1 1 RP-1999-0044 2 3 4 IN THE MATTER OF the Ontario Energy Board Act, 5 1998; 6 7 8 AND IN THE MATTER OF an Application by Ontario 9 Hydro Networks Company Inc., for an Order or 10 Orders approving year 2000 transmission cost 11 allocation and rate design. 12 13 14 Hearing held at: 15 2300 Yonge Street, 25th Floor, Hearing Room No. 1, 16 Toronto, Ontario on Friday, November 26, 1999, 17 commencing at 0900 18 19 R.M. Higgin Presiding Member 20 P. Vlahos Member 21 B. Smith Member 22 23 24 25 ISSUES DAY 26 27 VOLUME 1 28 2 1 APPEARANCES 2 JENNIFER LEA Board counsel, Board 3 HAROLD THIESSEN/ staff 4 KATHI LITT 5 DONALD ROGERS/ Ontario Hydro Networks 6 GARY SCHNEIDER/ 7 BRYAN BOYCE 8 ROGER WHITE Energy Cost Management Incorporated 9 (ECMI) 10 KELLY FRIEDMAN/ Municipal Electric 11 MORRIS TOUCHE Association (MEA) 12 PETER BUDD/ TransAlta Energy Corporation 13 ADAM WHITE 14 MARK RODGER Toronto Hydro Electric 15 System Limited 16 MARK OSBALDESTON/ IPPSO 17 HAROLD WONG Energylink Power 18 Corporation 19 GEORGE VEGH Toromont Energy 20 DAVID POCH Green Energy Coalition (GEC) 21 BRUCE CAMPBELL/ Ontario Power Generation 22 JOHN RATTRAY/ 23 ANDREW BARRETT 24 RICK COBURN INCO Limited 25 ZIYAAD MIA Ottawa Hydro and Coalition of 26 Distribution Utilities 27 28 3 1 APPEARANCES (Cont'd) 2 ERIK GOLDSILVER Five Nations Energy Inc. and 3 Electrical Contractors 4 Association of Ontario 5 JAMES FISHER/ Association of Major Power 6 KEN SMELSON Consumers in Ontario (AMPCO) 7 SHARON WONG Imperial Oil Limited 8 LINDA KLAAMAS NorthWatch 9 KENNETH LIDDON Suncor Energy Inc. 10 CAROL GODBY/ Chiefs of Ontario 11 DAVID DRINKWALTER 12 TOM ADAMS Energy Probe 13 ROBERT WARREN Consumers Association of 14 Canada 15 RICHARD STEPHENSON Power Workers Union 16 MICHAEL JANIGAN Vulnerable Energy Consumers 17 Coalition (VECC) 18 MURRAY KLIPPENSTEIN Pollution Probe 19 TED COWAN Ontario Federation of 20 Agriculture 21 22 23 24 ` 25 26 27 28 4 1 Toronto, Ontario 2 --- Upon commencing on Friday, November 26, 1999 3 at 0900 4 THE PRESIDING MEMBER: Please be seated. 5 Good morning, everybody, and welcome to this 6 proceeding of the Ontario Energy Board. 7 My name is Roger Higgin and with me today, on 8 my left, Brock Smith, and on my right, Paul Vlahos. 9 As you all know, the purpose is as set out in 10 the Procedural Order No. 1. We are here to finalize the 11 issues list for the RP-1999-0044 proceeding in order 12 that the completion of filing of evidence and the 13 interrogatory process can proceed. 14 We will also deal with the forward schedule 15 and any procedural matters related to that today as 16 well. 17 So, with no more ado, we will get on. 18 The first order of business as usual is to 19 enter appearances. We would like you to find a 20 microphone if you are not in front of one and to speak 21 slowly so that we and the court reporters can get the 22 names and affiliations down. 23 So let's start with the Applicant. Where is 24 the Applicant? 25 MR. ROGERS: Here we are right here, 26 Mr. Higgin. 27 THE PRESIDING MEMBER: Right. 28 MR. ROGERS: My name is Donald Rogers and I 5 1 represent the Applicant in these proceedings. With me, 2 to my right, is Mr. Gary Schneider, Senior Advisor with 3 my client. And to my left, Mr. Bryan Boyce. 4 THE PRESIDING MEMBER: Thank you. 5 Yes, sir. 6 MR. WHITE: I am Roger White of Energy Cost 7 Management Incorporated and I am representing a number 8 of small and medium-sized municipal electrical 9 utilities. 10 THE PRESIDING MEMBER: Good morning. 11 MS FRIEDMAN: Kelly Friedman, representing the 12 MEA, and with me is Morris Touche. 13 THE PRESIDING MEMBER: Thank you. 14 MR. BUDD: Good morning, Dr. Higgin, Members 15 of the Board. My name is Peter Budd and I am acting on 16 behalf of TransAlta Energy Corporation. With me, in the 17 back of the room, is Mr. Adam White. 18 THE PRESIDING MEMBER: Thank you. 19 MR. RODGER: Good morning. Mark Rodger, 20 appearing as counsel to Toronto Hydro Electric System 21 Limited. 22 MR. OSBALDESTON: Good morning, Mr. Chair. My 23 name is Mark Osbaldeston and I am here on behalf of 24 IPPSO. Appearing on my left is Harold Wong from 25 Energylink Power Corporation, and IPPSO member. 26 MS LEA: Good morning. Jennifer Lea, 27 appearing for Board Staff. With me are Harold Thiessen 28 and Kathi Litt. 6 1 MR. VEGH: Good morning. George Vegh on 2 behalf of Toromont Energy. 3 MR. POCH: Good morning. David Poch on behalf 4 of the Green Energy Coalition, the GEC. 5 MR. CAMPBELL: Good morning, Mr. Chair. My 6 name is Bruce Campbell, I appear on behalf of Ontario 7 Power Generation. Appearing with me, second to my left 8 is John Rattray. Assisting us today is Andrew Barrett, 9 who is a Advisor, Regulatory Affairs at OPG. 10 THE PRESIDING MEMBER: Thank you. 11 MR. COBURN: Good morning, Mr. Chairman. Rick 12 Coburn, counsel to INCO. 13 THE PRESIDING MEMBER: Thank you. 14 MR. MIA: Good morning. Ziyaad Mia, appearing 15 on behalf of a group of distribution utilities. 16 THE PRESIDING MEMBER: Thank you. 17 MR. GOLDSILVER: Good morning. My name is 18 Erik Goldsilver. I am representing the Electrical 19 Contractors Association of Ontario and Five Nations 20 Energy Inc. 21 THE PRESIDING MEMBER: Thank you. 22 MR. FISHER: Good morning. My name is James 23 Fisher and I am counsel to (AMPCO). With me is Ken 24 Smelson. 25 THE PRESIDING MEMBER: Thank you. 26 MS WONG: Sharon Wong for Imperial Oil 27 Limited. 28 MS KLAAMAS: Linda Klaamas, appearing for 7 1 NorthWatch. 2 THE PRESIDING MEMBER: Good morning. 3 MR. LIDDON: Kenneth Liddon, representing 4 Suncor Energy. 5 MS GODBY: Good morning. Carol Godby 6 representing the Chiefs of Ontario, the First Nations 7 interest. With me is Dr. David Drinkwalter. 8 MR. ADAMS: Tom Adams on behalf of Energy 9 Probe. In the normal instance we will be represented by 10 Mark Mattson. 11 MR. WARREN: Robert Warren for the Consumers 12 Association of Canada. 13 MR. STEPHENSON: Richard Stephenson for the 14 Power Workers' Union. 15 MR. JANIGAN: Michael Janigan for the 16 Vulnerable Energy Consumers Coalition. 17 THE PRESIDING MEMBER: Mr. Janigan. 18 Anyone else? Okay. 19 Are there any late interventions that are 20 being applied for today? 21 Seeing none, we will move ahead. 22 My colleague just asked if NorthWatch was 23 actually registered as an intervenor. I hadn't checked, 24 but -- 25 It is. Thank you very much. All right. 26 Let's go on to the preliminary matters. 27 THE PRESIDING MEMBER: I believe there is a 28 matter that we need to address on the matter of 8 1 affidavits regarding publication of notice. We have a 2 letter from Mr. Rogers in that regard, so let's start 3 with that one. 4 MR. ROGERS: All right. Thank you very much, 5 Mr. Chairman. 6 Actually I have several preliminary matters, 7 but I will begin with that, if I might. 8 As the Board knows as a result of a letter 9 that I wrote to you that through inadvertence 10 publication of the Board's Notice of Application did not 11 take place in one small French-language bi-monthly 12 newsletter entitled "Agricom". 13 Now, I point out that although we acknowledge 14 that it is unfortunate that this mishap occurred, 15 publication did take place in 54 English-language daily 16 or weekly newspapers and 20 French-language daily or 17 weekly newspapers. 18 I am further instructed that two 19 French-language publications did publish the notice, and 20 these publications have a circulation which completely 21 overlaps the circulation of "Agricom". I therefore do 22 not believe this oversight will have any practical 23 effect. 24 What we propose to do is to publish, at the 25 next available opportunity, in "Agricom", that I think 26 is on December 7, 1999. In the unlikely event that that 27 publication results in any intervenors coming forward 28 late, we would certainly agree to them being given late 9 1 intervenor status and we would do our best to 2 accommodate them to relax any rules concerning 3 interrogatories, and so on, to see that their interests 4 are adequately protected. 5 So I jut ask the Board's approval for that 6 process. 7 THE PRESIDING MEMBER: Thank you. 8 Ms Lea, do you have any comments? 9 MS LEA: No. Given the proposal by the 10 Applicant, I think that is acceptable and I think that 11 the proceeding can go ahead under those circumstances. 12 Thank you. 13 THE PRESIDING MEMBER: Thank you. 14 Then we will approve that. 15 MR. ROGERS: Thank you very much, 16 Mr. Chairman. 17 THE PRESIDING MEMBER: Thank you. 18 MR. ROGERS: There are two other matters I 19 would like to bring to the Board's attention and indeed 20 to everyone here's attention. 21 The first is with respect to an update of the 22 filing. An update has been prepared and will be served 23 on everyone today. 24 There is one matter, however, though, that I 25 would like to draw to your attention now before we begin 26 discussion of the issues list, because it deals with the 27 generation connection issue which is contested item 28 No. 1 on the list today. 10 1 My understanding is that the generation 2 connection allocation in the Application, in the 3 material filed with the Application, concerns an amount 4 of approximately $2 million or so, and I want everyone 5 to know that the update considerably increases that 6 figure to about $21 million being directly affected by 7 this issue. I thought it important for everyone to know 8 that before we begin discussion today. 9 As I say, the details of this update will be 10 provided to all parties today. I cannot provide it 11 right now. 12 The third matter, sir, that I would like to 13 raise with the Board, involves three utilities, Ottawa 14 Hydro, Toronto Hydro and Gloucester Hydro. I don't 15 believe it affects any other participants to these 16 proceedings. 17 Mr. Mark Rodger represents Toronto Hydro, and 18 he is here. I spoke yesterday with Mr. Peter Thompson, 19 who represents Ottawa Hydro. 20 There is an issue outstanding with respect to 21 these three customers dealing with a low voltage switch 22 gear equipment credit which has been historically given. 23 It is proposed by the three utilities and my 24 client that we ourselves deal with that offline, as it 25 were, outside the hearing process. I don't think we 26 need to take the Board's time with this issue. We hope 27 that we can resolve the issue between us. 28 I wanted to alert the Board to the fact that 11 1 if we cannot, then we may be asking the Board to add it 2 to the issues list at a later date. 3 Of course, the Board will have to decide 4 whether or not you wish to accommodate that request and 5 I hope it won't be necessary, but I wanted you to be 6 aware that it's a possibility. 7 THE PRESIDING MEMBER: Can you just tell me 8 how that relates and then respects on the contestant 9 issue. 10 MR. ROGERS: Not at all. I think I understand 11 it well enough to explain this to you. I understand 12 historically certain switch gear facilities were 13 installed by these three utilities themselves and there 14 has been a credit historically given to them to account 15 for that. 16 It doesn't really relate to this low voltage 17 shared facilities, item under -- 18 THE PRESIDING MEMBER: Not in the shared 19 facilities category. 20 MR. ROGERS: No. 21 THE PRESIDING MEMBER: Okay. Thank you. 22 MR. ROGERS: Thank you. Those are my 23 preliminary matters. 24 THE PRESIDING MEMBER: Thank you. 25 Any other preliminary matter? 26 Mr. Klippenstein has come in. Would you like 27 to enter an appearance, sir? 28 MR. KLIPPENSTEIN: I would on behalf of 12 1 Pollution Probe, with apologies for tardiness, Mr. 2 Chair. 3 THE PRESIDING MEMBER: Just make sure the 4 reporter -- he may not know you as well as we do. Give 5 us your name. 6 MR. KLIPPENSTEIN: Murray Klippenstein for 7 Pollution Probe. Thank you, Mr. Chair. 8 THE PRESIDING MEMBER: All right then. The 9 results of the issues conference, I will just ask Mr. 10 Rogers to speak to that matter and the draft issues list 11 that we were provided with as a starting point and I 12 will move from there. 13 MR. ROGERS: Very well, sir. Thank you. 14 I think the Board does have a draft of the 15 issues list, and we have put it all on one page, showing 16 those issues that were agreed to at the conference the 17 other day, at the bottom of the page, those issues on 18 which we could not reach agreement and which we will ask 19 you to make a decision. There are seven of those. My 20 client opposes the addition of those seven to the issues 21 list. 22 THE PRESIDING MEMBER: Okay. Well, for the 23 purpose of this, we may as well give this an exhibit 24 number just so we can all know where we started from and 25 then we will progress from there. 26 Ms Lea. 27 MS LEA: We haven't actually created an 28 exhibit list yet. However, since this is the first 13 1 piece of paper that is coming before us, why don't we 2 just call it Exhibit A-1 and we will proceed from there. 3 Thanks. 4 EXHIBIT NO. A-l: Draft of Issues List 5 THE PRESIDING MEMBER: Now, first of all, just 6 to be clear, the Board in the overall outcome of today 7 is to approve overall the issues list. 8 Now, that also means that the Board has to 9 approve the agreed issues as well as the contested. 10 Okay? So the first order of business then is for the 11 Board, since we have a couple of questions, to ask some 12 questions about some of the agreed issues. 13 We are going to proceed in that way. Mr. 14 Vlahos is actually going to ask some questions regarding 15 issue No. 1 under the agreed list. 16 MEMBER VLAHOS: Thank you, Mr. Chair. Yes, I 17 did have some questions for clarification. Perhaps -- 18 is it Ms Godby? 19 MS GODBY: Yes. 20 MEMBER VLAHOS: Thank you, Ms Godby. I guess 21 I need some clarification or the Board needs some 22 clarification as to what is contemplated under that 23 issue. It appears to me it is one of a process. What 24 is your thinking on this matter? Do you perceive 25 cross-examination or evidence or something that could be 26 dealt in argument or is it simply a matter of making a 27 statement by way of a complaint? 28 MS GODBY: I think probably a combination of 14 1 all three, sir. I expect -- I discussed this briefly 2 with the client following the issues day on Wednesday. 3 Certainly there will be a statement made as to the 4 client's feelings about the consultation process, 5 specifically with First Nations. Also, there will be 6 evidence lead with respect to the deficiencies in the 7 consultation process. 8 This is all a matter of record. It has been 9 filed in Exhibit B in the applicant's record. There may 10 in fact be some cross-examination. 11 MEMBER VLAHOS: What is the expectation, Ms 12 Godby, in terms of the final outcome? Do you expect the 13 Board to make a ruling on what? What is the issue to be 14 decided upon in terms of cost allocation or rate design? 15 MS GODBY: It may very well be. I understand 16 the Board's concern. Your concern is, you know, look, 17 if we find that it's deficient, how is it remedied? Is 18 it remedied by our appearance at the hearing? Well, 19 that may very well be the case. 20 We certainly want to get it on the record that 21 there has been deficiencies in the process with respect 22 to consultation. Consultation, as the Board may know, 23 with aboriginal peoples is a very, very, very 24 significant and important point that has been coming out 25 of the courts, the Supreme Courts, along with Energy 26 Boards and other administrative Board proceedings. 27 We certainly want the clients to avail 28 themselves of an opportunity to express what their 15 1 interests are before the Board. It may very well be 2 that their positions that are taken into account or 3 haven't been taken into account by the applicant as a 4 result of the inadequate consultation process. 5 MEMBER VLAHOS: To the extent that the 6 positions of First Nations has not been reflected 7 adequately in the recommendations by the applicant, 8 isn't this the forum moving forward to the hearing that 9 you can address those issues? 10 MS GODBY: The hearing itself? 11 MEMBER VLAHOS: Yes. I mean to the extent 12 that there are some issues that do not meet the 13 requirements of First Nations, isn't this the process 14 where we can address those issues? It did not appear on 15 the issues list. 16 MS GODBY: I'm not quite sure I understand 17 your question, but, you know, some of the issues perhaps 18 that didn't make the agreed issues list are of concern 19 to the clients. You know, given the fact that there has 20 been inadequate consultation, this might be taken into 21 account if in fact the client feels that it 22 needs to -- we view the Board's decision with respect to 23 a certain matter or a decision that has been made. 24 MEMBER VLAHOS: I'm not sure that I'm further 25 ahead, Ms Godby. You are suggesting that there are 26 issues that are additional issues from the ones that 27 appear here, whether it is on the agreed side or the on 28 the contested side, that they may be of interest to 16 1 First Nations, so there may be additional issues are you 2 suggesting? 3 MS GODBY: No. I'm saying that the 4 applicant's contention is that there has been adequate 5 consultation. As a result of the consultation, there 6 has been a consensus reached. Our client's position is 7 that there hasn't been consensus because of the 8 inadequacies in the consultation process and they would 9 like an opportunity to express where their views may 10 differ from what the applicant says their views are. 11 MEMBER VLAHOS: And that's with respect to the 12 specific issues that are contained in the application. 13 Correct? 14 MS GODBY: That's correct, but, sir -- I see 15 your point. I see that you are saying look, you are 16 going to have an opportunity to address the issues that 17 are on the list, you are going to have an opportunity to 18 express your point of view where your point of view 19 differs from that of the applicant and you are going to 20 be able to bring those forward in the context of those 21 issues. 22 However, the aspect or the element or just the 23 consultation process itself is a very unique and special 24 interest with respect to First Nations. It's very, very 25 important that, you know, the consultation process that 26 involves or that integrated First Nations input has to 27 be a little bit different and has to respect, you know, 28 certain First Nations values and First Nations 17 1 understanding and First Nations political protocols, 2 things like that that may not have been taken into 3 account by the applicant at the outset. 4 Just that in itself, just the consultation 5 process, what you see there in Exhibit B, is what needs 6 to be addressed from the First Nations perspective. 7 It's not just that their view may differ from, you know, 8 from the applicants on, for instance, you know, charge 9 determinant or what not, but one of the issues within 10 that. It's the very nature of the consultation process 11 itself which I think is extremely important to get 12 before the Board. 13 MEMBER VLAHOS: All right. Thank you. 14 THE PRESIDING MEMBER: The other one we had 15 some questions about -- and I will sort of lead off on 16 this -- is with respect to agreed issue No. 8: 17 treatment of new load connection investments. 18 I guess I would like to understand whether 19 there is something other than what we can obviously see 20 from the evidence, and perhaps Exhibit B, Tab 7, that 21 has now caused this to become an issue that is actually 22 on the issues list and requires more attention rather 23 than just being -- dealing with the evidence that is 24 under Tab 7. 25 Now, I don't know whether this would be the 26 applicant -- I guess you agreed to it -- and also, I 27 think it was Mr. Goldsilver, as I understand it, that 28 may have had an opinion on why this should be added to 18 1 the -- 2 MR. ROGERS: Yes. 3 THE PRESIDING MEMBER: And so, if you would 4 just like to tell the Board what lies behind that, we 5 would appreciate it. 6 MR. ROGERS: I wonder if my friend could do 7 that first. 8 THE PRESIDING MEMBER: Okay. 9 MR. ROGERS: We were a passive participant in 10 this. We agreed to it, but it wasn't our idea. 11 THE PRESIDING MEMBER: You were passive, were 12 you? 13 --- Laughter 14 MR. GOLDSILVER: Thank you, Mr. Chair. 15 My client, the Electrical Contractors 16 Association of Ontario, has a very specific issue with 17 respect to this broader issue; and that is, that OHNC is 18 talking about opening up new connection facilities to 19 competition -- and we fully support that. 20 However, in their evidence, they have not said 21 what part of OHNC will be providing those new connection 22 facilities, whether it will be the regulated side or a 23 competitive affiliate, and, on behalf of the ECAO, they 24 believe that it is an extremely important issue, 25 especially due to the fact of the new legislation that 26 has come out, with regards to the separation of 27 competitive and regulated functions of a regulated 28 business. 19 1 THE PRESIDING MEMBER: I think we understand 2 the issue better now, having your explanation. 3 Mr. White, would you like to add something? 4 MR. WHITE: Yes. I would say that the nature 5 of the treatment of new load connections is of interest, 6 in particular, to at least one of my clients, in that 7 historical efforts have influenced the behaviour of my 8 client and the behaviour of the network system, and that 9 historical issue is a transition and, in our view, needs 10 to be recognized and addressed by the Board. 11 I understood that the client might even be 12 seeking separate intervenor status in this -- late 13 intervenor status in this particular proceeding. 14 THE PRESIDING MEMBER: Thank you, Mr. White. 15 Mr. Rogers, do you have -- 16 MR. ROGERS: Mr. Chairman, I don't -- 17 THE PRESIDING MEMBER: Just before you do. 18 Does anybody else -- 19 MS LEA: I had a question, actually, for Mr. 20 Goldsilver, or perhaps Mr. Rogers. 21 Mr. Goldsilver, given the evidence that exists 22 in Exhibit B, Tab 7, are you seeking additional evidence 23 from Ontario Hydro, in this matter, or are you seeking 24 to call evidence, on behalf of your clients, yourself? 25 Do you know that yet? Is there a sufficient evidentiary 26 base for the Board to deal with this matter, at this 27 time? 28 MR. GOLDSILVER: I haven't discussed that 20 1 matter fully with my client yet, but on a preliminary 2 matter, what we are looking for is an answer, a simple 3 answer, who will be providing those services, and it's 4 not an issue that I think will be brought up at the 5 hearing. We are hoping to deal with it either through 6 the interrogatory process or through the settlement 7 conference. 8 I will be the first to admit that it is, in 9 the overall scheme of things, a minor issue but, 10 nonetheless, a very important issue for my clients. 11 MS LEA: Okay. That's helpful. Thanks. 12 THE PRESIDING MEMBER: Anyone else. 13 Mr. Rodger? 14 MR. RODGER: Thanks, Dr. Higgin. 15 This is also an issue that Toronto Hydro is 16 interested in, but more from the specific issue of in 17 the short term the proposal is that the new load 18 connection facilities will be added to the existing 19 connection pools, in order to keep the pools whole, and 20 we have questions around the process keeping the pool 21 whole. 22 So that's what will be the focus of our 23 interrogatories -- and we can't ask the interrogatories 24 unless it's on the list. 25 THE PRESIDING MEMBER: Thank you. 26 Mr. Rogers, do -- 27 MR. ROGERS: Just to say that this was not on 28 our proposed issues list. We acquiesced, in view of the 21 1 arguments you have heard, because we were assured this 2 wouldn't take very much hearing time and it was a matter 3 of asking some interrogatories, so we agreed to it. 4 THE PRESIDING MEMBER: Do you have a comment 5 on this, sir? 6 MR. FISHER: AMPCO supports the inclusion of 7 this issue because we don't believe that there's 8 sufficient evidence -- information in the evidence as to 9 how this will be done and we want to ask questions on 10 the implementation and we believe that this is the first 11 step into putting competition into the transmission 12 marketplace. 13 THE PRESIDING MEMBER: Thank you very much, 14 Mr. Fisher. 15 Anyone else? Ms Lea, do you have a comment? 16 MS LEA: Thank you. 17 When you have completed dealing with the 18 agreed issues list, I think I have one or two comments 19 to make. 20 THE PRESIDING MEMBER: So we have a better 21 understanding, now, as to why that was added, and that's 22 been helpful. 23 So we will now go ahead with addressing the 24 contested issues -- yes? 25 (UNIDENTIFIED SPEAKER): I think Ms Lea wanted 26 to say something. 27 MS LEA: Thank you. 28 It was just this, it was a point of 22 1 clarification from the applicant, which I spoke to Mr. 2 Rogers about. 3 Board staff has noted that there are issues 4 that I believe the applicant is seeking a finding from 5 the Board upon which are not upon this agreed issues 6 list. 7 I just wanted to confirm the applicant's 8 position that the applicant did require findings, for 9 example, on the appropriateness of the filed rate 10 schedules, point of billing, those sorts of issues that 11 are not specifically listed, and that that was agreeable 12 to the applicant; they were still seeking those 13 findings. 14 MR. ROGERS: Yes, if I could clarify that. 15 It's my fervent hope that, at the end of this case, you 16 will approve the application in full and all of our 17 proposals will be approved. So we will be asking you to 18 do that. 19 Now, there are a number of these proposals 20 that we are making that are being contested by various 21 of the participants, and those are listed on the list of 22 issues. But, otherwise, we will be asking you to 23 approve our proposals, even though they don't appear on 24 the issues list, because they are really not 25 contentious. The contentious ones are on the issues 26 list. 27 THE PRESIDING MEMBER: That's your position, 28 as I understand it? 23 1 MR. ROGERS: Yes. 2 THE PRESIDING MEMBER: All right. 3 MS LEA: Thank you, Mr. Rogers. That's 4 helpful. 5 The other thing was I believe that a gentleman 6 arrived who does represent an intervenor, in these 7 proceedings, who contacted Board staff and indicated 8 that he may have an issue that he wishes to see added to 9 the list. 10 Is the gentleman from the Ontario Federation 11 of Agriculture here? Did you wish to make an appearance 12 at this point, sir? 13 MR. COWAN: (Off mic...) 14 THE PRESIDING MEMBER: Could you use the 15 microphone. 16 MR. COWAN: Ted Cowan. Ontario Federation of 17 Agriculture. 18 I have discussed the question of allocation of 19 funds from distribution to transmission under the rural 20 rate assistance with Mr. Curtis and we have agreed that 21 this would come up in April, in all likelihood, at the 22 distribution rate hearings, also with Mr. Thiessen of 23 your staff. So we have an agreement on that. Thank you 24 kindly. 25 MS LEA: Thank you very much. I appreciate 26 your appearance. 27 THE PRESIDING MEMBER: All right. In terms of 28 how we are going to try and proceed, we will, of course, 24 1 in the interest of efficiency, we will ask that somebody 2 who is a lead party to address the issue that they want 3 to see added to or the list amended, and then those that 4 want for that will follow and then those who are opposed 5 to it, including the applicant will follow, and then, 6 finally, the party that is the proponent will have a 7 chance to reply to what has been said, as to whether the 8 issue should be added or not to the list. So that's the 9 way we would like to do that. It keeps things in 10 reasonable order. And we please ask everybody to be 11 brief. 12 Just before we start, in particular, I would 13 like to note to Mr. Rogers, give you a bit of a heads-up 14 as to whether -- you should be addressing why the issue 15 is part of the evidence but you don't want it on the 16 list. So, in other words, there's evidence there but 17 you don't want it on the list. For example, you may 18 say, "Therefore, we are expecting for the Board to adopt 19 your conclusion". You may be taking that approach. 20 So, when your turn comes, could you address 21 that particular thing as to why you don't want it on the 22 list, even though there is evidence. 23 Now, if it's an issue there is no evidence, or 24 you have to spend months producing evidence, well, we 25 obviously understand that doesn't apply. 26 But in the other alternative, are you asking 27 the Board to accept your conclusion instead of asking it 28 to the list? 25 1 MR. ROGERS: If it is not relevant, why do we 2 put it in the evidence? 3 THE PRESIDING MEMBER: Yes. 4 MR. ROGERS: That's your question. 5 THE PRESIDING MEMBER: That is the issue. So 6 if you could -- 7 --- Laughter 8 THE PRESIDING MEMBER: So if that comes before 9 your turn, we will go ahead. Okay. 10 The first issue -- 11 MR. KLIPPENSTEIN: Mr. Chairman -- 12 THE PRESIDING MEMBER: Yes? 13 MR. KLIPPENSTEIN: -- I apologize -- Pollution 14 Probe was just attending to see whether issues came up 15 on some of the agreed issues that concerned it and since 16 seems to have been dealt with, I wonder if I -- and 17 perhaps there are others in the same situation -- could 18 be excused. 19 THE PRESIDING MEMBER: Okay. 20 MR. KLIPPENSTEIN: I feel a little rude 21 leaving so early, but with your permission I will do so. 22 THE PRESIDING MEMBER: Okay. Thank you, 23 Mr. Klippenstein. 24 We will move then. The first issue: Should 25 generators pay for existing TX connections? The 26 evidence here is referred to as Exhibit D, Tab 8. 27 I think I understand that GEC and IPPSO were 28 going to speak to this. Am I correct? 26 1 MR. POCH: I think I'm at bat, Mr. Chairman. 2 THE PRESIDING MEMBER: All right. 3 MR. POCH: IPPSO has invited me to take the 4 lead 5 Mr. Chairman, first of all, this is Tab 8, as 6 you have noted. We heard this morning that we can 7 expect an update today indicating that the annual amount 8 at stake has now risen to $21 million in the latest 9 version of the evidence, so I'm ballparking that 10 somewhere in the vicinity of a quarter of a billion 11 dollars' worth of assets. Of course there is the 12 potential for that number to change. That is of course 13 I guess part of issue number 1, which is the principles 14 and methodology of allocation amongst different pools, 15 assuming this becomes a pool. I'm not urging you to -- 16 whether or not that issue needs to get placed on the 17 issues list. One assumes if this is a separate pool, 18 then we can delve into whether the allocation is 19 suitable or whether that needs to be revisited in a 20 subsequent hearing, what have you. 21 Quite simply there is a startling asymmetry in 22 the position that OHNC has tabled. They acknowledge in 23 their evidence, on page 2 of 9 of that tab, that, for 24 example, existing non Ontario Hydro generation, that is, 25 non-utility generations, were assigned responsibility 26 for part of connection cost. They paid for that or are 27 continuing to pay for it under their arrangements with 28 the Applicant or its former incarnation. Their proposal 27 1 is that new connections to new generators will have to 2 pay for connection. I know Mr. Rodger wants to speak to 3 that as a separate item on the contested issues list, 4 but they are linked in the sense that it strikes -- it 5 shows up the tremendous asymmetry here. 6 In the evidence, the concern expressed -- or 7 the rationale for the position from OHNC is that we want 8 to be looking at going forward, new investments. This 9 is really an artifact of history, and what is important 10 is that the industry understand its cost 11 responsibilities in future. But of course we are 12 talking about a competitive future and what happens to 13 the largest generator in the province is of vital 14 importance to all other generators and of course impacts 15 rates, not just for generation, we know it will impact 16 embedded generation or the avoided rates of those 17 involved in embedded generation and in conservation. 18 It is not a simple issue of course. The 19 resolution of the net billing/gross billing issue will 20 impact on what kind of an impact this ultimately has, 21 that is, where we place these costs. It also depends 22 on -- I know that Mr. Campbell will speak to: Well, 23 where is this money going to come from? It is not a 24 simple issue. 25 I think I'm not doing my friend, Mr. Rogers, a 26 service by anticipating -- and his position is: It is 27 relevant, it is just very complicated and controversial 28 so you shouldn't deal with it at this time. 28 1 I think that speaks for itself. It is, on its 2 face, a relevant issue. It is, I readily admit, a 3 complicated issue and a controversial issue. All the 4 more reason the Board needs to deal with it in this 5 foundational hearing. 6 I should say that -- and, again, I hope I'm 7 not misstating what I anticipate Mr. Rogers position 8 will be -- that in a number of the other contested 9 issues we will hear from the Applicant that there was a 10 fairly broad consensus in the consultations about some 11 of these issues and we have a -- the Board is heavily 12 burdened, we all appreciate that, and that these are 13 ones that can wait. 14 I don't think that can be said about this one. 15 You will see in the Applicant's summation of the 16 consultation positions there was a split on this issue 17 and I think there is a lot of interest in the issue. 18 It is also I think fair to say that it is 19 related to some of the issues: net versus gross, and 20 the export wheeling issues. I think it would probably 21 be healthy in terms of looking towards some resolution 22 of matters in an ADR if we were able to look at the 23 possibility of trading off some of the elements of these 24 decisions. 25 I'm sure, for example, that Mr. Campbell's 26 client will be looking at his bottom line and can better 27 stomach a position on one issue depending on the outcome 28 of another. 29 1 Finally, if my friends are very persuasive 2 that it is a highly complicated issue, then I think what 3 the proper course of action is is to let them explain 4 that to us as part of settlement discussions and then we 5 can look at -- if we are persuaded that it isn't 6 manageable at this time, then we can look at the kinds 7 of terms that would be palatable for the various parties 8 to see a deferral of that issue, that is, what kind of 9 information needs to be assembled, in what format, and 10 what scope of study could underlie a better opportunity 11 to discuss this and when can that be made available? 12 So, as you can imagine, Mr. Chairman, all 13 parties are interested in having these kinds of issues 14 resolved before a PBR is visited upon us and these 15 allocations tend -- these structures tend to get 16 entrenched. 17 So, for those various reasons, we would ask 18 that the Board give us an opportunity to delve into this 19 issue further. 20 THE PRESIDING MEMBER: Thank you. 21 Just as a general question which we will ask, 22 do you have any use in putting forward this as an 23 addition, that the evidence that is filed under Tab 8 is 24 adequate, or are do you have a view that there will need 25 to be an expansion of considerable evidence -- an 26 expansion of that evidence? I guess this issue is to be 27 addressed in more depth, I guess, than what þ- 28 MR. POCH: I believe that there is a 30 1 reasonable likelihood we could obtain what we need in an 2 interrogatory process. I say that without understanding 3 how difficult it will be for my friends to respond. But 4 I think it can be addressed that way. 5 In the alternative, depending on what the -- 6 if the concern expressed is about evidence, then that is 7 information we need to discuss whether or not it is 8 reasonable to defer the issue from our perspective. But 9 I think there is some possibility we can deal with it 10 that way. 11 I think there is a lot of discussion here 12 which is really a question of principle, you know, 13 dealing with questions of equity and fairness as opposed 14 to the opening up -- are we just revisiting history? 15 You know. The Board will appreciate a lot of that is 16 really questions of not requiring data-based evidence. 17 THE PRESIDING MEMBER: Okay. 18 My colleague points out that at this point the 19 Board hasn't ordered the settlement costs. One has to 20 at least work with that as the assumption at the moment 21 until that is done. 22 MR. POCH: I had taken that from þ 23 THE PRESIDING MEMBER: Given what I think we 24 know it, it is quite likely but, at this point, we have 25 not ordered that a cost be -- 26 MR. POCH: My apologies, Mr. Chairman. I had 27 taken that from the discussions yesterday where I think 28 a number of parties were assuming that was a likelihood. 31 1 THE PRESIDING MEMBER: The Applicant hasn't 2 asked this morning yet. Am I right? 3 MR. POCH: Well, maybe we should put him on 4 the spot first. 5 --- Laughter 6 THE PRESIDING MEMBER: Okay. 7 Who would like to go next in adding this issue 8 to the list? If not, we will move to anybody who is 9 opposed. Who would like to go next? 10 Yes? 11 MR. OSBALDESTON: I would adopt Mr. Poch's 12 submissions on behalf of IPPSO. 13 THE PRESIDING MEMBER: Thank you. 14 Mr. Adams? 15 MR. ADAMS: I would like to make some brief 16 submissions in opposition to inclusion of this matter on 17 the issues list. I want to bring two considerations to 18 the Board. 19 THE PRESIDING MEMBER: Just a minute. We want 20 to make sure that everybody who is supporting it goes 21 first, that's all. 22 Mr. Cowan from Agriculture, OFA. Mr. Cowan 23 first and then Mr. Janigan I think. 24 MR. COWAN: Ted Cowan, Ontario Federation of 25 Agriculture. The Federation of Agriculture is concerned 26 that the asset value of generating plants, including 27 free connection or asset value of generating plants with 28 paid for connections may be quite different. We think 32 1 there is a substantial sum involved and that it should 2 be itemized on the account. Hence, we feel that number 3 one should be discussed. 4 THE PRESIDING MEMBER: Thank you very much. 5 Mr. Janigan. 6 MR. JANIGAN: Thank you, Mr. Chair. 7 On behalf of the Vulnerable Energy Consumers 8 Coalition we are concerned that this issue be dealt with 9 in the context of the proceeding at a timely moment. We 10 have reviewed the evidence and believe that it 11 illustrates some fairly clear policy choices that are 12 available to the Board at this point in time. 13 We would be anxious to hear the submissions of 14 the Applicant with respect to the timeliness of this 15 matter, or whether or not there is better evidence that 16 may be offered at some point in time, but at this 17 juncture we see no reason why it shouldn't be added to 18 the list. 19 THE PRESIDING MEMBER: Thank you. 20 Ms Godby. 21 MS GODBY: Briefly, Mr. Chair, the First 22 Nations also supports the submissions put forth by Mr. 23 Poch. 24 THE PRESIDING MEMBER: Thank you. 25 Anyone else? 26 Now is your turn, Mr. Adams. 27 MR. ADAMS: I apologize for being out of 28 order. 33 1 In opposing the inclusion on the issues list I 2 want to make two submissions to the Board. The first is 3 that the matters impacted by any decision this Board 4 might take relate both to the Market Power Mitigation 5 Agreement, in our submission, and also the financial 6 restructuring of OPG and OHSC. The Board ought to bear 7 in its consideration of inclusion of this matter on the 8 issues list how far it seeks to extend its jurisdiction 9 into those matters previously decided in other 10 processes. 11 The second submission I wish to make is that 12 Mr. Poch's submissions in favour of inclusion suggest to 13 you a multi-party negotiation, where there would be 14 exchange of information and discussion. 15 One of the parties that has an interest is not 16 an applicant, that is OPG. It is not clear procedurally 17 how such a multi-party negotiation might take place in 18 the context of an application that's brought by a 19 separate corporation. 20 So for both of those reasons we suggest to you 21 that this is not an appropriate matter for inclusion in 22 the issues list. 23 THE PRESIDING MEMBER: Thank you, Mr. Adams. 24 Next in the opposed group is Mr. Campbell. 25 MR. CAMPBELL: Thank you, Mr. Chairman. 26 We are, of course, concerned that tab 8, 27 contested issue No. 1, not be added to the issues list. 28 It is OPG's position that the allocation of existing 34 1 generation connection facilities to the network 2 facilities pool and the decision to collect these costs 3 from load customers should not be included as part of 4 these proceedings. 5 Now, the agreed issues list already includes a 6 wide range of issues, most of which are themselves 7 complex and contentious in their own right. The reason 8 they got on the agreed issues list is because they were 9 the most important issues for the largest number of 10 participants and, in our submission, OHNC is to be 11 credited with recognizing that fact and putting them out 12 front and centre. 13 So without adding anything to the agreed list, 14 the process before you will be complex and it will be 15 challenging and there is limited time available. Open 16 access is anticipated for November 2000 and that means 17 that there will only be a limited window after this 18 Board issues its decision for that decision to be 19 implemented. 20 It is important, therefore, in our submission, 21 to focus the hearing issues and the time available on 22 the most important issues and to get those decided as 23 quickly as possible. 24 We know that the Applicant is concerned that 25 its resources are stretched to deal with the matters on 26 the agreed list and that it views generation connection 27 as a matter that should be, I use the phrase, a second 28 generation issue to be dealt with down the road. 35 1 Now, from my client's perspective adding this 2 matter to the issues list would add very substantially 3 to the difficulties foreseen by the Applicants and faced 4 by the Board in these proceedings. I would like to 5 illustrate the range of problems that would come into 6 play in these proceedings. 7 Now, first, and I am going to illustrate that 8 through, basically, seven topic areas, but just before 9 turning to them I want to deal with a couple of 10 questions that Mr. Poch raised. The first is he passed 11 out a figure of a quarter billion dollars in assets. I 12 don't know where he gets that number. 13 Mr. Rogers indicated this morning that the 14 revenue requirement change has gone from $3 million to 15 $21 million. If I multiply the asset values that are 16 given in tab 8 for the assets that were contemplated, I 17 don't get anything close to a quarter of a billion. I 18 get a number that is under $100 million. I am not 19 saying it is not -- what I am saying is that Mr. Poch's 20 quarter of a billion dollars may be a catchy number, 21 but, in my submission, you should not make any 22 conclusions based on that calculation because I don't 23 know where it came from and there is no evidence before 24 the Board to support it. 25 Secondly, in Mr. Poch's submissions he dealt 26 with the possibility of addressing this in settlement 27 discussions. Of course, the kinds of problems that Mr. 28 Adams raised remain, even if it is discussed in 36 1 settlement discussions, but the fact of the matter is by 2 then adding this issue will have precipitated an 3 enormous amount of work. Again, I want to illustrate 4 that work that would be imposed on both OPG, the parties 5 to the hearing and the Board, by speaking to kind of 6 seven basic areas, or six or seven basic areas that I 7 think demonstrate the complexity of issue and the kind 8 of work that has to be done and, in my submission, 9 apparently has not been done to date. 10 So, turning to those points, the first one has 11 to do with the fact that adding this issue would, in our 12 submission, force a revisiting of the financial 13 structure and underpinning of the break-up of Ontario 14 Hydro. What we are dealing with here is approximately 15 $21 million of a revenue requirement of $1,163,000,000, 16 which is about 2 per cent or less of the revenue 17 requirement. 18 Now, I will be surprised if my friends at the 19 end of the day in addressing this issue accept even the 20 $21 million figure as appropriate. We have every 21 indication that their view is that it should be 22 substantially higher. The minute you get into 23 substantially higher numbers, this whole issue of the 24 assumptions and allocations that were made in dealing 25 with the financial structure and setting up the asset 26 allocation underpinning for the two companies would have 27 to be re-evaluated without doubt. Shifting the assets 28 around in that way could also then affect -- drop 37 1 through those numbers, that analysis and affect the CTC. 2 So other issues that come up having to do with 3 the restructuring is, if in these circumstances that 4 change is to be made, then perhaps those assets should 5 be transferred to OPG. What is the consequence of that? 6 So what we say is that this would require, 7 given the numbers that I believe my friends would push 8 towards, this would require a substantial redoing of 9 steps that we believe have already been put behind the 10 province in dealing with restructuring. 11 The second issue that you would have to look 12 at is, you would have to consider the history of the 13 development of the Ontario Hydro system. Generation 14 connections were constructed as part of an integrated 15 Ontario Hydro system. 16 Regardless of the argument about what 17 constitutes a generation connection, the fact of the 18 matter is that the system was designed in a very 19 integrated way and that it is a very artificial exercise 20 to try to paw through that integrated structure and now, 21 with retrospect, pluck out what might have been 22 considered connection and what might have been 23 considered network in a system that was designed on an 24 integrated basis. 25 Those decisions were made in the circumstances 26 of the day and, in my submission, even with 27 restructuring it's not appropriate to go back and redo 28 all those decisions, but that is what you would be asked 38 1 to do. 2 That matter is discussed in the evidence at 3 Tab 8, Schedule 1, page 6, starting at line 14 and 4 carrying through to page 7 at line 24. 5 These are not concerns -- the concerns that I 6 am raising are not ones that I am bringing to the table, 7 they are ones that are in the evidence as relevant to 8 this matter. Similarly, the matter that I have spoken 9 to already about the need to revisit the financial 10 restructuring is a matter that has already been raised 11 in the evidence at Tab 8, Schedule 1, page 5, and you 12 will find it mentioned at lines 22 to 26. 13 So it is not simply OPG here saying these 14 things will come up, we know they will come up. They 15 are raised in the evidence already, but they would have 16 to all be fulsomely addressed. 17 The third issue that I believe this raises is, 18 it raises real questions for NUG agreements. 19 If OPG were forced to pay for connection 20 charges, then this undermines the premises behind 21 existing NUG agreements and they would need to be 22 reviewed to determine whether the payments that NUGs are 23 receiving are appropriate compensation for the 24 connection costs that it has absorbed. 25 It may be that that would lead to having to 26 unbundle those contracts and separate out payments for 27 energy and connection, and that would all be necessary 28 to ensure that NUGs were paying appropriate connection 39 1 costs and were not receiving compensation for 2 transmission costs in excess of the cost of their 3 connections. 4 Again, this issue is one that is identified in 5 the evidence at Tab 8, Schedule 1. You can find it at 6 page 2, lines 9 to 18, and at page 6, lines 1 to 12. 7 My fourth point is simply that what the 8 network company has proposed is entirely consistent with 9 the MDC recommendation on this matter. That 10 recommendation can be found in the MDC third interim 11 report, Recommendation 2-6, which states unequivocally 12 that the cost of these connection assets that we are 13 discussing here, except for transformer facilities that 14 exist or are committed at this time, should be rolled 15 into the revenue requirements of the existing common 16 transmission grid. That position was not changed in the 17 MDC final report. 18 Now, the fifth complication that would come up 19 and that has been touched on briefly by my friend, 20 Mr. Adams, is the matter of the implications for the 21 Market Power Mitigation Agreement. 22 Again, this is not an issue that OPG is for 23 the first time indicating that would come into play, it 24 is an issue that the Applicant in its evidence has 25 identified, again in Tab 8, Schedule 1, page 4, lines 24 26 to 28. That concern is recognized in the network 27 company's evidence at that point. 28 It is quite clear that OPG would be uniquely 40 1 disadvantaged if it should be forced to pay for existing 2 generation connections because of the 3.8 cent cap 3 included in the Market Power Mitigation Agreement. The 4 cap would make it difficult for OPG to include 5 transmission costs in its bids unless it can 6 successfully invoke the force majeure provisions of the 7 agreement or renegotiate it. 8 So changing the MDC approach that was adopted 9 in the market power agreement would, not only in our 10 submission, distort the energy market but it might also 11 require fundamental changes to that market power 12 agreement. 13 My sixth point is that what the network 14 company has proposed is consistent with industry 15 practice in surrounding jurisdictions. Any change to 16 that would put OPG at a significant competitive 17 disadvantage with those utilities in the surrounding 18 jurisdiction. 19 Again I point to the evidence filed by the 20 Applicant, Tab 8, Schedule 1, page 5, lines 14 to 16, 21 and there the Applicant points out that it is not the 22 normal practice in surrounding jurisdictions to charge 23 generators. That is what the parties supporting adding 24 this notion want to have happen. 25 So again we say that charging -- doing what is 26 being requested and charging OPG for these costs would 27 be put the company at a significant competitive 28 disadvantage vis-a-vis its U.S. competitors. 41 1 My final and seventh point really has to do 2 with materiality. 3 This application, at least in a technical 4 sense, is for a two-month period in its application. 5 The amount involved is about 2 per cent -- adjusting a 6 figure that is about 2 per cent of the overall revenue 7 requirement is now what we are talking about -- and the 8 Applicant has, in its own evidence, pointed out in the 9 last sentence of its evidence at Tab 8, page 9, line 20, 10 that the issue should be studied at a later date. 11 What we say is, given that suggestion from the 12 Application and the other issues that you have before 13 you, in our submission, you have more than enough on 14 your plate already and this matter should not be added. 15 Now, I will be frank with you that some of the 16 considerations that I have talked about can't be 17 resolved in these hearings, can't be resolved in these 18 proceedings, but that will not excuse the Board from 19 addressing all relevant considerations relating to the 20 issues. All of those considerations are included in the 21 Applicant's evidence and the Board would be in the 22 position that it would have to address all of those 23 matters in some way in these proceedings if this issue 24 is added. 25 So with all of that, we came to the 26 conclusions, as I said before, that this issue should 27 not be added to the issues list and it is on the basis 28 of all of the points that I have raised that we 42 1 oppose it. 2 THE PRESIDING MEMBER: Thank you, 3 Mr. Campbell. 4 All right. We will move on for now. 5 Mr. Rogers, do you have -- 6 MR. ROGERS: Thank you, Dr. Higgin. 7 Most of the points that I wish to make have 8 been made by one or other of the persons who have 9 spoken, but it might be useful for the Board for me to 10 summarize very briefly the position of my client. 11 First of all, my client in the true sense of 12 the word is disinterested in this topic. It has no 13 pecuniary interest one way or the other. We have 14 serious concerns, however, about the limited time and 15 resources available to my client, to the Board and its 16 staff and to the participants having regard to when open 17 access is anticipated to begin. 18 On this particular issue, my client has made a 19 proposal which it believes is the correct proposal. We 20 believe it is fair, we believe it is consistent with 21 other treatment in other jurisdictions and we don't 22 believe any injustice is being done by the proposal. 23 It's also consistent with the MDC 24 recommendation, as has been pointed out. However, I 25 would like to say to the Board that in the event that 26 the Board feels that there is some doubt about that, 27 serious doubt about that, let us make no mistake. This 28 is a highly complex issue and with great respect to my 43 1 friend, Mr. Poch, who has a charming innocence about 2 him, it is not a philosophical discussion that can be 3 resolved in a half an hour. 4 It's very technically complex I am advised. 5 It will involve my client I fear in a tremendous amount 6 of technical work in order to develop the evidence 7 necessary in order for the board to fully analyze the 8 issue. We are greatly concerned about that in this 9 process. 10 Other jurisdictions, as has been said, have 11 viewed this and have treated this as a second generation 12 issue, that is to say an issue to be dealt with later on 13 as we evolve in this new process. If the Board wishes 14 to deal with this issue, I ask you to do it in that way, 15 to defer consideration of the issue until a later time 16 when we all have resources available to deal with it 17 properly. 18 The Board may even wish to consider holding a 19 special hearing if you think you can find time for it in 20 the foreseeable future to discuss this particular issue. 21 For these reasons, Mr. Chairman, my client 22 proposes that this not be an issue in this hearing. 23 Thank you. 24 MEMBER VLAHOS: Mr. Poch, if I can just follow 25 up. Can you just tell the Board what is the harm of the 26 compromise to your client if the Board was inclined to 27 view this issue as second generation? Indeed, I believe 28 you said as soon as time schedule permits. 44 1 MR. POCH: Let me address that first. 2 Conceivably that might be the appropriate result, but we 3 would like the opportunity, and I want to acknowledge to 4 the Board that that certainly is within the realm of 5 contemplation by my client. I can't speak for other 6 parties. 7 To be comfortable with such a deferral, we 8 would want the opportunity to try to come to terms with 9 the applicant on what kind of study or breadth of study, 10 what information should be made available to underlie 11 subsequent discussion. 12 There is also the related issue of what do we 13 do in the interim with the connection charges for new 14 generation? So, I can certainly undertake to you that 15 that's the kind of discussion that we would be happy to 16 engage in in a settlement discussion. I can't assure 17 the Board, of course, that it will drop off. It has to 18 be part of the hearing. 19 The harm -- well, there is always the question 20 of inertia and once we get off in a certain direction 21 and business decisions are being made. OPGI is entering 22 into contracts and then a year from now they will be 23 before you saying "You can't do this to us now. We are 24 entrenched. We have contracts", what have you. 25 Again, if it was to be deferred, we want the 26 opportunity to come up with an agreement that protects 27 us against that kind of a situation later. 28 If the Board would like, I can respond to some 45 1 of the other points now. 2 THE PRESIDING MEMBER: Yes, if you would do 3 so. 4 MR. POCH: Mr. Adams' point I think is the 5 more general one that has implications or relates to the 6 MMPA and the financial restructuring. In short, it 7 could affect OPGI's financial outcome. 8 Well, of course, every issue in this case has 9 impacts on OPGI. If not, I assume Mr. Campbell will be 10 excusing himself if he is successful in having this 11 issue taken off the list, but he won't because, of 12 course, all these issues affect the marketplace, affect 13 the opportunities and, therefore, the profitability of 14 OPGI. 15 It can't have been the government's intention 16 that OPGI shall be shielded from all uncertainty, 17 regulatory and market induced uncertainty. The point is 18 they are to be treated like any other business and they 19 have to wrestle with those uncertainties and they are 20 here today doing that. 21 I'm not sure I understood Mr. Adams' comment 22 about OPGI being in a difficult position not being the 23 applicant there. As a party, they have every degree of 24 standing if we do enter into settlement discussion. 25 They will have every opportunity to be at the table. 26 Mr. Campbell opened his comments by saying 27 that this issue wasn't on the issues list because to 28 OHNC's credit, they put the most important, largest 46 1 issues where there's agreement that they are important 2 on the issues list. I would like to just be clear. 3 No, things are on the agreed issues list 4 because OHNC agreed to have them there and if OHNC 5 contests they are on the contested issue even if we all 6 want them in the hearing. I don't think you can take 7 any indication from where they are on the list. 8 I should readily acknowledge that the quarter 9 billion dollar figure is totally -- from the top of my 10 head I just took $21 million as an annual value and 11 assumed there is some cost of capital in excess of 10 12 per cent that lead to that number. I just multiplied by 13 10 or 12. I didn't want to suggest to the Board that 14 there is anything more behind that number. 15 Mr. Campbell pointed out there's some numbers 16 in the evidence in the range of a hundred million. That 17 was before the update. We will await the update and see 18 what the numbers are, but certainly the number is 19 coming. 20 Now, Mr. Campbell gives his seven point list 21 of the issues of work this would necessitate. This 22 could necessitate a revisiting of OH restructuring or 23 the company could affect the CTC. He raises these 24 terrible issues to get us to all back off and at the 25 same time opens his comments and closes his comments 26 with reference to OHNC's acknowledgement that this is 27 perhaps a second generation issue and we heard Mr. 28 Rogers saying maybe even a separate hearing. 47 1 Either this is a difficult intractable problem 2 which you should never hear, if Mr. Campbell is right, 3 or it's a proper issue which you will need to hear at 4 some point, in which case the fact that we have to 5 wrestle with these difficult issues is not a 6 determinant. Maybe it does impact on this question of 7 when we have time to do that, but not whether. 8 Mr. Campbell says it was constructed as part 9 of an integrated system. I think what we are doing here 10 is getting into arguing the issue itself. I don't 11 propose to take debate. We are not here saying go back 12 and revisit those decisions. We are not telling you to 13 tear down the switch yard. We are saying who is going 14 to pay for it? That's the question before you. 15 Indeed, just to be perfectly clear, I just 16 glanced at the evidence, Exhibit C, tab 6, schedule 2, 17 page 1. I see on the first page things such as Bruce A 18 and B switch yard listed as being presently in a 19 proposal allocation network. 20 We are not talking about -- I mean we could be 21 talking about more complicated issues of how you 22 apportion a transmission line, for example, but we are 23 right now faced with the proposal that even such site 24 specific facilities as the switch yard are being 25 allocated to network. We think on its face that needs 26 to be looked at. 27 Mr. Campbell suggests that you are going to 28 have to -- that this raises the possibility of having to 48 1 reopen the NUG agreements. 2 Well, that's not before you, Mr. Chairman. I 3 don't have those agreements before us. I don't know 4 what the evidence will be on that -- I'm not sure you 5 would, in any event, be involved in that -- but let Mr. 6 Campbell raise that spectre if the issue surfaces. I, 7 frankly, don't understand it because the evidence is 8 that the NUG contracts have those -- are premised on 9 those entities paying their way. And that's precisely 10 the problem: they are paying their way, and future 11 generators will be paying their way and OPGI isn't. 12 Mr. Campbell says -- I think it's their fifth 13 point -- they would be uniquely disadvantaged. 14 Undoubtedly. 15 If a proposal is to give preferential 16 treatment to one party and we are talking about taking 17 it another way, yes, they will be uniquely affected. 18 I'm not sure that's any reason to shy away 19 from it. And that's got to be no less of a concern, if 20 it is a concern, if we deal with this in the second 21 generation. 22 It seems to me most of these arguments are 23 incompatible with the position that, well, we can deal 24 with it as a second generation issue. Either it's an 25 issue or it isn't -- and all these arguments, it seems 26 to me, are trying to suggest it's not an issue when, 27 clearly, it is. 28 International competitiveness. Consistency. 49 1 The suggestion is that other jurisdictions don't charge 2 for these connection charges. 3 Well, I mean maybe that's the right answer. I 4 think we need to look at -- then we need to look at what 5 we are proposing to do to the new generation and what we 6 have done with the NUGs. 7 The point is we are looking to -- at this 8 question of consistency inside Ontario, as well as 9 outside of Ontario. 10 Materiality. In theory, this hearing is about 11 two months' worth of rate year. I think we all 12 appreciate, though, that we are dealing here with some 13 fundamental issues which we presume have some life 14 beyond the two-month period. 15 Mr. Campbell complains this is perhaps 2 per 16 cent. Well, it's either material -- it's either a big 17 enough number to be of concern that he has to wind up 18 and come to bat, in which case it's a big number, or 19 it's a little number, in which case I'm not sure why 20 he's so upset. I guess that's again -- we can only know 21 that one if we get into the evidence. 22 In short, Mr. Chairman, I think my friends 23 aren't really saying this isn't relevant. I haven't 24 heard any arguments this isn't a relevant issue or any 25 argument that it's not an important issue. The only 26 issue seems to be whether we can manage it, at this 27 time, and I would simply say, if the Board is concerned 28 about that -- and I appreciate it's quite reasonable 50 1 that the Board might be concerned about that -- the 2 Board may wish to indicate its concern and encourage the 3 parties to try to seek some way of managing a deferral 4 of the problem to another day in a way it doesn't 5 prejudice the parties and in a way that makes it more 6 manageable. 7 We are certainly prepared to look at the 8 possibility of doing that, but we would hate to see it 9 struck, now, without any such protection. 10 Thank you, Mr. Chairman. 11 THE PRESIDING MEMBER: Thank you. 12 MR. ROGERS: Mr. Chairman, could I make -- I 13 realize we can't go on forever. I have a couple of 14 points of clarification that I think might assist the 15 Board in dealing with the issues, just as a repository 16 of certain information -- 17 THE PRESIDING MEMBER: All right. We will do 18 that. And then Mr. Poch may have a -- 19 MR. ROGERS: He may, but I don't believe he 20 will. 21 THE PRESIDING MEMBER: -- reply to your point. 22 MR. ROGERS: Just two points have been raised 23 which, I think, inadvertently have misstated the state 24 of affairs and I want the Board to be clear about this. 25 First of all, it's my advice that the existing 26 NUGs have paid for a part, but not all, of the 27 transmission connections, as it is defined in the 28 application. 51 1 Secondly, this $21.3 million that I spoke 2 about this morning, it's not in addition to the revenue 3 requirement, it's -- what I wanted to convey is that 4 revisions to OHNC's application, which would be served 5 today, indicate existing connection costs to generators 6 are approximately $21.3 million out of the revenue 7 requirement of 1.1 billion. So, it's an allocation sum, 8 not in addition to the revenue requirement. 9 THE PRESIDING MEMBER: Is that allocation 10 based on a revision of the cost allocation of the assets 11 and depreciation and other costs related to those assets 12 to the pools? Is that where that comes from? 13 MR. ROGERS: In part. There were some 14 algorithm changes which -- I think there were some -- I 15 can't think of another word for "error" so I will say 16 it -- errors made. 17 --- Laughter 18 THE PRESIDING MEMBER: We will look to the 19 evidence, okay, before we start. 20 Mr. Poch, do you wish to -- 21 MR. POCH: Just to say I understood the 22 evidence the way Mr. Rogers has stated it, including the 23 fact that there were errors made. 24 --- Laughter 25 MR. OSBALDESTON: Mr. Chair, if I can just add 26 a thing. 27 I know there's not a separate right of reply 28 except for -- Mr. Poch did not indicate, at one point -- 52 1 he wasn't sure if this was the position of all the 2 parties or whether they would agree to this being dealt 3 with as a second generation issue. 4 I just want to confirm that if the position is 5 that, this definitely is fundamental. It should be 6 dealt with now. It goes to the fundamental position of 7 parity among generators. It needs to be dealt with now. 8 MEMBER VLAHOS: I'm sorry. The question, sir, 9 was the -- some qualification of the harm, if you like, 10 if you went to second generation. The applicant's 11 position is that it ought to be a second generation 12 issue. But I was trying to get to the harm that may 13 result if we leave that a second generation. 14 MR. COWAN: Mr. Chairman. Ted Cowan, again. 15 Ontario Federation of Agriculture. 16 With respect to going to the second 17 generation, in materiality, it would be our contention 18 that the issue must be dealt with at this point, because 19 if there is a sale of a hydro generator before it would 20 get to the second generation, then the issue is moot, at 21 that point; it's a decision that would be made in the 22 sale and not made here, where it should be made, and the 23 assets will then be lost to the public, at that point. 24 --- Pause 25 THE PRESIDING MEMBER: Thank you. 26 We have no further questions on that issue and 27 we will obviously reserve on it for now and we will come 28 back either later, depending on what later is, today -- 53 1 the way we are going, it might be quite late -- or we 2 will reflect it in a procedural order. 3 So, let's have a look at the time. We have 4 been sitting an hour and a half, so I guess we should 5 contemplate a break. 6 I'm not very happy with how much progress we 7 have made in that time, but I think we all need to take 8 a short break. 9 So we will return at 1045 and we will pick up 10 Issue No. 2. 11 Thank you. 12 --- Upon recessing at 1022 13 --- Upon resuming at 1047 14 THE PRESIDING MEMBER: Just to tell you 15 roughly what the schedule will be, we are going to try 16 now to go to the lunch break at about 12:30, take an 17 hour for that, and then we will come back and try and 18 finish up as soon as possible this afternoon. It is 19 going pretty slow right now. 20 So we are now on contested issue number 2, 21 treatment of connection charges for new generation, in 22 which the evidence is Exhibit D, Tab 8. I understand 23 but may be corrected that Toronto Hydro is going to take 24 the lead on that. Is that correct, Mr. Rodger? 25 MR. RODGER: That is correct, Dr. Higgin. 26 THE PRESIDING MEMBER: Okay. Please go ahead. 27 MR. RODGER: Thank you, sir. 28 This particular contested issue in one sense 54 1 is perhaps the other side of the coin of the first issue 2 that was reviewed earlier today. But, at the outset, I 3 would say that, in our view, this is a completely 4 distinct issue and a separate matter which should be 5 included on the issues list regardless of how you 6 dispose of the first contested issue. 7 The approval that is being sought by the 8 Applicant is to impose connection charges on new 9 generators. Toronto Hydro's view is that this matter 10 should be properly included as an issue for this 11 proceeding to ensure that these proposed new connection 12 charges are consistent with the cost allocation and rate 13 design principles which underlie the entire application. 14 There are two specific principles that I would like to 15 draw your attention to in support of this matter. 16 The first is the principles of fairness in 17 ratemaking and cost allocation; and also the principle 18 of minimizing impacts on the economic operation of the 19 electricity market. Both these specific principles can 20 be found in the application at Exhibit 3 -- sorry -- 21 Exhibit C. 22 The first is regarding the fairness issue. 23 What the Applicant proposes is that we essentially have 24 two different classes of generators in Ontario on a 25 go-forward basis. We have the existing generators who 26 don't pay the connection charges and the new generators 27 who will. This is an advantage to existing generation 28 and our view is it will increase the generation of costs 55 1 for new entrants, which is against the broader 2 principles of the restructure which I will talk about a 3 little later. 4 So what Toronto Hydro wants to do is we want 5 to explore the impacts of these new charges, the impacts 6 of creating this unlevel playing field on a go-forward 7 basis as this new market commences, and we want to 8 understand why it is fair. We don't believe it is. 9 There is also a cost allocation issue as part 10 of this discussion. The general goal and the general 11 objective behind the application is that transmission 12 costs should be recovered in transmission charges. We 13 see the connections as a transmission cost. 14 What the Applicant's proposal does is shift 15 connection costs for new generation from the 16 transmission side into the commodity side. How new 17 generators are going to recoup these connection charges 18 are in their energy prices. Therefore, we say that 19 there is a blending of the transmission costs and the 20 commodity costs, and that is inappropriate. 21 So that is the fairness issue: Is it 22 consistent with the other principles that are 23 articulated in the application? 24 The second principle of rate design and cost 25 allocation is also that of minimizing the impacts on the 26 economic operation of the electricity market. If you 27 stand back for a second and view the broader bottom line 28 of this whole restructuring, it is clear that it is to 56 1 achieve customer choice in Ontario, and that means 2 competitive generation, a competitive commodity supply. 3 Unfortunately, we are not going to achieve 4 that fundamental objective when the so-called market 5 opens in November, and that is not an issue for this 6 proceeding. But what we do think is an issue for this 7 proceeding is that it is absolutely critical for this 8 Board to scrutinize any proposals or any charges which 9 could have an impact, and a negative impact, on that 10 ultimate goal of a real market, a real commodity market. 11 Without question, Toronto Hydro's view is 12 these new connection charges will have an impact and we 13 are saying to the Board "Let's explore it so we can see 14 whether it is minimal or whether it will have a serious 15 impact." 16 My client has a specific interest in this. 17 Last year Toronto Hydro announced a joint venture with 18 Boarlex to develop 112 megawatt cogeneration plant in 19 downtown Toronto. On more than one occasion the 20 Minister of Energy commended my client for this 21 $130 million of new investment and new jobs and so on. 22 We want the opportunity to explore this and see what the 23 impact is on us as an example. 24 Finally, I would respectfully remind the Board 25 of some of the guiding objectives that it shall adhere 26 to in its review of this application before the Board. 27 I would refer specifically to section 1 of the Ontario 28 Energy Board Act, 1998, and to two parts of that. 57 1 I will just read the two specific parts: 2 "The Board in carrying out its 3 responsibilities under this or any other 4 Act in relation to electricity shall be 5 guided by the following objectives:" 6 (As read) 7 "1. to facilitate competition in the 8 generation and sale of electricity and to 9 facilitate a smooth transition to 10 competition;" 11 "6. to facilitate energy efficiency and 12 the use of cleaner, more environmentally 13 benign energy sources in a manner 14 consistent with the policies of the 15 Government of Ontario;" 16 So, in our view, it is incumbent on the Board 17 to review this issue in light of that context. 18 Finally, I would say that when I said that 19 this issue was perhaps the other side of the coin of the 20 first issue, if I could rally one of Mr. Campbell's 21 arguments. I think it supports Toronto Hydro and why 22 there should be an issue. That was Mr. Campbell's 23 arguments that other jurisdictions don't impose charges 24 on generation and that OPGI would suffer a competitive 25 disadvantage if all of a sudden it had to start to pay 26 for connection costs. 27 Well, for new generation we will have a 28 competitive disadvantage, not only against those U.S. 58 1 competitors but also against OPGI here in Ontario. 2 So for all of those reasons, Toronto Hydro 3 would respectfully request that it be included on the 4 issues list for this proceeding. 5 Thank you. 6 THE PRESIDING MEMBER: Okay. Who else would 7 like to go next in support of adding this to the -- 8 Mr. Cowan? 9 MR. WARREN: Mr. Chairman, I have already 10 noted the linkage of issues here and I won't say 11 anything further. 12 THE PRESIDING MEMBER: Mr. Cowan? 13 MR. COWAN: Ted Cowan, Ontario Federation of 14 Agriculture. We would care to support Toronto Hydro and 15 Mr. Rogers' contention that it should be an issue. We 16 believe that the whole purpose of deregulation is to 17 have more competition and lower energy prices, and there 18 is an odd kind of competition where some people pay to 19 get into the market and others don't. We would care to 20 see either everybody pays or everybody free but an equal 21 footing. 22 THE PRESIDING MEMBER: Thank you, Mr. Cowan. 23 Is there anyone else? 24 What about IPPSO? Sir, you might have 25 something to say about it? 26 MR. OSBALDESTON: We have no opposition to 27 that issue being added to the list. 28 THE PRESIDING MEMBER: Anyone else adding this 59 1 to the list? 2 Okay. We will move on to those who oppose it. 3 I see there are people that may be that are having a 4 discussion. 5 Are you going to enter a submission, 6 Mr. Campbell, about opposing this issue as far as 7 whether it should be added to the list? 8 MR. CAMPBELL: No. We have no submissions on 9 this matter except perhaps to reinforce Mr. Rogers' 10 submission that the two issues ought to be dealt with 11 separately. 12 THE PRESIDING MEMBER: Thank you, 13 Mr. Campbell. 14 Anyone else? I will do the Applicant next. 15 Mr. Rogers then. 16 MR. ROGERS: Thank you, Dr. Higgin. I will be 17 very brief. 18 I agree that these rates should be fair and we 19 are trying to do that. That's the whole object of the 20 exercise. 21 The proposal of the Applicant in this 22 particular instance is fair, however, and maybe 23 misunderstood. 24 If the concern is that the transmission rate 25 treatment of new generators connecting to existing 26 connection facilities, if that's the concern then the 27 proposal is, of course, that these generators should not 28 pay for the existing facilities. The issue is not 60 1 between new generators and old generators. The issue is 2 from this time forward how do we treat new connections. 3 It is our proposal that everybody be treated the same 4 with respect to new connections. 5 So that if existing generators expand and 6 invest, like Mr. Rodger's client apparently proposes to 7 do and needs a new connection, then they will be asked 8 to pay for it just as will Toronto Hydro. 9 Our proposal is the consistent, fair 10 treatment, it seems to me with respect, and it may just 11 be that there is a misunderstanding of what is being 12 proposed. We submit it shouldn't be on the issues list 13 for that reason, but that's exactly what Mr. Rodger 14 advocates should be done. Thank you. 15 THE PRESIDING MEMBER: Thank you. 16 We don't have a question on those. Maybe you 17 would like to respond to that point. 18 MR. RODGER: I don't think my submissions 19 would change at all. It's the question of whether new 20 connection charges and the generation associated with it 21 there is unlevel playing field created vis-a-vis any 22 current existing generation. So in my view all my 23 submissions stand. 24 MEMBER VLAHOS: Mr. Rogers, based on what Mr. 25 Rodger -- I have got to keep the names straight. 26 MR. ROGERS: It's complicated isn't it. 27 THE PRESIDING MEMBER: Don't throw me in their 28 either. 61 1 MEMBER VLAHOS: Not by first name. 2 Based on Mr. Rodger's response that it's not a 3 misunderstanding, it's a cost allocation issue and it's 4 modest material -- well, the list is material, maybe 5 not, do you have anything more to say on this? 6 Going back to the Chair's point early on in 7 the day, to the extent that it's part of the prefiled 8 evidence part of the application, there has to be some 9 good reasons why you should not make it on the issues to 10 be heard? 11 MR. ROGERS: Yes. Let me address that point. 12 I will have to do it eventually. 13 All of our objections to issues going on the 14 list are not based on relevance. I can see that is a 15 relevancy issue. It's a question of priority I think 16 and what we deal with in this hearing and what's really 17 involved and whether there really is a serious issue 18 here, number one. 19 Secondly, let me just explain why it is that 20 what I say is irrelevant material found its way into our 21 submission. 22 The Board ordered the company to conduct an 23 extensive stakeholder consultation process which it did. 24 You will find the material in the applications that 25 deals with that stakeholder process which is not 26 directly relevant to the transmission rates which we are 27 seeking. This is not one of those issues. 28 MEMBER VLAHOS: Mr. Rogers, I will interrupt 62 1 you just for a minute. I am not sure that it is the 2 choice of words, the Board directed or did the Board 3 expect that there would be a consultation? 4 THE PRESIDING MEMBER: The word is "expect". 5 Believe me we checked that. 6 MR. ROGERS: That's my word. I took it very 7 seriously when I read it and the company did it. 8 I don't really have anything more to add to 9 what I said. It's a simple issue. The proposal, I 10 think, is clear. It's intended to promote equity 11 between customers -- I'm sorry, between generators on a 12 go-forward basis. We submit it really shouldn't take 13 the Board's time in this hearing. 14 MR. RODGER: If I could add one comment, Dr. 15 Higgin, because Mr. Rogers did raise the issue in his 16 last submission about priorities and only those of top 17 priority should make it onto the list. 18 In our view the priority of this whole 19 exercise is to get to a competitive commodity market. 20 New generation is a key feature in getting us to that 21 "M" state, so these charges we would like to find out 22 what the impact will be on getting to the bottom line 23 goal of why we are all doing this. Thank you. 24 THE PRESIDING MEMBER: We will reserve on that 25 issue and move ahead to issue No. 3, locational 26 transmission pricing and the reference is Exhibit D, tab 27 10 and, of course, there is a study that has been filed 28 by the Applicant. Who would like to go ahead on this? 63 1 I think I have Toronto Hydro again as leading off on 2 this. Please go ahead, Mr. Rodger. 3 MR. RODGER: Thank you, Dr. Higgin. 4 This particular issue we believe also should 5 be included on the issues list as it goes to the themes 6 on rate design and transmission price unbundling that 7 find their way throughout the application. 8 If you look at the evidence, what the 9 Applicant says, and for the reference if you look at 10 Exhibit A, tab 2, line 28, essentially the Applicant 11 says that they support the long-term direction towards 12 locational transmission prices, but that essentially at 13 this time it is set aside for the pooling concept. 14 Now, Toronto Hydro's position is if that in 15 fact is the case that the long-term goal is to put this 16 pricing in place, then let's start to explore some of 17 the implications now. I have long since personally 18 given up on what constitutes short term or long term, 19 but what we do have in this application in Exhibit D, 20 tab 10 is we have an eight-page exhibit and we have 20 21 pages of attachments. The exhibit was filed as part of 22 this application that seeks approval for this matter and 23 Toronto Hydro is saying we want to understand what's in 24 those 28 pages. 25 For example, we want to understand 26 particularly where Toronto Hydro lies in the form of 27 their scatter charts and so on that forms part of this 28 evidence if it is something that ultimately is going to 64 1 be implemented. 2 So we would like to ask interrogatories about 3 this issue. We want to find out the impact on Toronto 4 Hydro because it may be that the Applicant, while they 5 deem it appropriate not to consider it at this time, it 6 may have a significant bottom line impact on Toronto 7 Hydro. 8 So we cannot ask interrogatories unless this 9 is an issue and, as I said, if it is something we are 10 moving towards let's find out about it now, rather than 11 starting at square one perhaps at next year's hearing. 12 For those reasons we would ask that it be included on 13 the list. Thank you, sir. 14 THE PRESIDING MEMBER: Anyone else? 15 Mr. Osbaldeston. 16 MR. OSBALDESTON: I adopt Mr. Rodger's 17 submission, sir, and would just add that from IPPSO's 18 point of view locational pricing is something which adds 19 a high degree of uncertainty for long-term planning by 20 generators and load, that it's something that needs to 21 be explored now if that's going to be the direction. 22 THE PRESIDING MEMBER: Just to clarify on both 23 submissions, you say "be explored". Do you mean in 24 detail or do you mean have it discussed and have a 25 direction set out maybe by the Board as to how to 26 proceed on a going forward basis. Is that what you are 27 really asking? 28 MR. OSBALDESTON: Yes, sir. 65 1 THE PRESIDING MEMBER: All right. 2 Anyone else who would like to make a 3 submission in support of adding locational pricing? 4 Mr. Rogers, back to you again. 5 MR. ROGERS: Thank you, sir. 6 THE PRESIDING MEMBER: We are really going 7 fast now. 8 MR. ROGERS: I won't slow the train down, I 9 can assure you of that. 10 First of all, this is one of the issues that 11 was included in the application because it was raised by 12 stakeholders as an issue of interest for them. But we 13 submit that, in any event, it really is premature to be 14 dealt with by the Board at this time, this issue. There 15 are several reasons for that. 16 Market rules suggest an 18 month delay before 17 implementing locational marginal pricing for energy, and 18 we submit that it is sensible that locational 19 transmission pricing considerations should be 20 synchronized with that aspect. 21 The Board will be aware that the company's 22 proposal, I think, is in accordance with the 23 government's direction as presented in the White Paper 24 as the government policy, as we understand it, with 25 respect to uniform pricing for transmission at least in 26 the short term. 27 We acknowledge that in future it may be a 28 valid consideration, but we have limited time and 66 1 resources available here in this hearing. It's not just 2 my client that is limited in time and resources, it is 3 all the participants to this proceeding. 4 There are serious issues we believe, serious 5 issues and concerns regarding the settlement process 6 that must be implemented by the independent electricity 7 marketing operator to accommodate locational 8 transmission pricing. 9 This is a very big issue which may be another 10 issue ultimately which is deserving of the hearing on 11 its own accord, but I submit it would be impractical to 12 try to deal with it in this proceeding. 13 Now, my client has done some work on the 14 issue, and if what people are seeking is simply to know 15 where they fall on the graph of locational transmission 16 pricing, which I understand to be one of the major 17 concerns expressed, then we can accommodate that. We 18 will provide that information. 19 But we are really not well equipped, 20 Mr. Chairman, to embark on a great deal of additional 21 technical work in this area at this time and I fear it 22 would be a waste of the Board's time and resources to 23 get into this issue at this time. 24 So we can accommodate with respect to the work 25 that we have already done, and we will share that with 26 the intervenors if that is what they want. 27 THE PRESIDING MEMBER: Thank you. 28 Could you, then, just address, perhaps amongst 67 1 other things, in your reply what additional evidence and 2 whether you are seeking really that the interrogatory 3 process will allow you to solicit answers based on the 4 existing evidence or you are going to be asking for 5 additional work to flesh out, shall we say, some of the 6 aspects of the study? 7 MR. RODGER: I think first, generally, sir, if 8 I can say that to date when we have been trying to 9 review this exhibit it is unclear, from at least what 10 has been filed, how we can make an apples to apples 11 comparison between the pooled approach which is proposed 12 for you approval and locational transmission pricing, 13 the specifics of that. 14 So there are a series of interrogatories that 15 we hopefully will clarify that we can do that. That's 16 part of it. 17 Also, it is again to try to bring out what the 18 bottom line impact will be on Toronto Hydro by going 19 with one approach to the other. So that is really what 20 we are trying to get a handle on. 21 At this point I have no instructions about 22 whether Toronto Hydro will in fact be advocating this at 23 the end of the day at this hearing, but we are saying 24 that if this is the road we are heading down, we have 25 some material on it, help us to understand it. That is 26 really the result we are trying to achieve. 27 I would just say, to respond to Mr. Rogers, a 28 couple of points though, that his issue about the timing 68 1 should coincide with locational marginal pricing, that 2 is a separate issue. We are not talking about 3 congestion pricing here, so we do see that distinction. 4 Also, in terms of whether the approach for 5 locational transmission pricing is consistent with the 6 White Paper, I'm not sure that even if it was introduced 7 it would be inconsistent. 8 I, perhaps along with other prudent counsel 9 that appear before this Board have a copy of the White 10 Paper and the Energy Competition Act by my bedside for 11 nighttime reading, and in going through it last night I 12 couldn't find anywhere in the White Paper a direction 13 about postage stamp rates. Even if it could be 14 construed in the White Paper, we could have locational 15 transmission pricing and have postage stamp rates within 16 the Toronto franchise area. 17 So I think just to say that it is inconsistent 18 might in itself need more explanation. So for these 19 reasons we would request it be added. 20 THE PRESIDING MEMBER: Mr. Cowan, we know what 21 the process is. That then kicks it back to other 22 parties to have a reply to your comments. So if we can, 23 in future, have your comments before the -- 24 MR. ROGERS: My apologies, sir. 25 THE PRESIDING MEMBER: So go ahead. Just go 26 ahead. I just point that out. 27 MR. COWAN: With respect to the other parties, 28 I think you will find we fall right in the middle in 69 1 this instance. 2 Ted Cowan, Ontario Federation of Agriculture. 3 We are very concerned about locational 4 transmissional pricing. We have looked at it. We feel 5 that for rural areas it will perhaps have the most 6 profound effects of anywhere in the province, perhaps 7 both positively and negatively. We have no grasp on 8 what that means for us at this point. 9 We also feel that any study of locational 10 transmissional pricing requires a new cost of service 11 study, which is your Item 7 here, that is requires such 12 a new cost of service study to be considered in a 13 through manner. 14 So I would simply ask that the locational 15 transmissional pricing and the new cost of service study 16 be considered together and that we not go ahead on the 17 one without the other. 18 THE PRESIDING MEMBER: Just to summarize, you 19 are looking for a process which will yield information 20 (a) in this proceeding and also on a going-forward basis 21 how locational transmission pricing should be developed 22 in the future. 23 MR. COWAN: That's right. 24 But we certainly feel completely unprepared, 25 both as a group and in terms of the information 26 available to us to deal with it at this time, though we 27 have no objection to it being considered. But we would 28 be very wary of that consideration leading to some kind 70 1 of a firm decision at this time. 2 THE PRESIDING MEMBER: Does anybody wish to 3 comment? 4 Mr. Rogers, things went out of order and so I 5 gave you that opportunity. 6 MR. ROGERS: Well, I would like to make one 7 other comment. I'm sorry to keep jumping in here, but 8 just so it's clear. 9 I think I can speak for my client here, I hope 10 they won't be angry with me, but I think our position on 11 this is that it is an interesting topic. We don't 12 believe it is appropriate for this hearing, but we are 13 prepared to answer reasonable interrogatories based 14 on the work we have done to date on this issue, if 15 that helps. 16 I would ask the Board to consider carefully 17 before you make a ruling that will require the company 18 to go and do a lot of additional work in this very 19 busy time. 20 THE PRESIDING MEMBER: Mr. Rodger. 21 MR. RODGER: Well, if it gives my friend and 22 the Board any comfort, I can assure you that Toronto 23 Hydro will only ask reasonable interrogatories. 24 --- Laughter 25 MR. ROGERS: Well, it's a new world for 26 everyone I can see. 27 THE PRESIDING MEMBER: I won't go back to the 28 HR series of hearings that we are familiar with. 71 1 --- Pause 2 THE PRESIDING MEMBER: Thank you, then. We 3 have all of that for that issue. 4 We will now move to issue No. 4, 5 implementation, reference Exhibit D, tab 13. I am given 6 to understand that TransAlta and Mr. Budd are going to 7 lead on this. Is that correct? 8 MR. BUDD: Yes, sir, we volunteered. 9 THE PRESIDING MEMBER: All right. 10 MR. BUDD: Or were volunteered. I understand 11 that the IMO has sent an e-mail or a letter and I am 12 wondering whether you propose to read that now so I have 13 an idea of what it is that they said or would you rather 14 I go first? 15 THE PRESIDING MEMBER: Better we can read it. 16 We didn't know it was here. Jennifer. 17 MS LEA: Well, I was going to read it as one 18 of the people who is supporting the issue. As you have 19 a right of reply, would that be sufficient? 20 MR. BUDD: That's fine. Thank you. 21 I think you will find, Mr. Chairman and 22 Members of the Board, that there is some substantial 23 support for the idea that one would be able to explore 24 the implementation of the cost allocation and rate 25 design proposals. My friends who are in support may in 26 fact speak to that shortly. 27 I guess I would first like to point out to the 28 Board that I think implementation is in fact very 72 1 relevant to what it is that we are here to do. In fact, 2 it's essential to the market opening, the target date 3 which is currently November 1, 2000. 4 I would like to go through a couple of 5 examples in my submissions, but I would note that in 6 Exhibit D, tab 13, schedule 1, page 1, four items are 7 mentioned by the applicant, those bullet points from 8 line 8 to line 11 dealing with cost allocation, rate 9 design, transmission, system code, market rules and 10 design and then, finally, customer connection agreement. 11 I propose to deal with just the last two principally. 12 In our submission, it is vital that this 13 matter be considered because the transmission tariff has 14 to be implemented by the IMO, as you know. In choosing 15 that form of tariff, it will be important for all of us 16 to know whether alternative forms of the tariff are more 17 or less consistent with the IMO processes and easier or 18 more difficult for the IMO to implement. 19 I know the Board is going to be working with 20 the IMO back and forth on these kinds of matters and 21 each will be paying attention to what each other is 22 doing. 23 In our view, the successful implementation of 24 this tariff by the IMO will be enhanced as long as 25 there's an opportunity to explore and ask questions 26 about it. We also believe that the opportunity to 27 explore these areas and, where possible, receive 28 direction from the Board, will assist participants in 73 1 the market and potential participants in the market with 2 gaining additional certainty. With the rapid pace that 3 we are on moving toward the opening of the market, that 4 certainty will be of great assistance. 5 Essentially, there needs to be an alignment 6 between the terms and the market rules which, as you 7 know, are under development and the terms that are used 8 in defining the transmission tariff. That's one of the 9 points we would very much like to make in going through 10 this hearing. 11 Now, in fairness to our friends at OHNC, we 12 recognize this is a bit of a chicken and egg situation. 13 The question is to what extent should the transmission 14 tariff be set to conform with the current draft market 15 rules which, as you know, some of which are changing and 16 to what extent should the market rules be changed to 17 conform in fact with the transmission tariff. We 18 recognize it's important for us to be flexible and 19 pragmatic on which takes precedence. 20 The market rules on transmission in chapter 10 21 clearly state at several places that the determination 22 of the tariff, of course, is up to the OEB. What we 23 want to do as intervenors is have an opportunity to 24 check that fit as we go forward to implement and to seek 25 consistency, which is our key point here. 26 Just to give you a couple of examples on this. 27 I had an opportunity to speak with our friends at AMPCO 28 about it. There are aspects of the market 74 1 implementation by the IMO that will be difficult to 2 change if the transmission tariff tries to impose 3 different requirements. 4 For example, the placement of wholesale 5 meters. That matter will need to be determined to make 6 the energy market work. It's vital that the 7 transmission tariff be constructed so that it can be 8 applied using the same metering positions and metering 9 data. You can imagine it would be hugely inefficient to 10 have to place meters in different positions solely to be 11 able to charge the transmission tariffs with these kinds 12 of implementation issues which we think are vital. 13 Another example would be for your 14 consideration that it will be much more convenient for 15 the IMO if the definition of transmission customer, an 16 issue which I note is on the agreed upon list, coincides 17 with an existing defined category of market participant. 18 We would submit that every time a new category is 19 created, the complexity of the IMO systems increases as 20 increased combinations of participant categories and 21 transaction categories must be handled, so we would like 22 an opportunity to ensure that that integration for 23 implementation is properly managed. 24 Now, one of the ways to test whether a concept 25 for the transmission tariff is workable is to be able to 26 simply ask questions as to how it will be implemented in 27 particular cases. We feel that this process can weed 28 out the attractive theoretical proposals that would lead 75 1 to excessive complexity and implementation. We are 2 before the Board to assist with that process. 3 I would further note that at Exhibit D, tab 4 13, schedule 1, page 2 of 3, at lines 21 through 24, 5 OHNC indicates that it's its understanding there would 6 not be any problems introduced by the approval of this 7 application with market design. They are in fact in 8 discussion with IMO staff. 9 That may well be nice and fine, but it doesn't 10 go far enough to put the principles in front of the 11 intervenor participants here at an early enough date, 12 given the pace on which we are all proceeding. 13 With respect to the customer connection 14 agreements which form the basis of the contractual 15 obligations, we want an opportunity to explore the terms 16 and conditions which are found at D, tab 13, schedule 3, 17 to make sure that these fit as well. 18 While we recognize in our friend's point on 19 this that we will not be able to settle all of the 20 implementation of issues in this hearing, we think it's 21 still nonetheless very important that intervenors be 22 able to explore the implementation issues to the extent 23 they can so they can make informed decisions and so can 24 the Board, taking into account those implementation 25 consequences. 26 Just in closing, this issue of compatibility 27 of the transmission tariff to market rules is very 28 important. It just has to fit for the market to work 76 1 properly and with as much ease as possible. 2 With respect, we would submit that we are here 3 to set just and reasonable rates. That's the Board's 4 jurisdiction and task before it. It only makes sense 5 that those rates be implemented as the title of this 6 hearing binder suggests, cost allocation, rate design 7 and implementation. 8 Thank you. 9 THE PRESIDING MEMBER: Thank you, Mr. Budd. 10 Okay. Who would like to follow now in support 11 of adding implementation to the issues list? 12 MR. FISHER: Just quickly, Mr. Chair, I just 13 wanted to -- 14 THE PRESIDING MEMBER: If you would just 15 identify yourself. 16 MR. FISHER: I'm sorry. My name is Fisher. I 17 represent AMPCO. I just wanted to mention in the 18 interest of efficiency, as Mr. Budd acknowledged, we had 19 shared our information with Mr. Budd for this 20 presentation, so we have nothing further to add at this 21 time. 22 THE PRESIDING MEMBER: Thank you, Mr. Fisher. 23 Anyone else? Board staff? 24 MS LEA: Thank you. I received a fax -- Board 25 staff received a fax from the Manager of Regulatory 26 Affairs for the Independent Market Operator. He has 27 requested that this statement be read into the record. 28 The person sending this fax was Amir Shallaby, spelled 77 1 A-m-i-r S-h-a-l-l-a-b-y, Manager of Regulatory Affairs 2 of the IMO. The statement is as follows: 3 "The IMO wishes to support the inclusion 4 of implementation issues in the scope of 5 this hearing. In the technical 6 conference, the IMO raised the question 7 of consistency and fit between the 8 proposed rates and the market rules, 9 processes and definitions. It is this 10 concern that prompts our support for 11 keeping the implementation issues in 12 sight. 13 The IMO will administer the rates 14 ordered in these proceedings. This will 15 include metering, settlements and revenue 16 transfer. The IMO notes that the 17 definitions, the data requirements and 18 processes for implementing the proposed 19 rates can result in unfavourable 20 implications on the schedule and costs 21 associated with the infrastructure being 22 designed and on the settlement and 23 metering functions. For these reasons, 24 the implementation issues are relevant in 25 our view." 26 Thank you. 27 THE PRESIDING MEMBER: We had better put that 28 in as an exhibit so that it will form part of the 78 1 record. I guess it's A-2, is it? 2 MS LEA: It can be made an exhibit if you 3 wish, sir. 4 I'm not sure that because I received it in the 5 written form, that it has to be made an exhibit, but 6 certainly we will get a clean copy of it -- do we have a 7 clean -- yes, we can provide a clean copy of it and make 8 it an exhibit. 9 While we are on the question of exhibits, Mr. 10 Boyce assisted me earlier with respect to the exhibit 11 list that the Ontario Networks Company has developed for 12 this hearing -- and I'm pleased to receive his 13 assistance -- and he suggests that the draft issues list 14 be actually Exhibit G, Tab 1, Schedule 1. 15 So I think, then, that this statement, if you 16 wish it filed as an exhibit, would be Exhibit G, Tab 2. 17 Thank you. 18 THE PRESIDING MEMBER: Okay. Now, having had 19 Board staff represent a view of the IMO, who else would 20 like to make a submission in support of implementation 21 (off mic...)? Anyone? 22 Okay. Then, I guess we are up to the 23 applicant. 24 MR. ROGERS: I wish Mr. Shallaby had the 25 courage to come and make those submissions in person, 26 but... 27 --- Laughter 28 MS LEA: Well, I'm sure he's attempting to 79 1 reduce costs. I'm sure he has the best intentions. 2 --- Laughter 3 MS LEA: Anyway, and you are the brilliant 4 oral advocate I want, Mr. Rogers. 5 --- Laughter 6 MR. ROGERS: My position is a brief one, 7 again, Mr. Chairman. 8 The concern that I have is one of priorities 9 and efficient use of the Board's time with issues that 10 it can decide in this case, in thinking ahead to when 11 you are ready for reasons for decision what you will do 12 with the information that will be developed through this 13 discussion about hypothetical situations. 14 We believe that there is a need for some 15 certainty around market rules, transmission system code 16 and other related regulations and codes before you can 17 have a meaningful final determination of these issues 18 about implementation and, simply, we simply question the 19 utility in having these speculative discussions, however 20 interesting they will be, based on hypothetical 21 assumptions, during this hearing, when we have so much 22 other important work to do, when the assumptions may 23 turn out not to be correct at the end of the day. 24 So it's our submission that it's premature to 25 deal with this issue, at this time, in this hearing; 26 although we recognize that it's important and has to be 27 done at some time, we just -- none of us are equipped to 28 deal with it properly, yet. 80 1 Those are our submissions. 2 THE PRESIDING MEMBER: Thank you. 3 Just a question there. There seems to be also 4 a question of timing implicit in your submission. 5 What would the applicant do if, for example, 6 the transmission system code was issued as a draft, or 7 even a final, document, say, before this proceeding had 8 either commenced or during that? What would be your 9 view as to how you would adapt some of your evidence, et 10 cetera, to that type of event? I use that one as an 11 example. 12 MR. ROGERS: Can I just take some advice? 13 THE PRESIDING MEMBER: Yes. 14 --- Pause 15 MR. ROGERS: Can I answer it this way, Dr. 16 Higgin, that, first of all, I understand that my client 17 is a stakeholder and a participant in those discussions 18 and, hence, will have some input into what the result 19 will be. But if there is a final result available, 20 prior to the close of this case, my client, I think, 21 would intend to come forward and revise its submission 22 to accommodate that certainty. 23 THE PRESIDING MEMBER: Your submission is 24 that, until that point, it's speculative to change the 25 details or to try and bring forward detail on some of 26 these issues? 27 MR. ROGERS: Precisely. 28 THE PRESIDING MEMBER: That's your -- 81 1 MR. ROGERS: That's our submission. 2 MS LEA: I don't know if I can be of 3 assistance, Mr. Chairman. 4 I'm informed by Board staff that, in terms of 5 timing, I think the draft code may be sent to 6 stakeholders for comment, in the very early part of 7 December was my understanding, in terms of the timing. 8 So we are not far away from sending out the initial 9 code. 10 I think I might also draw parties' attention 11 to the statement by the applicant, in Exhibit D, Tab 13, 12 Schedule 1, page 2, lines 7 through 10 -- that's Exhibit 13 D, Tab 13, Schedule 1, page 2 -- in which the applicant 14 points out that there has been a code, of some nature, 15 in place for some time, so that the development of a 16 transmission system code may be a feasible undertaking 17 within the time frame of this proceeding, in any event, 18 even if it starts in early December. 19 THE PRESIDING MEMBER: Does anyone have any 20 information on perhaps the, quotes, final draft of the 21 market rules? Does anybody have any timing information 22 regarding those? 23 --- Pause 24 THE PRESIDING MEMBER: The only one the Board 25 is directly involved with is the transmission one (off 26 mic...) 27 So we will take Mr. Budd's reply then, please. 28 MR. BUDD: Thank you, sir. 82 1 It may well be the case that there's a 2 movement toward getting the market rules in close to 3 final form in the spring and, hopefully, that will leave 4 enough time for parties to be able to understand them. 5 So that won't wait until the beginning of 6 November, you can understand. That's my understanding, 7 as well. 8 With respect to timing, just generally, I 9 think, if I may, not to reply for the applicant, but my 10 understanding of what an applicant would do, in that 11 kind of circumstance, is it may choose to file updates; 12 it may choose to supplement its evidence, with consent 13 of the parties or at a direction of Board; and it may, 14 in fact, choose to recall witnesses, depending on how 15 that may go. 16 So, I mean, we possibly have three months 17 prior to the close of the oil hearing. A number of 18 things can happen in that time frame. My clients 19 recognize that. And we assure the Board we intend to be 20 fully co-operative where we can. 21 So, just in terms of time, I would say to the 22 Board that I think there is time enough to be able to 23 deal with this issue, in reply to my friend Mr. Rogers. 24 Thank you. 25 THE PRESIDING MEMBER: Thank you. 26 I think that's, okay, enough on that issue, 27 Item No. 4. 28 Moving on, now, to Item No. 5: First Nations 83 1 special interest. And the reference here is Exhibit B, 2 Tab 6. 3 I guess Ms Godby is coming forward to address 4 that as to performance. 5 MS GODBY: Thank you, Mr. Chair. 6 I do have a suggestion. While I would dearly 7 love to make to my submissions, at this point, I 8 recognize that I may, in fact, be the only that's 9 interested in them. So, out of consideration to my 10 colleagues, I have no objection to standing this one 11 down until the other matters are heard. But I'm in the 12 hands of the Board. 13 THE PRESIDING MEMBER: Well, would that help 14 you in -- depending how the timing goes, we may deal 15 with the other issues even as early as lunch. But if 16 that helps you, we will be happy to do that. 17 MS GODBY: I'm prepared to proceed now. So I 18 certainly... 19 THE PRESIDING MEMBER: We can wait, if you 20 would rather, until after lunch. 21 MS GODBY: Is that fine? 22 THE PRESIDING MEMBER: Yes, that's fine. 23 We will move on, then, to the next issue, to 24 give you time to (off mic...) and be more ready. 25 MR. ROGERS: Well, before lunch, if possible. 26 Right? 27 THE PRESIDING MEMBER: We will see. 28 MS GODBY: Mr. Chair, I'm certainly prepared 84 1 to proceed now. It's simply that others -- I understand 2 that, and appreciate, in fact, that the other people 3 here have an interest, I'm sure, in the other issues 4 that are raised and not necessarily in the issue that 5 I'm raising, so. 6 THE PRESIDING MEMBER: All right. 7 Number 6, then: the treatments of low voltage 8 shared facilities. That's Exhibit D, Tab 9, of the 9 evidence. 10 I understand -- I stand, again, to be 11 corrected -- that MEA may be wanting to take lead on 12 this one. 13 MS FRIEDMAN: Yes, that's correct. 14 Kelly Friedman, for the MEA. 15 The matter of low voltage shared facilities is 16 relatively -- is a relatively simple one, to my delight. 17 Some lines, in Ontario, that operate at less 18 than 50 kV, actually function as transmission 19 facilities, either transporting bulk power to an LDC or 20 connecting direct customers at their functionally 21 transmission connection facilities. 22 The status quo is that in excess of 100 MEWs 23 are supplied by these low voltage facilities, these 24 arrangements that resulted from past decisions to 25 connect these MEUs in a way that minimized costs to the 26 Ontario Power Pool. Therefore, the costs of these 27 facilities have traditionally been recovered by charging 28 all MEUs and those customers connected to these 85 1 facilities through transmission rates. 2 The Applicant has framed the issue regarding 3 low voltage shared facilities for the purpose of 4 stakeholder consultation as follows. 5 Should OHSC's low voltage facilities, 6 currently used to supply some large users and some MEUs, 7 be treated as transmission facilities and their costs 8 recovered through a transmission rate, or who should pay 9 for the shared low voltage facilities and on what basis? 10 I propose to very briefly cover how several 11 different parties have proposed to answer those 12 questions by looking at the Market Design Committee's 13 recommendation, what the stakeholders' consultation 14 revealed, as summarized by the Applicant, what the 15 Applicant has indeed said in its evidence on this issue, 16 and what the Applicant did in its application and the 17 rationale, as I understand it, for its position. 18 The Market Design Committee final report, at 19 page 4-4, and this is recommendation 4-2 of the Market 20 Design Committee, stated as follows: 21 "We recommend that the current cost 22 recovery method be continued for those 23 low-voltage existing facilities that 24 function as transmission, but that 25 regulations allow affected LDCs to be 26 exempted from a dual licensing 27 requirement solely on that account. 28 However, we also recommend that in the 86 1 future, all the costs of new transmission 2 connection facilities be allocated on the 3 principle of `user pays'." 4 In Exhibit B, Tab 9, of its materials, 5 specifically at Schedule 7, page 43 of 91, the Applicant 6 summarized the stakeholder input on this issue as 7 follows: 8 "(1) There is a clear preference on the 9 part of some stakeholders to pay any 10 shared low voltage related charges as 11 part of the transmission service. 12 However, some other stakeholders have 13 noted a preference for specific charges 14 or other approaches; 15 (2) Stakeholders assign the existing 16 level of cost unbundling to be 17 appropriate; 18 (3) Many stakeholders, though not all, 19 expressed the desire for the status quo 20 for cost pooling of existing shared low 21 voltage facilities;" (As read) 22 The Applicant then went on to say, and I quote 23 again: 24 "Impact of the year 2000 transmission 25 rates to be provided later." (As read) 26 As I understand it, no impact analysis has 27 ever been provided. 28 What the Applicant did in its application with 87 1 respect to low voltage shared facilities is interesting. 2 It stated -- and this reference is at Exhibit D, Tab 9, 3 Schedule 1, page 3 -- OHNC has stated in its application 4 that this issue: 5 "...will not be resolved in the context 6 of the transmission cost allocation and 7 rate design proposal for the year 2000." 8 (As read) 9 Presumably, then, implicit in that is that it 10 will be dealt with as part of the distribution rate 11 hearing. If I understand, the reason for this is 12 because there is no revenue requirement attached to 13 these facilities. 14 I say that the reasoning of the Applicant is 15 flawed on several accounts. Firstly, the Applicant says 16 that the issue will not be resolved here, and that is 17 who should pay for these facilities will not be 18 resolved. But by refusing to address the issue in the 19 context of these proceedings, and saying that it is 20 exclusively a distribution issue, the Applicant has 21 effectively imposed a resolution and that is that only 22 those connected to these facilities will ultimately pay 23 for them. 24 Specifically addressing the position that 25 since there is no revenue requirement attached to these 26 facilities this issue doesn't belong in this proceeding, 27 I would like to point out what the Board said in its 28 Revenue Requirements Order of March 15, 1999. This 88 1 reference is at Appendix C to that order of March 15 at 2 page 3. 3 The Board made the following finding, and I 4 quote: 5 "The Board accepts that OHSC's 6 designation of assets of either 7 transmission or distribution is 8 consistent with the definition of the two 9 functions in the legislation using the 10 50 kV dividing point. For the purpose of 11 determining revenue requirements for the 12 years 1990, 1999 and 2000, the Board 13 finds the designation of assets set forth 14 by OHSC to be reasonable. The Board 15 notes stakeholder concerns regarding the 16 application of the 50 kV criteria and the 17 transfer of transmission assets to 18 distribution. The Board expects OHSC to 19 file evidence concerning the 20 appropriateness of the asset assignment 21 in OHSC's next rate application." 22 (As read) 23 With great respect, this directive from the 24 Board cannot mean that a change to the status quo can 25 occur -- that is, the current parties who pay for these 26 facilities will not be paying for them any longer -- and 27 that any analysis or argument with respect to this issue 28 should happen after the horse is let out of the barn -- 89 1 that is that OHSC can file evidence at a following rate 2 hearing to justify continuing to let the horse run free; 3 in other words, let's change the status quo and then 4 debate the issue afterwards. 5 I would like to turn to what OHNC said in even 6 its own evidence on this point, and this reference is at 7 Exhibit B, Tab 9, Schedule 7, at page 42 of 91. OHNC 8 said there: 9 "The revenue requirement for the shared 10 LV facilities is estimated to be about 11 $44.8 M (based on preliminary analysis of 12 OHSC Distribution cost-of-service), and 13 this portion of OHSC Distribution charges 14 will be collected through OEB-approved 15 transmission rates." 16 Of course the Applicant's application, in 17 fact, doesn't propose at all that they be collected 18 through transmission rates. 19 In closing, the MEA's position is that the 20 Applicant's position on this issue cuts against, first, 21 the status quo; and, secondly, what it itself said it 22 would do -- that is, provide an impact analysis and 23 collect through transmission rates -- what the Market 24 Design Committee recommended, and what it appears the 25 stakeholders express in the stakeholder consultation. 26 The MEA submits that OHNC ought to be required 27 to justify this position in light of all these 28 contradictions in this hearing. 90 1 Those are my submissions. 2 MEMBER VLAHOS: Ms Friedman, if I may, if the 3 Applicant were to justify its position, what does that 4 mean? Does that mean beyond argument? Does it mean 5 additional evidence? What, in your view, would be a 6 fair justification? 7 MS FRIEDMAN: Firstly, the impact analysis 8 that it said it would do should be provided. 9 I don't contemplate that an extensive amount 10 of work would be done. What I do contemplate, and the 11 Applicant I'm sure will speak to this, is that the 12 numbers are available. For example, we see the 13 $45 million figure that has already been referenced, and 14 we do know that it would be the medium and small 15 utilities that would be impacted for the most part by 16 the costing allocated to them and not shared with other 17 LDCs as is the status quo. 18 So we imagine that we can get some information 19 by way of interrogatories of this impact, so that we can 20 understand that this decision is a reasoned one and not 21 a change to the status quo just because it is convenient 22 to call these distribution facilities. 23 So I don't contemplate that there will be 24 extensive evidence. I will have to take instructions on 25 it. My client has not yet decided whether they would 26 need to retain a consultant to provide evidence on this 27 issue, but that would depend on the results of the 28 interrogatories. 91 1 MEMBER VLAHOS: From the Applicant's 2 perspective by this extensive evidence do you mean in 3 addition to interrogatories or responses to 4 interrogatories that will be filed? Do you see that the 5 Applicant would need to file additional evidence apart 6 from the process of interrogatories? 7 MS FRIEDMAN: The MEA's position is that 8 through the interrogatories the Applicant ought to be 9 able to do that. In the evidence there are several 10 tables of different options and what the impact would be 11 of taking various positions on each of the issues. What 12 is missing from there is this issue. In fact, it has 13 just been taken out and we don't know what the impact 14 would be. 15 I believe Mr. White will deal with this to 16 some degree, but just as an example, there are several 17 options that indicate that the smaller LDCs will, in 18 fact, get a reduction in transmission rates to 8 per 19 cent, for approximately 8 per cent. 20 But if we consider this $45 million bill will 21 be foisted on those same parties, in fact in net they 22 may have an increase of their overall rates, but we 23 don't see any of that in the numbers provided by the 24 Applicant. The MEA does contemplate that they could 25 answer our concerns by way of interrogatories. It would 26 be extensive evidence. It would be revisions of some of 27 the numbers. 28 MEMBER VLAHOS: Thank you. 92 1 THE PRESIDING MEMBER: Who else would like to 2 follow in support. Mr. White. 3 MR. WHITE: I will try and keep my comments as 4 brief as I can, but I am prepared to answer specific 5 questions on examples of the type of implications of 6 what I am after, as well as the -- in other words, the 7 practical aspect as well as the conceptual aspects. 8 It was ECMI who raised some concerns during 9 the Ontario Hydro Energy Services Company hearing and we 10 were pleased to see the Board's response. It's our view 11 that going ahead with this change in allocation of the 12 low voltage distribution facilities and the similar 13 treatment of high voltage distribution street assets, as 14 to moving them to a distribution system company asset 15 and not addressing them in the transmission hearing 16 could result in a disproportionate impact on smaller 17 utilities or on lucky utilities, those that don't happen 18 to have a transformer station located within their 19 boundaries or, in fact, co-operative utilities who have 20 participated with Ontario Hydro in allowing and 21 encouraging the deferral of the construction of 22 transformer stations through incurring some costs of 23 their own or, in fact, accepting load through alternate 24 delivery points. 25 Ultimately, this gets to the functional nature 26 of the assets. If the assets are utilized instead of a 27 transmission facility or a high voltage transformation 28 facility, then it is our view that they probably belong 93 1 in that pool and to not consider them that way ignores 2 the fact that Ontario Hydro in operating the network 3 system may order customers to move load from what is 4 clearly in this proposal designated as a transmission 5 facility or a transformation facility, to a facility 6 which they would have to pay a premium cost for the 7 utilization of through the addition of a distribution 8 charge. 9 There is a need for Ontario Hydro to have that 10 latitude because sometimes it's the cheapest, most 11 cost-effective way to utilize the system, rather than to 12 building it to, yes, every town in the province. That's 13 not cost effective and that's not what we are saying. 14 So I think clearly this is a transition issue. 15 Assets previously in the transmission or transformation 16 pool, there should be some way to address that there. 17 If it isn't addressed, then maybe there will be no way 18 for Ontario Hydro Networks Corporation to permit -- I'm 19 sorry, to participate in pursuing cost-effective 20 alternatives to supply, rather than building additional 21 transmission facilities. 22 If a subtransmission line or a high-voltage DS 23 is a more cost-effective alternative, then we would want 24 to see that alternative within the scope, costing and 25 pricing as applied by OHNC in their application of 26 whatever rates they will charge to the new system. 27 I think in conclusion, this is clearly an 28 interface issue, maybe in some ways as profound or more 94 1 profound than those raised by Mr. Budd. I would be 2 concerned that if the Board does not address this issue 3 now they may close the door on the ability to address it 4 as a transmission issue. That is why ECMI introduced 5 that on behalf of our clients in the revenue requirement 6 hearing. Thank you. 7 THE PRESIDING MEMBER: We will proceed. If 8 anybody else would like now to make a submission 9 regarding this issue. 10 MS GODBY: I would just note, Mr. Chair, that 11 the First Nations would support the inclusion of this 12 issue on this list. Thank you. 13 THE PRESIDING MEMBER: For the Applicant then. 14 MR. ROGERS: Thank you, Mr. Chairman. 15 I have listened carefully to what has been 16 said. I think that we understand a little better what 17 is being posed now. I would like to ask the Board's 18 indulgence. I would like to take a little advice on 19 this before I give you the response of the company. 20 THE PRESIDING MEMBER: Yes. We are having a 21 little bit of difficulty with the revenue requirements 22 issue that is in the approved revenue requirement for 23 distribution for the current rate year and the 24 subsequent, separating that from the proposal here which 25 is to move these assets from the revenue requirement 26 into the transmission. We are having a little bit of 27 difficulty, how to do that in this proceeding, first of 28 all, versus the subsequent one. We are having some 95 1 difficulty ourselves. 2 MR. ROGERS: So were we. 3 THE PRESIDING MEMBER: Since I don't know if 4 you have anything you would like to add at this point, 5 Ms Friedman, or would you think that you would wait to 6 see what Mr. Rogers has to say on the issue and then 7 come back? 8 MS FRIEDMAN: Certainly. 9 THE PRESIDING MEMBER: Yes. I think that may 10 be the best. 11 Board staff, do you have anything to add on 12 this at the moment? 13 MS LEA: No, thank you. 14 THE PRESIDING MEMBER: So we will do that, if 15 you would like to take some advice and right after the 16 break we will come back to that issue. 17 MR. ROGERS: To try and persuade us, if you 18 can. 19 THE PRESIDING MEMBER: Mr. White, did you have 20 anything to add at the moment? 21 MR. WHITE: No, thank you. 22 THE PRESIDING MEMBER: We will do that. We 23 are having some difficulty. 24 We will move on to No. 7 for now, the new cost 25 of service study. I understand that IPPSO are going to 26 lead on this one. 27 MR. OSBALDESTON: Yes, sir. 28 THE PRESIDING MEMBER: Please go ahead. 96 1 MR. OSBALDESTON: Sir, it's IPPSO's position 2 that OHNC should be required to prepare a comprehensive 3 cost of service study. 4 In our view, this is an issue of rate design 5 procedure. In IPPSO's submission, the Board cannot 6 embark on this new ratemaking procedure based on 7 information prepared in the context of an old rate 8 structure. 9 I can give you a couple of examples. What 10 will be under review are rates and rate design 11 specifically, and particularly, as far as IPPSO is 12 concerned, net load billing versus gross load billing. 13 The impact assessment of various rate design 14 methods has been evaluated by OHNC over the period of 15 2000 to 2008 in its submission to justify its position 16 on the net load billing issue. 17 OHNC has assumed that their transmission costs 18 will remain constant throughout this period. But 19 whether transmissions costs, and specifically facility 20 equipment and installation costs to handle load 21 increase, remain constant over this period with varying 22 degrees of load growth and embedded generation is 23 clearly relevant to the impact assessment of net load 24 billing versus gross load billing or other rate design 25 methods and therefore impact the decision respecting 26 these methods. But to test this you need a 27 comprehensive study which is prepared in the context of 28 this rate application. 97 1 Rate design methodology has longer 2 implications than the short year 2000 application and 3 needs to be debated now before the opening of the 4 marketplace. This is really a theme that would, I 5 think, run through all of his submissions in support of 6 the contested issues. 7 That signal they are being sent out now and 8 that precedents are going to be sent out now which are 9 very important and this isn't the time to narrow issues 10 or foreclose discussion on certain issues or defer them, 11 but it is a time for a full hearing into what are 12 fundamental matters. 13 Just to take an example, in IPPSO's submission 14 if you are only concerned about the year 2000 15 transmission cost and rate design there would be no 16 adverse impact on net load billing shown for the year 17 2000 alone. 18 But clearly net load billing is a lot, in 19 which case IPPSO wouldn't have a problem. But that is 20 obviously not the position that OHNC is taking, so 21 IPPSO -- it needs to look at these projections and know 22 what is behind them and, in that regard, require the 23 comprehensive study. 24 In the alternative, sir, at a minimum IPPSO 25 needs to be able to make interrogatories on the 26 information which is contained in the application 27 respecting transmission costs for the period of 2000 and 28 2008. Without the ability to do that, at a minimum, we 98 1 will not be able to illustrate the potential benefits of 2 embedded generation which is encouraged by net load 3 billing. 4 Exhibit C, Tabs 2, 5 and 8, for example, 5 contain information of transmission costs and should be 6 open to interrogatories in this regard. If it requires 7 the development of new data by OHNC, then OHNC should be 8 required in response to such interrogatories to produce 9 such data. 10 I think what goes along with this alternative 11 argument, the issue would still be important to keep on 12 the list in the sense that IPPSO would want to argue at 13 the hearing that OHNC should be required to produce a 14 comprehensive study, if this Board decides that it 15 shouldn't be done in the context of this hearing, in the 16 context of the second hearing. 17 If I could just anticipate a couple of 18 arguments against. 19 I know, for example, on Item 1, should 20 generators pay for existing transmission connections, we 21 heard this morning that the allocation on this 22 particular item had increased tenfold this morning, and 23 that points to the kind of thing where we really do need 24 some certainty to be able to proceed. 25 On that item too, I know the argument was 26 made, well, it's a small item, it doesn't matter. I 27 might anticipate the argument can come back, well, this 28 one I am talking about now, No. 7 is a big item. I 99 1 think it really points to the need, if that is the case 2 then, it needs to be dealt with now. 3 If it is a big undertaking that doesn't mean 4 it's an unreasonable one. In fact, on the contrary, in 5 IPPSO's submission it is fundamental to the proceeding 6 before this Board. 7 No further submissions, sir. 8 THE PRESIDING MEMBER: Thank you. 9 Could you just clarify what you think should 10 be the components of a "new cost of service study"? 11 What do you think that should encompass? For example, 12 cost allocation? Rate design? What should it 13 encompass? 14 MR. OSBALDESTON: Sir, I have to take some 15 advice on that and get back to the Board. I need to get 16 some instruction on what IPPSO's position would be on 17 that. 18 THE PRESIDING MEMBER: The other submission 19 related specifically to -- as I took it and maybe you 20 can clarify this for me -- the question of 21 interrogatories related to the Agra Monenco Study under 22 the net versus the gross load billing. Exhibit D, 23 Tab 5. 24 I wasn't quite clear on what your submission 25 was, with respect, asking additional projections, and so 26 on, relative to that. Maybe you could just clarify for 27 me, if you could. 28 Because that is Issue No. 3, and I assume that 100 1 the study reports the Applicant's evidence, and so on, 2 and is open to questions. So I'm not quite clear on 3 your submission on that aspect. 4 Did you hear what I -- 5 MR. WONG: It's Harold Wong with Energylink 6 Power Corporation. 7 To assist IPPSO in the answering of that 8 question, the Monenco Agra Study concludes that certain 9 levels of embedded generation projects could be 10 developed in the Province of Ontario. 11 THE PRESIDING MEMBER: Has assumptions that 12 are part of the study, right? 13 MR. WONG: Indeed. Where those projects may 14 be located is pertinent to how the benefits of embedded 15 generation may be linked into transmission rates. 16 So the question as to how much embedded 17 generation, what type of embedded generation, where they 18 are located, in fact part of OHNC's analysis, impact 19 assessment of net versus gross load, and IPPSO and 20 Energylink would certainly like the opportunity to ask 21 questions on those numbers as an effort to develop our 22 own scenario for the allocation of projects under 23 different customer groups for example, the implications 24 that may have on capital costs of those customer groups, 25 avenues that therefore would be required from those 26 groups. 27 So it speaks to rate shifting. 28 THE PRESIDING MEMBER: Okay. I guess I'm 101 1 finding some difficulty relating that to the first part 2 of the submission, which is the need for a new cost of 3 service study. That was all. I was just trying to -- 4 how the two related. 5 But you have asked to come back to it so maybe 6 you could address that, because I think it is within 7 normal bounds fair game to ask questions regarding the 8 study in Exhibit D, Tab 5 filed as part of the evidence 9 and to ask questions. It's fair game to do that. 10 So we will come back to it in that regard. 11 The question, then, is how best to proceed on 12 this issue, whether or not your new submission will 13 likely impact on what Mr. Rogers has to say. I'm sure 14 that will be -- I think we better just defer it until -- 15 would you agree? 16 MR. ROGERS: That might be the way to proceed. 17 I'm quite happy to -- I have very brief comments to make 18 about this and it may be I won't have to say anything 19 further. 20 Why don't I set our position now and, if 21 necessary, perhaps you could give me the right to reply 22 to anything new. 23 THE PRESIDING MEMBER: Right. Well, let's 24 collect any other views that would like to first and 25 then we don't have to go around again with respect to 26 anybody who is supporting IPPSO's view, particularly on 27 the new cost of service study as per Item 7. Anybody 28 else who wishes to make a submission? 102 1 No? Okay, then. 2 Mr. Rogers, if you would like to make your 3 points and then we will take it from there. 4 MR. ROGERS: Thank you, Dr. Higgin. 5 The request is for a new cost of service 6 study. That is what we thought we were being asked to 7 do. We oppose that very strenuously. 8 The revenue requirement for this proceeding 9 was determined last spring. Cost of service study, as I 10 understand the cost of service study, goes to the 11 revenue requirement, not cost allocation. We submit 12 this is not relevant to this proceeding. 13 In any event, it is a very big undertaking, as 14 the Board knows, to engage in such a cost of service of 15 study. If one is appropriate, it will be appropriate in 16 the next full rate hearing when we are seeking to adjust 17 the revenue requirements. 18 Those are my submissions. 19 MEMBER VLAHOS: Mr. Rogers, I guess I have a 20 question about clarification from anybody. When we talk 21 about cost of service study, do we mean cost allocation 22 study or do we mean cost of service study as we know it 23 in the gas industry? 24 I will tell you why I am asking this. To me a 25 cost of service study, and I guess I have been 26 influenced over the years on gas regulation. I came to 27 the PBR and everybody was talking about cost of service 28 study and they referred to a cost allocation study. 103 1 I was going to ask IPPSO, you know, what is 2 the understanding? Is that a cost allocation study they 3 are talking about? If that's the case, if they question 4 the adequacy of the allocation study that has been 5 filed, it would seem to me that it would be fair to ask 6 for interrogatories about the allocation study and, 7 therefore, they can argue that it is adequate or not 8 adequate. 9 MR. ROGERS: I agree. 10 MEMBER VLAHOS: So I guess a lot of that 11 hinges on IPPSO's responses as to what do they mean by 12 cost of service study? Is it a revenue requirement study 13 or is it simply a cost allocation study? 14 THE PRESIDING MEMBER: I think we are going to 15 take advice on that and come back to us on it. That's 16 another role expressed in terms of the issue as we see 17 it. Okay? We will take your submission on that. 18 We are up to now the point that we have 19 deferred that and we need now to come back to item No. 20 5, which is before the lunch time, so Ms Godby, would 21 you come and make your submissions. 22 MS GODBY: Thank you, Mr. Chair. 23 Let me start by saying first of all that the 24 First Nations don't expect or want for that matter the 25 Board to make decisions regarding the existence or the 26 interference or the infringement of aboriginal and 27 treaty rights in the context of this proceeding. We 28 understand that that is not an appropriate subject 104 1 matter for this proceeding. 2 What we do want to do, however, is ensure that 3 any decisions that are made by the Board in this 4 proceeding won't prejudice the First Nations in 5 asserting such claims at a later point. 6 It's our position that the evidence will show 7 that First Nations have historically been prejudiced and 8 continue to be prejudiced by the installation and 9 construction of transmission and generation facilities. 10 These facilities have primarily interfered with things 11 like hunting, fishing, gathering rights. 12 Now, in the context of determining what an 13 appropriate transmission rate structure is and other 14 charges, we would assert that the First Nation should 15 have the opportunity to lead evidence with respect to, I 16 guess, what I will call their special circumstances or 17 evidence relating to prejudices they have suffered or 18 the infringement of treaty rights, environmental 19 concerns, these kinds of things. 20 The Board, in our respectful submission, has a 21 jurisdiction to consider a special rate structure or a 22 flexible rate structure. In considering that, they can 23 certainly take into account evidence lead by the First 24 Nations with respect to their, as I call them, special 25 circumstances. 26 This is not something that has been pulled out 27 of the air by our clients. In fact, at the consultation 28 or the stakeholders consultation versus the round table 105 1 discussion, this was something -- this issue was 2 addressed by the First Nations at virtually every single 3 round table. 4 If I can just pull one example out of the 5 book, I would like to do that out of the exhibit that 6 has been filed. The reference is Exhibit B, tab 6, 7 schedule 1. It's the first report that has been filed. 8 If we go to page 2 of 9, the last paragraph on 9 the page, under the summary of general issues raised, 10 the report cites: 11 "Recognition of the status of First 12 Nations as the original peoples of this 13 land and the recognition of issues such 14 as land claims, compensation for past 15 grievances, environmental protection, the 16 provision of reliable and affordable 17 energy of First Nation communities were 18 identified as fundamental issues that 19 must be addressed. The participant 20 stressed that these issues must be 21 addressed by the government in a 22 meaningful way in rates design. This 23 might mean establishing special rates for 24 First Nations and discounting rates for 25 First Nations including removing the tax 26 recovery portion built into the rate in 27 recognition of the fact that First 28 Nations are not legally required to pay 106 1 all taxes." 2 Now, you have to appreciate some of the 3 comments are made by First Nations who are not 4 particularly sophisticated in the issues and don't have 5 a lot of technical expertise or knowledge, but the 6 concept of a special rate design in order to take into 7 account some of the historical prejudices that have been 8 suffered is very, very clear and has been made a point 9 at every single round table. 10 Now, I don't purport and I won't go through 11 each and every round table, but I can assure the Board 12 that the reference to the infringement of aboriginal 13 treaty rights, et cetera, the reference comes up time 14 and time again at these round table discussions. 15 On a final note, I recognize and the clients 16 recognize surely that the Board and the applicant and 17 the participants here, there is limited time and limited 18 resources, but the fact is First Nations' interest can't 19 and shouldn't be ignored simply because they are 20 complicated, they are contentious and they are time 21 consuming. 22 You know we appreciate that those are all 23 arguments that might be brought forward and think well, 24 you know, this isn't an appropriate place to determine 25 these issues. Well, in fact the First Nations would 26 submit that this is an appropriate place given the 27 Board's jurisdiction and mandate in fact and ability to 28 develop a flexible rate structure. 107 1 Those are my submissions, unless the Board has 2 any questions. 3 THE PRESIDING MEMBER: Just one question, just 4 a matter of information. Are the First Nations' 5 transmission cost customers as now defined or proposed 6 by Ontario Hydro networks in this application? 7 MS GODBY: Yes, I believe they are. 8 THE PRESIDING MEMBER: Some of your locations 9 are transmissions to customers as you see them as per 10 that definition. 11 MS GODBY: Yes. 12 THE PRESIDING MEMBER: Thank you. That was 13 the question. 14 MEMBER VLAHOS: Ms Godby, I have a couple of 15 questions. 16 The evidence that is contemplated to be filed 17 by First Nations, it goes to the special circumstances 18 that you described, in support of a special rate 19 structure. 20 Are you with me? 21 MS GODBY: Yes. 22 MEMBER VLAHOS: Okay. Is it contemplated 23 there will be any evidence filed, in terms of 24 quantifying what this special rate ought to be -- for 25 example, 5 per cent less -- with appropriate evidence to 26 justify that level? 27 I'm trying to understand. 28 Is it only to the special circumstances? Or 108 1 is it also a quantification of what that rate ought to 2 be? 3 MS GODBY: I would anticipate that if a 4 proposal were put forth for a special rate design, we 5 would also put forth evidence which would go to the 6 quantification of that. 7 MEMBER VLAHOS: Okay. And my second question 8 is: On the first issue, on the special circumstances, 9 why do you feel that evidence has to be adduced, as 10 opposed to being part of the argument? 11 MS GODBY: Why do I feel that evidence has to 12 be adduced, as opposed to being part of the argument? 13 MEMBER VLAHOS: Yes. 14 MS GODBY: I think -- 15 MEMBER VLAHOS: Argument in support of a 16 special rate, the quantification part of the evidence. 17 MS GODBY: I think that it would be helpful 18 for the Board to hear evidence from First Nations, with 19 respect to the extent, and, particularly, if -- the 20 extent of the prejudice -- and, particularly, if there 21 is going to be some, as you suggested, some 22 quantification of that damage, and then that's 23 translated into, you know, a justification for a 24 potentially lower rate, I think that it would be helpful 25 for the Board to consider that in evidence. 26 MEMBER VLAHOS: Thank you. 27 THE PRESIDING MEMBER: Any other parties wish 28 to speak in support of this matter? 109 1 Then, Mr. Rogers. 2 MR. ROGERS: Thank you, Dr. Higgin. 3 First of all, I believe that no First Nation 4 community is directly connected to transmission. They 5 are either fed through OHNC distribution system or 6 through remote communities supply, and I do not believe 7 there are any First Nations who are direct customers of 8 the transmission system, but an estimate has got to 9 be -- perhaps over the noon hour if she could advise us 10 if I'm incorrect. I'm not aware of any. I would like 11 to know who it is if there is. 12 And if I'm correct in my belief, then, her 13 concerns, however legitimate they might be, are not 14 appropriate for this transmission rate hearing. There's 15 really nothing you can do, in this process, to address 16 her concerns. It's a distribution rate issue or a 17 government issue. 18 Ms Godby talks about transmission lines 19 crossing lands and interfering with honey and gathering 20 rights and so on. I don't mean to try to ignore the 21 issue, because it's complicated, but I would think that 22 that concern is addressed through the process by which 23 these rights-of-way are acquired. My understanding is 24 there are negotiations, there is compensation and 25 consideration paid for these rights-of-way. It's 26 outside this Board's jurisdiction. 27 And so, it's my submission that it's not a 28 transmission issue -- however important may be -- and 110 1 it's not something that you have any jurisdiction to do 2 anything about, in this hearing, and so it ought not to 3 be on the issues list. 4 MEMBER VLAHOS: I'm sorry, Mr. Rogers. We 5 don't have the jurisdiction to authorize lower rates or 6 to create a class, a rate class? 7 MR. ROGERS: Well, I think, in this 8 proceeding, we are dealing with the transmission rates, 9 and I would submit to you that you could alter the 10 transmission rates for transmission customers, but 11 there's not much you can do to alter rates for 12 distribution customers, in this proceeding. 13 MEMBER VLAHOS: I understand. That was your 14 first point. 15 MR. ROGERS: Yes. 16 MEMBER VLAHOS: But I thought you questioned 17 the authority of the Board to create any class of 18 customers attracting a different rate? 19 MR. ROGERS: Oh, no, no. Not at all. Oh, no, 20 no, no. 21 MEMBER VLAHOS: I'm sorry. 22 MR. ROGERS: I agree that that's your 23 jurisdiction. 24 THE PRESIDING MEMBER: Ms Godby, could you 25 address Mr. Rogers' points, and maybe also ask this 26 question -- I asked this question, whether or not this 27 is, again, if you are not -- and that assumption I don't 28 make; it's not my assumption -- transmission customers, 111 1 First Nations, the question of revenue requirement, 2 which relates to all of the costs of designing, 3 developing, maintaining transmission systems which, of 4 course, then would speak to the issues around 5 compensation and all those things, it would be a revenue 6 requirement proceeding that needs to address the 7 question of those issues relative to the issues here, 8 which are transmission cost allocation and rate design. 9 MS GODBY: If I can speak to the issue of 10 whether or not First Nations are transmission customers. 11 I didn't mean to misstate the facts. In fact, there are 12 three First Nations currently in the north that are 13 moving towards that, as we speak, and there are others 14 that are considering it. And it's also relevant, I 15 would note, to the extent that First Nations are 16 interested in getting involved in the generation aspect 17 of electricity in that the charges that are going to be 18 allocated to them are going to be impacted. 19 With respect to your second question, about 20 the revenue requirement and whether or not that's more 21 appropriately dealt with in another proceeding, I don't 22 know whether or not my comments on the first part of 23 that question dealt with that but perhaps this issue is 24 something that's important enough to warrant a separate 25 hearing or a separate proceeding. 26 THE PRESIDING MEMBER: Thank you. 27 We will reserve on that matter and we will now 28 look forward where we go from here. 112 1 There's a couple of items that we need to 2 complete and so, therefore, we will move on to the lunch 3 hour, I think, unless you people need some time to get 4 instructions and so on, and we will come back at 1:30. 5 Just for those that are -- the Board will make 6 a decision during that time whether or not we will be 7 able to, quote, surrender our decision on the issues 8 list this afternoon or whether we will have to proceed 9 by way of issuing the procedural order next week. 10 So we will consider that, based on what we 11 have heard, and we will let you know, at that time, how 12 we are going to proceed to complete this after the lunch 13 break. Okay? 14 So we will see everybody back at 1:30. Thank 15 you. 16 --- Luncheon recess at 1230 17 --- Upon resuming at 1334 18 THE PRESIDING MEMBER: Thank you. Please be 19 seated. 20 Just to recap where we are, we still have to 21 come back to the low voltage facilities issue and hear 22 from Mr. Rogers and Ms Friedman; and then we also have 23 to go back to the IPPSO issue on the qualification of 24 the cost of service study; and then, finally, as I 25 understand, there are some further submissions to 26 clarify a First Nations situation vis-a-vis 27 transmission. Those are items that may be still 28 outstanding. 113 1 Is there anything else that we need to 2 schedule in the next while? Okay. 3 So shall we start with the low voltage shared 4 facilities and Mr. Rogers? 5 MR. ROGERS: Thank you, Dr. Higgin, and 6 Members of the Board. 7 I had given some thought to the comments made 8 by my friend over the lunch hour and I think I can make 9 fairly brief submissions now that I have thought this 10 through. 11 These low voltage shared facilities are not 12 included in the transmission revenue requirements. 13 These facilities have been classified as transmission 14 when the Board sets the revenue requirements that will 15 apply to this proceeding. It doesn't mean that is 16 forever and ever, but -- distribution, I'm sorry, 17 distribution, when the Board set the revenue requirement 18 for this hearing. It is a distribution issue. 19 Let me just go back a little bit in time, 20 because my friend alluded to Exhibit 8 -- Exhibit B, 21 Tab 9, Schedule 7, in which, you will remember, she 22 talked about some options that were discussed whereby 23 OHSC said in this overhead that she referred to that the 24 distribution charges will be collected through only the 25 approved transmission rates. She mentioned that in her 26 argument to you. I believe that was discussed during 27 the consultation process back in August of 1999 as a 28 possible way of proceeding. 114 1 But, subsequently -- and my friend's client I 2 think knows this because they were a member of the 3 advisory committee of the advisory team that issued the 4 report that dealt with this very issue, sir, and this 5 report states, on page 2, that it was agreed that 6 because this aspect of the OHSC proposal was not 7 directly relevant to OHSC transmission revenue 8 requirement it can and should be dealt with in another 9 forum, e.g. as a distribution rate issue. This is the 10 very issue we are talking about now. 11 So the advisory committee recommended -- which 12 my friend's client was a member of -- recommended that 13 this be dealt with through the Board's distribution rate 14 process. This came out in September after the original 15 proposal was discussed internally in the consultation 16 process. This is found in the evidence as well at 17 Tab 8, Schedule 2. 18 Sir, the concern is, the problem is, of 19 course, that, this being a distribution issue and the 20 way this case has been framed, to change that 21 classification now means you would have to alter the 22 revenue requirement, it seems to me, because if you 23 suddenly say these are now going to be transmission 24 facilities, then the revenue requirements will change. 25 The Board has control over both the 26 transmission rates and the distribution rates. If there 27 is a concern by my friend that somehow this issue will 28 fall between the cracks, unless the Board can control 115 1 that and ensure that it does not, at some point you will 2 have a process to satisfy yourselves that the 3 distribution rates are fair and reasonable. At that 4 time, I expect that this issue will be raised. The 5 status quo now will be one of these options available 6 for the Board to apply at that time. 7 So there really isn't any change now. There 8 will be an ample opportunity in the fullness of time for 9 this issue to be developed during consideration of 10 distribution rates, and that is when it should be done, 11 with respect. The status quo will be an option at that 12 time, with other options, for the Board to consider. 13 Thank you. Those are my submissions. 14 THE PRESIDING MEMBER: Just a question for 15 clarification there. 16 We will perhaps hear from the MEA but, 17 basically, have you provided any information -- because 18 I'm not able to identify it -- about the impact of this 19 decision if it went either way? 20 You know, right now you have said it clearly, 21 it is a distribution in the distribution revenue 22 requirement not the transmission. The issue is if it 23 had gone the other way or if people thought to go the 24 other way, have you provided information about what the 25 impact would be either in aggregates or specific groups 26 of MEUs? 27 MR. ROGERS: The answer is, yes, we have done 28 it in aggregates, but not specifically -- 116 1 THE PRESIDING MEMBER: That is in the 2 evidence? 3 MR. ROGERS: Yes, it is. 4 THE PRESIDING MEMBER: Okay. I'm not going to 5 go any further except to say that that is filed in the 6 evidence and it is part of the evidence. 7 MR. ROGERS: Yes, sir. 8 THE PRESIDING MEMBER: Okay. Thank you. 9 MS FRIEDMAN: Could we get a reference for 10 that? Sorry to interrupt. 11 MR. ROGERS: Yes. Exhibit B, Tab 9, 12 Schedule 7, page 42. This is an estimate at the time, 13 it was in August, of $44.8 million based on the 14 preliminary analysis available at that time. 15 THE PRESIDING MEMBER: Yes. I had that down 16 from somewhere in an earlier statement that the 17 associated revenue requirement was $44 million. Right. 18 And you have made that reference I believe. 19 Okay. So at least we have an understanding of 20 where that is. 21 Then, the last -- Ms Friedman, if you now 22 would like to reply, or if you want to consider anything 23 a little further we will give you some more time to 24 consider that, or -- 25 MS FRIEDMAN: I'm happy to reply at this time. 26 THE PRESIDING MEMBER: Okay. 27 MS FRIEDMAN: With respect, I'm not sure that 28 what would be required -- if this issue was considered 117 1 and the Board felt fit to decide against the Applicant 2 on this issue that a change in classification or a 3 change in the revenue requirement is necessary. It is 4 perhaps trite, but new problems require creative 5 solutions and I'm not sure that we can't, through the 6 hearing process, propose different solutions. 7 It may in fact be that the answer is 8 co-operation between the Applicant and its affiliate in 9 terms of who collects the costs of these facilities and 10 who benefits for them. In other words, perhaps the 11 result would have to be that the Applicant collects the 12 costs of these facilities and remits them to the 13 distribution company in order to satisfy its revenue 14 requirement. 15 I just throw that out as something to think 16 about, but I'm not sure that now is the time to preclude 17 this issue being given consideration because of the 18 spectre of having to change the revenue requirement. 19 I'm not sure that reallocation of these assets would be 20 necessary. 21 THE PRESIDING MEMBER: Mr. White. Okay. The 22 wrong order again. 23 MR. WHITE: I'm sorry, and I apologize for 24 that. 25 I would like to say that my clients were not 26 part of the committee that put together that report, nor 27 did they have input to it. I would suggest that it is 28 potential that the codes of conduct for the transmission 118 1 company may be a lot easier for the Board and all LDCs 2 to deal with if we don't have to deal with the cost 3 consequences of potential dealing in the interests of an 4 affiliate in an operational decision. 5 In other words, I am sure the network company 6 and the people sitting here would not operate that way, 7 but one can construct a situation where the Networks' 8 company might order an LDC to take power from a more 9 costly facility in favour of leaving its affiliate not 10 taking power from that more costly facility. So, I 11 think addressing it now may make some of the other 12 issues around the Networks' company and easier for the 13 Board and all participants to deal with. I apologize 14 for throwing that in at this time. Thank you. 15 THE PRESIDING MEMBER: Other questions from 16 the Board. I think we have a fair understanding of 17 where the issue is and we will consider it further. 18 We come back now to the issue of the 19 clarification of the cost of service study. If you 20 would like to give us a bit more, having thought about 21 it over the lunch break, what you would like to see, 22 that would be appreciated. Thank you. 23 MR. OSBALDESTON: Thank you, sir. 24 I think there was some question about whether 25 what was really sought was a cost allocation study. I 26 confirm that that's not the case. What is sought is I 27 think what was referred to otherwise as a revenue study. 28 If I can be helpful, the nub of it is what 119 1 IPPSO is looking for is projections on facilities costs, 2 for upgrades reinforcement, suspensions, replacements 3 and that really goes to their ability to test the OHNC's 4 projections on the effects of net load billing on 5 embedded generations. 6 THE PRESIDING MEMBER: So you would like to 7 get more information than has been filed with regard to 8 projections on capital facilities, upgrades, expansions 9 and so on, so that the costs of the network, for 10 example, can be projected forward. Is that the type of 11 thing you would like to -- 12 And that hasn't, in your view, been addressed 13 in the evidence adequately at the moment. Is that 14 right? 15 MR. OSBALDESTON: No, sir. 16 THE PRESIDING MEMBER: Right. 17 So what would be, in your view just so I have 18 an understanding of this, the parameters that you would 19 like to see put into that study, if you can a little 20 bit, to address the kind of things you are looking for? 21 You are looking for additions to capital assets 22 projected forward and looking at the impact of those on 23 cost of service depreciation (off mic...) on all those 24 factors in terms of those changes to the capital base. 25 Is that the type of thing? 26 MR. OSBALDESTON: Yes, sir, and whether they 27 relate to expansion and (off mic...) yes. 28 THE PRESIDING MEMBER: Thank you. 120 1 MEMBER VLAHOS: I would like to follow up on 2 that. I am sorry, I forget your name. 3 MR. OSBALDESTON: Mark Osbaldeston. 4 MEMBER VLAHOS: Yes. I jotted it down, but I 5 lost the page. 6 Is this something that you want the company to 7 prepare now or are you going to ask them in 8 interrogatories and hopefully the information can come 9 that way? I am just not sure about the scope of the 10 study. 11 MR. OSBALDESTON: To the extent that it can be 12 produced by interrogatories that will be fine, but if it 13 is information that needs to be produced that's not 14 available now we would like them to get started 15 preparing that, to the extent that it's new evidence or 16 new data. 17 MEMBER VLAHOS: So you would like from the 18 Board then -- to the extent the Board will be inclined 19 to include this issue, you asked in the interrogatories 20 if the answers are ready the answers will be provided. 21 If the answers are not there, then you expect the 22 company to do whatever is necessary to provide that 23 information? 24 MR. OSBALDESTON: Yes, sir. 25 MEMBER VLAHOS: Just a moment please. 26 --- Pause 27 MR. OSBALDESTON: If it is helpful to the 28 Board, Mr. Wong might be able to provide some more 121 1 specifics about exactly what the concern is. 2 THE PRESIDING MEMBER: Please go ahead, Mr. 3 Wong. 4 MR. WONG: The concern is surrounding the 5 assumption made by OHNC in their application that the 6 revenue requirements remain constant throughout a period 7 of the year 2000 to 2008. That assumption is used in 8 the impact assessment of net load billing versus gross 9 load billing. 10 We believe, or we would like to at least test 11 that assumption as to whether that's appropriate in 12 light of load growth that is projected over that period 13 in time. 14 That also leads into perhaps some arguments on 15 our end that there are specific benefits that embedded 16 generation could provide in deferring or eliminating 17 some of these costs down the road and those benefits 18 should be considered in the impact assessment to look at 19 rate design. 20 MEMBER VLAHOS: Mr. Wong, questions of that 21 type show me the sensitivity or show me the impact to 22 assume a 5 per cent increase in your revenue requirement 23 or whatever. Those kinds of questions I guess always 24 make sense to the Applicant and the responses do come 25 back to the best of their ability. I can see 26 interrogatories of that type, but I am just still not 27 sure what is a brand new cost of service study. It is 28 beyond me still. Unless I have a good understanding of 122 1 exactly what you are after, I am just not sure how I can 2 be inclined to include that issue. 3 It seems to me that through the interrogatory 4 process you can ask the questions and get the responses 5 in terms of what is the impact of this if you are to 6 change your assumption about your revenue requirement 7 over the next five years and here are the assumptions. 8 MR. OSBALDESTON: From IPPSO's point of view 9 if the Board is not inclined to order a new cost of 10 service study, in the alternative I would request that 11 it order that OHNC be required to respond to 12 interrogatories of the nature that you described. 13 THE PRESIDING MEMBER: Leaving aside whether 14 the Board may or may not order, what is your comment? 15 Do you have any further comment on behalf of the 16 Applicant, Mr. Rogers? 17 MR. ROGERS: Only this. We would object to 18 generating a lot of new work which really is commercial 19 intelligence being sought by one of the intervenors 20 which has no probative value to you in determining 21 whether these transmission rates are appropriate for the 22 year 2000. 23 We will answer appropriate interrogatories to 24 the best of our ability based on the information we have 25 available with respect to the net gross load billing 26 issue or any other issue that's on the issue list. 27 THE PRESIDING MEMBER: A final word from 28 IPPSO. 123 1 MR. BUDD: I would just go back to my further 2 point, IPPSO's position to the extent that that 3 information is not available. I think it needs to be 4 prepared. 5 THE PRESIDING MEMBER: All right. Thank you. 6 We will consider it. 7 The only other item I have, and maybe you can 8 help me, Ms Lea, is whether or not there is a further 9 clarification from First Nations regarding their status 10 of transmission customers and what may be locations of 11 that. 12 MS LEA: I can help you with the first. I'm 13 not so sure about the second. 14 I spoke to Ms Godby just immediately before we 15 began again because we had talked briefly over the lunch 16 period. My understanding is that at present she agrees 17 that as far as she knows, there are no First Nations who 18 are at present transmission customers of OHNC. Am I 19 correct? I see her nodding. That's fine. 20 The concern that I took from her submissions 21 earlier was that it is possible that during the time 22 that this rate design or the rates may endure that some 23 of her clients may become transmission customers. I 24 understood that to be the concern. 25 There is a concern in my view with this Board 26 undertaking to hear matters about which you have no 27 jurisdiction or about which you can do nothing. I think 28 the submission, as I understand it, is that the Board 124 1 should consider the special circumstances of First 2 Nations people and determine whether a special rate 3 should be considered or made provision for and whether 4 that issue should be considered in this hearing. 5 I understand that Ms Godby's position is that 6 yes, it should be, and that Hydro's position would be 7 no, it should not be. Please correct me if I have 8 misstated anything there. 9 THE PRESIDING MEMBER: Please, can I hear Ms 10 Godby. 11 MS GODBY: The difficulty is, Mr. Chair, 12 Members of the Board, that there is currently underway 13 construction of a transmission line up in the north for 14 three First Nations communities. It may very well be 15 that over the course of the period of time that the 16 rates are sought that this could impact on the First 17 Nations and they would have no input at that time into a 18 rate structure until another one is brought before this 19 Board. That's of concern to them. 20 At the very least, and there is no indication 21 as to whether another rates application is going to be 22 made -- in fact, I understand from the submissions today 23 that their revenue requirement is in fact supposed to be 24 stable until 2008, so we may not even see another rates 25 application until that time, although I think that's 26 probably unlikely. 27 In any event, you know, that certainly is 28 conceivable. 125 1 THE PRESIDING MEMBER: Yes, and I understand 2 your point. 3 MS GODBY: The issue, Mr. Chair, is that we 4 want -- you know, we would like to have at least OHNC to 5 be given the flexibility to negotiate a discounted rate 6 for First Nations, that opportunity arises for them as 7 transmission customers and other charges such as 8 connection charges. 9 THE PRESIDING MEMBER: I believe that 10 clarifies the position. 11 As far as the revenue requirement, and the 12 Board may or may not be asked to look at any rate design 13 issue simultaneously with studying revenue requirement, 14 we have another proceeding in GATT. We have done that 15 traditionally, you know, not just focus exclusively on 16 the requirement. As rate design, cost allocation rate 17 design issues come up, we will hear those as well in 18 conjunction. That is the normal process. 19 Anyway, thank you very much for that 20 clarification. 21 MS GODBY: Thank you. 22 THE PRESIDING MEMBER: Are there any other 23 matters now before we have to have a little closing the 24 loop on this and then we will proceed to see if there is 25 any scheduling or other issues. 26 Are there any other matters anybody wants to 27 raise regarding the proposed issues, list draft issues? 28 I think perhaps you had some submission, as I 126 1 recollect, Ms Lea, about whether or not there were 2 matters that the applicant or others were asking for a 3 Board determination on, regardless of whether they were 4 on the issues list or not. I think you did suggest that 5 one. 6 MS LEA: I spoke to that, yes. 7 THE PRESIDING MEMBER: Do you think that is 8 applicable to other people here? They understand the 9 import of that as Mr. Rogers does, or do we need to 10 repeat it? 11 MS LEA: I trust so, sir. As I understood the 12 application's position, they have made an application 13 which is contained within all the binders that they have 14 filed with the Board. The Board may need to make 15 findings on certain matters that are in those binders 16 that are not specifically listed as an issue on the 17 agreed list or may be included on the issues list by the 18 Board as its result of the consideration of the 19 contested issues. 20 The fact that an issue is not specifically 21 listed on the issues list does not, in my understanding 22 of the applicant's position and I agree with it, means 23 that the Board cannot make a finding on it or will not. 24 It means that as far as the Board understands it or 25 rules on it, parties are not going to debate that issue 26 before the Board at the hearing at this time. 27 You can accept the applicant's position or 28 modify it if you have evidence to back up that 127 1 modification, but it will not be debated actively by 2 parties in the hearing. That was my understanding. 3 THE PRESIDING MEMBER: I think that's 4 generally how we have proceeded in the past in those 5 kinds of -- that approach will apply here. If everybody 6 is clear about that. 7 Having said that, we can wrap up the issues 8 and we will say, as you would probably anticipate, the 9 Board would like a bit more time to consider agreed 10 issues, some of the more complicated nuances of them and 11 so on so that we will do that with the goal of trying to 12 issue a procedural order early next week clarifying the 13 approved issues list. 14 Thank you. 15 Mr. Rogers, do you have something? 16 MR. ROGERS: No. Thank you very much. 17 THE PRESIDING MEMBER: The only other 18 remaining issue is a few little housekeeping issues 19 which I would like to turn to. 20 First of all, we would, of course, set out the 21 forward schedule. Everybody I think has procedural 22 order No. 1. The only thing we are asking here is, 23 particularly from the applicants and I know you can't 24 until you have a determination on the issue, whether you 25 see or anticipate any major hiccups in terms of the 26 schedule or the timing that is set out in procedural 27 order No. 1 or if somebody here is now saying we have to 28 go and provide major evidence and we need three months 128 1 to do it, things like that. Does anybody at this point 2 have any big problems that can be anticipated? 3 I know it will be somewhat dependent on the 4 issues list. All we can ask then is if there are, bring 5 them to the attention of the Board staff quickly. Don't 6 hang around. We can then try and accommodate as best we 7 can those changes, if needed, and at least address them 8 so if you can, bring them to the Board staff's 9 attention. 10 If you are considering whether you need some 11 additional evidence or whether an issue can be advanced 12 through cross-examination of the applicant's witnesses, 13 then try to do that. If possible, collaboration between 14 parties is also very helpful in avoiding duplication in 15 intervenor evidence and so on. To the degree that you 16 can, we ask that you do that. 17 Finally, a word on costs, a four letter or 18 five letter word, this proceeding under the Board's 19 eligibility in cost award rules. It is just to let you 20 know that the Board will be vigilant on matters such as 21 things like the need for counsel to attend every day, 22 duplication overlap, the lack of efficiency time 23 matters, and we will take these matters into account 24 when it comes to the amount of each party's cost awarded 25 at the end of the hearing. 26 That's all I have to say. 27 MR. ROGERS: Could I just make one comment and 28 that has to do with the interrogatory process which is 129 1 obviously an area of serious concern for us. 2 When you mentioned any problems that may 3 arise, that's one area where we are concerned obviously. 4 This won't be new to the Board. 5 I would ask if when people submit 6 interrogatories, it would be most helpful if electronic 7 copies of interrogatories could be sent to Ontario Hydro 8 at the same time. It would help the process 9 considerably. Those who are able to do so, have the 10 facilities to do so, we would ask that they please do 11 that. 12 THE PRESIDING MEMBER: All right. The other 13 thing would be to make sure that the references to the 14 evidence on which the questions are based are accurate 15 and complete because there's nothing worse than doing 16 this when you send a question and the reference is not 17 there or is incomplete or it's wrong. It's very 18 inefficient. Please check your reference and that 19 should help. 20 MR. ROGERS: And send them to Mr. Boyce and 21 not to Mr. Rogers. That would help. 22 THE PRESIDING MEMBER: All right. Are there 23 any other matters before we close today? If not, I 24 would like to thank everybody for attending and for your 25 patience. As I said, we will issue a procedural order 26 with the approved issues list as soon as possible. 27 Thank you very much. 28 --- Whereupon the hearing adjourned at 1416