                                                           23
    
 1    the process.  I will have something more to say about
 2    the genesis of the draft proposal in a few moments on
 3    my specific submission on the role of Board staff, but
 4    suffice it to say for the present, it was clear to
 5    everyone, I think, that Board staff was a proponent and
 6    an advocate of the proposal which was circulated in the
 7    form of the draft SSC on January 29th of this year and
 8    has been the focal point of the submissions requested
 9    by the Board from time to time since January.
10                      That document describes it as the
11    Board staff's proposal. It is accompanied by a Board
12    staff paper which explains the rationale for the
13    proposal and by the Board staff and why the Board staff
14    prefers that proposal, for example, to the MDC
15    proposal.
16                      The evidence of Professor Dewees --
17    his written presentation made it clear that his
18    function was to comment upon not just the MDC proposal
19    but on the draft SSC and to come forward as a proponent
20    for that.  So it seemed to the intervenors -- in my
21    submission, the record is reasonable clear -- that
22    Board staff in this proceeding was actually taking an
23    advocacy position.  It was in a partisan role with
24    respect to the proposal which was seminal in this
25    proceeding.  The proposal around which the whole debate
26    has been focused was one which was advocated for by
27    Board staff.
28                      We had assumed that, as in the past,

                                                           24
    
 1    in, for example, other hydro hearings, Board staff
 2    would declare itself and would be a party in the
 3    proceedings and would have its position and evidence
 4    out there for people to see, for people to test, and
 5    the Board staff would make their submissions on the
 6    matter in dispute and the parties would have an
 7    opportunity to answer the Board staff's position.
 8                      However, at the technical conference,
 9    we were informed by Board staff that they were not
10    participating in the hearing; that, rather, their role
11    would be exclusively -- and these are Mr. Hewson's
12    words -- as advisor to the Board.  That causes me grave
13    concern because the record is clear, in my respectful
14    submission, beyond per adventure, that Board staff is
15    an advocate and a proponent of one of the alternatives
16    which is clearly before the Board and, frankly, has
17    always been put to the intervenors as being the
18    proposal that had primacy of place, in my submission.
19                      So Board staff is out there.  They
20    have submitted a rationale.  They have said, "Here's
21    what we think is right."  But then as the process gets
22    under way what they want to do is go back into the
23    woodwork and say, "We are not going to put our necks
24    out there.  You are not going to have an opportunity to
25    see exactly what we say.  You are not going to have an
26    opportunity to debate with us.  You are not going to
27    have an opportunity to see what we say and to test it. 
28    Rather, we will, behind the scenes, simply act as an

                                                           25
    
 1    advisor to the Board."
 2                      Well, respectfully, Mr. Chair, that
 3    is not cricket.  It just isn't, and that raised our
 4    concerns that, frankly, the Board simply hadn't paid
 5    enough attention, respectfully, to the process that it
 6    was engaged in, what the components of the process
 7    were, what the purpose of the process was, what the
 8    roles of the parties should be, and what the procedural
 9    safeguards should be.
10                      So with that background let me deal
11    specifically with the three particular orders I want to
12    address myself to today.
13                      The first one is the question of what
14    is the record in this proceeding; the second matter is
15    the issue of the Board giving reasons for its decision
16    in this matter; and the third issue deals particularly
17    with the role of Board staff.
18                      Turning to the first issue, which is
19    the record in the proceeding, you will have gathered
20    from my introductory comments, Mr. Chair, one of our
21    concerns is that we are not quite sure what the
22    proceeding is which translates into a direct concern of
23    what is the record in these proceedings.
24                      Certainly, the intervenor I
25    represent, and I believe the ones Mr. Power represents
26    and likely others, approached the matter on the
27    assumption that there would be a record in the
28    proceeding which consisted of the proposals and

                                                           26
    
 1    submissions that were made to the Board in response to
 2    the Board's Notice of Hearing.
 3                      The confusion which now seems to
 4    reign as to whether this is a hearing, what nature of
 5    proceeding it is, whether the Board is making a
 6    decision, causes us to raise the question of:  What is
 7    the record?  What is the record before the Board?  What
 8    is the record upon which the Board will make its
 9    decision in this matter?
10                      Our initial inclination, frankly, Mr.
11    Chair, after the exchange at the outset of the
12    technical conference, was to make a motion for the
13    Board to conduct this as a full and proper hearing
14    strictly in accordance with its rules of procedure. 
15    Upon reflection, we don't believe that that is
16    necessarily the most appropriate result for a number of
17    reasons.
18                      We continue to be cognizant of the
19    Board's need and desire to deal with these matters in a
20    relatively expeditious fashion and one which is not
21    unduly burdensome, not just to the Board itself but to
22    the parties who have an interest in the proceedings. 
23    We are mindful of the burden that the Board has on its
24    shoulders in dealing with the multitude of matters that
25    is on its docket resulting from electricity
26    restructuring and for the Board to allocate its
27    resources appropriately, and, indeed, the need for the
28    industry participants to allocate resources in a

                                                           27
    
 1    reasonable and rational way to deal with the various
 2    issues.
 3                      We were also mindful that, at the end
 4    of the day, I believe, parties received a reasonable,
 5    if not perfect, opportunity in the technical conference
 6    to explore the rationale and the background for the
 7    various alternative proposals that were presented.  So,
 8    at the end of the day, keeping in mind the various
 9    objectives, the MEA proposes as a compromise that the
10    matter not be conducted as a full hearing in strict
11    accordance with the rules of procedure set out in the
12    Board's own rules, but the quid pro quo for that is
13    some clarity as to, amongst other things, what the
14    record and the proceeding is.
15                      In our submission, the record should
16    consist of not just the submissions which are made on
17    August 9th, but the transcript of the technical
18    conference that was conducted beginning July 13th, and
19    that those two components should collectively
20    constitute the record before the Board in this
21    proceeding.
22                      That, to our mind, accomplishes two
23    objectives.  It gives some reasonable safeguards to all
24    the intervenors in the sense that they know what the
25    case is.  They know what the record in the proceeding
26    is.  They know what the material is that they must meet
27    and respond to.
28                      The other side is we believe that the

                                                           28
    
 1    technical conference, as I said, gave parties a
 2    reasonable opportunity to test the evidence of the
 3    other parties, so that we would be content that the
 4    record consist of those two components.
 5                      I point out for the Board that if, in
 6    fact, this were to be considered a hearing in
 7    accordance with the Board's Rules, that, under rule 34
 8    of the Board's own draft Rules, the transcript of the
 9    technical conference would form part of the
10    proceedings.  So we are not asking for anything new or
11    extraordinary, just asking the Board to recognize, if
12    nothing else by analogy, that if this were a hearing
13    the technical conference proceedings would be part of
14    the record.  So what we propose is that there be a
15    record in this proceeding consisting of the August 9
16    written and oral submissions and the proceedings of the
17    technical conference.
18                      The other necessary component of
19    that, of course -- and I would not think there would be
20    much dispute or debate about this -- is that the
21    parties should have the opportunity to make submissions
22    to the Board with respect to the evidence that was
23    taken at the technical conference.
24                      In short, we just want the
25    opportunity, while it may be part of the record to take
26    some time in our submissions to point out to the Board
27    the key passages in any intervenor's view and to make
28    submissions to the Board as to what conclusions the

                                                           29
    
 1    Board should draw from the evidence that was taken at
 2    the technical conference.
 3                      So that is the first issue, then: 
 4    The record in the proceedings, that it consist of the
 5    August 9 proceeding, the technical conference, and that
 6    the parties have an opportunity to make submissions to
 7    the Board with respect to the evidence taken at the
 8    technical conference.
 9                      The second issue is the question of
10    the Board issuing reasons for decision in this matter. 
11    It is customary, of course, when the Board issues an
12    order after a hearing that the Board give reasons for
13    its decision and I think it is beyond doubt that it is
14    good regulatory practice for the regulator, when making
15    significant orders, to issue reasons for its decision.
16                      An accepted regulatory principle is
17    that regulatory principles, if you will, should be
18    transparent, that the parties who are interested in the
19    Board's exercise of its jurisdiction should know the
20    rationale and principles upon which the Board is
21    acting.  That, in my submission, seems fundamental.  As
22    I indicated before, the decision the Board will
23    potentially make in this proceeding is, indeed,
24    fundamental.
25                      I would ask the Board to keep in mind
26    that there will undoubtedly be -- because this is a new
27    process for everyone, there will undoubtedly be
28    questions that arise in the future as to the

                                                           30
    
 1    application of the SSSC Code.  There is undoubtedly
 2    going to be a period of transition or adjustment where
 3    there are questions or ambiguities as to how the Code
 4    should be implemented and applied in practice.
 5                      It would be a tremendous assistance,
 6    and I suggest it would be fundamentally necessary, for
 7    the parties who have to deal with those issues to have
 8    the guidance and advice of the Board's reasons and
 9    rationale for its decisions in this matter to inform
10    them in the process of application and implementation
11    of the Code.
12                      I also remind the Board that,
13    undoubtedly, there are going to be changes in the
14    future.  We are at the start of a process which will
15    take a number of years, to some extent will be by trial
16    and error.  I think we all recognize that there are
17    going to be changes as we move along the path.
18                      The only way that change can be dealt
19    with and managed intelligently is for the Board to give
20    clear indications at the beginning of the process of
21    what its regulatory policy is, of what its regulatory
22    objectives are, the rationale it has for the selection
23    of the various options it chooses at the end of the day
24    so that the parties will be able to compare results, in
25    fact, with Board-articulated objectives in determining
26    what changes should be made in the future.
27                      I also want to point out to the Board
28    that if in fact the Board in this matter were

                                                           31
    
 1    exercising a statutory power of decision, which I
 2    suggest, by analogy, if not legally, it is doing, it
 3    would be incumbent upon the Board to give reasons for
 4    its decision, if requested.
 5                      Section 17 of the Statutory Powers
 6    Procedures Act -- and I have copies here I can provide
 7    the Board with later --
 8                      THE PRESIDING MEMBER:  We have
 9    section 17.
10                      MR. MARK:  -- makes it mandatory for
11    the Board to issue reasons for a decision if requested
12    by a party.  In my submission, it would be appropriate
13    for the Board, if only by analogy, as I said, to
14    consider that it should act in accordance with that
15    directive.
16                      Lastly on this point, Mr. Chair, and
17    not to put too fine a point on it, there is an issue
18    here of the Board's credibility with the participants
19    in this industry.  The Board has had reposed in it a
20    very substantial regulatory power.  We are all familiar
21    with the irony that deregulation in this industry is
22    heaping on the Board a regulatory obligation that is
23    far greater than any they had previously had with
24    respect to this industry.
25                      I think it reasonable to say that it
26    is important that the Board be perceived by the
27    participants in the industry as, frankly, being a
28    credible regulator.  That credibility is only enhanced

                                                           32
    
 1    when, as I said before, the reasons for the Board's
 2    policy choices are transparent.  Credibility of the
 3    Board will not be enhanced if the Board makes
 4    fundamental policy decisions and directives without
 5    informing the participants and without informing the
 6    public about the reasons for the choices it makes. 
 7    That does not engender confidence in the Board's role
 8    as regulator.
 9                      Lastly, Mr. Chair, I want to turn to
10    the question of the role of Board staff.  In my
11    introductory remarks, I touched upon that issue
12    somewhat.  I gave you an overview of sort of how our
13    concerns about Board staff arose.
14                      I remind the Board that the issue of
15    the role of Board technical staff is not a new one.  It
16    has sort of percolated around for a number of years and
17    concerns have been raised from time to time.  Given,
18    though, the clear regulatory powers the Board now has
19    to exercise in connection with the electricity
20    industry, we believe it is important that clarification
21    be given with respect to Board technical staff's role
22    and the function that the Board staff will play in the
23    regulatory process starting with this proceeding.
24                      The issues we are dealing with are
25    fundamental and, as I said before, the Board has to be
26    concerned that its process, as well as the substance of
27    its decision, are transparent and engender confidence
28    of the public and the participants.  There can be no

                                                           33
    
 1    ambiguity left with respect to the role of Board staff,
 2    in my submission.
 3                      Now, it is clear that the Board staff
 4    is playing a pivotal role in a number of the Board's
 5    regulatory initiatives and, indeed, that is expected
 6    and there is no objection to that.  The Board staff are
 7    the directors of licensing, they are assisting the
 8    Board in developing codes, in developing administrative
 9    procedures, in developing the regulatory regimes such
10    as the PBR handbook.
11                      Everybody acknowledges and recognizes
12    that there is a fundamental and important role that
13    Board staff is playing there, but it plays that role,
14    indeed, as Mr. Hewson says, as advisor and as assistant
15    to the Board members themselves.  It is not an
16    independent function that they used to perform in
17    connection with the old Hydro hearings, where they were
18    an intervenor, had a mandate to -- I never quite
19    figured out who they represented, but they represented
20    somebody.
21                      THE PRESIDING MEMBER:  We sometimes
22    wondered that, too.
23                      MR. MARK:  That was the bugaboo, but
24    at least we knew, if I can put it in its crassest
25    terms, that they were not behind the podium with the
26    Panel.  They were actually out there as a party and we
27    had the opportunity to see what they had to say and
28    meet it in a hearing and address it in argument.

                                                           34
    
 1                      Our concern is that, in this
 2    proceeding -- and all of that is fine so long as the
 3    Board staff is occupying the role as assistants to the
 4    Board.  The problems arise when Board staff become
 5    themselves a proponent or a partisan in a proceeding
 6    because then, manifestly, there is an issue that when
 7    the Board's assistants and advisors are taking a
 8    partisan role in the proceedings, that is entirely
 9    inappropriate.
10                      Now, at the technical conference, Mr.
11    Hewson, I believe, tried to alleviate intervenors'
12    concerns about the Board staff role.  He suggested and,
13    indeed, he stated in so many words that Board staff was
14    not a proponent or an advocate of the draft SSC and
15    that the Board staff would not be participating in the
16    hearing and would not be making submissions to the
17    Board.
18                      I think Mr. Hewson -- and this is at
19    pages 17 and 20 for the Board's reference -- was
20    clearly, if I may suggest, in light of the concerns
21    about Board staff's role, trying to create the
22    impression that the Board staff had acted in putting
23    forward the draft SSC Code merely as a catalyst for
24    discussion.
25                      I want to read to the Board what Mr.
26    Hewson had to say about the Board staff function in
27    connection with the development of the draft SSC.  At
28    page 17 of the transcript of the technical conference,

                                                           35
    
 1    beginning at line 14, Mr. Hewson says:
 2                           "Board staff's paper was put
 3                           forward based on the MDC's
 4                           proposals and recommendations to
 5                           the government.  There was
 6                           urgency set out during initial
 7                           consultations with during
 8                           initial consultations with
 9                           municipal utilities and
10                           stakeholders that some draft of
11                           the standard supply service be
12                           provided.  The only alternative
13                           that was out there at the time
14                           was the MDC proposal.  Staff put
15                           forward a paper, a straw man for
16                           want of a better phrase, that
17                           was there to raise issues and
18                           seek input from people."
19                      At page 19, beginning at line 11, Mr.
20    Hewson states:
21                           "It was simply a discussion
22                           paper ... put forward by Board
23                           staff in order to establish some
24                           alternative for the Standard
25                           Supply Code, which is now being
26                           discussed in more depth.  That
27                           was the intention of the comment
28                           paper that was put out on

                                                           36
    
 1                           February 29."
 2                      I am assuming that should be January
 3    29.
 4                           "It was never intended to be
 5                           seen as Board staff's decision
 6                           on where they expect standard
 7                           supply to go.  It is a proposal
 8                           paper."
 9                      Mr. Chair, with all due respect to
10    Board staff, if that was in fact the case, I would not
11    be as troubled, but the record indicates otherwise.
12                      In the January 29th communication
13    which put out, the Board staff background paper, it is
14    impossible to read that package and come to any
15    conclusion other than that the Board staff has
16    considered the issue of SSSC on its merits and has
17    determined that this is the preferred option which it
18    is advocating.  There is simply no question about that
19    when you read the document.  If you look, for example
20    -- and I will give you just a few references.
21                      Just give me a moment.
22                      THE PRESIDING MEMBER:  Just on this
23    point, Mr. Mark, we do have a copy of the 29 January
24    document, the main document.  Right now we do not have
25    a copy of the background paper that you are referring
26    to.  So could you make sure that either we have it or
27    that your references are very clear, so that we can --
28                      MR. McCANN:  The document you are

                                                           37
    
 1    referring to is tab B in the motion record.  Am I
 2    correct about that?
 3                      MR. MARK:  That is correct.  Thank
 4    you, Mr. McCann.
 5                      So the Board has the record.  It's at
 6    tab B.
 7                      THE PRESIDING MEMBER:  Thank you.  We
 8    have it now.
 9                      MR. MARK:  If you look, for example,
10    at page 2 of that document under the heading
11    "Obligation to Sell", then the second full paragraph
12    begins with the words, "Board staff has proposed a
13    draft Code".  Then it continues in the next sentence:
14                           "In developing the draft Code,
15                           staff considered the structure
16                           of the proposed retail market
17                           and the following principles."
18                           (As read)
19                      Then they go on to delineate a number
20    of principles which the Board staff says they
21    determined are appropriate.
22                      Those words admit only at the
23    conclusion that this is not a straw man.  This is the
24    Board staff's proposal which it arrived at based on
25    consideration of the merits and after unilaterally
26    determining, in their view, what the guiding principles
27    ought to be.  This has as much resemblance to a straw
28    man as the tin man does.  It is not a straw man.

                                                           38
    
 1                      Those, incidentally, are not the
 2    principles of the MDC.  Mr. Hewson said this is just
 3    taking the MDC proposal and putting it in the form of a
 4    draft Code for consideration.  This is not what the MDC
 5    said or did.
 6                      Over on page 3, you will see that the
 7    Board staff clearly takes credit for the authorship of
 8    this.  The full line after the bullets:
 9                           "Staff reasoning for proposing
10                           each of these aspects of the
11                           Code is summarized below."
12                           (As read)
13                      The Board staff goes on to give its
14    rationale, not the MDC's.
15                      Now, if there were any question at
16    all about whether or not what the staff is doing here
17    is simply passing along in codified form the MDC
18    proposal, you can do away with any doubts by looking at
19    page 4.
20                      We all know, Mr. Chairman, that, in
21    fact, the draft SSSC is not the MDC proposal.  There is
22    a fundamental difference between the MDC proposal and
23    the Board staff paper, which is the question of whether
24    it should be a smooth or an unsmoothed spot price
25    pass-through, which is a fundamental point of
26    difference on a very significant issue of substance.
27                      The Board staff made a determination,
28    given its view of the merits, to depart from the MDC's

                                                           39
    
 1    proposal.  This is not the MDC's proposal, it is the
 2    Board staff's own.  The first full paragraph on page 4,
 3    the short one:
 4                           "This approach was chosen over a
 5                           fixed price regime and the
 6                           smoothed spot price pass-through
 7                           recommended by the Ontario
 8                           Market Design Committee."
 9                           (As read)
10                      With the greatest of respect to Board
11    staff, this is not what Mr. Hewson tried to tell us it
12    is.  Board staff may have, upon reflection, recognized
13    the procedural difficulties they were in, but they
14    cannot unwind this.  This is their proposal, they are
15    the proponent, it is their rationale.
16                      Page 6 at the top of the page, first
17    full paragraph:
18                           "In sum, Board staff believed
19                           that charging standard supply
20                           service customers..."  (As read)
21                      They are putting out there their
22    belief, their opinion, their advice, and that continues
23    with the presentation by Professor Dewees.
24                      Now, at page 18 of the transcript of
25    the technical conference, on the subject of why Mr.
26    Dewees was being brought forward, Mr. Hewson says,
27    beginning at line one:
28                           "...Board staff, in consultation

                                                           40
    
 1                           with the Board, got approval to
 2                           provide some funds to Dr. Dewees
 3                           to come forward as a
 4                           representative from the MDC who
 5                           could speak to the reports of
 6                           the MDC and the proposals put
 7                           forward by the MDC."
 8                      Mr. Chair, I don't propose to take
 9    you chapter and verse through Dewees' evidence, or his
10    presentation, but it is clear from reading it that what
11    in fact it is is it's a presentation not on the MDC
12    proposal, but on the Board staff proposal, and his oral
13    presentation was manifestly in support of that
14    proposal.  His evidence in the technical conference was
15    in support of the draft Code.
16                      Professor Dewees includes in his
17    written submission a rebuttal, "Response to comments on
18    the draft code regarding price", at page 6.  This is
19    not a piece which is, "Here is what the MDC did and
20    why", this is an advocacy piece intended to rebut
21    criticisms of the Board staff proposal.
22                      In our submission, it should be
23    apparent that there is ample cause for concern on the
24    part of intervenors that the position enunciated by Mr.
25    Hewson at the technical conference doesn't reflect the
26    reality of the staff role.  The reality is that the
27    Board staff is a proponent of the draft SSC.  They are
28    a partisan.  I don't say that in a pejorative sense,

                                                           41
    
 1    but they have a position.  They advocate that position. 
 2    They put forward analysis and they have called a
 3    witness to support that position.  The draft SSSC is
 4    not a straw man.
 5                      In that circumstance, it is
 6    fundamentally essential that Board technical staff not
 7    occupy the role of an advisor to the Board in
 8    connection with this proceeding.  It would violate, in
 9    my respectful submission, every fundamental tenet of
10    fairness and natural justice for the Board staff to be
11    occupying that position.
12                      I think, in the long run, the Board
13    is going to have to deal with this issue on a broader
14    level in terms of sorting out how Board staff
15    participates in these processes.  But, in this
16    particular hearing, what is going on is, with respect,
17    somewhat unseemly and the Board, in my respectful
18    submission, has no alternative but to take the proper
19    steps to make sure that they are insulated from Board
20    staff in connection with its deliberations on this
21    issue.
22                      It is simply unfair for us to have a
23    hearing and a proceeding where we get to meet the
24    opposition and then have the Board deliberate with the
25    advise, counsel and assistance of one of the partisans
26    in the process.  In our submission, at least with
27    respect to this particular proceeding, the Board must
28    take that step.

                                                           42
    
 1                      If the Board doesn't propose to take
 2    that step, Mr. Chair, I want to reserve my right to, at
 3    that time, address whether there is some further relief
 4    that would be appropriate, but at this time we think
 5    the appropriate disposition with respect to this
 6    proceeding is that Board staff not be permitted to
 7    exercise that function and, just as sort of a general
 8    comment, we think it would be appropriate if the Board
 9    would articulate at this stage of the process what it
10    views Board staff's role as being as this whole
11    regulatory process moves forward.
12                      In my submission, it is again in the
13    interests of the integrity and credibility of the
14    process that the Board come forward with a clear
15    statement for the public and the parties of what role
16    Board technical staff will be playing in proceedings of
17    this nature.
18                      Mr. Chair, subject to any questions,
19    those conclude my submissions, and I will hand it over
20    to Mr. Power to deal with the issues that he will deal
21    with.
22                      THE PRESIDING MEMBER:  Since the
23    relief has been divided into two parts between you, I
24    think what we will do now is we will take a short break
25    and then if we have any questions on the first part, so
26    we don't mix it up with the second part, we will go to
27    those straight after the break and then we will proceed
28    to Mr. Power.

                                                           43
    
 1                      We will return at 10:30, please. 
 2    Thank you.
 3    --- Short recess at 10:15 a.m.
 4    --- Upon resuming at 10:30 a.m.
 5                      THE PRESIDING MEMBER:  Mr. Mark, Mr.
 6    McCann will ask a few questions of clarification on
 7    some of the points and then the Panel may or may not,
 8    depending on how those go, have some questions as well. 
 9    Then, having done that, we will move on with Mr. Power.
10                      Mr. McCann, please.
11                      MR. McCANN:  These are just questions
12    of clarification.  The first one has to do with the
13    word "application" as it is used in section 19,
14    particularly 19(4) which you referred to and other
15    sections.  I note, for example, that other provisions
16    of the Act, such as section 60, talk about -- section
17    60 refers to the right of any person to apply for a
18    licence to the Director of Licensing.  I am stressing
19    the word "apply".
20                      So would you agree with me as a
21    matter of statutory interpretation that applications
22    under the new Ontario Energy Board Act, 1998, can lead
23    to results other than the making of an order by the
24    Board; for example, the issuing of a licence?
25                      MR. MARK:  Just let me turn that up.
26                      MR. McCANN:  I am not sure an awful
27    lot turns on this in terms of your argument.  I am not
28    suggesting that, but just really for clarification

                                                           44
    
 1    because I think under the old legislation we were all
 2    pretty clear that an application led to an order.  I am
 3    submitting, I guess, that the word "application" may
 4    have a somewhat wider scope in the new legislation.
 5                      MR. MARK:  Just give me one second.
 6                      MR. McCANN:  Just to continue the
 7    theme of my argument, for example, I note that section
 8    17 of the legislation -- I realize I am hopping around
 9    here -- says that all orders made and licences issued
10    by the Board shall be signed by a number of named
11    people.  So there seems to be a distinction between an
12    order and a licence, but there seems to be an
13    application process which may be some --
14                      MR. MARK:  I haven't gone through the
15    Act in its entirety to sort, if you will, catalogue the
16    circumstances in which people can make applications,
17    which I think we would have to do before we gave a
18    definitive answer as to your question, but let me point
19    this out.  Section 19 certainly seems to -- it all
20    deals with questions of law and fact and things that
21    are hearing in nature.
22                      I think the question is somewhat moot
23    because the Board has issued a notice saying they are
24    having a hearing.  Now, you may be able to argue that
25    when the Board says "hearing" they didn't mean hearing,
26    they meant whatever it is that they convene, but I
27    rather took it that, given the invitation of 19(4) and
28    the issuance of a Notice of Hearing, you combine that

                                                           45
    
 1    -- that it was a hearing.
 2                      Secondly, let me make the point, that
 3    in 19(2) it says:
 4                           "Subject to subsection 127(2)
 5                           the Board shall make any
 6                           determination in a proceeding by
 7                           order." (As read)
 8                      This is a proceeding.  It may not be
 9    an application, but it is clearly a proceeding, and
10    under 21(2) -- at least the argument goes that it is a
11    proceeding -- there would have to be a hearing.
12                      MR. McCANN:  That is fair.  I don't
13    think we need any more on that.  I don't think much
14    turns on it in terms of your argument.
15                      Now, there is just one thing I want
16    to clarify.  You mentioned in your remarks to the Board
17    the need for procedural safeguards in this proceeding,
18    and you mentioned that several times, but do I take it
19    that if the relief that you are seeking were to be
20    granted by the Board, you are not seeking other relief
21    or those procedural safeguards would then be, if not
22    perfectly met in your view, at least reasonably met for
23    the purposes of this proceeding?
24                      MR. MARK:  I think that is an
25    important question, and let me make it perfectly clear
26    where we stand on all of this.
27                      Let me say at the outset, if you have
28    read the transcript of the technical conferences -- I

                                                           46
    
 1    know the Board has -- that we have a fundamental
 2    position that in fact the draft SSC, to the extent it
 3    can determine the rates question, we say is not
 4    something the Board can adopt.  Under section 78, you
 5    can't do that, but that is on the merits and you will
 6    hear that, in our submission, if you were going to
 7    adopt -- that you can adopt and if you purported to
 8    adopt it that would be something that would have to
 9    have a section 78 hearing.  But that is on the merits
10    as to whether the draft SSC is something the Board can
11    actually adopt as its determination of this proceeding.
12                      Assuming that the Board is not going
13    to do that, assuming that the Board isn't going to what
14    would, in my view, completely step outside of its
15    jurisdiction, then you are correct.  If the relief we
16    are seeking in this motion is granted, then we are not
17    seeking any other relief, again without prejudice to
18    whatever my position may be, if the Board adopts the
19    draft SSC, which we say is ultra vires.
20                      MR. McCANN:  But at least you would
21    feel you could continue with this proceeding and make
22    your submissions at the appropriate time.
23                      MR. MARK:  I wanted to make clear
24    that what we have put forward is a compromise position.
25    I mean one can take it either it is a compromise of our
26    position, there should be a hearing, or even if one
27    takes the view that, technically, it is not necessary
28    for there to be a hearing, we say, by analogy, there

                                                           47
    
 1    should be certain safeguards.  But whatever way you get
 2    to that point, we are prepared to live with this and
 3    not seek any further procedural safeguards, if you
 4    will, again.  Also, if the Board issues some
 5    clarification about Board staff role, we may have some
 6    further requests regarding that.
 7                      We are talking about for this
 8    proceeding.  I am not suggesting that this would be
 9    satisfactory for some other proceeding.
10                      MR. McCANN:  Right, fair enough.
11                      I should just flag for your attention
12    that at the time when you are making your submissions
13    about section 78 and the relationship of that to this
14    proceeding, I think the Board would be assisted if you
15    also dealt with section 129, which is the transitional
16    provision.  I am not suggesting you need to do that now
17    because you have indicated you are going to do that
18    another time, but all I really want to do is make sure
19    you are aware that the Board would be assisted by
20    dealing with that.  I believe that was somewhat
21    discussed at the technical conference, too.
22                      MR. MARK:  I will amend by submission
23    accordingly.
24                      MR. McCANN:  Now, I just want to
25    raise another point about the relief you are seeking. 
26    You can understand, I think -- leaving aside the merits
27    of the issue for a moment, you can understand, I think,
28    that there might be some reluctance in the Board to

                                                           48
    
 1    issue an order against Board staff given that -- and
 2    again I am setting aside the merits of this for the
 3    time being, but Board staff are employees of the Board,
 4    they are dedicated public servants.  I mean there may
 5    be some reluctance in the Board to issue an order
 6    against Board staff.
 7                      My question to you is this, and you
 8    don't necessarily needs to address this now:  Are there
 9    other ways in which the substance of what you are
10    seeking could be achieved?  Just note, for example,
11    that section 21 of the legislation provides that:
12                           "The Board may at any time on
13                           its own motion and without a
14                           hearing, give directions --"
15                           (As read)
16                      Well, the important words I am
17    looking at are:
18                           "...give directions incidental
19                           to the exercise of the powers
20                           conferred upon the Board by this
21                           or any other Act".  (As read)
22                      The power to give directions, for
23    example, is perhaps a bit softer, if I can use that
24    word, than issuing an order.  I don't necessarily want
25    you to respond fully to this now, but I am just looking
26    at alternatives to get to the same place.
27                      MR. MARK:  Let me deal with that
28    because I think it also addresses the question that we

                                                           49
    
 1    were asked to address at the outset, which is:  Are we
 2    asking the Board and, if so, what is the authority for
 3    the Board to make orders against people who aren't
 4    party to these proceedings, particularly Board staff
 5    and PHB?
 6                      We don't see it as necessary to do
 7    that, whether one calls it directions or -- certainly,
 8    vis-…-vis Board staff.  I mean if the Board tells us
 9    that they have considered Board staff's role and they
10    have considered that it would not be appropriate for
11    them to have the advice and counsel of Board technical
12    staff in connection with this proceeding, that is
13    sufficient.  I mean we will assume that the Board will
14    conduct itself in accordance with what it indicates is
15    an appropriate proper process and we don't need any
16    orders against Board staff.
17                      With respect to PHB, it seems to me
18    that if the Board says that Board staff ought not to --
19    or if the Board says that it ought not to be receiving
20    advice from PHB, we will assume, without the need for
21    any further order, that they won't do that.  I think,
22    unless it's shown otherwise, we would assume that PHB,
23    as a professional consulting firm used to regulatory
24    environment, would heed that has well.  I don't think
25    it needs to be done by, you know, orders of injunction
26    against anybody.
27                      If the Board issues some
28    clarification of what it sees the appropriate role of

                                                           50
    
 1    the appropriate parties to be, I would think we would
 2    be content that people will, you know, govern
 3    themselves accordingly.
 4                      MR. McCANN:  More on the issue of
 5    Board staff, I would just like to clarify one thing. 
 6    References were made to Board technical staff and,
 7    really, that is kind of an out-of-date term in our new
 8    organization.  I am not going to take an hour and a
 9    half to take you through the organizational chart of
10    the Ontario Energy Board -- I am not sure I could,
11    anyway, but it is available and is an interesting
12    document.
13                      The point I want to make is that I
14    think the part of the Board to which you are primarily
15    referring here is now known as the licensing and
16    applications -- I am sorry, one moment, please.
17                      Well, we have the Licensing and
18    Applications Branch, the director of which is the
19    Director of Licensing.  There are managers of
20    facilities, rates, licensing.  There are other areas of
21    the Board, corporate services, regulatory affairs,
22    which are also involved in advising the Board.  It is a
23    more complex organization than we had a few years ago.
24                      Again, I am not suggesting anything
25    turns on your argument one way or another on that.  I
26    just want to clarify that the Board's organization is
27    quite different from what it was and we have grown a
28    great deal and the whole issue of the appropriate flow

                                                           51
    
 1    of advice within the Board and so on is one that we are
 2    very much aware of and are trying to deal with.
 3                      I will ask you one last question. 
 4    Would it be your client's position that the technical
 5    conference in this case would have been more
 6    successful, could have been more successful if Board
 7    staff had not been there, if Board staff had not
 8    participated?
 9                      MR. MARK:  I don't think you can
10    unscramble that egg.  You know, for better or worse --
11    I mean since January of this year the process seems to
12    have been focused on comments on the draft SSC.  So we
13    got to the technical conference, I think, with that
14    focus.  I don't think it hurt or helped the process one
15    way or the other that Board staff participated or
16    didn't participate in the way it did.
17                      I think what we are asking for is
18    some clarification so we all know what everybody's role
19    is.  I mean whether it would have been preferable for
20    Board staff to participate otherwise, it depends on
21    what their role is.
22                      MR. McCANN:  Thank you.
23                      Could I just have your indulgence for
24    one moment, Mr. Chair?  I need some advice from my
25    colleagues.
26                      THE PRESIDING MEMBER:  Certainly.
27                      MR. McCANN:  If I could just have one
28    moment, Mr. Chair, I have something here that I would

                                                           52
    
 1    like to confer about.
 2    --- Short Pause
 3                      I think that completes my questions
 4    for clarification, Mr. Chair.  Thank you very much.
 5                      THE PRESIDING MEMBER:  Mr. Laughren?
 6                      MR. LAUGHREN:  Mr. Mark, I wonder if
 7    you could clarify a matter for me because I am fretting
 8    about it.  As you know, there is a lot of complex
 9    matters dealt with by the Board in the proposed
10    handbook, which is very technical, very complex, and I
11    am wondering to what extent you see the role of Board
12    staff in all of these matters and how the Board
13    functions or would function without advice from Board
14    staff, because these are matters that the Board must
15    eventually approve, including something as technical as
16    the handbook.
17                      MR. MARK:  You have raised, Mr.
18    Laughren, a very large question.  As I think I have
19    indicated during my submissions, I think the Board has
20    to -- I am sure the Board has given a lot of thought to
21    the appropriate role for or roles for Board staff.  I
22    am not suggesting that there should not be a very
23    significant role for members of Board staff advising
24    the Panel, but I think it has got to be made clear what
25    that is and the Board has to have it clear in its own
26    mind what those responsibilities are and who is doing
27    it.
28                      I think the public has to understand

                                                           53
    
 1    that and I think one has to be careful when one gets
 2    into a process such as this of making sure that if
 3    Board staff is in an advisory capacity, they don't end
 4    up in a situation that happened here, where they are
 5    clearly a proponent of one of the alternatives which is
 6    in play in the hearing process.
 7                      So I guess the short answer is we are
 8    not suggesting that that they should not have an
 9    advisory role, we expect they will, but one thing they
10    cannot be is both an advisor and a party, if you will,
11    in substance, in the same proceeding.  That seems to be
12    a problem that somebody has gotten themselves into here
13    and I just think that globally the Board will have to
14    address that issue.  I agree these are complex matters
15    and you need a technical staff.
16                      MR. POWER:  If I may add to that,
17    this has caused some considerable thought and I think
18    this set of proceedings is relatively unique in that
19    there is a confluence of events around this one that I
20    suspect will not be at the next proceeding, such as
21    PBR.  We do not have a staff draft paper that so
22    strongly commented on, et cetera, et cetera.  There is
23    the PBR handbook, but I think the language in there is
24    at least different than what I have seen and what the
25    staff paper came up with.
26                      It's a small point, but there has
27    been confusion here from the start as to whether the
28    staff is the independent facilitator of the process,

                                                           54
    
 1    whether they are an intervenor -- they half seem to be
 2    and half do not seem to be -- or are they an expert
 3    proponent or is there somebody else who should be the
 4    expert proponent to whom we should ask these questions. 
 5    I think if there is a latter, someone who is clearly an
 6    expert proponent that was separate from the Board staff
 7    role, that would be helpful.
 8                      MR. MARK:  Could I just add something
 9    to my previous comment, Mr. Laughren?  Mr. Power is
10    right, it has caused a lot of people to think long and
11    hard.  I think what the Board has to bear in mind is
12    why you have Board staff in an advisory capacity.
13                      When one gets into a proceeding where
14    there needs to be a determination in the Board, it may
15    be necessary at that stage for the Board to put some
16    boundaries upon what staff can do.  It may be that once
17    you commence a proceeding, in connection with your
18    deliberations you cannot take the advice and counsel of
19    Board staff, which is not to say they do not have a
20    general advisory role to play as the Board moves
21    through a number of regulatory matters.  But a
22    proceeding or a hearing is a different sort of beast,
23    if I can put it that way.
24                      You may have to put up defences and
25    say that once we embark upon a proceeding, Board staff
26    is no longer your advisor.  You now have a record. 
27    That is one of the key principles of, you know,
28    tribunal procedure, that there is to be a record and no

                                                           55
    
 1    more than that record and there is not to be any
 2    submissions, in effect, by somebody off the record.
 3                      So maybe when the proceeding starts,
 4    their advisory function ends.  There are ways to --
 5    there may be more ways to skin the cat, but I suggest
 6    that is a distinction that has to be kept in mind.
 7                      THE PRESIDING MEMBER:  Just to follow
 8    up, Mr. Mark, you would be aware that many of these
 9    issues have been addressed in the change of role of
10    staff as it relates to gas proceedings.  Understandable
11    rules and tenets have been developed for the gas which
12    have guided the Board many times through those
13    proceedings and, indeed, the Board, I think quite
14    clearly, sees that maybe we need to clarify things
15    because of the electricity sector and the type of
16    proceedings there.  I have no doubt that may be at the
17    root of what the problem may be, in my view.
18                      But the Board has addressed these
19    issues in its regulatory proceedings in gas in spades. 
20    Those of the parties that are standing behind you here
21    will be quite aware that it took a little while to work
22    out those with some goodwill from all parties before
23    the role of Board staff became a clear role that was
24    satisfactory both to assisting the Board and assisting,
25    I might add, the intervenors in the process.
26                      MR. MARK:  I understand that.  I do
27    not claim intimate familiarity with the rules on the
28    gas side.  I want to make it clear to the Board that

                                                           56
    
 1    the MEA and I am sure the other intervenors would
 2    welcome an opportunity to make sure there is a -- to
 3    work out a set of rules which everyone is content with
 4    and, more importantly, are transparent.
 5                      THE PRESIDING MEMBER:  That I have no
 6    disagreement with.
 7                      MR. MARK:  But I think you will
 8    understand our concern, Mr. Higgin, is when we see what
 9    has been presented in the Board staff, and I say this
10    with all due respect to Board technical staff because I
11    acknowledge they have always endeavoured to be helpful
12    intervenors and to run fair proceedings.
13                      I do not want to suggest in any way
14    that they have acted improperly, but we have ended up
15    in a conundrum where it seemed to us that there was a
16    proponent here, the Board staff paper said as much, and
17    then we are told at the hearing that, no, it was just a
18    straw man.  With the greatest of respect, that is when
19    the bells go off.  I mean that is just not right and it
20    raises questions, it raises concerns which have to be
21    dealt with.
22                      THE PRESIDING MEMBER:  Thank you.
23                      Just with respect to the record, if
24    you could help me, as well as the transcript, which is
25    your principal concern, that the transcript would be
26    part of the record of the proceedings, do you include
27    the papers that were submitted and which were the basis
28    of the discussions at the technical conference?  Do you

                                                           57
    
 1    include all the papers, including Dr. Dewees' paper, et
 2    cetera?  Are you including the paper?
 3                      MR. MARK:  Yes.  Indeed, I think that
 4    was implicit in the submission because, frankly, we
 5    want to make sure it's in the record, as well as the
 6    questions of clarification that were asked of Professor
 7    Dewees.
 8                      THE PRESIDING MEMBER:  It is
 9    difficult to separate the two, but just to clarify, you
10    would include all of those papers that were officially
11    submitted to the technical conference?
12                      MR. MARK:  Yes.
13                      MR. POWER:  I note, as an
14    administrative matter, I think there are still two
15    matters that were agreed on the closing moments to be
16    filed that may not have been filed yet, but everybody
17    has known of them and have had copies available, if
18    they wish.
19                      THE PRESIDING MEMBER:  Thank you.
20                      Barring any other questions, Mr.
21    Mark, on your part of the motion, thank you very much
22    and we will now move on with Mr. Power.
23                      MR. POWER:  Thank you very much, sir.
24                      I would like to begin, first, with
25    the section 2.5.7 of the Affiliate Relationships Code. 
26    I note by way of background that the submission of
27    these parties at the end of the day, I think you can
28    see from the transcript, is that 2.5.7 of the Affiliate

                                                           58
    
 1    Relationships Code goes beyond simply that of
 2    regulating conduct.  It actually has become a
 3    fundamental market mechanism that is going to have some
 4    significant impacts on the marketplace, to give you
 5    some context of the thinking around the positions of
 6    our parties.
 7                      The staff draft paper came out the
 8    end of January.  As you will recall, there was, I
 9    think, in excess of 50 submissions made at that time on
10    both the Standard Supply Code, as well as the Affiliate
11    Relationships Code.  The majority of those submissions
12    at the time raised a range of concerns about both
13    Codes.  They were not fatal to the Codes.  There was a
14    lot of support on some points, but certainly 2.5.7 of
15    the Affiliate Relationships Code created some concerns.
16                      Now, out of that, Minister Wilson, as
17    we know, wrote a letter, which is at tab G on the
18    materials before you, Mr. Laughren, which has become of
19    some significance and importance to the stakeholders in
20    the process.  In the third paragraph there, the
21    Minister states that:
22                           "In conveying interim approval
23                           for the distribution licences
24                           and the Affiliate Code, I wish
25                           to note the following points. 
26                           As noted in my previous
27                           correspondence, I am encouraged
28                           by the Board's plan to initiate

                                                           59
    
 1                           a grace period of six months
 2                           prior to the enforcement of the
 3                           Code.  This grace period is an
 4                           important transitional step that
 5                           will permit the industry to gain
 6                           some practical experience of the
 7                           licensing regime.  Moreover, I
 8                           expect that the Board's proposed
 9                           consultations with distributors
10                           will permit the design of
11                           appropriate exemptions to ensure
12                           that existing utilities are well
13                           positioned to compete..."
14    And I underline the words "to compete":
15                           "...in the new market place on a
16                           level playing field..."
17    Which I also underline:
18                           "... with the private sector."
19                           (As read)
20                      This letter came out of extensive
21    consultations that the minister had undertaken arising
22    out of the draft Codes which had been proposed at that
23    time by Board staff and, obviously, there were
24    significant concerns.
25                      When you go over to the next page, at
26    the top of page 2, the Minister himself states,
27    presumably on the advice of his senior bureaucrats:
28                           "Given the direct relationship

                                                           60
    
 1                           between customer transfers and
 2                           the broader issues regarding the
 3                           discharge of the default supply
 4                           obligations, I expect that the
 5                           Board would defer section 2.5.7
 6                           of the Code pending the outcome
 7                           of your continued consultations
 8                           on the Standard Supply Code."
 9                           (As read)
10                      On this letter and on some other
11    matters, there was the expectation of our clients and
12    many more that 2.5.7 is intrinsically intertwined with
13    the Standard Supply Code issues.  It may be that at the
14    end of these proceedings we cannot decide 2.5.7 and I
15    guess those will be submissions at the end of the day
16    if you left this in, but certainly for you to render a
17    good decision which understands the impacts on the
18    participants and fundamentally in the marketplace, then
19    you have to have some consideration for 2.5.7 as part
20    of your overall deliberations of the Standard Supply
21    Code.  That is the essence of the position that the
22    parties represented here.
23                      Now, if I may, if I can turn you to
24    tab 2 in the affidavit of Mr. Grieves, paragraph 7, on
25    page 3, we had the benefit of Ms Woolf's testimony and
26    report, which I understand you would have read and
27    seen.  Ms Woolf, if you look at her CV, was an advisor
28    to the government in designing Bill 35 and was

                                                           61
    
 1    intimately involved with that process and, perhaps
 2    equally or more importantly, she has been one of the
 3    longest experts in electricity deregulation in the
 4    world and has advised on just about every major
 5    deregulation that there is.  She brings some good
 6    wisdom to these proceedings.
 7                      Her comment there is that:
 8                           "I do regard Affiliate
 9                           Relationships Code 2.5.7 as
10                           being inextricably linked to the
11                           Standard Service Supply Code.  I
12                           think that if you read it at
13                           face value, it simply makes it
14                           impossible to implement
15                           condition 14(2) of the
16                           transitional distribution
17                           licence as drafted."  (As read)
18                      So I have the Minister's and concerns
19    of a number of participants clearly saying it is linked
20    to the subject matter of these proceedings.  I have an
21    expert, Ms Woolf, saying the same thing.  Now I turn my
22    mind to who else has considered this matter.
23                      At tab N of this document, you will
24    find the reference to the PHB document from the MDC,
25    which is at the heart of the Standard Supply Code draft
26    code based upon everything we have learned.  Now, if
27    you look at page 1, you can see that it is an
28    evaluation of default supply options presented to the

                                                           62
    
 1    retail technical panel.  Mr. Dewees testified that this
 2    was the document upon which the MDC reviewed and made
 3    decisions around the standard supply service.
 4                      On page 2, they identify,
 5    essentially, five options that were considered by this
 6    consultant in the overheads that followed.  You will
 7    see that point 5 is the spot price, "Option Number 5,
 8    smoothed spot price."  That is the one that Mr. Dewees
 9    indicated was the foundation for the staff draft Code.
10                      The rest of the document goes on and
11    provides a number of pros and cons and observations on
12    those five options.  But what is probably fundamental
13    to this motion here today is if you turn to page 19, at
14    the end.  This is PHB's statement which was the prime
15    and major consultant to the MDC and we understand the
16    prime and major consultant to the Board itself.
17                      Here PHB, after they have presented
18    options on the five options, say, in big bold letters
19    on the top:
20                           "There are important policy
21                           issues that apply to all default
22                           supply options but were not
23                           addressed by the retail
24                           technical panel."  (As read)
25                      This is a very significant caveat by
26    PHB as to issues which are central to the decision
27    around the Standard Supply Code.
28                      If you go down to point 2, it says

                                                           63
    
 1    right there in language that is almost exactly the same
 2    as section 2.5.7 of the Affiliate Relationships Code:
 3                           "The assignment of default
 4                           supply service by the LDC to its
 5                           competitive affiliate..."
 6                           (As read)
 7                      So here we have the Board's own
 8    experts, if I may, when advising the MDC, saying that
 9    this issue of 2.5.7 is an important policy issue that
10    apply to all default supply options, obviously
11    including the one that we have here, but were not
12    addressed by the panel indicating that obviously there
13    is much further study that has been required before
14    they would conclude on the merits of one option over
15    another.  I mean these are six pretty fundamental
16    important issues.  Point 3 there is also a sub-point of
17    point 2.
18                      If you look at the Market Design
19    Committee Report, fourth quarter, in different spots it
20    says:  "We did not do all the work that we set out to
21    do.  There was a number of points of study that we
22    could not complete."  Mr. Dewees was very honest on the
23    stand about that.  He said:
24                           "We did the best in the time
25                           that we had, but we cannot hold
26                           out to the world that we
27                           completely analyzed all the key
28                           issues to understand the impact

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 1                           of our work once it is applied
 2                           and interpreted and put into a
 3                           regulatory framework which will
 4                           affect all the participants."
 5                           (As read)
 6                      PHB was very honest, I think, in
 7    flagging these caveats to its initial work which Mr.
 8    Dewees admits was, under rushed circumstances, not
 9    completed.  I think the important part here for this
10    part of the motion here is that I have what has become
11    the Board's own export advisor saying that this is an
12    important policy issue that must be considered as part
13    of understanding the Standard Supply Code and how it
14    works and how it operates and who it will affect.
15                      So I guess I have the Minister
16    concerned, I have the majority of the intervenors
17    concerned, I have Ms Woolf with her expertise saying it
18    is intrinsically related, I have PHB saying 2.5.7 is
19    obviously an intrinsically related issue to the
20    Standard Supply Code, I have Mr. Dewees saying there is
21    insufficient time to think through that which has
22    become the foundation of the draft Code, and I have the
23    MDC report giving caveats and warnings throughout that
24    there is much further work to be done and they do not
25    purport to finish off this debate.
26                      There has been a lot of urgency in
27    this process with Bill 35, the Market Design Committee,
28    and, unfortunately, now before the Board that all the

                                                           65
    
 1    participants know we are under great pressure to move
 2    along as best we can, as co-operatively as we can, to
 3    get these issues resolved.  My concern to you, though,
 4    is that we have had some warnings from the experts in
 5    the MDC process and we have got some warnings from some
 6    people who are here in these proceedings that we
 7    saying, "We understand your time urgencies, but beware
 8    of rushing too fast."  That is the clear message.
 9                      At the end of the day in these
10    proceedings, I think you are going to be left in a
11    difficult dilemma.  We have got the testimony of PHB,
12    this document of Mr. Dewees saying the work was not
13    completed on the Standard Supply Code.  You have the
14    testimony of some other experts, like Seabron Adamson,
15    who says, "I have some alternative ideas but I admit
16    the work has not been committed there either because
17    Ontario is a very fact-specific jurisdiction."
18                      I think you are going to be left in
19    an interesting position of weighing two competing
20    experts, both of which have qualifiers on the work. 
21    You may adopt the Standard Supply Code as it is or you
22    may say, "We recognize there are some alternative
23    models and we adopt one of those", or you may say, "We
24    are not certain and we may require some further
25    analysis", and perhaps that is the intellectually
26    honest thing to do.
27                      I know that cuts against the grain of
28    the pressure that we are all under, but the evidence

                                                           66
    
 1    that we have had in the proceeding to date is that
 2    2.5.7 and the Standard Supply Code is much more than
 3    codes of conduct.  They are fundamental market
 4    mechanisms and, at the end of the day, we are going to
 5    hear evidence to the effect that -- we already have,
 6    but you will hear argument on this -- 2.5.7 is the
 7    linchpin to decontrol by Ontario Hydro.  Lakeview is
 8    the first step in decontrol.
 9                      The evidence we had in these
10    proceedings is that if there isn't some ability to have
11    bilateral contracts and a fixed price.  Lakeview will
12    certainly be stalled by many years, if not killed
13    outright.  If the objective, which it is under the
14    legislation, is to encourage competition and drive
15    price down, the fundamental issue affecting price and
16    lowering prices is the cost of generation and
17    competition within generation.  If we don't get
18    competition in generation, we are just meddling around
19    the edges in terms of driving price down.  That is what
20    Ms Woolf was talking about at the proceedings in her
21    reference to 2.5.7.
22                      We think it is not unreasonable for
23    you to consider in your deliberations at the end of the
24    day the relationship of 2.5.7 and weigh the evidence
25    that occurred in these proceedings.  You may well
26    decide that it requires further thought.  You may
27    decide to reject it and may decide to do something
28    else, but I guess we are asking you, in light of the

                                                           67
    
 1    importance of this, that it should clearly be part of
 2    these proceedings.
 3                      You have evidence on the record that
 4    parties were told they could put evidence in, and they
 5    did, and there was questions on it.  You now have the
 6    benefit of that.  I guess I am suggesting to you,
 7    certainly with the parties we represent, the decision
 8    you make on this will be seminal to how they carry on
 9    in the marketplace.  It is that important.
10                      Now, Board counsel at the start had
11    mentioned that there was a question on this and, if I
12    understand my notes correctly, which would be how and
13    when the transitional distribution licence might be
14    amended, and I suspect it was in relation to this
15    particular issue.  Out of fairness, I hadn't thought
16    that through, but I guess my response would be we will
17    be much wiser in a couple of weeks in how to answer
18    that question when you have seen the submissions and
19    you make the decision you do.  If you decide simply to
20    adopt the Code as proposed right now, I suspect you
21    won't have to deal with that question.  But if you take
22    an alternative course of action, you might have to.
23                      The Board does have the powers to
24    give notice to amend. I think that is a relatively
25    straightforward matter that can be done early in the
26    fall, depending upon the decision you reach.  You have
27    the powers to determine whether you want a hearing on
28    it or simply written submissions which, given the

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 1    extent of the discussion you have had in here amongst
 2    the major players affected by the proceedings, I don't
 3    think you are going to get much new on it.  So I am not
 4    afraid of it, I guess, is my only comment or advice
 5    back to you.  I think you can do it very time
 6    efficiently.
 7                      Now, if I may, I would like to turn
 8    to the grounds of relief that relate to PHB, if I may
 9    call them that, if I can refer back to the Grieve
10    affidavit, tab 2.  Beginning at about paragraph 17, in
11    that affidavit there is an overview of the relationship
12    of PHB to the MDC and, ultimately, to the Board
13    process.
14                      Mr. Dewees' evidence was that PHB was
15    not just the prime consultants, but the consultants
16    which undertook the vast majority of the work for the
17    MDC.  His evidence was also that, specific to the spot
18    price mechanism, they were the proponent.
19                      There is a quote later on in
20    paragraph 21 on page 7 when Mr. Dewees was asked about
21    the role of PHB in the spot market pass-through.  He
22    responded that PHB suggested that.  I think it was
23    Larry Ruff who suggested that back in April when we
24    first began discussing retail competition.  So I don't
25    think there is any controversy as to where the proposal
26    came from.  It came from one consultant who was
27    retained by the MDC, who is now retained to advise you.
28                      As an aside, from my understanding of

                                                           69
    
 1    how major regulatory changes have occurred in other
 2    jurisdictions, it is extremely rare to have one
 3    consulting firm providing the lion's share of advice
 4    from start to finish, and for good reasons.  These are
 5    complex areas where we are crystal ball gazing to some
 6    degree and it helps to have various perspectives.
 7                      One of the perceived difficulties
 8    with this process is that we have got the judgment and
 9    perspective of only one consultant controlling the
10    process and a consultant, I might add, that is not
11    Ontario-based and perhaps not sensitive to the Ontario
12    market issues.  This is not a slight on their
13    expertise, but it is a recognition of reality.  So we
14    have got one consultant, PHB, which has made the
15    recommendation, which is the foundation of the standard
16    supply code before us.
17                      Now, where does that take us to?  It
18    creates concerns about bias and it creates concerns
19    about accuracy.  As one side issue, to give you a sense
20    of what is in the minds of some of the intervenors to
21    these proceedings, on paragraphs 18, 19 and 20 there is
22    a discussion about work that PHB had done, which is the
23    foundation of the Standard Supply Code proceedings.  On
24    page 18, there is a volatility presentation made to the
25    MDC.  It looked at a number of factors and concluded
26    volatility is a very serious issue, but then looked to
27    Alberta as a benchmark on Ontario.  Then it concluded
28    after looking at Alberta data and some adjustments for

                                                           70
    
 1    the Ontario scenario, volatility can be dealt with. 
 2    That was their judgment.
 3                      At paragraph 20, at the bottom of
 4    page 6, another perspective finally came forth through
 5    these proceedings, and you have got the benefit of
 6    that.  Seabron Adamson, who is an expert in competitive
 7    electricity markets who actually designed the
 8    fundamental mechanisms in Alberta upon which PHB has
 9    commented, said in no uncertain terms, and he is quoted
10    at the bottom:
11                           "I would advise you strongly to
12                           put some very strong caveats on
13                           estimates of volatility taken in
14                           the market.  Alberta, because it
15                           is in Canada, has really no more
16                           connection to the Ontario power
17                           market than that of New Zealand. 
18                           To suggest that this is the
19                           pricing pattern consistent with
20                           generators recovering their
21                           average costs in the Ontario
22                           market is to me to have a very
23                           profound misunderstanding of the
24                           nature of the Alberta market
25                           historically."  (As read)
26                      The advantage of this proceeding is
27    we are actually now getting two perspectives or more
28    perspectives.  The disadvantage of what we see right

                                                           71
    
 1    now is that there is only one perspective -- which may
 2    be right or may be wrong, we don't know; at the end of
 3    the day, you will decide that -- but that one
 4    perspective has captured the process throughout and now
 5    is seen to be unfairly or not capturing this process
 6    and being the advisor to the central decision maker,
 7    while still having authorship of the proponency of some
 8    of the core issues.  The fact that we have somebody who
 9    is the market designer for Alberta basically saying
10    that the foundation of the advice for this Code is
11    fatally flawed doesn't give us much confidence.
12                      This is an appearance issue and I
13    have toyed at first with doing the usual and pulling
14    out the case law and all that sort of thing, but what I
15    would rather do is just leave you with two principles
16    or statements.  The first is by the Supreme Court of
17    Canada.  For those who like to look up these things, it
18    is the Committee for Justice, a 1978 case, at 1 SCR
19    369.  The quote there on the test of reasonable
20    apprehension of bias from the Supreme Court is:
21                           "Would an informed person think
22                           it more likely than not that the
23                           decision maker would
24                           unconsciously or consciously not
25                           decide fairly..."  (As read)
26                      "Unconsciously or consciously". 
27    There is no suggestion of improper motive.  That is not
28    the test.  It is an objective appearance about a

                                                           72
    
 1    concern that an impartial technical decision might be
 2    rendered without a fully impartial process.
 3                      There is another classic line, which
 4    is really the foundation of some of the modern law
 5    around tribunals.  There is a well known line of cases
 6    that hold that the tribunal cannot seem to admit to its
 7    decision-making process one of the parties or someone
 8    too closely connected with one of the parties or a
 9    proponent of a position; and, right now, fairly or not,
10    in the eyes of many in this room, PHB is viewed as the
11    proponent.
12                      Staff, as you have heard from Mr.
13    Mark, is also seen to fall in the trap of being
14    perceived to be a proponent through the materials that
15    they have produced and drafted and all the parties have
16    read.  Both of them appear to have a vested interest
17    and, at the same time, access to the Board, which will
18    render a decision in this matter.
19                      Again, there is no suggestion of
20    inappropriate behaviour, but there is only one
21    perspective which has been dictating this debate, which
22    also happens to be the advisor to the Board on the very
23    decision they are going to render.  It would have been
24    much more helpful if PHB had taken the stand and we
25    would have had the benefit of seeing what their
26    underlying analysis was, the basis for their decisions. 
27    We would have had that on the record and compared and
28    contrasted with the other experts.  We would have all

                                                           73
    
 1    known what was on the record and been able to make
 2    submissions to you on it.
 3                      Right now we are left with an
 4    appearance of because they advise you behind the
 5    scenes.  They will be doing further research to bolster
 6    the work that they did, which is the foundation of the
 7    Code that is before us, and that raises a serious
 8    concern.
 9                      So, to come back to the prayer for
10    relief that is at the start here, if I may, under 1(1)
11    we are seeking an order of the Board amending the
12    issues list to add the following issue:  That the
13    Affiliate Relationships Code section 2.5.7 and the
14    transfer of customers to affiliates be added to the
15    Board's consideration.  I guess we are just asking that
16    you keep an open mind to the interrelationship of this,
17    given all the advice that we have had that it is
18    intrinsically related.
19                      Regarding 3, 4 and 5, which is an
20    order of the Board regarding Putnam, Hayes & Bartlett,
21    following up on some of the comments made by Board
22    counsel, I am not confident we need an order at the end
23    of the day because, if I understand correctly, this is
24    probably a contractual matter where the Board can
25    simply state:  "We are content to instruct this advisor
26    on this issue not to be involved in advising us or
27    Board staff.  No further order is required."  I think
28    if we just heard a statement to that effect, the

                                                           74
    
 1    appearance issue is resolved and that is the end of it
 2    and there is no more than that.  So, in looking for
 3    alternatives, I think a simple statement to that effect
 4    would resolve all concerns.
 5                      Those are all my submissions, Mr.
 6    Chairman.
 7                      THE PRESIDING MEMBER:  Thank you very
 8    much, Mr. Power.
 9                      We will see if there are any
10    questions from Board counsel and then the Board may
11    have one or two.
12                      Do you have any questions, Mr.
13    McCann?
14                      MR. McCANN:  Well, I would just like
15    to trace through what the argument is here.  I mean Mr.
16    Power has set it out in-depth there and I am not
17    suggesting it is not clear, but just for the sake of
18    clarity I want to make sure that we have all got it.
19                      Let me try this question:  Whatever
20    one may make of the paper that was issued by Board
21    staff, the SSS code, what PHB may have advised the MDC,
22    there is going to be a hearing in a couple of weeks at
23    which alternatives to the SSS code draft can be put
24    before the Board and an opportunity is being given to
25    anybody who wants to, essentially, to put those
26    alternatives forward.
27                      There has been a technical conference
28    and it may well be that the proceeding to that

                                                           75
    
 1    technical conference will be before the Board as well. 
 2    That is part of the issue we are deciding today.
 3                      Why would it be your submission that
 4    that process which will take place would not overcome
 5    any appearance that the Board might be leaning in a
 6    direction or that some advisors might have access to
 7    the Board, that others did not, or whatever?  I mean
 8    the bias question.  Why did that proceeding not
 9    overcome those concerns?
10                      I mean I would have thought that in
11    many cases the answer to an apprehension of bias is the
12    openness of the process.  I guess I would like you to
13    comment on why you think that isn't quite sufficient in
14    this case and that it is necessary for the Board to go
15    further and in some way clearly insulate itself from
16    certain consultants it has retained.
17                      MR. POWER:  There is two, I guess,
18    broad aspects to that.  It is a good question.
19                      I respond to part of the question in
20    that it is our vague and uncertain understanding that
21    what will occur in two weeks is no more than a
22    30-minute oral submission by the parties on the record. 
23    At least that is the way the Board's procedural
24    directions have been interpreted by everybody I have
25    spoken with.
26                      In the traditional sense, that means
27    there is no new evidence.  All that you have before you
28    is the transcripts and the reports that were given at

                                                           76
    
 1    the technical proceedings.  So our perception right now
 2    is all we are getting, if I may phrase it that way, is
 3    simply an opportunity to sum up what has already
 4    occurred in the past and make presentations on that.
 5                      In the interim -- I guess this is my
 6    second point -- people are asking me as counsel to
 7    parties:  What work is going to be done by PHB given
 8    what came out in the transcript of the last two weeks
 9    between now and that hearing?  Who will they be
10    advising?  Will that work be on the record so that we
11    can understand it and probe it and make argument on it
12    or will it simply be as part of their general retainer
13    behind the scenes to Board staff and to the Board?
14                      If they are generating advice and
15    other work on these issues, which the Board may be
16    receiving or Board staff, how will that affect the
17    decision process if we don't know about it, if we don't
18    know what it is, if we can't get access to it and we
19    can't probe it like we can with everything else in the
20    proceedings?
21                      So there is confusion and a lack of
22    certainty, both regarding what we are doing in two
23    weeks, I guess.  If it is simply a summation of 30
24    minutes of what has gone on in the past and asking
25    questions, then there is no new procedural opportunity,
26    I guess, to adduce evidence on alternatives and it
27    doesn't resolve the concern.  In the interim, I can
28    only pass on the questions that have been raised to me.

                                                           77
    
 1                      MR. McCANN:  I think those are all
 2    the questions I have, Mr. Chair.
 3                      THE PRESIDING MEMBER:  Thank you, Mr.
 4    Power.
 5                      Mr. Laughren?
 6                      MR. LAUGHREN:  Mr. Power, help me out
 7    here.  Are you suggesting that the Board should have
 8    retained a duplicate set of consultants to advise us on
 9    this matter and, further, if that duplicate had
10    recommended the same thing as PHB, would you feel
11    better?
12                      MR. POWER:  Let me address the first
13    question first.
14                      The difficulty we find here is that
15    PHB is the proponent of the essence of the proceedings. 
16    If I had my druthers, you would have the benefit of
17    what many of the regulators have in other jurisdictions
18    -- I am sure people here are aware of it -- in that
19    there is usually a senior and eminent peer review panel
20    of experts who won't do individual or unique study, but
21    who will review, from a peer review perspective, the
22    work which has been conducted by the lead consultants.
23                      I think if we had somebody in that
24    role, not doing an original study but who is seen to be
25    providing good peer review and that was available to
26    you, I think that would go a long way, if that peer
27    review was seen to be independent and impartial to the
28    proponents of any particular matter before you.  It is

                                                           78
    
 1    a mechanism that has worked well elsewhere.
 2                      It is a mechanism, I think, that is
 3    particularly important given the seriousness of the
 4    issues that we are going to be grappling with over the
 5    next year.  So, Mr. Laughren, if I could make one
 6    suggestion, that would go a long way.
 7                      Now, if, at the end of the day,
 8    coming to your point two, they agreed with the
 9    recommendation of PHB or anybody else behind the scenes
10    and they are impartial and that sort of thing, that's
11    life, but I would still hope for a proceeding where we
12    can probe the assumptions of the proponent of these
13    fundamental market mechanisms and test their
14    assumptions.  The chips will fall, as they always do,
15    where they fall.
16                      MR. LAUGHREN:  Thank you.
17                      Just a follow up on that.  Could you
18    just define for me what you viewed or characterized as
19    PHB and staff -- those were your words -- have a vested
20    interest?  How would you see that?
21                      MR. POWER:  The interest that I am
22    speaking about from staff's perspective is, obviously,
23    what they laid out in their discussion paper at the end
24    of the January of this year, where they have gone on
25    and have not only taken the MDC work but then they go
26    on at length, as Mr. Mark outlined, and advocated a
27    position and put that advocacy position out to the
28    world to test.

                                                           79
    
 1                      So I would presume from an
 2    intellectually honest perspective when you put
 3    something out to the world to test, you expect some
 4    debate, discussion and you are going to support your
 5    position.  Correct?  It is just human.  So from a
 6    purely human level, there is obviously some people who
 7    have done some good work, who feel strongly about it
 8    and will continue to advocate that until a decision is
 9    made otherwise.
10                      Similarly, if I was PHB or any other
11    consultant whose work had become the subject matter of
12    such a contentious public proceeding -- it is not a
13    hugely contentious one, we are not in three weeks of
14    litigation, but there is obviously some serious issues
15    here -- I can tell you that I would direct my people to
16    dig in, do more work, think the issues through, have we
17    missed anything, what have we missed and let's keep
18    working on this, folks.  I think most people would
19    expect they are doing that.  So from that perspective,
20    in terms of they have attached their reputations to
21    their recommendations, I do expect they have an
22    interest in this.
23                      MR. LAUGHREN:  Do you see that
24    different to other parties that have advocated
25    positions -- which is what we are looking for,
26    alternatives --
27                      MR. POWER:  Yes.
28                      MR. LAUGHREN:  -- in which they have

                                                           80
    
 1    developed a vested interest or may have?  How do you
 2    separate the two?
 3                      MR. POWER:  Actually, we would have
 4    probably welcomed Board staff and PHB or whoever else
 5    formally being an intervener, formally having to put
 6    all of their evidence and perspective on the record and
 7    formally being able to ask questions.  Then that would
 8    have resolved all of this.
 9                      But because they are in this
10    netherworld of not formally intervening and we do not
11    have a right of asking the basic questions around how
12    they reached their assumptions and they are physically
13    located in these offices, they are in a very different
14    position than others who are here proposing an
15    alternative.
16                      THE PRESIDING MEMBER:  Thank you.
17                      Just with respect to clarifying now
18    2.5.7 and the relief that you are requesting, I hope I
19    can explain this to you, if we look at article 1 of the
20    motion and look at sub (1) -- and you wish to add
21    number 5 to the issues list that the Board issued in
22    Procedural Order 2 -- the wording says, "and the
23    transfer of customers to affiliates".
24                      Now, the question I am trying to get
25    to is:  Do you only distinguish there to affiliates or
26    do you distinguish to third parties?  Is the issue that
27    you are trying to address and you want the Board to
28    consider that the mechanisms that relate to transfers

                                                           81
    
 1    to affiliates are to include as well to third parties
 2    that may be acting on behalf of the distributor, as the
 3    Act allows?  I am just trying to clarify which you
 4    want.  Do you want the more constrained interpretation
 5    or do you want the broader interpretation?
 6                      MR. POWER:  The short and honest
 7    answer is I hadn't thought through that clearly by
 8    giving my perspective, for what it is worth. 
 9    Obviously, from the proceedings, what is motivating
10    most of the people here is the issue to enter into
11    bilateral contracts with enough certainty to assure new
12    generation to enter the marketplace and most people
13    probably think about that only in the more constrained
14    sense.
15                      But I am quite open to an observation
16    that there may be other issues we have not thought
17    about in terms of transferring customers to third
18    parties in the broader sense.  So, to that end, I think
19    if I was in your shoes, I would probably keep my
20    options open and hear submissions on both.
21                      THE PRESIDING MEMBER:  This Code that
22    is the subject and the issues do address quite a few of
23    the issues related to third parties.
24                      MR. POWER:  Yes.
25                      THE PRESIDING MEMBER:  To cite 2.2.4,
26    2.2.5 and also confidentiality of information to third
27    parties, it does not specifically address the
28    affiliate.  So I understand your answer and, as far as

                                                           82
    
 1    you are concerned, a broad interpretation would be
 2    preferable.
 3                      MR. POWER:  I expect so, yes.
 4                      THE PRESIDING MEMBER:  So without any
 5    other questions, we would like to thank you, Mr. Mark
 6    and Mr. Power, for bringing the motion and now we will
 7    move on to those who wish to make submissions.
 8                      In general, as I said at the outset,
 9    we would like to hear from those that are in
10    substantial support of the motion, if there be any. 
11    Maybe they would like to identify themselves and then
12    proceed.
13                      Yes, anyone?
14                      MR. KLIPPENSTEIN:  Mr. Chairman, on
15    behalf of Pollution Probe, I would like to make a few
16    comments in support of the motion.
17                      THE PRESIDING MEMBER:  Okay, that
18    would be fine.  Would you like to proceed, Mr.
19    Klippenstein?
20                      MR. KLIPPENSTEIN:  Certainly, thank
21    you.
22                      Mr. Chairman, you said at the
23    beginning that you asked other parties in speaking on
24    the motion not to re-plow ground already plowed.  I
25    hope not to do that.  As a boy, being raised in rural
26    Manitoba and Saskatchewan, I dimly recall that after
27    having plowed ground, the next step was to spread some
28    BS on it.  I hope to avoid that step as well.

                                                           83
    
 1                      I would have three submissions on
 2    behalf of Pollution Probe.  The first is that the
 3    relief requested in the motion is a step in the right
 4    direction in terms of safeguarding the fairness of the
 5    process.  I would suggest on behalf of Pollution Probe
 6    that we do not think they go far enough in safeguarding
 7    the fairness of the process, but, obviously, that is an
 8    issue beyond this motion.  Because Pollution Probe
 9    feels that they are a step in the right direction,
10    Pollution Probe would support them.
11                      Secondly, I would simply add to the
12    point made by my two friends that the issues involved
13    here are of fundamental significance, but I would just
14    add that not only does it involve -- and I am thinking
15    particularly here of the spot price mechanism -- issues
16    of market structure and competition, but certainly,
17    from Pollution Probe's point of view, it is
18    fundamentally significant from an environmental point
19    of view and Pollution Probe certainly believes that, in
20    effect, a code which essentially compels a very large
21    number of customers to adopt a dirty coal power source,
22    if you will, will have very real and lasting importance
23    in terms of, if you will, dirty air and dirty lungs. 
24    Not to get too strong about it, but Pollution Probe
25    thinks that is at stake.
26                      Thirdly, one of the safeguards that
27    Pollution Probe is very concerned about is the lack of
28    thorough testing of the spot pricing mechanism idea. 

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 1    There is a certain amount of testing and review that
 2    has gone on.  My friend, Mr. Power, however, has
 3    surveyed the history of the idea of spot pricing
 4    mechanism in this proceeding and has, I think, pointed
 5    out very well that the idea has been characterized
 6    throughout by a lack of testing.
 7                      He has pointed out that at the level
 8    of the PHB consultants, they acknowledged a certain
 9    lack of study of the spot pricing mechanism as opposed
10    to alternatives.  The same lack of study has been
11    acknowledged at the MDC level and again at the
12    technical conference level.  Throughout, therefore,
13    this idea has moved and now become entrenched, if you
14    will, in a Code which is the default position here
15    without properly being tested or at least thoroughly
16    being tested.
17                      I certainly don't say that the
18    ability of different parties to put forward competing
19    ideas is not extremely helpful, but there is a point
20    where the inability of parties in this process to test
21    the spot pricing mechanism idea thoroughly by actually
22    engaging in an aggressive interchange about the
23    deficiencies of the idea, in the end, leaves the Board
24    without a certain element of perspective on the idea.
25                      I am not suggesting cross-
26    examination, because that is a different form of
27    hearing, but some process of actually being able to
28    push the boundaries is missing from this process. 

                                                           85
    
 1    Pollution Probe feels this very keenly because of what
 2    happened in the technical conference.
 3                      Mr. Gibbons, on behalf of Pollution
 4    Probe, appeared at the technical conference and
 5    questioned Professor Dewees and at the point where the
 6    critical issue of the spot price mechanism essentially
 7    compelling the purchase of the dirtiest or coal-fired
 8    option came up, Mr. Gibbons expressed Pollution Probe's
 9    concern and put a question to Professor Dewees.  The
10    transcripts governing this are at Volume 1, July 13, at
11    pages 156 and on.
12                      Mr. Gibbons was cut off by the
13    facilitator who, quite appropriately, in terms of the
14    rules of the conference said, "You cannot do that.  You
15    can only ask clarification, you can only ask questions
16    to help understand rather than challenge or test the
17    ideas."  So there is an example on a key question where
18    Pollution Probe was specifically cut off on the crux of
19    the issue.  Mr. Gibbons barged ahead a little bit and
20    got a bit of an answer, anyway, but was certainly
21    constrained on a critical issue.
22                      I am not suggesting that there should
23    be some kind of cross-examination put in place, but my
24    suggestion is that this lack of ability to really test
25    ideas and the lack of a testing of ideas, as Mr. Powers
26    has explained through the process, is something the
27    Board should take into account.  In my submission, the
28    spot price mechanism is an idea that has more

                                                           86
    
 1    appearance of validity for the Board than it actually
 2    has.
 3                      I would use the analogy of a train. 
 4    The spot price mechanism is an idea that looks like a
 5    big powerful shiny train coming down the track, but on
 6    closer examination, it is a train that started at the
 7    top of a hill and gathered momentum through gravity and
 8    inside there is perhaps not much of an engine, but it
 9    seems like a big powerful idea that has now found its
10    way into the Code.  My concern is that without some of
11    the testing that should have gone on throughout the
12    process, there are now no brakes to stop the train.
13                      My submission is that the Board
14    should be, therefore, extremely cognizant of the lack
15    of testing of the spot pricing mechanism idea
16    throughout the process as it arrives here today.  In
17    the next step in the hearing, in my submission, the
18    Board needs to listen extra carefully to the
19    submissions on the spot pricing mechanism with those
20    caveats in mind.
21                      Thank you, Mr. Chair, those are my
22    submissions.
23                      THE PRESIDING MEMBER:  Thank you Mr.
24    Klippenstein.
25                      Mr. Mia?
26                      MR. MIA:  On behalf of the Coalition
27    of Distribution Utilities, we are in substantial
28    support of the motion, with the exception that we take

                                                           87
    
 1    no position on paragraphs 3, 4 or 5.
 2                      THE PRESIDING MEMBER:  Do you have
 3    any supplementary submissions or is that adequate?
 4                      MR. MIA:  That is it.
 5                      THE PRESIDING MEMBER:  Thank you.
 6                      Anyone else?
 7                      Now, are you in substantial support
 8    or are you in neutral territory or are you opposed?
 9                      MR. MATTSON:  No, we are in
10    opposition to the motion and we will make our
11    submissions in order.
12                      THE PRESIDING MEMBER:  Is there
13    anyone else who is in substantive support?  No.  Then I
14    guess we will move to Mr. Warren.
15                      I anticipate you will not be in
16    substantive support.
17                      MR. WARREN:  That is a fair guess,
18    Dr. Higgin.
19                      Let me say, first, Mr. Chairman and
20    Mr. Laughren, with respect to the prayer for relief,
21    subsection (1) -- sorry, subsection (2) of number 1
22    with respect to the issuance, we do not believe that an
23    order is required from the Board that they will issue
24    reasons for decision.  It has been my experience that
25    this Board has an exemplary record explaining exactly
26    why it does, whether you agree with it from time to
27    time or not.  I do not believe, in our respectful
28    submission, that an order is required.  We would expect

                                                           88
    
 1    that it would be granted in the ordinary course.
 2                      With respect to the balance of the
 3    relief requested, we are in opposition to it for
 4    reasons which I will explain.  But I want to begin with
 5    the general observation which is really responsive,
 6    first of all, to the observations of Mr. Klippenstein,
 7    in which he said that we need a process which
 8    aggressively challenges the spot price pass-through.
 9                      Mr. Klippenstein and I have clearly
10    been in a different solar system for the last six
11    months because we have had a mountain of material which
12    has been submitted at various stages of this process
13    criticizing ad nauseum the spot price pass-through.  We
14    have had a vigorous exchange of ideas.  We have Ms
15    Woolf coming forward, we have Mr. Adamson.  What more
16    do we need?
17                      We have, the Board has, all the
18    parties have, the benefit of a full exchange of views
19    on this.  To suggest that we need something more in the
20    process is, in my respectful submission, unrealistic. 
21    I simply do not see the need -- my client does not see
22    the need for some sort of process changes that allow
23    more to be put before the Board, as though the
24    suggestion and, indeed, the suggestion is that there
25    has not been a full opportunity to test the adequacy of
26    whatever PHB has said, whatever anyone else has said.
27                      The process designed by the Board,
28    the invitation from the Board was, "Give us

                                                           89
    
 1    alternatives, show us the inadequacy of the spot price
 2    pass-through", and if my friends have failed to do that
 3    it is not the process' fault and it is not the Board's
 4    fault.  That is a fundamental contextual issue for all
 5    of these submissions.
 6                      I am going to divide my submissions,
 7    Mr. Chairman, into two parts.  First, I will deal with
 8    the issue of whether there is any factual basis for the
 9    relief requested by my friend.  Second, I will deal
10    with the merits of the submissions my friends have
11    made.
12                      Dealing first with the factual basis,
13    because it is a requirement of the Board's rule that
14    there be some basis factual basis for the relief which
15    is to be granted, let me deal first with the first
16    prayer for relief, which is adding section 2.5.7 of the
17    ARC and the transfer of customers to affiliates to the
18    issues list.
19                      The Board, as you will recall, gave
20    the parties an opportunity to make submissions on its
21    proposed issues list and the parties did so. 
22    Presumably, the moving parties took advantage of that
23    opportunity to make submissions.  The Board made a
24    decision on this very issue when it issued and that
25    decision was reflected in Procedural Order No. 2.
26                      What the moving parties now want is a
27    reconsideration of that issue and they should be
28    governed by Part 10 of the Board's Rules, which set out

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 1    the procedure to be followed when you are seeking a
 2    review of any matter or any decision of the Board.
 3                      Rule 63.01 of the Board's Rules sets
 4    out the grounds that should be addressed in seeking
 5    that relief and none of the material which is before
 6    you, either the motion or the supporting affidavit,
 7    address that.  What fresh information is brought before
 8    you to support the argument that you were wrong in your
 9    initial decision?  What we hear is that a whole bunch
10    of folks think this is an important issue.  That is an
11    argument that has been made for months.  We have been
12    aware of the Minister's letter for months.  What is the
13    basis, in my respectful submission, for the relief?
14                      Paragraphs 4 through 8 of Mr.
15    Grieve's affidavit, in particular paragraph 8, concedes
16    that Mr. Power made submissions on this point.  There
17    is nothing in the balance of Mr. Grieve's affidavit
18    that warrants a reconsideration.  There are no
19    arguments which are advanced that could not have been
20    made before.  There is no basis in fact, in my
21    respectful submission, upon which the Board should
22    reconsider its earlier decision.
23                      Let me deal, then, with this request
24    in prayer for relief number 3 that PHB should not be
25    providing advice to the Board.  I want to say as a
26    general observation that there is no factual basis for
27    this request whatsoever.  I would ask the Board to turn
28    up Mr. Grieve's affidavit at this point in my

                                                           91
    
 1    submissions.
 2                      We have, first, paragraphs 17 through
 3    27 of Mr. Grieve's affidavit.  The observations which
 4    are contained in there can be summarized in the
 5    following way.  First, in paragraph 18 through 20,
 6    PHB's analysis of volatility was, in some measure,
 7    inadequate.  I do not agree with that submission, but
 8    it does not matter whether I agree with it or not.  The
 9    analysis of volatility in that context was for work PHB
10    was doing for the MDC.  It is not a ground for
11    disqualifying PHB as an expert for the Board.
12                      Secondly, in paragraphs 21 through
13    23, Mr. Grieve suggests that PHB supports one pricing
14    mechanism.  It, ultimately, made that recommendation to
15    the MDC, but that is not relevant to its function as an
16    expert for the Board.  There is nothing in the evidence
17    that suggests that PHB has a vested interest.  It has a
18    monetary interest in the outcome of the proceeding,
19    some monetary interest in the structure of the market. 
20    It has a view.
21                      The highest we can put Mr. Grieve's
22    facts is that it may have a view on what the approach
23    of on what is the appropriate spot price mechanism.  Is
24    that a basis for disentitling it to be an expert
25    advisor to the Board?  There is no suggestion in the
26    material that PHB would not or could not responsibly
27    canvass the alternatives for the Board and there is no
28    suggestion they are not experts.

                                                           92
    
 1                      In paragraphs 24 through 27 of Mr.
 2    Grieve's affidavit, he argues that PHB was -- he
 3    alleges that PHB didn't consider some issues in its
 4    work for the MDC.  So what?  How are any of those
 5    allegations relevant to his function as an expert for
 6    the Board?  Are Mr. Power and his clients simply being
 7    tender-hearted in this case, wanting to be solicitous
 8    of the Board or wanting to make sure that PHB coopers
 9    up whatever problems it had for the MDC?  Surely, that
10    is not a basis, Mr. Chairman, for disqualifying them as
11    an expert.
12                      The irony of these sections of the
13    Grieve affidavit is that they allege deficiencies in
14    the work of PHB which the moving parties are fully
15    aware of and which they can correct in their
16    submissions to the Board.  Again is there a factual
17    basis in Mr. Grieve's affidavit for this issue, the
18    suggestion that they should be disqualified as experts?
19                      At bottom, I say with respect, the
20    factual allegations, factual statements in Mr. Grieve's
21    affidavit amount to an argument that Mr. Grieve's
22    clients don't like what PHB is saying about the spot
23    price pass-through, but that is not a basis for
24    disentitling them to act as an expert, a point to which
25    I will return in a moment.
26                      To allow the argument to proceed on
27    the facts as set out by Mr. Grieve would be to set a
28    dangerous precedent for the Board.  The factual basis

                                                           93
    
 1    amounts to this, that anyone who disagrees with the
 2    position of the Board on an issue can, for that reason
 3    alone, ask that an expert be disqualified.  The Board,
 4    in my respectful submission, should not allow that to
 5    be done.
 6                      Granting the relief which is asked
 7    for would be worse.  The point here is that Mr. Grieve
 8    in the affidavit has provided no factual basis for the
 9    order and, in like fashion, that applies to prayer for
10    relief 4 and 5.
11                      I want to make one final observation
12    on the factual basis, Mr. Chairman, for this prayer for
13    relief because Mr. Grieve's affidavit conflates alleged
14    deficiencies in PHB's work with alleged deficiencies in
15    the work of the MDC, and I find that to be regrettable. 
16    It is regrettable that some in fact former members of
17    the MDC think that there is some advantage now to be
18    gained in attacking the work of the MDC.  These were
19    well-intentioned, hard-working people who gave their
20    time --
21                      MR. POWER:  I would have to object to
22    that.  There is no suggestion of that here.  There
23    hasn't been any suggestion of that throughout the
24    proceedings.  If my friend is going to say that, I want
25    the particulars.  I want to know the grounds for the
26    particulars because he is now about to get into
27    people's characters and motives, individuals, which are
28    not part of this proceeding.

                                                           94
    
 1                      MR. WARREN:  Mr. Chairman, may I make
 2    my suggestions and draw what conclusions I may on the
 3    affidavit which has been supplied by Mr. Grieve?  If my
 4    friend Mr. Power disagrees with it, he has an
 5    opportunity to respond.
 6                      My point, simply, Mr. Chairman, is
 7    that what we have here is an affidavit which attacks
 8    the work of PHB, attacks by necessary implication the
 9    work of the MDC.  None of it is either appropriate or
10    relevant to the arguments that were made.
11                      Can I now turn to the question of
12    substantive relief which has been asked for?  The first
13    prayer for relief is adding section 2.5.7 of the
14    Affiliate Relationships Code to the issues list.  The
15    argument is, as I hear it from Mr. Power this morning,
16    simply that some people think it is important to the
17    commercial context of the market.  The point is that
18    the Board has considered section 2.5.7 in its
19    consideration of the Affiliate Relationships Code, and
20    it shouldn't be reopened now.
21                      It is not up to the Minister to
22    dictate how the Board should deal with this issue.  For
23    what it is worth, I don't take the position that the
24    Minister has said how the Board should deal with it in
25    his letter, but even if he did, it is not up to the
26    Minister to do that.  It should not be, in my
27    respectful submission, added to the issues list.  It is
28    not relevant to the standard supply issue.

                                                           95
    
 1                      The Board, however, must be aware of
 2    one of the problems that arises if it accedes to this
 3    request.  It was not on the issues list before.  All of
 4    the parties did not have an opportunity to make
 5    submissions with respect to this issue.  So the Board
 6    has to, in effect, reopen this process to give people
 7    an opportunity.
 8                      Ms Woolf, in my respectful
 9    submission, jumped the gun when she included it in her
10    material.  Whether we believe that she should or should
11    not have done is neither here nor there.  If the Board
12    accedes to this argument, it has to open up the
13    process, delay the process to allow people to say what
14    they wish about the Affiliate Relationships Code.
15                      With respect to the second prayer for
16    relief -- that is, allowing the proceedings and the
17    technical conference to be considered part of the
18    record and the parties to make submissions -- we have
19    no objection to this, Mr. Chairman.  We understood that
20    this was always going to be the case.  We are not quite
21    sure why it has to be the subject of a motion.
22                      The danger for the Board, however,
23    Mr. Chairman, in dealing with this issue is that it is
24    variously characterized by the merit moving parties as
25    testimony and evidence.  It is neither.  It is not
26    evidence that was given under oath, it was not
27    testimony that was given under oath, it wasn't sworn
28    and cross-examination was not allowed.

                                                           96
    
 1                      Now, all of us at this table
 2    violated, to greater or lesser degree, that stricture.
 3    but all of us, in some measure, did not cross-examine
 4    on that material.  If it is characterized as evidence
 5    and if you then allow distinctions to be made, for
 6    example, as between who is an expert and who is not an
 7    expert, that would be unfair because it would require a
 8    reopening of the process to have the materials sworn,
 9    to allow full cross-examination and to have challenges
10    as to whether people were or were not experts.
11                      We do not believe it is necessary to
12    characterize this as evidence for a full exchange of
13    views.  The matters have been debated, as I say,
14    virtually ad nauseam for months.  Allow what material
15    parties feel is relevant to be put before the Board and
16    the Board to make its decision.  We understood that
17    those were the rules that were governing the process
18    and those are the rules that should be continued with
19    no strictures on them.
20                      Let me turn to prayer for relief 3, 4
21    and 5, which is the prayer for relief to, in effect,
22    get rid of PHB.  I say with respect that this prayer
23    for relief is utterly without merit.  We hear for the
24    first time this morning, for the very first time, some
25    allegation that somebody is biased.  We have a
26    reference to a Supreme Court of Canada case which dealt
27    with the issue of whether the decision-maker was
28    biased.

                                                           97
    
 1                      Now, I didn't see that to be the
 2    allegation in the material that was filed, but we hear
 3    the word "bias" this morning, and there is no basis
 4    upon which the Board can conclude that it is biased. 
 5    There is no material that would suggest that PHB is
 6    biased.
 7                      Now, section 14 of the OEB Act allows
 8    the Board to retain experts, and it is interesting, Mr.
 9    Chairman, and important I think that there are no
10    restrictions which are put on the Board's use of
11    experts.  There are no restrictions, for example,
12    parallel to those which appear in rule 52.03 of the
13    Rules of Civil Procedure.
14                      Now, the moving parties have not in
15    their prayer for relief asked for any rules governing
16    PHB's role.  They have simply asked that PHB be struck
17    as an expert.  There are no allegations, no factual
18    support for any allegations, that there is some
19    impropriety on the part of PHB or any bias in the sense
20    that they have a monetary interest in the outcome of
21    the proceeding.
22                      At bottom, what is suggested is that
23    the moving parties simply don't like what PHB thinks
24    about this issue.  My friends have given us no
25    authority for the proposition that that disentitles PHB
26    to be an expert.  After all, experts take positions on
27    issues.  We hope that those positions are reasoned,
28    that there is a thorough examination of the

                                                           98
    
 1    alternatives, but even if there aren't, that is a
 2    problem for the Board in its use of the expert and it
 3    is not a problem for the process.
 4                      As I say, there is no law that I am
 5    aware of that an expert can't take a position on the
 6    issues.  After all, that is what experts do and it is
 7    simply no basis for disentitling them to help the
 8    Board.
 9                      More importantly, in a sense, it sets
10    a very dangerous precedent if the Board were to order
11    that it can't listen to PHB and it can't have PHB as an
12    expert in this case.  It, in effect, amends section 14
13    of your act to read, "The Board may retain an expert
14    subject to the consent of the parties", and that
15    consent can be withheld simply because they don't think
16    they are going to like what it is the expert is going
17    to say.  In my respectful submission, the Board should
18    not make a decision which has the effect of amending
19    that section of the Act.
20                      As a practical matter, the Board
21    needs expert advice and it should be able to seek it
22    where it believes is appropriate.  In our respectful
23    submission, you have no basis in either fact and law
24    for granting any of the grounds 3, 4 and 5.
25                      Let me turn, finally, Mr. Chairman,
26    to the question of the role of Board staff, which, in
27    terms of the seriousness of the issues put before you,
28    is, I think, the most important issue.  I appreciate

                                                           99
    
 1    the benefit of Mr. Mark's serious analysis of the issue
 2    and of his submissions.  I say with great respect to
 3    Mr. Mark that I disagree.
 4                      In my respectful submission, it is
 5    inaccurate to characterize the Board's January 29th
 6    paper as an advocacy position.  While we may choose to
 7    quarrel with the use of some of the what I will
 8    describe as transitional language used -- that is, a
 9    transition from a consideration of the alternatives to
10    the conclusion that ought to be reached -- we may
11    quarrel with some of that transitional language and
12    say, "It might have chosen to use more neutral
13    language."
14                      At the end of the day, a fair
15    characterization of the Board's paper is it is setting
16    out an alternative.  That the alternative reaches some
17    conclusion as to which of the various options is the
18    more attractive does not make it an advocacy paper.  It
19    makes it simply an ordinary, responsible process of a
20    rational group of people.  You set out alternatives and
21    you reach conclusions.  That does not make it an
22    advocacy position, it does not make Board staff
23    partisans.
24                      Now, my friend Mr. Mark has no
25    authority, or at least he is not advancing authority
26    for the proposition which is implicit in his argument
27    that Board staff must take no position on issues.  They
28    have to, in some sense, to continue with my friend Mr.

                                                          100
    
 1    Klippenstein's farm metaphor, be caponized.  They can't
 2    say, "This is what we believe a correct position is at
 3    the end of the day," and that is neither realistic nor
 4    fair.  Responsible advisors have to take positions on
 5    issues.  If advisors are acting effectively, they must
 6    canvass the arguments and say, "These are the ones
 7    which we believe have greater merit."
 8                      Now, the irony is that in this case
 9    Mr. Mark has the full advantage -- Mr. Mark and the
10    others have the full advantage of knowing what the
11    Board staff's reasoning process is and a full
12    opportunity to respond to it, to say, "We think this is
13    the flaw in the analysis."  So I ask the question
14    rhetorically:  Where is the mischief?
15                      If we have simply brought up into the
16    light of day what the Board regularly does, I presume a
17    reasoned analysis of alternatives which are presented
18    to the Board, the Board has every opportunity to say,
19    "We don't agree with your reasoning".  The real
20    mischief, however, in Mr. Mark's suggestion is that it
21    effectively deprives the Board of advisors.
22                      I urge the Board not to go down the
23    road which is open to them by Messrs. Mark and Power to
24    say, "Well, we are going to make subtle distinctions on
25    the Board staff's function based on the nature of the
26    process", because that effectively cripples your
27    ability to get day-in and day-out expert advice.  If
28    that position is accepted, Board staff can no longer

                                                          101
    
 1    advise the Board on contentious issues because, heaven
 2    forefend, Board staff may take a position on an issue. 
 3    That is completely unrealistic.  It is at odds with the
 4    fundamental function of expert advisors.
 5                      There is, in my respectful
 6    submission, simply no foundation to Mr. Mark's
 7    argument.  It is dangerous in its implications and it
 8    should be rejected.  I say this with respect to Mr.
 9    Mark that the effect of his argument and Mr. Power's
10    argument on PHB is to really isolate the Board, to take
11    away from you the benefit of expert advice for the sole
12    reason that Mr. Mark's clients and Mr. Power's clients
13    disagree with it.
14                      This is a decision which is an
15    important one for the Board and I would urge the Board
16    not to accede to the arguments that this case requires
17    limits to be put on the Board staff's function.  Board
18    staff has done nothing more than what responsible Board
19    staff always does.  It is unfair, in my respectful
20    submission, to characterize the January 29th position
21    as an advocacy position.
22                      There is no merit, in my respectful
23    submission, in the argument that has been made.  There
24    is no perception of unfairness.  We know what Board
25    staff is thinking, we know what advice it is going to
26    give to the Board, and everybody has a full opportunity
27    to respond to it, in any event.
28                      I have some submissions, Mr.

                                                          102
    
 1    Chairman, at the end of the day with respect to timing. 
 2    We are on a very tight timing horizon.  Perhaps it is
 3    unfair of me to whine publicly, but my client is under
 4    pressure under a number of proceedings.  There is the
 5    Consumers Gas proceeding, there is a Union-PBR
 6    consultation which is taking place as we speak, and
 7    this motion will make it very difficult for us to
 8    comply with the Board's timing for August 9th.
 9                      So I would ask the Board to give some
10    consideration to perhaps extending the deadline
11    somewhat or being flexible in the deadlines with
12    respect to that because this motion has taken a
13    considerable amount of time to respond to.
14                      Those are my submissions on the
15    motion.  I would ask the Board to dismiss it in its
16    entirety.
17                      THE PRESIDING MEMBER:  Thank you, Mr.
18    Warren.
19                      Mr. McCann, do you have any
20    questions?
21                      MR. McCANN:  No, thank you, Mr.
22    Chair.
23                      THE PRESIDING MEMBER:  Just a moment,
24    please.
25                      Thank you.  I think you have answered
26    the one I had.  You have already dealt with it.  Thank
27    you very much.
28                      Moving on.  Mr. Brown?

                                                          103
    
 1                      MR. BROWN:  Thank you, Mr. Higgin.
 2                      As I indicated, sir, and Mr.
 3    Laughren, I am making submissions today on behalf of
 4    two groups.  The first group is Direct Energy and
 5    Enershare Technology, both of which are retailers or
 6    marketers.  The second group is the Ontario Natural Gas
 7    Association or ONGA, which is a coalition which
 8    includes utilities, large customers, as well as
 9    retailers.
10                      I am going to split my submissions
11    into two parts.  The first part will deal with the
12    procedural matters and the second part will deal with
13    the requested amendment to the issues list.
14                      The submissions that I make on the
15    procedural issues will be on behalf of all three
16    entities.  The submissions that I will make with
17    respect to the issues list will be on behalf of Direct
18    Energy and Enershare only.  It will not be on behalf of
19    ONGA.
20                      So with that by way of clarification,
21    if I could turn to the procedural matters that have
22    been raised in the Notice of Motion, the main desire of
23    the parties for whom I am making submissions today is
24    that the Board should avoid procedural delays in this
25    matter and proceed to hear submissions on the Standard
26    Service Code on August 9th, and that is the main
27    motivating force behind our submissions.
28                      In terms of the specifics of the

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 1    relief that is being asked, I can say that I support in
 2    large part the submissions that my friend Mr. Warren
 3    just made on the procedural matters.  Let me go through
 4    the five issues that have been identified and give you
 5    our position.
 6                      First, with respect to whether the
 7    Board should issue reasons in this proceeding, I think
 8    it is unclear whether in the present case the Board is
 9    exercising a statutory power of decision and,
10    therefore, would be required to issue reasons.  In any
11    event, as a practical matter, the Board will hear
12    submissions on August 9th and the Board will decide
13    whether or not, under the circumstances, this is a
14    matter in which it is appropriate to issue reasons for
15    its decision.  As Mr. Warren said, this Board has vast
16    experience and expertise in that matter and it can make
17    the decision at that time.
18                      Second, with respect to the record of
19    the proceedings, I join Mr. Warren in expressing some
20    surprise that this is even an issue.  In the Notice of
21    Hearing that was issued in early June in this matter,
22    it was clearly stated that a transcript of the
23    technical conference will be available to parties and
24    the Board.  I took from that that the parties could use
25    the transcript at the hearing on the merits on August
26    9th and the Board would also refer to it.
27                      I really don't think anything further
28    needs to be said, but if you have to, then certainly

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 1    you can indicate that, indeed, parties are free to
 2    refer to the transcript at the hearing on August 9th,
 3    although subject to the caveats that Mr. Warren put
 4    forward.  This is not evidence under oath, although it
 5    is the presentation and explanation of a number of
 6    proposals.
 7                      With respect to the role of Board
 8    staff, I was not present during the technical
 9    conference, so I have only followed the matter through
10    the transcript.  It may be fair to say that given the
11    background to this hearing, some of the statements made
12    by Board staff and staff counsel on the first day of
13    the technical conference perhaps were made somewhat in
14    haste or perhaps they were caught somewhat off guard by
15    some of the initial positions that were taken by
16    certain of the intervenors in this proceeding.
17                      There seemed to be a very aggressive
18    procedural flavour that started off the technical
19    conference and which is not in character of most
20    technical conferences, but I certainly do not think
21    that Board staff or Board counsel should be called to
22    task for some words spoken at that time when one steps
23    back and looks at the substance of what happened.  The
24    substance is very clear.
25                      My friend Mr. Mark, during the course
26    of his submissions, said he would be content if the old
27    Hydro standard prevailed because it provided an
28    acceptable standard and he identified two elements to

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 1    that standard with respect to the role of Board staff. 
 2    The first is that intervenors have an opportunity to
 3    see what Board staff says about a matter and, second,
 4    that intervenors have an opportunity to respond to what
 5    Board staff says.  Both of those tests have been met in
 6    spades in this case.
 7                      In January, Board staff issued its
 8    discussion paper.  Whether one characterizes it as a
 9    straw man or the advocacy position of a particular
10    point of view does not really matter.  The cards were
11    on the table, face up.  People knew what the starting
12    point of the discussion would be and with every
13    discussion there has to be a starting point.  Board
14    staff initiated that and elicited or solicited comments
15    on that.  Comments were made and then the Board issued
16    its Notice of Hearing.
17                      During the course of the procedure
18    that has developed under the Notice of Hearing, every
19    party has had an opportunity not only to comment on the
20    proposal or straw man or whatever that Board staff has
21    raised, but also to submit alternative proposals which
22    will be argued before the Board on August 9.  This is
23    certainly a case where, from the get-go, all of the
24    participants in the proceeding have known and have had
25    an opportunity to see what Board staff has said and,
26    most importantly, they have had an opportunity to
27    respond.
28                      So whereas there has been some

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 1    language this morning that conduct of Board staff may
 2    have been unseemly under the circumstances, in my
 3    respectful submission, there is absolutely no basis for
 4    that suggestion in this proceeding.  If certain
 5    intervenors took exception to some of the language that
 6    might have been expressed on the first day of the
 7    technical conference, in my respectful view, one has to
 8    take a look at the overall substance of what has
 9    happened in this proceeding and Board staff cannot be
10    impugned for what has occurred.
11                      Mr. Warren has also raised an
12    important point with respect to some suggestions of
13    bias which have been raised by certain parties today. 
14    Bias only applies to what the decision-maker in a
15    process does.  A decision maker must, in fact, not be
16    biased.  The decision maker must also not give the
17    appearance of not being biased.  I do not think there
18    is any secret or any expectation other than that at the
19    end of this process it will be the members of the Board
20    that will be the decision-makers and who will decide
21    what Standard Service Code should be put in place.
22                      I do not think one need say any more
23    than that, but if there is doubt raised by some of the
24    intervenors as to what the role of various people will
25    be in the decision-making process, I think the simple
26    expedience is simply for the Board, in its response to
27    the motion today, to indicate quite clearly what should
28    be obvious, that it is the Board that will be making

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 1    the decision as to what Standard Service Code terms
 2    will be and the Board will make its final decision
 3    based upon the submissions that the parties make on
 4    August 9th.  I really do not think anything more need
 5    be said on that.  Certainly nothing more need be said
 6    with respect to the role of Board staff.
 7                      The final issue with respect to
 8    procedure is the role of the consultant, Putnam, Hayes
 9    & Bartlett.  Putnam, Hayes & Bartlett earned the right
10    to provide advisory services to the Board through a
11    competitive process back in the latter part of last
12    year.  As my friend Mr. Warren indicated, the statute
13    clearly indicates that the Board is free to hire
14    whomever it considers to be qualified to provide it
15    with the advice or technical expertise that it requires
16    in any particular circumstance.
17                      The fact that Putnam, Hayes &
18    Bartlett was selected obviously indicated that the
19    Board had determined that that group had the
20    appropriate expertise and, given the role that Putnam,
21    Hayes & Bartlett played with the Market Design
22    Committee, I do not think any one can gainsay that
23    decision.  One might disagree with particular pieces of
24    advice that Putnam, Hayes & Bartlett may give, but one
25    cannot gainsay their expertise in the area.
26                      The gravamen or the crux of the
27    motion that is before you today with respect to the
28    role of PHB really seems to be that a group of

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 1    intervenors disagree with the position that PHB
 2    advanced with respect to this one issue, the default
 3    price mechanism.  At the end of the day, one must
 4    recall that it was a recommendation of the Market
 5    Design Committee, and not a recommendation of PHB, that
 6    found its way to the Minister through the market design
 7    report.
 8                      You also have the Market Design
 9    Committee itself recommending a variation of the spot
10    pass- through mechanism, so I do not think Putnam,
11    Hayes & Bartlett can be put four square and centre and
12    made the centre of attack, because much of what we are
13    considering in this particular proceeding is a variant
14    on what the market design committee proposed.  But with
15    respect to PHB, again I think it is clear -- and the
16    Board can state the obvious if that is what is needed
17    in response to its motion -- that, at the end of the
18    day, it will be the Board that will be deciding what
19    Standard Service Code will be adopted, not Putnam,
20    Hayes & Bartlett.
21                      As I indicated with respect to the
22    role of Board staff, I do not think any more need be
23    said than that with respect to that with respect to
24    Putnam, Hayes & Bartlett.  Certainly, there can be no
25    complaint on behalf of any participant in this
26    proceeding that there is any surprise or uncertainty as
27    to the position that PHB has advocated on this point.
28                      It has been apparent, I think, since

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 1    the second quarter or third quarter report of the MDC
 2    what the position of Putnam, Hayes & Bartlett has been
 3    and everyone has had a opportunity to comment on that
 4    or put alternative proposals before the Board.  So
 5    those are the definitions and the practical solutions
 6    perhaps that can be made to some of the procedural
 7    issues that have been raised by the moving parties in
 8    this matter.
 9                      I will turn, then, to the second part
10    of my submissions, which is with respect to the request
11    that the issues list be amended as described in the
12    notice of motion.  In listening to the submissions of
13    my friend Mr. Power, I am unclear as to what the moving
14    parties are actually requesting by asking that the
15    issues list be amended.
16                      There are two possibilities.  They
17    could be asking for the ability to refer to section
18    2.5.7 of the Affiliate Code in their final submissions
19    before the Board or they could be asking the Board to
20    consider making changes to section 2.5.7 as part of
21    this proceeding.
22                      If what they are really asking for is
23    simply an opportunity to refer to existing provisions
24    of the Affiliate Code in their argument, there is
25    nothing stopping them from doing that.  They can refer
26    to any statute, any rule, any code that is out there in
27    the course of making their argument.
28                      If, however, what they are really

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 1    asking for is an opportunity to persuade the Board to
 2    change the content of section 2.5.7 of the Affiliate
 3    Code, then on behalf of Direct Energy and EnerShare we
 4    vigorously oppose granting that relief in the form that
 5    it has been raised in this Notice of Motion, and we do
 6    so for three reasons.
 7                      First, the Affiliate Code was the
 8    product of a comprehensive stakeholder process which
 9    commenced in late January of this year.  A draft Code
10    was circulated by the Board for comment and that draft
11    Code contained a section identical to the present
12    2.5.7.  In the initial draft, it was number 2.6.3. 
13    Stakeholders were given full opportunity to comment on
14    this proposed provision in the context of the Board's
15    consultation with respect to the Affiliate Code.  No
16    doubt every one around this table, if they were
17    concerned about any provision in that Code, availed
18    themselves of that opportunity.
19                      Once the Code was issued on April
20    1st, the consultation process came to an end.  Quite
21    frankly, if any party remained dissatisfied with any
22    provision of the Code, it was open to them to seek
23    review of that Code elsewhere.  Certainly, as this
24    Board is aware in the context of other codes that the
25    Board has issued, two of my clients, Direct Energy and
26    Enershare share, have resorted to asking others to
27    review provisions of the Code, but that was available
28    as well to the moving parties that are before you today

                                                          112
    
 1    and they did not do that.  So the Code stands as it is.
 2                      Against this background of the
 3    consultative process in which the parties had an
 4    opportunity to make comments on section 2.5.7, in my
 5    submission, it is highly inappropriate for the moving
 6    parties to seek to reopen that issue through the back
 7    door of the issues list in this particular proceeding.
 8                      With respect to the second submission
 9    I make in opposition to this part of the prayer for
10    relief, as my friend Mr. Warren indicated, the Notice
11    of Motion that commenced -- the Notice of Hearing that
12    commenced this particular proceeding identified what
13    the issues would be and then a week later the Board
14    actually issued its Procedural Order No. 1 which
15    identified the issues.  That was over a month ago.
16                      No motion was brought at the time
17    that Procedural Order No. 1 was issued asking for any
18    amendment or change to the issues list.  It is only
19    part way through the technical conference that, all of
20    a sudden, certain parties bring a Notice of Motion
21    asking for the issues to be changed.
22                      If the parties really wanted to amend
23    the issues list at the beginning of the process, they
24    should have done it.  To endeavour to do it now would
25    greatly prejudice the position of many other parties
26    before this proceeding.  If the Board were to grant my
27    friend's request for or the client's request to amend
28    the issues list and then simply to proceed to hear the

                                                          113
    
 1    matters on August 9th, there would be a grave prejudice
 2    and procedural unfairness to all of the parties that
 3    are before you.
 4                      None of the parties entered this
 5    proceeding or entered the technical conference or will
 6    be entering the submissions on August 9th with the
 7    expectation that a changed section 2.5.7 was going to
 8    be on the table.  If such a change is going to be
 9    contemplated by the Board, then appropriate notice must
10    be given and parties have an opportunity to respond
11    fully and to canvass fully the implications of that
12    proposed change.  That did not happen.
13                      There was an opportunity to bring
14    that motion at the beginning of the process and the
15    parties did not do that and for that reason alone the
16    Board should not accede to their late request.  There
17    can be no secret as to what the implications or the
18    impact of section 2.5.7 of the Affiliate Code could be. 
19    That would have been known in February or March.  It is
20    simply too late in the day in the context of this
21    proceeding to try to change the issues list.
22                      The final submission I make is the
23    point raised by Board counsel, Mr. McCann, this
24    morning, who indicated quite clearly that there is a
25    mechanism available if any party disagrees with that
26    section of the Affiliate Code and that an application
27    can be made to the Board on proper notice to other
28    parties to ask for changes or amendments to that

                                                          114
    
 1    provision of the Code.  If parties desire to do that,
 2    that is the route that they should take.  They should
 3    not try and change at the last moment the issues that
 4    are before this Board in this proceeding.
 5                      So for those reasons I would ask you
 6    to dismiss the relief that is being requested in
 7    paragraph 1(1) of the Notice of Motion and with respect
 8    to the procedural issues, I have given you the proposed
 9    routes that we advance before the Board.  Those are my
10    submissions.
11                      THE CHAIRMAN:  Thank you, Mr. Brown.
12                      Mr. McCann, do you have any
13    questions?
14                      MR. McCANN:  No, I have no questions. 
15    Thank you, Mr. Chair.
16                      THE CHAIRMAN:  No questions.  Thank
17    you very much for those submissions, Mr. Brown.
18                      Now to Mr. Mattson.  We would like to
19    kind of complete this portion and then after the lunch
20    break, there will be the reply from the bringers.
21                      Mr. Mattson?
22                      MR. MATTSON:  Thank you, Mr.
23    Chairman.
24                      As I indicated, my client is opposing
25    the position as brought forward by the moving parties
26    today.  However, we take a slightly different position
27    with respect to why we are in opposition to the motion. 
28    The relief sought by my friends, as Mr. Mark indicated

                                                          115
    
 1    to you in his submissions, does not go so far as to
 2    suggest that there should be a full, formal proceeding
 3    before the Board with regard to the Standard Service
 4    Supply Code issues.
 5                      Instead, Mr. Mark indicated that his
 6    client, after some consideration, decided that due to
 7    expediency and issues of the regulatory burden that is
 8    currently on the Board, they decided that they could
 9    come up with some specific elements of procedural
10    fairness that they felt would satisfy their clients'
11    concerns.  Those are listed in the relief sections 2 to
12    6.
13                      I agree with my friend Mr. Janigan
14    completely when he indicates in his letter to you that
15    these specific sections, these specific requests by the
16    moving parties for more formal procedural requirements,
17    have only chosen those selections from that menu of
18    formal procedural requirements to bolster the position
19    of the moving stakeholders rather than provide a
20    framework for procedural fairness.  This is what I
21    think the Board really needs to turn its attention to
22    and I do not believe the Board or Board staff has, to
23    date, addressed what was a fairly significant
24    submission made or realization made at the technical
25    conference that significant parties to the MDC process
26    are not in agreement with that paper.
27                      While many of the parties at the
28    table were involved in that consensual process, it was

                                                          116
    
 1    open.  My client, Mr. Adams, was on that MDC, Ms Girvan
 2    from CAC, Mr. Budd, who is a partner with Mr. Power was
 3    on the MDC, MEA representatives were on the MDC.  That
 4    was a consensual process that the Board and all the
 5    parties hoped would come to a resolution without the
 6    need for a hearing.  There was no question about that.
 7                      Parties were hoping to find another
 8    process, one that was not an adjudicative process, one
 9    that did not require a formal hearing, in order to
10    implement new policy guidelines or concerns that the
11    government was in support of, that the Board was
12    co-operating with, and all the parties were going to
13    make best efforts to resolve.
14                      However, at the technical conference,
15    it was clear that certain parties to that process no
16    longer were prepared to go along with the consensus. 
17    There was a break.  The Board then, as the new act
18    gives it the power to choose, and it must choose, then
19    must decide the process by which it, at that point,
20    chooses to proceed with.
21                      Whether or not it chooses to go
22    forward with a less formal process, as Mr. Mark's
23    clients have made it clear right from the beginning,
24    and run the risk of a judicial review that would find
25    that the level of fairness inherent in that process did
26    not meet the safeguards and the fairness that Mr.
27    Mark's and Mr. Power's clients believe they are
28    entitled to under law, it does not matter any longer

                                                          117
    
 1    what the parties here say to you, whether they think
 2    the process is fair or not, and it really does not
 3    matter whether you decide the process is fair or not.
 4                      What you need to ascertain is what
 5    the law, ultimately -- what standard of fairness the
 6    law attaches to a process such as this, where the
 7    rights of Mr. Mark and Mr. Power's clients are so
 8    fundamentally affected.  Mr. Mark made it very clear
 9    time and time again how fundamental these issues are,
10    how these issues are central to the restructuring of
11    the Ontario's electricity sector, how his clients would
12    be deprived a fundamental fairness of due process if
13    the process goes forward, but he gave you an out.  The
14    out was that if you accept this list of procedural
15    fairness items, then he will go forward.
16                      It is just like a leaky pipe.  If you
17    patch one part of the pipe, there will be pressure
18    elsewhere and the leak will spring up elsewhere.  Now,
19    that may not concern the Board because the other
20    parties then could go and judicially review the
21    process.  The problem is that most of the other parties
22    are public interest groups and do not have the deep
23    pockets to take a matter for judicial review to the
24    courts.  These parties do.
25                      My client has been before the court
26    on judicial review brought forward by the MEA in the
27    past.  We know about that with respect to Environmental
28    Assessment Board's decision, Justice Saunder's

                                                          118
    
 1    decision, to allow Energy Probe to bring forward its
 2    evidence regarding competition that went for judicial
 3    review.
 4                      My client, certainly, could not bring
 5    forward a judicial review application.  So if you
 6    accept just certain portions of what essentially is due
 7    process or procedural fairness, the other parties have
 8    to then look at, how are we affected by the decision,
 9    and let us look substantively at what Mr. Mark is
10    arguing for.
11                      The technical conference.  We are all
12    well aware of the level or the weight that the Board
13    gives to testimony or evidence at a technical
14    conference.  There isn't cross-examination.  Ms Lea
15    indicated it is really to help understand the evidence.
16                      The MDC was not formally represented. 
17    In fact, Dr. Dewees did not even have a representative
18    who declared openly that we are going to represent this
19    man or this evidence or this is our position.  As the
20    Board indicated, it wasn't their evidence.  Mr. Dewees
21    was here on his own.  Mr. Mark asked who paid him, who
22    invited him, why is he here.  Well, it wasn't really
23    clearly resolved on that day, but Mr. Dewees did get up
24    and did speak about what the MDC considered over the
25    course of the year.  But there really was nobody there
26    to help Mr. Dewees to protect him or putting him
27    forward as though it was somehow a proposal.
28                      Maybe that should be fixed.  Maybe

                                                          119
    
 1    the Board, under section 19, the powers given to it by
 2    the new Act, should, of its own motion, bring forward
 3    that evidence and allow Mr. Mark, allow Mr. Power to
 4    cross-examine, bring their own evidence, allow the
 5    Board to make an independent decision, one that would
 6    be free of any risk of judicial review, one that would
 7    do away with the threats that at some point someone
 8    would find the process not to be fair, either at the
 9    beginning of the process or at the end of the process.
10                      The Board is very good at
11    adjudicating issues, has been for 25 years.  Rule
12    making and licensing and issuing codes is new to the
13    Board.  It is something that the Board has just begun
14    to involve itself in.  There are standards that the
15    courts have imposed on rule-making procedures.  We are
16    all very familiar with the Ontario Securities
17    Commission under the Daniel task force when it changed
18    the Ontario Securities Commission from what was an
19    adjudicative process to a rule-making process.  They
20    ended up in court for some two years, had to then issue
21    a whole huge list of new procedural guidelines, but
22    then the court found that to be fair.
23                      I don't think we are at that point
24    yet here at the Ontario Energy Board.  We may be, but,
25    hopefully, we won't be before the courts and have the
26    courts force the Ontario Energy Board to do that.  It
27    is not necessary in these circumstances.  These issues
28    are well-defined.  The parties line up very clearly as

                                                          120
    
 1    to where they support and don't support the issues.
 2                      The Board used to do Hydro rate
 3    hearings with issues three, four pages long and they
 4    had to be done in 30 days and the front-end process was
 5    very quick; time constraints always.  This is a much
 6    smaller matter.  This is something that the Board could
 7    definitely look to and say, "Well, this is not an issue
 8    that should be left to a less formal proceeding."  We
 9    are at the point now where the consensus is broken
10    down, where clearly this is a decision that we have to
11    make, yes or no, what is the Standard Service Code
12    going to look like.
13                      Somebody has to make that decision,
14    somebody has to be accountable for that decision,
15    somebody has to be responsible for it.  I believe it is
16    the Board's role.  The Board is the independent
17    tribunal, a regulator, and you have to make that
18    decision.  When you make that decision, shouldn't that
19    decision be made in accordance with the Rules and with
20    the processes that you are familiar with and that will
21    give that decision legitimacy?
22                      There is no question about it.  It
23    would be a very difficult task for anybody to attack
24    the merits of a decision that this Board makes with
25    respect to the proposals before it.  It is not very
26    difficult at all to attack the decision of the Board if
27    it goes to process because the courts believe that they
28    are the keepers of what is due process, what is the

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 1    standard of fairness.  The courts always look to
 2    process and are prepared to overturn boards' decisions
 3    when they are not fair.  But when it comes to the
 4    merits of the decision, or the correctness of the
 5    decision, it is much more difficult.
 6                      Energy Probe are very concerned that
 7    this entire process may be sidetracked and we may find
 8    ourselves down on University Avenue in the courts and
 9    the entire electricity restructuring may somehow be put
10    -- somehow be sidetracked or delayed all because the
11    Board, for whatever reason, chose not -- even in light
12    of what my friends say that they have concerns with the
13    process, that the Board chose not to exercise its
14    discretion within the formal hearing process that it
15    has been given the power to implement.
16                      That is the basis and that is the
17    heart of our concerns here.  So those submissions we
18    intended to make on August 9th.  We intended to come
19    before you on August 9th, put forward our position with
20    respect to the MDC, the Board staff's paper, and
21    respond to my friends' alternatives and, at the same
22    time, put to you at that time a request that the Board
23    ascertain what the level of fairness is required in
24    order to make this decision and determine whether or
25    not it needs to have a hearing with respect to the
26    issues that are before it.
27                      Because of this motion, however, and
28    because my friends have chosen to ask for what I would

                                                          122
    
 1    suggest is special treatment given to their clients
 2    with respect to what formal guarantees of procedural
 3    fairness they see they need, because of that I have
 4    been forced here today to say we disagree with the
 5    relief requested.  However, we do believe that the
 6    Board needs very seriously to concern itself with the
 7    fairness of the process, what process it intends to go
 8    forward with.
 9                      After August 9th, I would suggest
10    that would be appropriate, but the Board may even want
11    to consider it before August 9th and ask parties to
12    come forward on August 9th with their opinion as to
13    whether or not the process is fair and maybe even get a
14    legal opinion, either from within your own Board staff
15    or from a law firm outside the Ontario Energy Board,
16    with respect to what is a fair process, considering the
17    fundamental issues that we are discussing here and how
18    they affect so many of the players in Ontario with
19    respect to the energy restructuring.
20                      That, I believe, is the central issue
21    here.  I know the Board wants to go forward with this. 
22    Energy Probe would be more than happy to see the work
23    that was done in the MDC approved and implemented in a
24    timely fashion.  That is what we want.  Our
25    organization has put a great deal of time and resources
26    into that effort.  So have many of the other public
27    interest groups.  So in fact did the parties that are
28    bringing the motion today.  We spent a great deal of

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 1    time and resources.  Everybody would like to see it put
 2    in place as soon as possible.
 3                      Can that be done now within the
 4    current process?  I suggest, given Mr. Mark's and Mr.
 5    Power's comments, no, that if we go ahead with the
 6    process as it has now been structured, I think we are
 7    going to be finding ourselves -- and, Mr. Mark, maybe I
 8    am wrong, but I think Mr. Mark will not accept a
 9    process that doesn't protect his clients' rights with
10    regard to being treated fairly, having a full
11    opportunity to address all these issues.
12                      He has made that clear, Mr. Chairman,
13    now and I think it is up to the Board and the parties
14    to be very careful and to be very aware of that.  If it
15    just means that we have a small hearing, three to four
16    days, a small issues list, we can put all of those
17    concerns to bed and the process can go forward.
18                      If we stick with the current process,
19    we may always have that guillotine over our head that
20    at any time this process may be derailed, as Mr. Mark
21    used that word.  He could derail the process even
22    though he doesn't want to, but the process can be
23    derailed at any time and there is nothing the
24    government or this Board can do about it because the
25    law has given Mr. Mark certain rights and guarantees,
26    and I am sure he is going to take full advantage of
27    them.  A hearing certainly would satisfy all those
28    concerns and we wouldn't have to worry about this at

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 1    all.
 2                      Those are my submissions, Mr.
 3    Chairman, if there are any questions.
 4                      THE PRESIDING MEMBER:  Thank you, Mr.
 5    Mattson.
 6                      Mr. McCann?
 7                      MR. McCANN:  No, I don't have any
 8    questions, Mr. Chair.  Thank you.
 9                      THE PRESIDING MEMBER:  No thank you,
10    no questions at the moment, Mr. Mattson.
11                      I don't think there are any other
12    parties that have snuck in while we were doing this, so
13    I think that we will take the break for lunch and come
14    back at 2:00 o'clock.  Should the moving parties find
15    that that is not enough, they can let us know but,
16    otherwise, we would like to get on with it.  If you
17    think that is adequate for you, then we will resume at
18    two and we will hear the reply from the moving parties.
19                      Thank you very much.
20    --- Lunch recess at 12:50 p.m.
21    --- Upon resuming at 2:10 p.m.
22                      THE PRESIDING MEMBER:  Please be
23    seated.
24                      Are there any preliminary matters or
25    has anything come up?
26                      Just to inquire, Mr. Mark and Mr.
27    Power, you do have copies of the submissions that were
28    provided this morning, the six of them?  You do have

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 1    those?
 2                      MR. MARK:  If they were available
 3    here, we have them.
 4                      THE PRESIDING MEMBER:  The Board will
 5    refer to those submissions.
 6                      MR. POWER:  Yes, I have them.  Thank
 7    you.
 8                      MR. McCANN:  Mr. Chair, could I just
 9    interject there?  I think there may be a problem with
10    one of the documents.  I believe the document is signed
11    by Mr. Hebert or Mr. Herbert.  We are having trouble
12    locating a copy.  If you could give me your copy --
13                      THE PRESIDING MEMBER:  I have a copy,
14    if you will just hold a minute.
15                      MS FRIEDMAN:  Larry Hebert.  It is
16    actually on the table there.
17                      MR. McCANN:  I take that back, then. 
18    It is available.
19                      THE PRESIDING MEMBER:  So they are
20    all available.  Thank you.
21                      If that is it, would you like to
22    reply, then?  I don't know whether Mr. Mark is going
23    first or Mr. Power.
24                      MR. MARK:  I drew the short straw, so
25    I will go first.
26                      Let me respond to some of the points
27    raised by friends.  Mr. Warren raised the issue, I
28    believe, of the timing of the effort to put section

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 1    2.5.7 of the Affiliate Relationships Code back on the
 2    issues list and suggested that this motion was, if I
 3    have it correctly, both untimely and not under the
 4    appropriate procedure.
 5                      In terms of the timing, Mr. Chair, I
 6    should remind the Board that Procedural Order No. 2,
 7    which gave the Board's final determination, if you
 8    will, on what would be on the issues list was
 9    distributed to intervenors the evening prior to the
10    commencement of the technical conference.  So there was
11    no earlier date at which it could have been brought
12    and, in response to the suggestion I believe from Mr.
13    Brown that there is some prejudice from now moving
14    against that because parties would have done something
15    different, that is manifestly not true.
16                      I mean, parties' submissions for the
17    technical conference had to be in five days prior to
18    the commencement of the technical conference, which was
19    four days prior to the Board releasing its procedural
20    order dealing with the issues list.  So if Mr. Brown's
21    client or anyone else did not deal with that issue in
22    their material, it is their own fault and it has got
23    nothing to do with when this motion was brought, given
24    the timing of the Board's Order on that issue.
25                      With respect to Mr. Warren's
26    suggestion that this should have been by way of a
27    motion for a rehearing of that issue, I suppose he is
28    right that we could have referenced in the Notice of

                                                          127
    
 1    Motion rule 63 of the Board's procedure, but I can't
 2    possibly think that Mr. Warren was under any
 3    apprehension that we were doing something other than
 4    asking the Board to reconsider the ruling it made in
 5    Procedural Order No. 2 excluding 2.5.7 from the issues
 6    list.  Pray tell, what did he think we were doing if
 7    not asking the Board to reconsider that issue?
 8                      So I am not sure what the basis of
 9    the objection is.  If it is anything more -- if it is
10    simply the technical objection that our Notice of
11    Motion doesn't refer to Rule 63, it asks the Board for
12    leave to amend the Notice of Motion.  But while we are
13    on the subject of reference to the Rules, I think Mr.
14    Warren has misstated the content of rule 63 when he
15    suggested to the Board that it was incumbent upon a
16    party seeking a review or rehearing of that issue to
17    demonstrate that there were new facts or circumstances
18    which warrant a reconsideration.  That is not what Rule
19    63 says.
20                      Rule 63 of the Board's Rules say the
21    grounds for the rehearing may include -- and I note
22    "include", which does not suggest that the list that
23    follows is not exhaustive, but it includes not just new
24    facts but includes error of law or jurisdiction,
25    including a breach of natural justice, error in fact,
26    change in circumstances, new facts that have arisen,
27    facts that were previously placed in evidence and could
28    not have been discovered by reasonable diligence at the

                                                          128
    
 1    time, and an important matter of principle that has
 2    been raised by the order or decision.
 3                      Even if there weren't some new facts
 4    or circumstances -- I believe there are and Mr. Power
 5    will address that -- clearly our position is that the
 6    Board made a fundamental error in excluding that issue,
 7    one which, if nothing else, was an important matter of
 8    principle and certainly raises a question of whether
 9    there has been an error of law or jurisdiction,
10    including a breach of natural justice.
11                      We say that 2.5.7 is necessarily
12    implicated by the issues which you have under
13    consideration on your own issues list.  If you were to
14    determine, based upon the evidence of the parties, that
15    there should not be a restriction on the LDC or its
16    affiliates with respect to providing service -- if
17    there should not be a restriction on the affiliate with
18    respect to providing service to the section 29
19    customers, you could not give effect to that
20    determination without revisiting 2.5.7.
21                      So that is as fundamental as it gets. 
22    Call it an error of law, call it an error of
23    jurisdiction, call it natural justice or call it an
24    important point of principle.  It simply doesn't get
25    more fundamental that that, in our submission, and, in
26    my submission, we, frankly, come within any of those
27    grounds under Rule 63.
28                      Mr. Warren characterized our

                                                          129
    
 1    submissions with respect to PHB as being an attack or a
 2    complaint about the deficiencies in their work.  That
 3    is not the nature of the motion and that is a
 4    mischaracterization of the motion, mischaracterized to
 5    portray it in a poor light.
 6                      The reference to some of the
 7    evidentiary gaps in the work of MDC and PHB is not by
 8    way of criticism, but is by way of pointing out the
 9    importance of the procedural issues to coming to a fair
10    resolution in this matter.  Our concern is not that PHB
11    may or may not have done certain aspects of the work
12    which ought to have been done.  The concern is that PHB
13    may address these issues other than on the record.
14                      So the other characterization of the
15    motion by both Mr. Warren and Mr. Brown that our
16    suggestion is that the Board should not hear from PHB
17    at any time -- should not have heard from PHB because
18    PHB has a position to advance, that is not what this
19    motion is about.  That is not the gravamen of the
20    complaint.
21                      The gravamen of the complaint is that
22    if the Board continues its retainer of PHB as its
23    advisor, then, going forward, PHB is presumably going
24    to have the opportunity and will express views, make
25    submissions, make statements, including rebuttals, to
26    the Board other than in the presence of the parties,
27    which is why you recall our initial position was,
28    "Let's have the witnesses and let's have

                                                          130
    
 1    cross-examination", because our concern is that -- I
 2    will be upfront on the record.  I do not care if PHB
 3    wants to advocate for the theory that the world is
 4    flat, as long as I get a chance to see everything they
 5    say and respond to it.  It is a question of procedural
 6    fairness.  The law is crystal clear and I am sure
 7    neither Mr. Warren nor Mr. Brown would disagree that
 8    what is said should be said on the record.
 9                      When it comes to your deliberations,
10    that is for you alone.  If you are going to receive
11    advice from PHB, it should only be done on the record
12    in the proceedings.  So the concern is not that they
13    have got a position to advocate, from my perspective,
14    the concern is that their time for doing that has
15    passed.
16                      As we move into the hearing stage of
17    the proceeding and the Board's deliberation stage in
18    the proceeding you should not hear any more from them. 
19    I am happy to spar with them on what I can see, but I
20    can't spar with them on what I cannot see.
21                      Mr. Warren and, I believe, Mr. Brown
22    make the point -- they say there is simply no evidence
23    in the record of bias or a pecuniary interest on the
24    part of PHB.  Again, they mischaracterized the motion. 
25    As I am sure the Board recognizes, the legal test for
26    bias is not whether someone has malice or whether
27    somebody has some motive for favouring one side or the
28    other.

                                                          131
    
 1                      The legal test of bias is whether a
 2    reasonable person would conclude that there may be --
 3    that because of the process, as Mr. Power pointed out
 4    in his reference to the Supreme Court of Canada case,
 5    either consciously or unconsciously, there may be an
 6    influence on the process in favour of one position at
 7    issue or the other.  That is what is meant by bias.  It
 8    is not a question that we are trying to show that PHB
 9    has some ill motive, doesn't like our clients or is
10    doing this in order so they can continue to earn fees. 
11    The question is a fundamentally simple one.
12                      PHB is an advocate of one of the key
13    positions which is being put forward by certain parties
14    in this proceeding.  That, in law, is a bias.  If that
15    bias is not out in the open and on the record as a
16    party, then it is improper.  If PHB wants to come
17    forward -- if Board staff wants to come forward with
18    PHB as a party in the proceeding and put them up and
19    have them as a party and a witness, fine.  But what
20    they cannot have is PHB to be the advisor to the Board
21    on that issue.  That is what the bias issue is about.
22                      Both Mr. Warren and Mr. Brown suggest
23    that if you accede to the motion, you will essentially
24    be ruling that Board staff can never take a position
25    and that the Board could never retain an advisor
26    because those people will, in the natural course of
27    events and human nature, have opinions and positions on
28    the matters.  Again, with respect, that

                                                          132
    
 1    mischaracterizes the point of the motion.
 2                      The fact is here that it is not just
 3    that PHB has a view on a matter, but the proposal which
 4    is advocated, the primary proposal before the Board is
 5    PHB's.  It is the author of it, it is the proponent of
 6    it.  In that circumstance, it is improper for PHB to be
 7    retained by the board in the deliberative phase of this
 8    proceeding.
 9                      Similarly, with Board staff, we do
10    not expect that Board staff, in the ordinary course of
11    events of advising the Board, would not have opinions
12    on matters.  But we ask you to look at the
13    circumstances of this proceeding.  Board staff is the
14    proponent of one of the major proposals which is
15    advanced as a solution and the Board has got to decide
16    between that proposal and competing proposals.
17                      I cannot imagine that it escapes my
18    friend that the complaint is about the unfairness, that
19    one of the persons who was essentially a party in
20    everything but name should also have the ear of the
21    Board in the back room.  That is what dozens and
22    hundreds of cases on procedural fairness are about.
23                      It is no answer to say, "Well, you
24    have heard what the plaintiff in the case has to say
25    and you have had your chance to cross-examine him.  So
26    having had that chance, it is okay if the plaintiff
27    sits with the judge while the judge makes his
28    decision."  That is a ludicrous submission.  That is

                                                          133
    
 1    what my friends are saying.
 2                      They are saying, "Because Board staff
 3    and PHB have declared themselves and you have had an
 4    opportunity to ask them questions and respond with your
 5    own evidence, then be quiet, don't complain that they
 6    are now going to sit with the Board while the board
 7    makes its decision."  That is manifestly absurd.
 8                      Mr. Brown suggested that it was
 9    enough for the Board to state that it and it alone will
10    be the decision-maker in this case.  I am hard-pressed
11    to think of a more circular line of reasoning.  If the
12    courts would always simply take the word of a Board
13    that notwithstanding the appearances of unfairness, the
14    appearances of improper procedure, the appearance of
15    deficient procedure, a simple attestation by the Board
16    that it will not be influenced by those things, we
17    would never have a case come out of the courts on
18    procedural fairness.
19                      The point is, if there is procedural
20    unfairness, if there are circumstances of communication
21    and advice to the Board which are improper, it can't be
22    cured by the Board standing up and saying, "We will
23    still let those take place, but we promise you we will
24    exercise our own independent judgment at the end of the
25    day."
26                      Our concern is that even in the good
27    faith exercise of your judgment, you will undoubtedly
28    be influenced by the professional advice you are

                                                          134
    
 1    getting.  You wouldn't need to retain professional
 2    advisors if you were not intending to, at some level,
 3    be influenced by their advice.
 4                      Now, if Mr. Brown is content that the
 5    Board and the Board alone be the decision-makers
 6    without any influence from PHB or Board staff, then I
 7    do not understand why he is opposing the motion.  He
 8    should agree to it.  If Mr. Brown is proposing that,
 9    notwithstanding what we have to say, PHB and Board
10    staff should be available to consult with the Board
11    while you make the decision, then it is manifestly not
12    enough for him to say a declaration by the Board that
13    they will be free of the bad influence is sufficient
14    answer to the motion.
15                      Now, Mr. Brown complains that the
16    attempts to have issue 2.5.7 put back on the issues
17    list, if my note is correct, is a back-door attack on
18    that issue.  Might I respectfully suggest, Mr.
19    Chairman, that what we have done is go through the
20    front door.
21                      Mr. Power has taken you to the
22    correspondence from the Minister and with Mr. Laughren
23    and, in my respectful suggestion, it was the reasonable
24    expectation of the parties that the issues relevant to
25    2.5.7 would be in play and that final determination on
26    2.5.7 would not be made until after this proceeding. 
27    It is only when it came became clear that that was
28    potentially not going to happen that the concern was

                                                          135
    
 1    put on the table.  That is the farthest thing from a
 2    back-door attack.
 3                      Lastly, let me turn to the
 4    submissions of Mr. Mattson.  I am grateful for Mr.
 5    Mattson's support, as I take it the extent -- he shares
 6    some concerns about the fairness of the process.  Where
 7    I part company from Mr. Mattson is his suggestion that
 8    the relief should be dismissing this motion.
 9                      I think Mr. Mattson's argument,
10    distilled down to its essence, is he agrees there are
11    procedural problems here, but because his client has
12    chosen not to ask for any relief with respect to those
13    procedural problems, you should dismiss the application
14    of any other party who is proposing certain relief to
15    deal with those problems.  I think that is the essence
16    of his argument.
17                      He says that the MEA and Mr. Power's
18    clients are coming forward today with solutions which
19    are satisfactory to them but may not be satisfactory or
20    sufficient for other parties.  Well, they were at
21    liberty to bring their own motion and put on the table
22    what they wanted.  They have not.  They cannot object
23    to the relief we are seeking by saying they prefer to
24    sit still with their hands in their pockets.
25                      If what Mr. Mattson is really saying
26    is it does not matter what you do today, that at the
27    end of this proceeding he has got a judicial review
28    application, well, he has got that whether you do

                                                          136
    
 1    anything or not.  I ask you to get on with dealing with
 2    our relief.
 3                      His suggestion that we are somehow
 4    laying in the weeds with the judicial review
 5    application is not correct.  I have told you that this
 6    is a compromise which will avoid that.  It seems to me
 7    that Mr. Mattson is the one who is holding that spectre
 8    out and over the Board's head by saying that he is not
 9    even going to participate in this debate of whether
10    what we are proposing rectifies the unfairness.
11                      He has made it very clear, I think,
12    that he is the one who is holding out that spectre. 
13    But he is holding out the spectre not to have you hold
14    a full hearing, which would be the obvious answer to
15    his concern, he holds that sword of Damocles over your
16    head for the purpose of inducing you to dismiss our
17    motion.  That is an improper threat.
18                      The last point, Mr. Chairman, is
19    really not a matter of reply, I know, but Mr. Warren
20    raised the issue of the timing of submissions which
21    were otherwise due in a couple of days.  In terms of
22    physical capacity, I am not requesting any extension of
23    time, but, obviously, we would like some clarity on
24    that issue.  If there is to be an extension, we would
25    like to know sooner rather than later given that our
26    deadline is a couple of days away.
27                      Mr. Power has some further
28    submissions.

                                                          137
    
 1                      MR. POWER:  Thank you.  Mr. Mark is
 2    thorough, as always, so my comments are fairly brief,
 3    actually.
 4                      There was some suggestion, I believe
 5    by Mr. Warren that 2.5.7 was improperly before the
 6    proceedings.  There wasn't an opportunity to make
 7    comments or reflect on the evidence.  I just reference
 8    for your information page 50 of day one of the
 9    transcripts where there was an exchange about this very
10    issue and Peter Budd and some others had raised the
11    question.
12                      About half-way down the page, Ms Lea
13    says that the Board may not be making any finding with
14    respect to the -- 2.5.7 is what the discussion is
15    about.
16                           "...it sounds like it won't be
17                           making any finding with regard
18                           to the Affiliate Relationships
19                           Code as a result of this
20                           proceeding.  But for your
21                           presentations in this technical
22                           conference, I don't have a
23                           problem with submissions being
24                           made about that section."
25                           MR. BUDD:  Yes.  In fact that
26                           forms a substantial part, I
27                           think, or component of the
28                           submission that has been put

                                                          138
    
 1                           forward by Ms Wells.
 2                           MS LEA:  I think what we are
 3                           aiming to do here, though, is to
 4                           keep focused on the Standard
 5                           Supply Service Code, and as
 6                           those policy matters relate to
 7                           the Standard Supply Service Code
 8                           we want to hear about them in
 9                           this proceeding..."
10                      She carries on and basically says
11    that the focus of the proceeding is the Code, but
12    obviously policy matters relevant to these proceedings
13    are formally on the table.  Nobody objected to that
14    statement on Monday and then we carried forward on that
15    basis, evidence was put in regarding 2.5.7.  I think it
16    is a little late in the day to suggest that there
17    wasn't a fair opportunity to have your say on 2.5.7
18    when we and others clearly put it up front at the
19    start, put in written materials clearly on it, raised
20    as an issue on the procedural day, and then Ms Lea
21    says, as it relates as a policy matter to debate, the
22    evidence is on the table.
23                      We did not try to open it up to be
24    the whole Affiliate Relationships Code, it was only
25    2.5.7 as an intricate, related issue to the Standard
26    Service Supply Code.  So if there is the suggestion
27    that nobody had their day on this issue or we are going
28    to need a whole new proceeding to have more evidence on

                                                          139
    
 1    this, I think that is inappropriate.  They had their
 2    opportunity.
 3                      On one other matter, Mr. Mark
 4    referenced the Board's Rules and a couple of things he
 5    alluded to in terms of new information certainly as we
 6    move through the proceedings.  The importance of the
 7    six PHB caveats to their overheads on the options for
 8    the Standard Service Supply Code that I referenced, the
 9    fact that he said further work had to be done and in
10    Mr. Dewees' testimony that the work was not done, that
11    the analysis was not completed and that in fact the
12    whole analysis of whether it be spot price or any other
13    mechanisms was not finished was certainly brand new
14    evidence that came up in these proceedings.
15                      We had certainly researched the MDC
16    process to try to find the underlying technical work
17    and we assumed that it existed somewhere, but it came
18    out on the record that, no, there has never been a
19    thorough, final evaluation of this issue or even
20    unthorough.  In fact, PHB says there are six major
21    issues.
22                      That certainly brought the
23    seriousness of the debate or the merits of the spot
24    price versus other proposals that were looked at much
25    more seriously to the table.  I wonder whether you
26    would have ever had the benefit of knowing that PHB put
27    those very significant caveats on and said 2.5.7 was
28    central to the issues in this proceeding unless we

                                                          140
    
 1    brought that on the table on day two.  So I would
 2    suggest to you some important policy issues did come up
 3    and new evidence if you were concerned about whether
 4    this was a section 63 motion or something else.
 5                      Finally, I guess, a concluding
 6    comment.  Mr. Warren made a statement which I think I
 7    correctly heard.  He is talking about what is an
 8    expert.  He says, "An expert can take a position, that
 9    is what they do."  The implication, of course, is that
10    they can advocate.
11                      I throw out to you a little
12    difference on what Mr. Mark said and that would be I
13    would hope that the Board is going to retain experts
14    who would be advising them behind the scenes as opposed
15    to formally in this process, that the type of expert
16    they would find is an impartial, independent advisor
17    who would merely present to you the pros and cons and
18    let you choose the position to advocate in your final
19    proceedings.  In my mind, that is the type of advisor
20    you deserve and I would hope that would be the quality
21    of fair advice that you would receive.
22                      Mr. Warren's characterization that it
23    is fair for the Board's expert to take the position
24    advocated is the very type of language that gets people
25    very concerned, particularly when, as Mr. Mark said,
26    that position is not put on the table for a fair
27    review.  I don't question, my clients don't question
28    that these are highly technical matters.  We certainly

                                                          141
    
 1    understand why you would seek to retain advice on this,
 2    as we have had to.  I assume you are going to rely on
 3    that advice, but I guess I just say to you it is our
 4    hope that it will be balanced on all sides, not the
 5    perception of just one side.
 6                      Those are all my comments.  Thank you
 7    very much.
 8                      THE PRESIDING MEMBER:  Thank you, Mr.
 9    Power.
10                      Just with respect to something Mr.
11    Mark said, can you clarify for me what type of hearing,
12    I will use that, as an alternative to the relief you
13    are requesting, if you have anything to say on that. 
14    What are the parameters, given where we have got to
15    now, not reinventing the history to this point?  Do you
16    have any views on that?  I don't want to put you on the
17    spot.  You have obviously asked for certain relief.
18                      MR. MARK:  It does put me on the spot
19    a bit because before we turned our minds to drawing
20    that creature, weighing all the circumstances, we came
21    up with the compromise that we have put before you.
22                      I can only put it in relative terms,
23    that it would involve substantially more than what we
24    have proposed.  I think the fundamental -- I haven't
25    thought about it in great detail, but let me tell you
26    sort of the issue which has always been, I guess,
27    closest to my heart in terms of the sense of fairness. 
28    It's three things really.  One is knowing the case you

                                                          142
    
 1    have to meet.  Is everybody out there and not in the
 2    woodwork?  In other words, do we have a record where it
 3    is clear what the issues are and who the proponents
 4    are?
 5                      Secondly, is that brought forward in
 6    the form of evidence so that it is presented in the
 7    presence of the Board and the Board has an opportunity
 8    to make an assessment of the witnesses and, most
 9    importantly, is it subject to testing and probing
10    through cross-examination and have we had the
11    opportunity to demonstrate that what has the patina of
12    being, you know, thorough and detached and professional
13    and supported by worldwide experience is really not
14    that at all.  So those were the concerns.
15                      I can't say I mapped out how exactly
16    that translates into a hearing process, but I think my
17    concern has always been for that central issue of
18    having everybody out there having witnesses, the Board
19    with an opportunity to evaluate them and, most
20    importantly, cross-examination.
21                      I sense for my friends that the issue
22    of reasons for decision isn't really an issue.  There
23    seems to be some support for having that.  The Board
24    may not like that, but there seems to be consensus
25    there.  I don't think I turned my mind too much to
26    that.
27                      MR. WARREN:  Mr. Chairman, I wonder
28    if I could, through you, ask a question of Mr. Mark

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 1    because in his reply submissions I understood him to be
 2    -- this is my gloss on it -- in effect, proposing an
 3    alternate form of relief for 3, 4 and 5 of his motion,
 4    and that is, rather than striking PHB as an expert,
 5    have some form of report to the Board presented and
 6    have PHB cross-examined on it, which would be roughly
 7    parallel to the process which is followed under the
 8    Rules.
 9                      I am wondering if I have understood
10    fairly that Mr. Mark, and I guess by implication Mr.
11    Power, are proposing that as an alternate form of
12    relief for 3, 4 and 5.
13                      MR. MARK:  No, we are not.  It is not
14    an alternate form of relief.  I would hope that is
15    abundantly clear.  I have made the submission in the
16    context, if that is what had happened, that would be
17    fine, but it is not what happened.  Our compromise is
18    because precisely you can't unscramble that and start
19    adding witnesses here and there without opening up the
20    whole thing again.
21                      THE PRESIDING MEMBER:  Mine was
22    prospective in terms of what alternative might you
23    propose from here on in, if any, rather than the relief
24    you have requested.  That is what I had asked and you
25    have answered the question, unless you have anything
26    else to add.
27                      MR. POWER:  If I may, there is a
28    serious concern about the cost burdens of these

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 1    proceedings, and that obviously weighed in the minds of
 2    many about whether they want to sustain the cost of
 3    having to come back and redo all this again in,
 4    perhaps, a more protracted adversarial fashion,
 5    particularly given the approach the Board appears to be
 6    adopting on costs for this proceeding, which is unless
 7    you are a public interest group or an association, it
 8    would be extremely onerous if there is no costs in this
 9    proceeding to have to come back and repeat it again;
10    extremely.
11                      MR. MARK:  Why don't we make it
12    clear, Mr. Higgin, just in response to your question? 
13    We are talking prospectively.  I am not talking about,
14    when you asked me what I would have envisaged as a full
15    remedy as opposed to the compromise, reopening the
16    whole process, but taking the submissions and the
17    witnesses such as they exist and exposing them to
18    testimony and cross-examination.  I am not suggesting
19    that there is any need to broaden the scope of the
20    evidence or the participants.  That is fine and that is
21    defined.
22                      The question was:  How do you get
23    their information before the Board in a fair way, not
24    whether that record is broad enough in that sense?
25                      THE PRESIDING MEMBER:  Thank you very
26    much.
27                      MR. POWER:  I throw out to you that
28    in these proceedings, I think because they are fairly

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 1    short and truncated and things evolved as we went
 2    along, you managed to keep it focused, but I think if
 3    you bring it back, it appears to be fairly broad.  I
 4    know there will be debate amongst MDC members who have
 5    formally changed their position since who don't agree
 6    with Mr. Dewees's testimony, rightly or wrongly, that
 7    the proposed model reflects the Board, and I just throw
 8    a caution that if we open the door to put in that, then
 9    I think we have got to open the door to put in a number
10    of things.  So there is a balancing point there I
11    guess, I just throw back to you, knowing some of the
12    discussions that have gone on in the last few days.
13                      THE PRESIDING MEMBER:  I heard that. 
14    Thanks.
15                      I see some body language behind that
16    certainly doesn't agree with that.  I don't want to
17    open this one up.  I think I will make a note that is
18    to your benefit that that is not a universally
19    supported view.
20                      MR. POWER:  It doesn't have to be.
21                      THE PRESIDING MEMBER:  Thank you very
22    much, everybody, for their submissions.  In this
23    matter, the Board will reserve on the motion.  We
24    recognize, of course, that there is a time frame, as I
25    have said, and a schedule and we have to try and deal
26    with that.
27                      In closing, I have a couple of
28    administrative matters.  First of all, on the issue of

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 1    costs first.  Parties should keep separate accounting
 2    for costs related to today's motion hearing from those
 3    of the main proceeding.  Just keep them separate from
 4    an accounting point of view.
 5                      I also note, as you all do and have
 6    done, that final submissions for the hearing are due on
 7    Friday, July 27th.  Is that correct?  That is what the
 8    procedural order said.
 9                      MR. McCANN:  The procedural order
10    said it would be due on Friday, the 30th.
11                      THE PRESIDING MEMBER:  From a
12    practical --
13                      MR. POWER:  I am sorry, I better
14    touch on that, if I may.  My understanding was that the
15    date actually followed on next Monday on the statutory
16    holiday.  Our staff had some discussions with Mr. Pudge
17    and our reading of the Board's procedures is that,
18    therefore, the submissions would actually fall on the
19    Tuesday following.
20                      THE PRESIDING MEMBER:  That is what
21    you have been advised.  That is what I was going to go
22    on and say.
23                      Given that situation, then, at the
24    moment, we are ensuring that that would be "extended"
25    under the Board's normal Rules with a statutory holiday
26    to be Tuesday, August 3rd, at 4:00 o'clock.
27                      The issue, then, is whether that will
28    provide enough time regarding any attention that may

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 1    have to be paid to the Board's decision on the motion,
 2    not the issue.  We are hoping that we can be
 3    expeditious and try and get it out by Friday before the
 4    long weekend.  If not, we will have to advise you and
 5    there may be, indeed, a small delay then required so
 6    that people can pay attention to the Board's decision. 
 7    However, all being well, we will have it out and,
 8    therefore, look to Tuesday, August 3rd, 4:00 o'clock.
 9                      Just to remind people, Monday, August
10    9th is the start.  We have not yet given the full
11    schedule, but we believe now that the sitting time will
12    commence at 9:30 a.m. on that day.
13                      A procedural order, which will
14    contain the order of submissions and any other
15    information, will be issued early next week.  That is
16    the plan.  Any questions about that?
17                      Thank you very much, everybody.  We
18    will see you on the 9th.
19    --- Whereupon the hearing adjourned at 2:47 p.m.