Rep: OEB Doc: 12KPD Rev: 0 ONTARIO ENERGY BOARD Volume: 5 13 FEBRUARY 2003 BEFORE: R. BETTS PRESIDING MEMBER P. SOMMERVILLE MEMBER B. SMITH MEMBER 1 RP-2002-0142 EB-2002-0420 TRANSCRIPT VOLUME #5 2 IN THE MATTER OF sections 70 and 74 of the Ontario Energy Board Act, 1998, S.O. 1998, c.15, Schedule B; AND IN THE MATTER OF Transitional Generation Licence EG-0333, issued to Ontario Power Generation Inc. AND IN THE MATTER OF an application by Ontario Power Generation Inc. to amend its licence obligations to provide a rebate to consumers under specified circumstances. 3 RP-2002-0142 EB-2002-0420 TRANSCRIPT VOLUME #5 4 13 FEBRUARY 2003 5 HEARING HELD AT TORONTO, ONTARIO 6 APPEARANCES 7 LAURIE KLEIN Board Staff DAVID BROWN Board Staff PATRICIA JACKSON OPGI MICHAEL PENNY OPGI 8 TABLE OF CONTENTS 9 REPLY BY MR. PENNY: [25] PROCEDURAL MATTERS: [106] 10 EXHIBITS 11 12 UNDERTAKINGS 13 14 --- Upon commencing at 9:35 a.m. 15 MR. BETTS: Good morning, everybody. Please be seated. 16 Certainly we have a smaller attendance today. These are the dedicated folks, obviously. 17 MS. JACKSON: We like to say small but select. 18 MR. BETTS: I like that. I'll accept that. 19 MR. PENNY: Just to keep you guessing this morning, Mr. Chairman, Ms. Jackson and I are both sitting at the counsel table, but as far as I'm aware, at least, I'll be delivering the reply. 20 MR. BETTS: Very well. 21 Welcome back, everybody, or those of you who have been able to attend. Again, we're here hopefully for the last day of the hearing portion and to receive final arguments from the applicant. Are there any procedural issues to begin with? 22 MR. PENNY: I have none, Mr. Chair. 23 MR. BETTS: Thank you, Mr. Penny. There are, for the record, no intervenors present. We will therefore commence the final arguments from the applicant. 24 MR. PENNY: Thank you, Mr. Chairman. 25 REPLY BY MR. PENNY: 26 MR. PENNY: Based on the intervenor submissions that you received yesterday, it is clear that all intervenors, with the exception of GEC, the Green Energy Coalition, accept that the licence conditions for decontrol have been met. There is, of course, an outstanding issue about the transparency and monitoring of the ring-fence plan which I will come back to, but there is an agreement, subject to GEC, that the conditions themselves have been met. And that consensus will enable me to keep the reply, I hope, relatively brief. 27 Let me start with the arguments of the one intervenor which does not agree that the licence conditions for decontrol have been met, that is, GEC. I will first address GEC's interpretation of the test for facilitating interdependent behaviour. That interpretation is articulated in paragraph 201 of yesterday's transcript, where Mr. Poch said that as long as there is any information shared which could be abused, the arrangements facilitate interdependent behaviour. 28 Now, the argument of Consumers Association addressed this point forcefully yesterday, and I'm pleased to say, Mr. Chairman, that for the first time in perhaps a long history of proceedings before this Board, I'm in complete agreement and indeed adopt the submissions of Mr. Warren on this issue. And because we adopt and support the submissions of CAC on the meaning of the test, I will not repeat those submissions other than to highlight and, in a few cases, supplement the key points. 29 Mr. Warren made four points. First, you cannot, as GEC urges you to do, look at potential effects of information flowing under the service agreements that were necessary to complete this transaction without looking at the protective arrangements that are also in place to regulate the dissemination and use of that information. We agree with the Consumers Association on this point, both as a matter of interpretation and as a matter of practical common sense. 30 In our submission, there is no evidence before you that OPG's protective arrangements, such as the code of business conduct and the ring fence, are deficient or unworkable. The words of the licence are that a transfer of effective control shall be considered not to have occurred if the Board determines that "there exist any ongoing arrangements which facilitate interdependent behaviour" between OPG and the transferee. GEC would have you read that to mean that you have no regard to whether the interdependent behaviour being facilitated is beneficial or adverse, material or immaterial, competition-enhancing or anti-competitive, or has any effect in the market or no effect in the market. 31 Now, Mr. Hunter, however, who is an expert in competition policy, you'll recall, testified that the facilitation of interdependent behaviour must include a consideration of whether there is an effect in the market, whether the effect is material, whether it is adverse, and whether it is anti-competitive. 32 In our submission, the whole point of the government's restructuring project, the whole point of the Macdonald report, the white paper, the work of the Market Design Committee and the minister's directive on OPG's licence conditions was to deal with competition issues and with market effects. The interdependence proviso in OPG's licence was added to the licence precisely to prevent the situation where ongoing arrangements, implicit or explicit, would cause material harm to competition by undermining OPG's obligation to divest generation capacity. And we say to ignore the competition-related and market effect-related context in which the licence arose is to ignore its very purpose. It cuts the tree from its roots. The GEC interpretation of the test, which is stripped of these market- and competition-oriented characteristics is nothing, we say, but an empty metaphysical exercise. 33 Now, Mr. Warren's second point on the interpretation of the interdependence test was a pragmatic one. It simply amounts to the fact that the service agreements were necessary for reasons of safety and technical operations. We agree with this point as well. And I would simply add that it could not have been contemplated by the Market Design Committee or the minister in issuing his directive that arrangements which, for reasons of public safety or technical expertise, are necessary for there to be any commercial divestiture of generation capacity at all would, in and of themselves, constitute facilitation of interdependent behaviour. That, I would submit, would be both self-defeating and illogical. 34 Mr. Warren's third point with which we also agree was in response to Mr. Poch, that the decision the Board must be made on the basis of evidence, not speculation. This is perhaps trite and to some, at least, self-evident, but it warrants emphasis in this particular case because GEC's submissions are largely based about speculation about uncertainties in the future. 35 Now, one certainly can speculate about whether new entrants will enter the Ontario market or not. We can speculate about whether rogue employees might or might not follow OPG's policies. We can really speculate about many things but they will not assist the Board in resolving this application. Here you have evidence of a series of comprehensive policies that, if the Board so chooses, will be mandatory conditions of OPG's licence. You have expert evidence that such arrangements have been very effective in similar contexts, for similar purposes, and there is no evidence that these arrangements are deficient or unworkable. OPG's evidence should, therefore, not be rejected in favour of speculation. 36 Mr. Warren's last point with which we agree was one of fairness. Energy Probe also supported this position. Put simply, OPG should not have to pay a rebate on revenues it does not earn. It is really as simple as that. 37 So let me then turn to my second point in reply which has to do with scheduling of outages, a submission made by GEC at paragraph 202 of yesterday's transcript. 38 The submission was that OPG's outages are coordinated with -- that is, OPG's outages are coordinated with OPG's Energy Markets Group and that OPG therefore has information not available to other players in the market. Now, Mr. Singer testified in answer to just such propositions from Mr. Poch at volume 1, paragraph 754 to 802, and specifically at volume 1, paragraph 767, that, and I'm quoting at paragraph 767: "In order to offer the generation into the market, you need to know whether that generation is available. So logically the outages need to be coordinated with offers into the market." So in other words, if it's not available, you cannot offer it. 39 That is no different, no different at all from any other generator in this marketplace. Each one knows its own outage schedule and they do not disclose that to the world. What they do do is negotiate those outages with the IMO and get the IMO approval for it and then the IMO reports all outage information on an aggregate basis. Under the IMO rules it has to work this way. If energy is offered and then dispatched, it must be supplied. And you would be in breach of the IMO rules and subject to sanctions if energy were offered, called upon and then not supplied. So plainly those who offer to sell a firm's energy have to know when it is and when it is not available. 40 If the implication of Mr. Poch's submission -- and it would have to be an implication because it was certainly not explicit -- was that Bruce outage information will somehow get to OPG's Energy Markets people, that is simply not so. The record could not be clearer that no Bruce Power information gets to Energy Markets employees at all, much less to those who schedule OPG's outages. 41 Let me turn now to a submission of GEC concerning the Market Surveillance Panel. At paragraph 236 of yesterday's transcript, GEC made the submission that the Market Surveillance Panel might have trouble discovering abuse in the early days of market opening, and I pause to say parenthetically, again, complete speculation, because deviations from the norm might not be obvious, he said. Now, Mr. Hunter was represented in that argument as having agreed to that proposition, but this, with respect, misstated Mr. Hunter's evidence. 42 At volume 3, paragraph 299, the suggestion of the Market Surveillance Panel having difficulty in their detection exercise was put to Mr. Hunter but he, in fact, disagreed with that proposition. And at volume 3, paragraph 299, in answer to this very proposition put to him by Mr. Poch, Mr. Hunter said as follows: "It might be. But it strikes me as well that, for better or for worse, we have a fair amount of experience with deregulation of electricity and so one wouldn't expect that what would happen in Ontario would necessarily -- given a product like electricity, which is basically an undifferentiated commodity would be any different. In fact, the paper you gave me before is sort of talking about how to do it and what works and what doesn't work and we know that there have been some things that work better than others. So I think -- all I'm saying is that they will be able to look at what's gone one in the rest of the world and figure out what they need to be worried about." 43 Now, in addition, the Board will know from a review of the Market Surveillance Panel's first report, that the market assessment unit monitors the market hourly, and after four months of hourly monitoring, and I won't even speculate about how many hours that would be, but after four months of hourly monitoring, you could rest assured that the Market Surveillance Panel has a lot of information about how generation capacity in Ontario is being offered into the market. And it is significant, in my submission, that none of Mr. Poch's speculations about the alleged difficulty of the Market Surveillance Panel monitoring this market are even hinted at in the Market Surveillance Panel's report. To the contrary. As exemplified in the passages read to you by Ms. Jackson yesterday from pages 114 and 115 of the compendium, they seem to take quite the opposite view. They say nothing about problems or deficiencies in their ability to evaluate market behaviour. 44 Now, also in the detection and transparency vein, GEC made a submission to you at paragraph 215 yesterday that because the bilateral contract market was less transparent there was more risk of interdependent behaviour. I would again point out that there is no evidence on how the service agreements could facilitate interdependent behaviour in this market. But apart from that, even if it is true that the bilateral market is less transparent, the Board has specifically been given the power to review all of OPG's bilateral contracting practices by virtue of section 19.2 of OPG's retail licence. And now I won't turn you to it and read it, but at paragraph 19.2 of OPG's retail licence, which can be found in the evidence at Exhibit I.6.5, specifically provides for the Board review of all of OPG's bilateral contracting practices. And in addition, OPG is required by section 19.3 of its retail licence to treat all customers fairly and without discrimination by virtue of the requirement in the bilateral market to use the same forward price curves for any quote made to any customer at approximately the same time. 45 So, in my submission, even if it were true that the bilateral market is less transparent, the Board has specific oversight and power over OPG's bilateral contracting practices by virtue of the retail licence. 46 Now, GEC submitted to you yesterday on more than one occasion by way of inter orum that if the Board approved decontrol there's no further jurisdiction in the Board to do anything. That, as he said, would be it. Now, this is not correct, in our submission. It is true that once the Board determines that effective control has or has not been transferred, that that determination also applies for the purposes of the same determination at a later date, and that you can find at page 3 of the compendium, part 4, section 5 of OPG's licence. And the reason for that is that OPG can ask the Board, as it has done here, in advance of its 42-month or 10-month targets, for a determination of decontrol -- 10-year targets, excuse me. All this provision of the licence means, however, is that if decontrol has been determined in respect of the Bruce station today for CRQ and rebate purposes, that determination also counts with respect to OPG's 10-year objective of reducing tier 1 capacity. It does not mean that the Board's jurisdiction over OPG as a licencee comes to an end. The licence, in fact, which is at Exhibit I.6.5, provides, among other things, in part 2, section 10, that the Board may require, and OPG must provide, any information the Board feels it needs to monitor OPG's compliance with the conditions of its licence, or any other legislative or regulatory requirement. So the Board has extensive powers under the licence, irregardless of its approval of the Bruce application, to require information from OPG to ensure compliance with licence conditions or any other legislative or regulatory requirement. 47 So Mr. Poch is quite wrong, in my submission, when he suggests that the Board has no monitoring role and no ongoing powers following approval of decontrol. That is explicitly contradicted by section 10.1 of the licence. 48 Now, 10.2 of the licence also requires OPG to notify the Board of any material change in circumstances that could affect OPG's ability to comply with the terms of its licence, so that's an additional requirement that continues by virtue of the licence, irrespective of the Board's determination of this particular application. 49 And finally, of course, section 9 of the licence gives the Board the power to suspend or revoke the licence if any licence conditions are not adhered to, so it can hardly be said that the Board has no power to monitor OPG's conduct, or that its authority is spent if it were to approve this application. 50 Let me give a brief word on performance incentives. GEC submitted to you yesterday, at paragraphs 219 and 220, that ring-fence compliance was somehow suspect because employees and senior executives had performance incentives as part of their compensation. This, once again, is, in my submission, entirely speculative and in fact is directly contradicted by the witnesses to whom Mr. Poch made this suggestion. 51 A full discussion of this issue can be found at volume 2, paragraphs 519 to 526, but I will just refer you today to paragraphs -- to one portion of that, paragraphs 525 and 526. At volume, 525, the question is put: 52 "Mr. Poch: All I'm suggesting is that there is this incentive, this pay incentive which is an incentive that pushes in the opposite direction of all the various arrangements that you've made. 53 "Mr. Drinkwater: That one I don't agree with you, Mr. Poch. I think that the incentive arrangements are very focused on other issues, such as meeting our safety, meeting our overall corporate goals. I don't believe that having performance-based pay means that people are pushed in the wrong direction. I think that's going too far, in my view." 54 So, in my submission, the suggestion that performance incentives somehow detract from the performance of the ring fence is both speculative and, indeed, contrary to the evidence. 55 I now want to speak about the suggestion that there be a forced sale of the Inspection Services Division. This arose at paragraph 246 of the GEC submission yesterday, that you should condition acceptance of Bruce decontrol on the divestiture, for example, of the Inspection Services Division to an arm's length third party. 56 Now, Mr. Warren, at paragraphs 362 and 363 of yesterday's transcript, responded to this suggestion by quoting from Mr. Drinkwater's evidence at volume 2, paragraph 403, to the effect that OPG's Board would not approve the divestiture unless it got a reasonable commercial arrangement, and that a requirement to divest would be a "real problem" for OPG. And we agree with Mr. Warren's suggestion and adopt his argument on this point as part of our reply. But I would add, I would add that conditioning approval of the Bruce decontrol on divesting the Inspection Services Division group obviously would put the CRQ reduction at risk so that the Energy Board would, in effect, be penalising OPG to the tune of about possibly $200 million a year, according to Mr. Singer's estimate from day 1, if that divestiture did not occur. And, indeed, the size of that penalty would clearly require divestiture immediately and at virtually any cost. 57 Now, Mr. Poch tried to suggest at paragraph 247 that this requirement was not -- would not really involve a fire sale, and that the $200 million rebate reduction could occur retroactively once the divestiture had occurred. Mr. Chairman, once the Board ordered that, as a condition of the CRQ reduction, OPG had to divest the ISD group, a fire sale is exactly what we would be talking about, because as soon as the rebate reduction is conditional on the sale of the ISD, any possibility of a commercial negotiation is gone and you don't have a commercial negotiation, you have to have a capitulation. 58 To the extent, I might add, that OPG was unable to obtain fair value for its assets, it is really the people of Ontario who are the losers because OPG, of course, is wholly owned by the government of Ontario. 59 Further, that GEC's suggestion that the rebate reduction could occur retroactively once the divestiture occurred is also without merit. This is because, under the terms of OPG's licence, once the settlement period is over, the rebate is fixed and there can be no further adjustments to the rebate for that settlement period. 60 So altogether, apart from the lack of evidence demonstrating the need for such a measure, the forced sale of the service division is, in my submission, commercially unworkable and unnecessarily punitive. 61 Now, at paragraph 221 of yesterday's transcript, GEC made the submission, in support of its position that the ring fence was inadequate, that you can't ring fence knowledge, they said, and ring-fenced knowledge could still influence decisions if an employee, for example, changed jobs. This issue was addressed by Mr. Singer on day 2, at paragraphs 817 to 821 of the transcript, and the position is summarised succinctly at 818 and 819 of the day-2 transcript. 62 Mr. Moran asked the question: "As I see the prohibition here, the prohibition is 'do not disclose sensitive information to colleagues.' In the scenario that you're describing, the person doesn't disclose it to any of his colleagues or her colleagues; instead, that person makes decisions as part of the job that that person is doing, that it factors that in in some fashion. I guess if I understand you correctly, what you're suggesting is that if such an individual did that, other people would notice. Mr. Singer: No, I'm saying that no individual could act on his own. No individual could change the offers by him or herself. No individual could change the outage schedule by him or herself. They would have to disclose that." 63 There is, in my submission, no basis in the evidence, therefore, for the argument that employees who change jobs are irrevocably tainted or pose a threat to the operation of the ring fence. And I should add, as Mr. Anderson did in fact at some of the other passages in that section of the transcript, that of course such conduct, even if they tried, would be in breach of the ring fence. 64 Mr. Poch also made to you a submission requesting collateral orders relating to the 25 per cent market share requirement. At paragraphs 251 and 252 of volume 4, GEC submitted that the Board should forbid OPG from entering into any other transactions with Bruce Power or its owners. The basis for this submission seemed to be that it would, I think he said, "be odd" if just because the 25 per cent market power condition was met on one day that OPG could go out and do another transaction subsequently that would put the transferee over the 25 per cent threshold. Now, of course, OPG could not go out and do another transaction subsequently with the same party because that -- and get approval of the Board if that would put the transferee over the 25 per cent threshold, and it seems to me, in my submission, a complete answer to this concern is the explicit language of the licence. 65 At page 3 of the compendium, the relevant licence provision is section 4(b)(i) and it says that no transfer of effective control takes place if the transferee has or obtained as a result of the transfer effective control over 25 per cent or more of the in service tier 2 or combined tier 1 and tier 2 capacity "in each case at the time of completion of the transfer ..." 66 So it is at the time of the completion of the transfer that the market share is measured, not later with the benefit of hindsight. This, Mr. Chair, makes perfect sense because anyone could acquire more capacity in a transaction having nothing to do with OPG, and whether they were or were not over 25 per cent as a result would have nothing to do with OPG or its licence. So if Bruce Power went out and bought from someone else capacity that took it over 25 per cent, that would have nothing to do with OPG, it would have nothing to do with OPG's licence, and would have occurred after the time of the completion of the transfer, as the licence says, that is before you here today. 67 Now, in such a case, I'd hasten to add, the purchaser would fall subject to the jurisdiction of the Competition Bureau and would have to pass muster under its requirements. But there is no need, in my submission, for collateral orders prohibiting OPG from selling to particular purchasers. The terms of the licence on this point are clear, and their purpose was in keeping with the Market Design Committee's objectives and the objectives of the minister's directive. 68 Now, that, Mr. Chairman, brings me to the end of my reply to the issues submitted by GEC alone, and almost to the end of my reply in total. 69 Most of the remaining intervenors, in some form or another, recommended acceptance of the additional commitments OPG has already agreed to make but also added a request for a requirement for third-party auditing of the ring fence and ring-fence compliance. So let me deal with that particular issue generically before turning to one or two remaining specific points raised by individual intervenor arguments. 70 When considering the question of an independent audit, the key question has to be: Is it, on the evidence, necessary for there to be a blanket requirement for such an independent audit, or third-party audit, excuse me, imposed as a condition of licence. Put it another way, is the insurance necessary, and at what cost? And we submit it is not. 71 This is not to say that the Board could never require such a process. But in our submission there is no evident need, given the evidence before you and the conditions and requirements -- protective devices already put in place, to require it today. OPG has already confirmed that internal audits of the ring fence can be a mandatory term of the licence, and has offered to provide its internal audit reports to the Board on a confidential basis, so the Board will have ongoing reports on how the compliance measures are working. 72 It is also worth remembering that the information exchanged under the service agreements has and will continue to decline, as are the numbers of employees subject to the ring fence. And further, the evidence available to you today from OPG is that because the internal auditors know the company, the product of their audit would be better in any event. So, in my submission, why leap into yet another layer of obligation and complexity and adopt a course of imposing more rigidity and processes and more cost when there is no demonstrated need for such measures. 73 As I've already indicated, the Board has the power, under section 10 of the generation licence, to require whatever information from OPG it feels is necessary to ensure compliance with licence conditions. In this circumstance, the prudent course is, in our submission, to monitor how things operate as currently proposed, and if, at any time, periodically or otherwise, an external audit is thought to be necessary, to pursue it at that time once there, perhaps, is some evidence of some unforeseen circumstance or deficiency and therefore a demonstrated need for that additional layer of protection. 74 Then just turning to a few individual points raised by individual intervenors. With respect to the IPPSO written argument, they made two additional submissions to which I want to respond; one relates to a request for further controls over OPG's employees and the other relates to a request for an order relating to future proceedings. 75 IPPSO has asked the Board for a series of orders governing the movement of employees to other jobs and their abilities to act and their capacities to act within OPG in those circumstances. Altogether apart from the question of whether the Board has the jurisdiction to make such orders, and altogether apart from the obvious micromanagement that would be entailed in making such orders, we have three submissions in response to this submission. 76 First, as I submitted earlier with respect to the GEC submission, one person, as Mr. Singer's evidence indicated, one person has no ability to change how OPG bids into the market. There is no contrary evidence and no evidence that such a draconian order of the kind requested by IPPSO would actually improve the situation. On the evidence, therefore, there is simply no basis or need for that kind of detailed and intrusive and micromanaged interference. 77 The second issue I wanted to raise is that preventing employees from seeking other positions within the company would put OPG in violation of its collective agreements which contain, as almost all do, provisions about the internal posting of job openings and how and by whom those positions may be filled. 78 And finally, in my submission, such a provision would be an unwarranted and unduly restrictive interference with the personal lives and aspirations and professional objectives of the company's employees and would therefore be unfair and, frankly, impractical. 79 Accordingly, we submit that this request that the Board take on the job of managing and monitoring OPG's human resources be rejected. 80 Now, IPPSO has also asked for a direction that service agreements may not be a feature of any future non-nuclear transactions, and the response to this argument, it seems to me, is self-evident. It would, in our submission, be wholly inappropriate for the Board to make other comments about other transactions or applications that are not before it or which have not yet been made. Each case must be decided on its own facts. There may be other applications. They may or may not involve nuclear generation facilities; they may or may not involve the need for service agreements. The Board should avoid the pitfall of commenting on matters which are unnecessary for the determination of this case and save for another day the determination of matters that are not yet before it. 81 So, in our submission, this IPPSO request is wholly inappropriate and should also be denied. 82 Now, Energy Probe, in its submission, raised an issue about the so-called missing 16 months of data in the underlying CRQ calculation which I wanted to speak to briefly. That submission was -- is in paragraph 409 of volume 4 of the transcript. 83 The suggestion, I think, was that some kind -- that there should be a requirement for some kind of further application for that -- or that some further application should be directed by the Board once the missing 16 months of CRQ data is filled in. That submission fundamentally, in my submission, misunderstands and misapprehends what the Board is deciding here and what the additional 16 months of CRQ data will have to include if the Board accepts OPG's application in this case. 84 By virtue of the Board's determination of this case, the Bruce capacity will either be in the CRQ if the application is rejected or be out of the CRQ if the application is accepted. Either way there will be no issue for the Board to decide in relation to the development of the data that will go out the additional 16 months that arose due to the delay in market opening. 85 The new CRQ data will only consider facilities that OPG controls, and if the Board confirms that effective control over Bruce has passed on from OPG, then, by definition, OPG won't control Bruce and therefore it will not be in the extended 16 months of CRQ data. There's simply no further issue to apply for or for the Board to even consider. 86 So, in my submission, there is no necessity, no requirement, and indeed the matter of any further applications with respect to that simply do not arise. Everything you need is before you today, and we don't need to come back on that issue. 87 Now, finally, there is a submission from the CME regarding a preference for the scheduling of Bruce Power outages, and the CME has asked for an order of the Board that Bruce Power's scheduling for planned outages should have priority over OPG's. Now, this, in my submission, first and foremost, simply falls outside the jurisdiction of the Board and, in effect, calls for a rewriting of the IMO's rules. It is the IMO, through its rules, which determines the priority of scheduling generation outages, and you've heard quite a bit of evidence about this and how the IMO does that. And this is, in my submission, simply not a matter for determination by the Ontario Energy Board. 88 Further, this request raises an issue that is not on the issues list and it is therefore not appropriately raised in this proceeding. 89 Finally, and not unrelated to the prior point that it's not on the issues list, I would make the observation that there is no evidence before you upon which you could possibly come to a view on whether this would be appropriate or inappropriate, or what collateral problems an order such as the one requested, if made, might raise in any event. CME did not put these questions, for example, to any OPG witness, and called no witness of its own to speak to the need for or effect of such a requirement. So the Board is left to consider this request in an evidentiary vacuum and should, for this reason as well, disregard it. 90 So for reasons of jurisdiction not being on the issues list and lack of any evidentiary foundation, we submit that the request for an order concerning the scheduling of Bruce Power outages should be dismissed. 91 That concludes my reply, Mr. Chairman. Thank you for your patience. 92 MR. BETTS: Thank you very much. 93 Just if I may, I'll just ask one question of clarification to make sure I understood. At one point, and I probably won't find it in my notes right now, but you referred to, I think it was section 10 of the licence -- 94 MR. PENNY: Yes. 95 MR. BETTS: -- And the Board's ability to require information with respect to any of the conditions that exist within the licence, and you were referring at that time to the Board's ability to request an external audit. Did I -- can I take from that that your position is that at any time the Board could request an external audit, in clear terms? 96 MR. PENNY: Yes, Mr. Chairman. The condition is quite broad and covers any information the Board requires, and I think we would agree that if the Board came to the conclusion that it would require an external audit, that that would fall within the powers of the Board under section 10. 97 MR. BETTS: Thank you. I was certain that that's what you were saying. I just wanted to clarify it. 98 MR. PENNY: I think the way that would work in the practical matter is that -- I suppose it could work a number of different ways. But one way that could work as a practical matter is the Board could retain its own auditor and then simply ask OPG for all of the information necessary in order for the auditor to do its work. So whether it encompasses the actual appointment of the third-party auditor or not is almost irrelevant, in a way. The fact is that the Board has the power to get access to all of the information it needs in order to carry out its function under the licence. 99 MR. BETTS: Okay. Thank you. 100 It appears as though we are reaching the conclusion of this hearing. I'll just ask if any parties have any procedural matters that have arisen at this point, or any questions for the panel before we close things off. 101 MR. PENNY: No, I think not from our perspective, Mr. Chairman. The only outstanding issue is the return of the contractual material, but I think we've made that point a number of times. 102 MR. BETTS: Very good. 103 MR. PENNY: And Mr. Brown I think indicated that he was going to send out a reminder to the parties on that. 104 MR. BETTS: We will do that for certain. With the agreement of the applicant, the panel will retain their documents until they issue the decision and at that point we will return everything. 105 MR. PENNY: That's fine, thank you. 106 PROCEDURAL MATTERS: 107 MR. BETTS: Just one item for the -- under procedural matters. 108 First of all, we have the pleasure of having our normal court reporter here. At one point it looked as though that was going to complicate -- her ability to be here was going to complicate transcripts being ready for today. As a result of her being here, transcripts will be ready on their normal schedule, and there should be no interference with that. 109 MR. PENNY: May I just add our appreciation and thanks to the reporters as well. I think the transcripts have been of a very high quality. 110 MR. BETTS: The panel certainly echoes that compliment. They have been of high quality, and as usual the staff has been very efficient and very flexible in supporting the needs of the hearing panel. 111 I think I'm ready to conclude this. First of all, I did say yesterday, or extend yesterday thanks to the intervenors for their participation in assisting and completing the record of this proceeding, and also developing some alternate considerations for panel consideration, as well as the applicant's consideration, and they certainly were of valuable support to us. I wanted to thank Board staff who have been, again, a valuable support to all of the participants here, and particularly to the panel. We have certainly appreciated that. I've already thanked those responsible for our transcripts. And very definitely I would like to thank the team representing the applicant; Mr. Penny, Ms. Jackson, for their clear, concise and well-organised presentation of their client's application; to Mr. Barrett and the regulatory team for the preparation and management of the application, and I think the obvious desire to be as transparent as reasonably possible, it was apparent; and also those appearing as witnesses, and I see some of them in the audience at this point, all were responsive, all were cooperative, and those individuals representing senior management of OPG clearly portrayed a strong sense of corporate integrity and professionalism. 112 With those comments, I will adjourn this hearing and we will begin the next stage which is the decision-making. Thank you all for your participation. 113 MR. PENNY: Thank you, Mr. Chair. 114 --- Whereupon the hearing concluded at 10:17 a.m.