Rep: OEB Doc: 12WWP Rev: 0 ONTARIO ENERGY BOARD Volume: 6 13 NOVEMBER 2003 BEFORE: P. SOMMERVILLE PRESIDING MEMBER A. BIRCHENOUGH MEMBER A. C. SPOEL MEMBER 1 RP-2003-0044 2 IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Sched. B); AND IN THE MATTER OF applications by Centre Wellington Hydro Ltd., Veridian Connections Inc., EnWin Powerlines Ltd., Erie Thames Powerlines Corp., Chatham-Kent Hydro Inc., Essex Powerlines Corp., Cooperative Hydro Embrun Inc. and Hydro One Networks Inc. pursuant to subsection 74(1) of the Ontario Energy Board Act, 1998 to amend Schedule 1 of their Transitional Distribution Licences. 3 RP-2003-0044 4 13 NOVEMBER 2003 5 HEARING HELD AT TORONTO, ONTARIO 6 APPEARANCES 7 JENNIFER LEA Board Counsel STEPHEN LOVE Board Staff GORDON RYCKMAN Board Staff MARY ANNE ALDRED Hydro One Networks Inc. MICHAEL ENGELBERG Hydro One Networks Inc. ANDY CHAN Veridian Connections Inc. and Centre Wellington Hydro Ltd. CAROL GODBY Southwest Applicants DAVID KENNEY Chatham-Kent Hydro MARK RODGER Toronto Hydro-Electric System Limited JAMES SIDLOFSKY LDC Coalition ANDREW LOKAN Power Workers Union DENNIS O'LEARY Wirebury Connections Inc. KELLY FRIEDMAN Electricity Distributors Association, Great Lakes Power 8 TABLE OF CONTENTS 9 PRELIMINARY MATTERS: [20] APPEARANCES: [50] MOTION BY HYDRO ONE NETWORKS INC.: [77] SUBMISSIONS BY MS. ADLRED: [78] SUBMISSIONS BY MR. RODGER: [95] PROCEDURAL MATTERS: [220] MOTION BY HYDRO ONE NETWORKS INC.: [235] SUBMISSIONS BY MR. O'LEARY: [236] SUBMISSIONS BY MS. GODBY: [310] SUBMISSIONS BY MR. LOKAN: [336] SUBMISSIONS BY MR. McLEOD: [363] SUBMISSIONS BY MS. YOUNG: [374] SUBMISSIONS BY MS. FRIEDMAN: [378] REPLY SUBMISSIONS BY MS. ALDRED: [388] REPLY SUBMISSIONS BY MR. RODGER: [407] DECISION: [453] 10 EXHIBITS 11 EXHIBIT NO. 1: (FOR IDENTIFICATION ONLY) ONE-PAGE DOCUMENT DATED NOVEMBER 13, 2002, ENTITLED: "MOVING PARTIES' PROPOSED TIMELINES TO IMPLEMENT ALTERNATE RELIEF" [116] 12 UNDERTAKINGS 13 14 --- Upon commencing at 9:30 a.m. 15 MR. SOMMERVILLE: Thank you very much. Please be seated. 16 Good morning, everyone. The Board is convened this morning in the matter of the Board file number RP-2003-0044. It is an application for distribution service area amendments. The purpose of the hearing today is to hear certain motions pursuant to Procedural Order No. 8 in that matter. 17 Sitting with me today is Arthur Birchenough to my left, and Cathy Spoel to my right. My name is Paul Sommerville, and I will be the Presiding Member for this proceeding. 18 Are there any preliminary matters that we need to deal with before we address the motions? 19 Ms. Lea. 20 PRELIMINARY MATTERS: 21 MS. LEA: Yes. Thank you, sir. I am aware of one preliminary matter related to a request for late intervenor status. I wasn't sure if you wanted to deal with this now and then take appearances. Probably that's the best way to deal with it. 22 I understand that Ms. Kelly Friedman is representing the Electricity Distribution Association, who made a request for late intervenor status. The Board, by way of letter dated November 12th, granted that status subject to objections, as we generally do. Any party has the right to object. 23 We received a letter dated November 12th, 2003, from a Mr. Dennis O'Leary, who represents Wirebury Connections Inc. I wonder if Ms. Friedman would care to speak to the request for late intervenor status and the intended participation of the Electricity Distributors Association? 24 MS. FRIEDMAN: Yes. Thank you. 25 The EDA has three points, really, in response to the concerns raised by Mr. O'Leary. 26 The first is that the EDA does not intend to file any evidence and intends to take the record as it stands. The Board should be aware we're not intending to elongate the proceedings at all, but just participate as any other intervenor would from this point forward. 27 The second point is, with respect to the constituency, the EDA can put forward arguments that are broad and represent the distribution sector as a whole. And let me put it this way: 28 The EDA does not advocate any one position on behalf of any one utility. I take my instructions from the board of directors, who's duly elected and is representative of the industry as a whole. 29 So what we get are arguments that have broad support from the distribution sector as a whole, but may not correspond with any given member's specific position in this hearing. 30 The third point I'd like to make with respect to the lateness of the intervention is just to remind the Board that Hydro Connections Inc. was granted late intervenor status just recently and was not required to demonstrate the uniqueness or distinctness of its arguments as compared to those of the rest of the parties in the proceeding. 31 MR. SOMMERVILLE: Mr. O'Leary? 32 MR. O'LEARY: Mr. Chair, on behalf of Wirebury Connections Inc., good morning to the Board Panel. We are pleased to hear that the EDA does not intend to file additional submissions and, therefore, should not result in any delay of the hearing. That's obviously one of our serious and important considerations. 33 We would simply reiterate the expression set out in our letter, that is, that the distribution utilities in this province are fully and adequately represented already before the Board, and our submission would remain that the Board would benefit, in our submission, very little from the EDA being added as a party to this proceeding. 34 MR. SOMMERVILLE: Are there any other submissions with respect to the request from the EDA for late intervention status? Does anyone else wish to address the subject? 35 MS. LEA: I'm not aware of any other objections, sir, but of course, the 10-day period provided for in our rules has not yet conspired, so it may be necessary for this panel to allow that to occur and then it can consider the intervention and objections in the normal manner. 36 MR. SOMMERVILLE: So we will reserve on the matter until that 10-day period has expired. 37 We do urge parties, if they do wish to make submissions on this subject, to do so promptly. 38 Ms. Friedman, is that a satisfactory situation? Do you need an earlier ruling than that? 39 MS. FRIEDMAN: Well, I only ask this question: What can my role be today with respect to the motions? I was hoping and intending to speak to the motions that are before you today. 40 MR. SOMMERVILLE: The Board will reserve on your status until our morning break, and you'll have to be in sort of a limbo until we can provide you with more guidance at that time. 41 Speaking of which, it is our practice to sit from 9:30 to approximately 11:00 in the morning, to take a brief break at that point, continue on to about 12:30 or so. Today we will be breaking a little bit earlier than that for reasons beyond our control. But we'll be breaking around 12:15. We'll reconvene at 2:00 and sit to somewhere between 4 and 4:30. 42 That's our typical practice. So you can organize matters accordingly. 43 There are a couple of days in the next couple of weeks when we expect this proceeding to probably consume some time over the next two weeks. There are a couple of days over the next two weeks in which we will have to take half-days related to matters involving Board members. But we'll get back to you on that later today or tomorrow. 44 Are there any other preliminary matters that the Board needs to deal with before we outline how we intend to deal with the motions today? 45 It's our intention to ask Hydro One Networks to lead argument in support of its motion first. We would then ask Toronto Hydro and the LDC Coalition to make its argument in chief and reply to the Hydro One submissions. We would then ask the remaining parties who wish to speak to either of the motions to do so, in whatever order presents itself. 46 We would then provide to Hydro One and Toronto Hydro and the LDC Coalition an opportunity to reply, to conclude submissions today. That's, of course, insofar as they are movers. 47 Are there any submissions with respect to that order of proceeding? 48 We will then proceed to get appearances this morning. 49 Ms. Aldred? 50 APPEARANCES: 51 MS. ALDRED: Good morning. My name is Mary Anne Aldred, and I'm here for Hydro One Networks this morning. I'm accompanied by Michael Engelberg, also counsel for Hydro One Networks. 52 MR. SOMMERVILLE: Good morning. 53 MR. ENGELBERG: Good morning. 54 MR. RODGER: Good morning, Mr. Chairman. My name is Mark Rodger, R-o-d-g-e-r, and I'm counsel for Toronto Hydro-Electric System Limited. With me is my colleague, James Sidlofsky, who is appearing for the LDC Coalition, which is comprised of Hamilton Hydro, Hydro Ottawa, Brantford Power, Markham Hydro Distribution, Hydro Vaughan and Enersource Mississauga. 55 MR. SOMMERVILLE: Will you be splitting submissions with respect to the motion? 56 MR. RODGER: No, sir, I'll be making the submissions on behalf of both groups. 57 MR. SOMMERVILLE: Thank you. 58 MS. LEA: Jennifer Lea, Board Counsel, and with me is my colleague Stephen Love, and Gord Ryckman. 59 MR. LOKAN: Andrew Lokan for the Power Workers' Union. 60 MR. SOMMERVILLE: Mr. Lokan, thank you. 61 MR. O'LEARY: Dennis O'Leary for Wirebury Connections Inc. 62 MR. SOMMERVILLE: Thank you. 63 MS. YOUNG: Gaye-Donna Young, Newmarket Hydro Limited. I'm the COO. 64 MR. SOMMERVILLE: Are you counsel, Ms. Young? 65 MS. YOUNG: No, I'm not counsel. 66 MR. CHAN: Good morning. It's Andy Chan, with the law firm of Reuter, Scargill, Bennett. I'm here with my colleague Michael McLeod from Regulatory Compliance Services. We're here on behalf of Veridian Connections Inc. and Centre Wellington Hydro. 67 MR. SOMMERVILLE: Mr. Chan. 68 MS. GODBY: Good morning, Mr. Chair. Carol Godby here for the Southwest Applicants, and they are comprised of EnWin Powerlines, Erie Thames Powerlines and Essex Powerlines. 69 MR. SOMMERVILLE: Good morning, Ms. Godby. 70 MS. FRIEDMAN: Good morning. I'm Kelly Friedman, appearing for the Electricity Distributors Association. As well, this morning I will be appearing as agent for a colleague, Andrew Taylor, who acts for Great Lakes Power, so I will simply be putting Great Lakes Power's position on the motions on the record. 71 MR. SOMMERVILLE: Ms. Friedman. 72 Are there any other parties who wish to be recognized? 73 MR. KENNY: David Kenny, Chatham-Kent Hydro. 74 MR. SOMMERVILLE: Mr. Kenny? 75 Anybody else? 76 MR. SOMMERVILLE: And at this point, Ms. Aldred, I'll ask you to make your argument-in-chief. 77 MOTION BY HYDRO ONE NETWORKS INC.: 78 SUBMISSIONS BY MS. ADLRED: 79 MS. ALDRED: Thank you very much, Mr. Chairman. 80 Procedural Order No. 7 for this combined hearing provided for final oral submissions followed by a series of hearings on the individual applications. Networks seeks to vary this order in one regard, and that's by the addition of oral expert testimony-in-chief and cross-examination on that testimony. 81 We're not seeking to delay or to expand the scope of the hearing by making this request. Networks is ready to proceed with its part of the hearing. 82 Expert reports have already been filed and Networks believes that expert testimony and the ensuing cross-examination on that testimony could proceed expeditiously and would not delay the proceeding. 83 It has been Networks' position throughout these proceedings, indeed, since February when the first Networks submissions responded to the amendment applications was filed, is that the Board should establish a set of principles which would apply to licenced territory amendment applications and that evidence should be heard on these principles. 84 Since the first procedural order in the combined proceeding, there has been an expectation among the parties that the proceeding would be an oral proceeding. Networks understands that the Board is attempting to streamline the proceeding and supports this objective. 85 The request to allow expert testimony is being made as Networks believes that the Board will be assisted by the viva voce evidence of Kema-Quantec and Mr. Todd of Elenchus Research Associates, and because of the hearing process, the Board would benefit from cross-examination and testing of the propositions put forward by these experts. 86 Since Networks filed its motion, there has been a motion brought by Toronto Hydro and the LDC Coalition, and responding materials to both motions filed by Wirebury and by the Southwestern Ontario Applicants. As you will be aware from reading these materials, there is much discussion in those materials about the exact nature of the principle portions of the hearing and the manner in which this hearing should proceed. 87 I'll leave those other parties to put their positions on this matter before you, but Networks' position is that the hearing process will be facilitated if the principles portion of the hearing is heard first, to provide a backdrop and context for the facts on the ground. 88 However, despite the areas of disagreement among the parties, I think all would agree that this hearing addresses issues of great importance to the future of electricity distribution in the province, and for that reason, in our submission, it is crucial for the Board to have as complete a record as possible. 89 Viva voce evidence on the economic and public policy principles which underpin the distribution of electricity here and elsewhere will allow the Board Members to pose any questions they may have directly to the witnesses and to hear the responses and ask follow-up questions if necessary. 90 Again, in Networks' view, this opportunity would also enhance the record. Networks therefore requests an amendment to Procedural Order No. 7 which would allow for direct testimony and, if necessary, that the Board direct that there be cross-examination on expert witnesses whose reports are admitted into the record. 91 Networks also requests that said direct testimony and cross-examination proceed prior to the individual factual portion of the hearing. 92 Those are my submissions. Thank you. 93 MR. SOMMERVILLE: Thanks, Ms. Aldred. 94 Mr. Rodger, in reply in chief. 95 SUBMISSIONS BY MR. RODGER: 96 MR. RODGER: First, in terms of reply to my friend at Hydro One, Mr. Chairman, I don't think there's any inconsistency in the submissions I'll make and the relief I want, and we're speaking about what my friend has suggested, with perhaps one exception. You'll hear shortly that we're proposing an alternate relief, again, alternate relief, that that would have the principles portion of the hearing go after the hearing of the individual applicants on the facts, and I'll explain that shortly. 97 So I think, in total, we support their view. I guess the addition is that we also seek to file direct evidence ourselves, and we're going to be asking for a short adjournment in that regard, but other than that, I believe we're on all fours with the Hydro One submission. 98 MR. SOMMERVILLE: Just how short an adjournment are you thinking of, Mr. Rodger? 99 MR. RODGER: If I could speak to that, and I'll just get to that in one second, Mr. Chairman. 100 MR. SOMMERVILLE: Sure. Thank you. 101 MR. RODGER: What you should have before you today, Mr. Chairman, is our motion record, which we filed on November 6th, and which is comprised of a notice of motion and an affidavit of Dr. Adonis Yatchew, and for the record that is Y-a-t-z-h-e-w. And our intent this morning is to provide you with a summary of the key elements of that motion, as just said, offer a refinement on our alternative relief requested, and respond to the submissions of the Southwest Group and Wirebury, and address any questions you may have. 102 So I'm also going to be referring to the Southwestern and Wirebury response to our motion. 103 The relief that we seek, sir, is cancellation or revision of Procedural Order No. 7 to permit the following. Firstly, an adjournment of the proceedings until the Board can reconvene in December to allow our clients, pursuant to rule 11 of the Board's practice rules, to allow us to file new written evidence in response to the John Todd report filed by Wirebury entitled: "The Benefits of Competition in the Electricity Distribution Sector," which was filed on September 26th, 2003. 104 Both the reports that we intend to file, and we're contemplating two separate reports, one from Dr. Yatchew and one from the LDC clients themselves, that both these reports speak to the guiding principles that you're being asked to consider, which are all within the approved issues list, and I'll speak to that later. 105 We're seeking a two-week time period in order to prepare and file these written reports, and so that would propose that we file this evidence with the Board and parties by December 1st. 106 We do not believe that there will be undue delay in this adjournment, and I can also advise the Board that I really don't think we could prepare the evidence any faster than two weeks. As you can appreciate, we do have certain realities working with seven clients. As the Board's aware, we try and put clients together to avoid repetition in these proceedings, but there are internal approvals that each of the clients have to have; they have to have their input and that does take some time. 107 In the Wirebury response to our motion, they asked that if the Board saw fit to grant our motion, that parties be entitled to submit interrogatories on the evidence that we would propose to file on the 1st, and we would certainly consent to do that if the Board desired to have an interrogatory process for our evidence. 108 Secondly, we ask that the oral hearing process itself be set out in a new order, and specifically a process which provides for filing of our written evidence, the presentation of applicants and intervenors' witnesses, including the presentation of direct evidence, cross-examination, and reply; and the submission of final argument on the matters set out in the issues list in Procedural Order No. 4. 109 So these items that I've just reviewed, this is clearly our first choice of the relief that we seek from the Board today. 110 Now, as I said at the outset, we do propose an alternative relief which we identified in our notice of motion. And our goal here has attempted to make a good-faith effort to try and maintain the Board's schedule with respect to the seven individual applications. And what both the moving parties and those who oppose the motions both appear to agree on is that there are two related but different objectives for these proceeding. 111 Firstly, the Board must establish guiding policy and principles for the service-area amendment applications generally; and second, deal with the fact-oriented applications of the seven individual local distribution company applicants. 112 And in the Wirebury response at paragraph 6, it described the seven individual applications as "truly factually based." And our proposal in the initial motion documents was to attempt to try and split the principles part of the hearing into two; one to deal with the seven applicants, the other to deal with the broader principles, particularly involving Wirebury. But we came to the conclusion that this was impractical to try and split the principle portion that way. 113 So our new alternate relief, if I could be permitted to call it that, is to have the Board consider the seven factually-driven applications on the schedule as the Board currently has forward, just deal with the facts only. And thereafter, in December, when the Board's schedule permits, then allow to have the entire hearing on the principles. 114 By this, we can maintain the goal of dealing with the seven applications in the Board's current schedule. It allows us to file evidence, and then we have a wholesome review of the principles' issues in December. And what I have done, and you should have copies, and I have others for my friends, is we've put together a proposed timeline of how we might implement this alternate relief. And I'm not sure, Ms. Lea, whether this should be given an exhibit number? 115 MS. LEA: It can certainly be given an exhibit number, just for ease of reference. It's not a piece of evidence. We're here on a motion. Why don't we call it Exhibit 1, for identification only. 116 EXHIBIT NO. 1: (FOR IDENTIFICATION ONLY) ONE-PAGE DOCUMENT DATED NOVEMBER 13, 2002, ENTITLED: "MOVING PARTIES' PROPOSED TIMELINES TO IMPLEMENT ALTERNATE RELIEF" 117 MR. RODGER: Thank you, Ms. Lea. This is a one-page document. It's today's date, November 13th. It's entitled: "Moving Parties' Proposed timeline to Implement Alternate Relief." 118 The first part of this proposal is November 17th and 18th: Parties meet to settle scope of facts. 119 The reason we put that in is we have a couple of days next week. And it's my understanding -- I wasn't involved directly in the urgent applications earlier this year, but my understanding is that a good deal of those applications dealt with kind of establishing the facts at the hearing. 120 So the view was that perhaps the Board and parties might benefit if we could establish what really is the box within which the specific applications must work with respect to the facts. And this would be akin to an issues conference-type process, where we would present to you: Here's the things that we would put forward in the facts part of this process. 121 From the 19th to the 27th, we would maintain the OEB's schedule for these individual applications on the facts, where applicants would present their witnesses, their evidence in-chief, there would be an opportunity for cross-examination and reply. 122 On December 1st Toronto Hydro and the LDC Coalition would file our new written evidence. If the Board so directed, we would respond to interrogatory requests on that evidence, and thereafter we could have the oral hearing on the guiding principles as soon as the Board process permitted in December. 123 As I said, this is an alternate relief. I do have sympathy for the Hydro One position that principles should come first. 124 On the other hand, it's unclear to me whether it's the Board's intent at this time to make a decision on principles in any event before it heard the individual fact applications. So, in that sense, whether it's principles first or facts first, unless the Board was committed to make a decision on principles first, it seems to me that the parties are in the same situation. 125 MR. SOMMERVILLE: Have the parties had this before this morning? 126 MR. RODGER: No, sir. I just delivered it this morning. 127 MR. SOMMERVILLE: Thank you. 128 MR. RODGER: Now the grounds for our motion. And they are two-fold. 129 In our view, there will be a breach of procedural fairness if an oral hearing is not held in this proceeding. And secondly, at present the Board has an incomplete record before it concerning the implications of the principles that you are requested to consider and adopt. Particularly with respect to addressing Wirebury's evidence of John Todd. And in our view, further evidence is needed for the Board to have a fulsome and complete review of the matters which is currently deliberating. 130 And at the outset, I wanted to acknowledge that this proceeding really has evolved into a very complicated one which involves fundamental policy questions concerning the very essence of the distribution sector in Ontario. We have what's developed into a rather fascinating proceeding, which is a melding of policy-making, combined with fact-based applications. So, first to the fairness issue. 131 In our view the procedural fairness centres around how intervenors reasonably should have interpreted the phrase "an oral hearing." In the case law that we cite in our brief, it's described as a legitimate expectation of an oral hearing. 132 Just to reference briefly, paragraph 21 of our notice of motion, we have an excerpt from the text hearings before administrative tribunals of Macaulay & Spragg. Of course, Mr. Macaulay was a former chair of this Board. And the quote reads: 133 "In summary, where a decision maker has promised an individual that a specific procedure will be followed before a decision is reached or the decision maker's conduct is such that it would reasonably create such a belief, the courts will uphold that individual's right to that procedure, even if the law would not otherwise recognize it. Legitimate expectations only operates to grant procedural, never substantive, rights, and there must be some promise or conduct which a reasonable person would reasonably expect that a specific procedure was to be followed." 134 And in our submission, Mr. Chairman, a legitimate expectation has been created amongst the parties about what the phrase "oral hearing" means. It's clear for those of us that have appeared before this Board over many, many years, and also for new intervenors as well. And I'll explain that shortly. 135 Now, some parties have suggested that the intervenors and applicants should have read in or somehow interfered that over the course of the many months since Procedural Order No. 1, an oral hearing was something other than the process I described in the relief that I requested. And in our view, the Board ought to reject this argument. 136 For example, if you look at the Wirebury reply, in response to our motion, in paragraphs 5 to 8, Wirebury presents its interpretation of how an oral hearing should be interpreted in this proceeding. And in their view, the phrase "oral hearing" has not one but two distinct meanings for this hearing. 137 Firstly, with respect to the seven applications, oral hearings mean what I described at the outset: Applicants lead evidence in-chief; there's a chance for cross-examination, reply and final argument; and so on. This is significant because Wirebury nowhere points to anywhere in any procedural order where oral hearing is defined this way. Wirebury can point to none of the specific words "leading evidence, permit cross-examination, reply" and so on. It simply was taken that this is what "oral hearing" means and we agree. 138 However, Wirebury goes on to state that the parties should also somehow have known that oral hearing had a very different meeting with respect to the principles part of the hearing, that is, no leading of witnesses, no cross-examination, no reply. 139 In our submission, if the Board intended in Procedural Order No. 1, and thereafter, to limit what the phrase "oral hearing" means with respect to the principles portion of the hearing, and as an aside, if anything, one would have thought that the principles portion was equally if not more important, given the broad policy role than perhaps the individual applications, where, if the Board had intended to somehow have multiple means of "oral hearing" it would have and ought to have made this clear at the outset of the process. It would have signalled at the outset that this was not going to be an ordinary oral hearing. 140 Also, in our view, the Board would not have ordered a combined hearing if it intended two separate processes under the phrase "oral hearing." There is simply no reasonable basis, in our view, to make the leap for interpretation of two notions of oral hearing which Wirebury suggests. 141 And in fact, Wirebury's own previous submissions contradict the dual definition of "oral hearing" contained in the Wirebury reply to our motion. 142 If you recall the response to Hydro One's objection on the introduction of the John Todd evidence in September, which evidence goes directly to the guiding principles that are before the Board, counsel for Wirebury states in his October 2nd letter, and this is referenced in our paragraph 13 in our motion materials: 143 "Since Wirebury will be presenting Mr. Todd for cross-examination in the oral phase of this hearing, Wirebury therefore does not see the need for additional interrogatories." 144 So it's clear from that response, I submit, that up until about a month or so ago, Wirebury thought that "oral hearing" meant leading and cross-examination of witnesses on the principles portion of this hearing. 145 We also have the reply of the Southwestern group to our motion. And at their paragraph 9, it's their view that Procedural Order No. 7 "does not foreclose the right of any party to call and examine witnesses, present evidence, or conduct cross-examination of the witnesses." 146 So even the opposing parties believe that oral hearing means leading evidence, cross-examination, in my view. 147 Now, why is an oral hearing, as I've described it, important for this particular proceeding? It's important because of the serious and profound implications for the entire LDC sector and the rights that will be impacted by the decision of this Board on principles. And I want to speak to some of those impacts just a little later. 148 But I would also point out that, in the Board's decision on jurisdiction earlier this year, it made the following statement as part of the decision last June. 149 "The Board wishes to state that it is very aware of the serious public interest concerns involved in granting service-area amendment applications. The Board will consider seriously both the regulatory policy issues and the practical implications of such applications." 150 The reasonable conclusion of the parties is that this is a proceeding which warrants the full opportunity to present witnesses, respond to evidence, and test evidence. One would not have reasonably interpreted the Board's concerns as translating "oral hearing," which has the elements of reduced levels of participation and no ability to test evidence by eliminating cross-examination. 151 Even on the simplest basis, beyond counsel's past involvement in proceeding, if there was a party that, for the first time, came to the Energy Board and wanted to get a sense of what oral hearing meant, what could they do? Well, they might go to the OEB web site. And they might, in the search engine, put in "oral hearing" and the output of that is a series of various cases on both the electricity and natural gas side, where the Board -- these are all kind of final decisions. But the Board takes them through the final decision, the oral hearing, and talks about the process that went on; that there was evidence filed; there were interrogatories on the evidence filed; there were responses given; there was reply evidence; there were interrogatories filed; the responses given; there was evidence in chief; there was cross-examination; there was reply, et cetera, et cetera. 152 That's what parties believe that phrase means, and in our view, that's what it meant for this hearing. 153 Now, the other ground for the relief that we seek has to go to the incomplete record, if our clients are prohibited from introducing the evidence that I have described at the outset. 154 At paragraph 6 to paragraph 21 of our notice of motion, we flag the areas of concern which Dr. Yatchew also talks about in his affidavit. I actually misspoke. It's paragraph 6 to paragraph 21 of Dr. Yatchew's affidavit. And this is the type of evidence that we believe is crucial in order to get a balanced view of the issues and submissions on the principles question, issues concerning minimum efficient scale, issues concerning regulatory efficiency, issues concerning test contestability, and issues concerning utility costs. 155 Now, I'd like to speak to that part of the Wirebury response to our notice of motion which submitted that the Yatchew evidence would not assist the Board in any way. And this, really, is Wirebury's paragraphs 34 to 52 of the response to our motion. And I thought, in reading the Wirebury submission, that it was actually very, very helpful to our motion, because what it does is it underscores the importance of having the opportunity to test the Wirebury case through cross-examination, and the need to complete the record through Dr. Yatchew's evidence with respect to the range of principles before the Board. 156 And I'll give you a couple of examples. In Wirebury's paragraph 36, it makes the statement: 157 "In a competitive market, Wirebury submits that it is not the responsibility of the regulator to determine whether distributors have sufficient scale to operate efficiently." 158 However, the view that the distribution of electricity should be thought of as a competitive market is the fundamental premise and principle that we say is false, and one that must be tested through cross-examination and the leading of evidence. In essence, Wirebury is advocating on the guiding principle which would have the effect of replacing the current regulatory model with competition, but this is precisely the debate over guiding principles which is the very focus of this hearing. 159 Next, Wirebury responds to the issue of efficient scale. In paragraph 38 there is a quote from Mr. Todd's evidence which states: 160 "For most operational functions, the efficient scale can be achieved in many ways other than through growth within a defined and sacrosanct licensed service area." 161 Well, my submission to the Board is where is the empirical evidence to support that? What are the sources for gaining efficient scale which Mr. Todd refers to? There are none identified. But Wirebury appears to be asking that you need not hear from Dr. Yatchew because somehow these assertions should merely be adopted by the Board without scrutiny or reply. 162 Next, with respect to regulatory costs, this is Wirebury's paragraph 41, there is the statement: 163 "Any incremental increase in regulatory costs would be inconsequential when compared to the benefits of allowing competition." 164 Well, this is merely an assertion. It's precisely the kind of statement that needs to be tested, responded to and challenged. 165 So this part of their submission, really, should not be accepted by the Board because it basically boils down to Wirebury asking the Board to prejudge your conclusions on guiding principles, and we say that is simply unsatisfactory. 166 Finally, the issue around ambiguity, around contestability. Dr. Yatchew said that was one area where he found the Todd evidence confusing. If you look at paragraph 47 of the Wirebury submission, the concept of the underserved customer, there is the statement: 167 "Hence, any location could become classified as underserviced and therefore become contestable at any time in the future." 168 We took that to mean that potentially any existing customer of an LDC might be deemed, in Wirebury's view, to be underserviced, and that seems to be very different to what John Todd said in his evidence about how existing customers are somehow off the table. It's just not clear. And the Board has to have that kind of detail and the responding detail, in order to make a comprehensive decision in this matter. 169 I also wanted to respond to some other submissions that Wirebury made in its response to our motion, one being that what we're really trying to do, that is, what Toronto Hydro and the LDC Coalition is trying to do, is to expand the issues list in this proceeding. 170 As a standard practice in the issue settlement conference process, it's rarely the Board's process to identify every possible theme under a particular issue. What parties agree to is a series of issues and the myriad individual issues are encompassed within the broad categories that are presented to the Board. In our view, all the areas of evidence that we identified as where we'd like to lead evidence on, or the kind of evidence, fit within this Procedural Order No. 4. 171 Now, in the Wirebury submission in paragraph 10, it refers to the supplemental submissions which all parties agree would be subsumed within the Procedural Order No. 4 issues list, and I believe the Board has a copy of that. This is a document that is undated, it just has at the top simply "Supplemental Submissions." And you'll see item number 3, "Impact on Distributors and Their Customers." 172 The final bullet talks about, "Wirebury or other parties may call evidence or make submissions with respect to the five items listed in Wirebury's letter of April 24, 2003, as parties believe they are subsumed in the issues list." 173 And we reference in our motion materials Mr. O'Leary's April 24th letter, and the five items are: one, open competition for distribution services; two, non-discriminatory access to distribution systems; three, customer value and reliability, energy efficiency and quality of electrical services; four, economic efficiency and distribution; and five, an expedient approval process. 174 So our view is that all the issues that we have raised in our notice of motion fall within what the Board and the parties have agreed are fair game for this process. There is no expansion of the issues list whatsoever by our notice of motion. 175 Also, I wanted to respond to further submissions of Wirebury along the lines of why didn't Toronto Hydro and the LDC Coalition file their evidence on August 7. There was also a reference in the August 7th submission that Toronto Hydro did make to the Board, and I quote, "Should the OEB hold an oral hearing?" They suggest that you take that we never intended an oral hearing to happen at the outset. 176 And we did that for a reason. And basically, our clients made the decision leading up to August 7th that the prudent course was to wait and see the case that was being put forward in favour of the fundamental principles that Wirebury was advocating. As an aside, I point out that Wirebury also didn't file their evidence on August 7th, but that's another matter. 177 In essence, our clients did not want to spend significant resources in evidence preparation on this huge question of redefining the whole distribution sector when it may not have been necessary. Thus, our statement in our August 7th filing: "Should the OEB hold an oral hearing?" 178 If the proponents to have Wirebury-type of principles did not file any expert evidence on the 7th of August, we anticipated that a possibility for this Board was to canvass with the parties at some point after August 7th about perhaps changing the process from a full oral hearing to, basically, going right to final argument as you did so in Procedural Order No. 7. However, it was also our expectation the Board would not have changed that process without first consulting the parties. And I'll give you a recent example of that. 179 Just in the past week or so, we had a major application file from Great Lakes Power on its leave to construct. The evidence was filed. The Board sent out a letter to intervenors saying: We're thinking about proceeding in this matter by way of written hearing. However, parties, if you have a different view and think there should be an oral hearing, you let us know, and then we'll decide. 180 That's what we anticipated if the Board was going to change the approach for this as well. 181 If Wirebury had just kept its evidence to the Wirebury employees' submission of the 7th, Toronto Hydro and the Coalition may very well not have objected to Procedural Order No. 7, and gone to final argument. And I can tell you what our final argument would have been: That there was completely insufficient evidence before the Board from that submission for you to grant the principles that they're seeking. However, when the Todd evidence was filed, the world changed and we had to respond and must respond to the evidence. 182 So, in my submission, the moving parties should not be criticized for trying to be prudent in the hope of avoiding considerable expense in preparing evidence when, as of August 7th, it was completely unclear whether that was needed or not. So we see no inconsistency whatsoever in our earlier submissions and what we're asking today. 183 Further, Wirebury, in paragraph 17, states that, you know, this is a significant policy component of this proceeding. There really is no applicant in a policy-type process. And our submission to that is, that is just not true. Wirebury clearly is an applicant in the sense of asking this Board to adopt a view of the world which would basically have the effect of endorsing its entry into the Ontario distribution marketplace. 184 If the Board was to find sympathy with the Wirebury principles, and you adopt some principles which support them, you can bet that if my friend was at its license or Wirebury rate application, there would be the submission made that: We don't have to deal with principles anymore. That was dealt with way back at this hearing. Right now we're just talking about numbers, about license conditions, but not to the principles of whether we're entitled to be here. 185 So I believe that Wirebury is a proponent of the policy that it seeks implemented, and to decide otherwise is just not the realities of what we're dealing with in this hearing, in my view. 186 Wirebury also goes on to make a special point of the fact that the Minister of Energy granted authority for Wirebury to proceed with making an application for rates back in April. And our view is that nothing should be read into this other than the Minister realized that the Board was the proper place to deal with these issues. But certainly nothing should be taken that somehow the Minister endorses this view of the world, or this concept, merely by moving it on to the Board. 187 In conclusion, Mr. Chairman, the policies and guiding principles to be decided in this proceeding is nothing short of determining whether the current regulatory model for the Ontario distribution sector should be abandoned and allowing competition forces to determine distribution services. When the Todd report was filed on September 26th, that changed everything, and, as I've said before, our clients could not sit by. We had to respond to that report. 188 Our view is that the Wirebury principles are absolutely contrary to everything this sector has undergone in the past number of years, whether we're speaking about the McDonald report, the white paper, the market design committee, the Energy Competition Act, and the Board's guiding objectives, the OEB Rate Handbook, and the whole PBR regime. Toronto Hydro and the LDC Coalition, we're real utilities. We've got hundreds of thousands of real customers today, and for a good part of the last century, having invested several hundreds of millions of dollars, are the ones on the ground, serving clients now. And it is critical, in our view, that we be given an opportunity to respond to the Wirebury view of the world. 189 I think in total, when you combine the Hydro One interests and our group's, we're probably close to 70 percent of all the distribution customers across the province of Ontario. 190 Rights of existing LDCs will be affected. There is no doubt. We made reference to possible impacts on credit rates, the need to create affiliates to compete with Wirebury because we'll get into a debate of average versus incremental costs and so on. There is no doubt that rights will be affected. 191 You have rule 11. In our view, rule 11 was there to deal with exactly this type of situation. When there's been a late filing of evidence, parties should have an opportunity to respond. You have a flexible enough process to allow that. And in our view, we request that the relief be granted so that the Board can have a fulsome review of the matters now before you. 192 Those are my submissions, sir. 193 MR. SOMMERVILLE: Mr. Rodger, without commenting on the substantive issues that you raised with respect to the relief that you seek, you have provided an alternative timetable as part of your submission this morning. If the Board were to grant the relief that you're seeking, I'm concerned that there may be some prejudice to some parties, and I'm going suggest something else maybe for the consideration of the other parties and yourself as we go through reply submissions this morning. 194 I'm thinking, for example, of trying to accommodate, as much as possible, the evidentiary portion -- not evidentiary portion, but the submission portion related to general principles, as a first stage, in effect, dealing with the Hydro One panel, perhaps dealing with the Southwest Utilities panel, next week, permitting submissions as contemplated by Procedural Order No. 7 on the general principles related to the issues involved, and then putting over until, say, December 10th or somewhere in that range the evidence of Dr. Yatchew and Mr. Todd, and letting, if I may refer to it in this way, the embedded distribution issue find itself at that point -- let me backtrack a second. 195 We may also be able to deal in some measure with the individual cases as you've suggested in that first phase, where we would try to deal with some of the applications, either from a factual point of view or whatever we can accomplish with respect to those cases, in the first phase; and then put the embedded distribution issues over to the 10th for Dr. Yatchew's evidence, and I believe it's Dr. Todd, Dr. Todd's appearance as well, if we were contemplating that kind of relief. 196 I'd like the parties to think about that. Obviously, the best approach for us would be if there emerged some form of consensus surrounding this subject matter. That would be helpful. But I'd like parties to put their mind to that in their submissions. 197 You will have an opportunity, Mr. Rodger, as part of your subsequent right of reply, to do so. 198 I wonder if -- Ms. Lea? 199 MS. LEA: Thank you, Mr. Chairman. I did have one question, if the Board permits, a clarification from Mr. Rodger. And perhaps I simply didn't read his initial notice of motion carefully enough. 200 Mr. Rodger, I just wanted to understand exactly what evidence you would be seeking to file, and when. I understood your submissions today to be that you were not merely contemplating the filing and subsequent examination and cross-examination of expert evidence from Dr. Yatchew, but you were also contemplating the filing and examination of evidence from a panel of your clients, representatives of your clients. Am I understanding that correctly? 201 MR. RODGER: Yes, Ms. Lea. We anticipate filing two reports on December 1st; one of Dr. Yatchew and one prepared by LDC officials. 202 MS. LEA: How does this relate to the evidence that you already filed on August 7th, which I understand was signed by counsel but was put in, I believe, as a submission more than a piece of evidence? I'm just trying to understand what is the record that your client is seeking this Board to allow at present? And would you be calling any panel related to the evidence that you had filed on the 7th? 203 MR. RODGER: As we said in our August 7th filing, if you look at paragraph 20 to 22, after we kind of underscored the various themes that we spoke to on August 7th, we said -- paragraph 22 says: 204 "Toronto Hydro-Electric System does not propose to provide detailed submissions in respect of the items on the Board's issues list. Toronto Hydro-Electric System submits that the principles set out above should guide the Board in its consideration of any service-area amendment application. However, Toronto Hydro-Electric System is providing --" 205 MS. LEA: Sir, you are going a little to quickly for the reporter. 206 MR. RODGER: I'm sorry. 207 "However, Toronto Hydro-Electric System is providing the following additional brief comments in respect of a number of enumerated issues, and may elaborate on these points at an oral hearing in this proceeding." 208 So this goes back to my submissions about what we did on August 7th. We didn't want to make the investment of doing significant reports if it wasn't going to be needed. But we wanted to keep the door open that should expert evidence like John Todd's reports be filed, then that was our appropriate opportunity to reply to that. And that's why we crafted the August 7th submission as we did. 209 MR. SOMMERVILLE: And just so that I'm clear, you would expect a panel, Dr. Yatchew, but also an additional panel? 210 MR. RODGER: I think we would have one panel, Mr. Chairman, comprised of Dr. Yatchew -- 211 MR. SOMMERVILLE: Dr. Yatchew and others. 212 MR. RODGER: -- and an LDC official. 213 MR. SOMMERVILLE: And they would be responding to questions related to both the expert evidence and the narrower evidence of your member companies; is that correct? 214 MR. RODGER: That's correct. 215 MS. LEA: Thank you. Thank you, sir. 216 MR. SOMMERVILLE: It seems to us it may be prudent and appropriate for us -- I indicated that we would take our normal break at around 11:00, but it seems to me it may be worthwhile for us to adjourn now for about 20 minutes. I'd like to encourage the parties to consider, as an alternative, some timing aspects and some order of process that may assist us in looking forward. So we'll adjourn now until 10 minutes to 11:00. 217 Ms. Friedman, we'll try to address your issue when we come back as well. Thank you. 218 --- Recess taken at 10:31 a.m. 219 --- On resuming at 11:22 a.m. 220 PROCEDURAL MATTERS: 221 MS. LEA: There is the matter of the intervention to be dealt with? 222 MR. SOMMERVILLE: Thank you, Ms. Lea. In light of the fact that parties to this proceeding had notice today with respect to the application of EDA, I've asked for submissions with respect to that. Mr. O'Leary provided us with his point of view prior to and then following Ms. Friedman's presentation. 223 Given the Board's power to abridge time in such matters, the Board will recognize the intervention of your client, and you may participate accordingly in today's proceeding. 224 MS. FRIEDMAN: Thank you. 225 MR. SOMMERVILLE: Thank you. 226 I think where we left off, Mr. O'Leary, I think you are next in line. I understand from Ms. Lea that there had been some discussions that have perhaps narrowed some gaps; maybe not. I'm sure we'll find out in the course of the presentation this afternoon. 227 Mr. Lokan? 228 MR. LOKAN: I'm in the Board's hands, of course, but if you are organizing this in terms of who had what views on what side, my submissions would be in support of the two motions. 229 MR. SOMMERVILLE: I think I've abandoned all hope -- 230 MR. LOKAN: Okay. 231 MR. SOMMERVILLE: -- of actually trying to organize it on that basis, Mr. Lokan. Thank you for that suggestion. 232 Actually, the course of proceeding, I thought it might be most appropriate to hear from Mr. O'Leary, probably Ms. Godby following that, insofar as she has filed material in an affidavit addressing the subject matter, and such other parties in whatever order they wanted to reply. 233 Is there any problem with that? Accordingly, Mr. O'Leary. 234 MR. O'LEARY: Thank you, Mr. Chair. 235 MOTION BY HYDRO ONE NETWORKS INC.: 236 SUBMISSIONS BY MR. O'LEARY: 237 MR. O'LEARY: Perhaps I could start where we left off just before the break, which is in response to your suggestion that the parties consider some sort of consensus approach to the timetable. And I have indicated to counsel that I've talked to that I would make this submission to you. 238 There was an attempt to try and come up with a formula which would avoid further time today and bring an end to some of these procedural wranglings. The suggestion, and we put forward this as the alternative proposal, would be this: That the Hydro One relief would be granted to the extent that they're asking to have their expert appear and give oral testimony and to be cross-examined; that Dr. Yatchew would be permitted to file a report on a date no later than December 1st, and if, in fact, it could be done any earlier, we would certainly encourage that to occur; that parties would be entitled to ask interrogatories within a specified period of time of Dr. Yatchew; and that a response to those interrogatories would be required from the moving parties or from Dr. Yatchew by a specific date as well. 239 We would then fix a date for the commencement of the oral portion of the hearing, and that the hearing itself from an evidentiary standpoint, that is, the sworn witnesses, would be limited to the experts that have filed reports. That would consist of Dr. Todd, Dr. Yatchew, the Quantec-Kema group, and the Southwestern expert, who I believe is Mr. Southam. And that would be the extent of the oral testimony, and that would be the extent of the parties that would be cross-examined. 240 We would then proceed with what I've called the factual-based applications. The reason why that was suggested is because there is some concern, or at least there was some preference expressed, that it would be helpful to have completed the principles cross-examinations and dealt with some of the same issues that have come up in some of those applications. And then there would be the final oral argument, that parties would make following those applications. 241 So that there is no loss of time, the suggestion was that next week those parties that are interested in the remaining seven, what I call factual applications, but they're not all truly just specifically factual, is that there would be some attempt too narrow and agree upon certain facts, that there would be a series of questions that would be circulated, and parties would try and settle any factual issues such as who's connected where, any boundary issues, et cetera. 242 That would be the alternative proposal we're putting forward. Where the parties have not been able to reach a consensus is in respect of whether or not -- there are, perhaps, two things. I think some have said they would now like to also file experts' reports, and our respectful submission to that would be that if they weren't aware that today was the day to ask for the right to file an expert's report, then they've been living somewhere other than within 500 kilometres of this province. 243 And secondly, the issue has arisen as to whether or not a party should be entitled to file additional non-expert evidence, or additional submissions. And I believe that's the relief that we're hearing from Toronto Hydro and the LDC Coalition. And they would also like then, the parties, to have the right to call a non-expert panel, which would undoubtedly mean that many, if not all of the other parties to this proceeding, will also want to call, in addition to experts, panels, who presumably will simply be reiterating what they've said in their submissions which should have been filed on August 7th in any event. And that's where the consensus has broken down, unless, of course, there's been a change of heart. 244 Unfortunately, I feel compelled, then to take a position opposing the motions before you today. 245 MR. SOMMERVILLE: Thank you, Mr. O'Leary. I appreciate that. 246 MR. O'LEARY: But that would be our alternative relief, should you be so inclined. 247 There will be some overlap in my submissions, particularly at the outset, as it relates to both motions, the Hydro One and the Toronto Hydro. In respect of the first, the Hydro One, our submissions are, briefly, that Procedural Order No. 7 was procedurally fair, and that there has been no breach of natural justice; that the procedure that the Board has proposed in Procedural Order No. 7 is appropriate given the nature of -- I call it part B of this proceeding, but it's the policy/principle portion of this proceeding. And it's also appropriate, given the nature of the submissions which have been filed. 248 It's also our submission that Hydro One has not demonstrated any procedural unfairness or prejudice. Our concern, which was addressed in our notice of motion, is that what Hydro One was asking for in terms of expanding the witnesses has been cleared up. We understand that they're only looking to produce their expert in cross-examination, and in that respect our concerns are therefore withdrawn. 249 Turning specifically to our submissions, and these early submissions relate to both motions. And I won't repeat them, relating to the fact that the nature of this proceeding and the evidence that has been filed with the Board is of a type that is appropriate for Procedural Order No. 7, it relates clearly to both the Hydro One and the Toronto Hydro motion. It's Wirebury's position that of the applications by the nine LDCs, it's clear that each has different factual bases that would require individual examinations, and it was within the Board's prerogative, under the Statutory Powers Procedures Act to combine all those applications, to hear them in one proceeding. That I call, or will call part A of this proceeding. 250 Part B is that part that relates to the principles or the procedures that the Board plans to adopt in future in its consideration of service area amendments. It's not intended, as Wirebury understands it, this proceeding will actually delve into the consideration of whether or not a certain type of distributor should or should not exist. That's not the role of this Board, as we understand it, in this proceeding. It is to set something more akin to the mergers and acquisitions and divestitures guidelines, to at least recognize in the setting of the procedures and principles that there will be issues that will arise in future. Many have been raised in the submissions that have been filed with the Board to date. And so that that future process or guidelines recognizes that these issues will be raised, and to the extent possible, accommodate for them and require parties to file information and evidence either in support of their position or that principle for the purposes of supporting that service-area amendment application. 251 But this proceeding is not intended to rule upon the existence of a particular type or any new distributor that may in future apply for a license application. 252 Ultimately, whether a service-area amendment application is approved in future by this Board will, obviously, be guided by the guidelines and principles that are set here. But it will depend upon the facts that are put before the Board at that time. And this is not the proceeding for that. 253 Accordingly, it is submitted that the Board was correct in believing and setting a Procedural Order No. 7 that it would not be helpful, nor appropriate, to invite parties to lead oral direct evidence and to cross-examine witnesses in respect of part B of this proceeding. 254 And if we look at the nature of the record that's been filed to date, Wirebury submits that there is support for Procedural Order No. 7. If we look at the files that have been made, specifically if we look at the filings by Toronto Hydro and the LDC Coalition, we see that, in fact, they have filed submissions by counsel. There was certainly no indication in those submissions that they intended to call a witness. They said if the Board should be inclined to proceed that way they might call a panel, but certainly there was no indication in that submission on behalf -- I should say in those submissions, because they're both the same and the LDC Coalition adopted that of Toronto Hydro -- that they intended to call a witness. 255 This suggestion by my friend that there was an expectation of the right to call an oral panel, we suggest, is simply a creation of recent events. 256 When we look at the nature of the evidentiary record filed to determine whether or not it's more akin to evidence or more akin to argument, which is what Wirebury submits has been put before you, is that most of the submissions really amount more to argument, with the exception of the experts' reports that are filed. You look for various signs of what is the nature of the evidence? Does it reference a particular witness? Does it come from counsel or does it come from a person that actually is speaking on behalf of that particular party? Does it contain words like -- and you will find this throughout the submissions of Toronto Hydro and the LDC Coalition -- does it contain words like "in the Networks' submission," "in Networks's view, Networks' belief." 257 Clearly, what they're making are submissions towards the types of principles and the types of guidelines and the process the Board should be following in future, for which cross-examination as between counsel on their various arguments would be of little assistance to the Board. I don't think anyone would want to see lawyers cross-examining one another on their argument and their submissions. 258 The lawyers might like that by I'm not sure that the panel would. 259 I have prepared a brief of authorities that should be before you, Mr. Chair. And I've included at the end of that, under tab 5, a decision of Mr. Justice Rosenberg. And I only wanted to highlight this case because it stands, in our respectful submission, for the proposition that there is no absolute right to cross-examine in a proceeding of this nature. Now, as is the case in most, what I call, administrative law decisions, there is no identical set of facts, and it's often involving a different Board or issue. But I'd ask you to turn to page 6 of that tab. 260 And the important point that I wish to draw is actually highlighted by the words of Justice Rosenberg there in the beginning of the first full paragraph, right after. You'll see this is under the former Statutory Powers Procedure Act, the wording of 10(c) is not identical to 10.1, which is the section which is in force today, but it's very similar. And you see right after, and the issue here is whether or not there's a right to cross-examine, the court held that: 261 "Even if the Act had applied to the proceedings before the provost," and it involved a provost at the university, "I would have held that no cross-examination was required as there was no issue of credibility." 262 My submission is, there is no issue of credibility for which cross-examination is necessary in these proceeding. If we go down a little further, beginning with the paragraph: 263 "The present case is different. There is no denial in the evidence of RECO rep. The arguments of the applicant are technical and procedural. Accordingly, the applicant is not under either the Rules of Natural Justice or if Statutory Powers Procedure Act entitled to cross-examine." 264 So the court's saying that where the matters are of technical and procedural nature, there is no automatic right to cross-examine. 265 Of course it is within the Board's discretion, but it is Wirebury's position, and we were in support of Procedural Order 7, that it's in your discretion in part B of this proceeding to take the position that it was not going to be helpful to it to proceed on the basis of oral testimony and cross-examination of that. 266 It's Wirebury's submission that there is no procedural unfairness. Turning specifically to the Toronto Hydro submissions and the LDC submissions, they have taken the position that there is a breach of the Statutory Powers Procedure Act. We have attempted to identify in our response the nature of our submissions as to why Wirebury does not, respectfully, agree with that submission. 267 We start, Mr. Chairman, with the definition under both the Statutory Powers Procedure Act and under your Rules of Practice and Procedure. Both are similar. 268 Oral hearing means a hearing at which the parties or their counsel or agents attend before the tribunal in person. Oral hearing does not mean, and as we go through other sections in the Statutory Powers Procedure Act, that there must always be a calling of witnesses. It's contemplated by the very definition of oral hearing in both the Act and your rules that there be occasion where that hearing would consist simply of submissions from counsel or unsworn submissions from the parties. In fact, that's what 15.1 of the Statutory Powers Procedure Act gives the Board the power to do. 269 And I do have a copy for your assistance, Mr. Chair, under tab 1 of the brief of authorities that were filed, where it says that the Board is entitled -- the statutory tribunal's entitled to receive evidence, whether or not given or proven under oath. So you're at liberty to rely on the unsworn submissions of a witness and the submissions of counsel. 270 15.1 is also important, because it gives you another important power. It states: "...but the tribunal may exclude anything unduly repetitious." Wirebury's submission is that it was clear from the submissions that have been filed to date that what was likely to occur was that if you had allowed viva voce oral evidence and cross-examination on that, you would have simply a reiteration of the submissions, not the facts. There's no issue of credibility here, and there are no facts that are in dispute. There would be a simple debate, a pro/con debate, if I may use that, between the witness on the stand and counsel doing the cross-examination; that there would just be repetition of what you've heard to this point, which would only tend to delay matters and result in additional cost to the parties. 271 Wirebury submits that it has been recognized by the courts, including in a decision of the Supreme Court of Canada that I've referenced in our materials, the Township of Innisfil, that the functions of a Board can vary significantly from that of a court. 272 In that passage which I've included, and there's the full decision of the Supreme Court in the brief of authorities, the court states -- and in the brief of authority the page where it appears is 12 and 13. At the bottom of page 12 of the Innisfil decision, the Supreme Court of Canada states: 273 "Indeed, the adversarial system, founded on cross-examination and the right to meet the case being made against the litigant, civil or criminal, is the procedural substructure upon which the common law itself has been built. That is not to say that because our Court system is founded upon these institutions and procedures that administrative tribunals must apply the same techniques. Indeed, there are many tribunals in the modern community which do not follow the traditional adversarial road." 274 Then in the first paragraph following the quotation there, starting with the words "the procedural format," the key passage there is -- they first talk about the role of a board where the rights of a party are at stake, and that in those circumstances the process must more appropriately parallel that of a court. But halfway through the paragraph it then talks about the other situation, which Wirebury submits is the situation in this proceeding, part B: 275 "Where, on the other hand, the Board, by its legislative mandate or the nature of the subject-matter assigned to its administration, is more concerned with community interests at large, and with technical policy aspects of a specialized subject, one cannot expect the tribunal to function in the manner of the traditional court." 276 So it's our respectful submission, sir, that the Supreme Court of Canada has stated that it is open to a board, a tribunal, to, as the Statutory Powers Procedure Act allows you, determine your own process. And where the subject matter before the Board is of a technical policy nature, that it is appropriate for the Board to limit the type of and extent of submissions and evidence as Procedural Order 7 does. 277 In respect of the Toronto Hydro and LDC submissions specifically, my friend in his submissions to you indicated that what they were proposing would all fall within the issues list which was agreed upon and was attached to Procedural Order No. 4. My friend also identified the fact that there was this supplementary submissions list which was negotiated and agreed upon by the parties and which we understand was also made available to the Board. And the purpose of that was to set clarity as to the extent that a party could go in filing evidence or submissions for the purposes of addressing one of the areas in the issues list which is attached to Procedural Order No. 4. 278 In other words, it was agreed that a party would not be met with an objection if they went and filed evidence and made submissions in respect of an item set out in the supplemental issues list. For your convenience, Mr. Chair, we have attached at tab 3 of our brief of authorities -- and apologies, it's not truly an authority, but it is, for your convenience, a copy of the issues list and the supplemental submissions which were forwarded to all parties. 279 And if we look at the supplemental submissions, and I do not intend to walk you through them, sir, at all, in detail. But we see under both heading 3 that there are items that deal with -- that are specific to embedded distribution networks, but there are also other items which are not specific to that which would also deal with principles and with procedure, including those listed under 5, "What quantitative analysis regarding impact on applicant and incumbent distributors should be required?" To the final one on the next page, "How should prices (rates) be determined for applications that result in non-continguous embedded distribution networks...?" That applies in every application. 280 Our respectful submissions in respect of these lists are, first of all, it is inappropriate and it would be prejudicial, and from a timing perspective, duplicative to try and separate out any policies or procedures which my friends might suggest relate only to embedded distributors from those which should apply to every service-area amendment application. The process should be flexible enough to accommodate whatever licenced distributor comes forward with an application, to separate out and try and treat them differently will only result in, dare I say, double the argument that you would hear. It need not be separated out. 281 Secondly, and from the specific standpoint of the motions that I'm responding to, it's still not clear to Wirebury why, when the parties knew precisely what the issues were going to be, that it was only on November 6th that the moving parties then sought leave to file an expert's report. And as I understand matters, essentially, re-open the proceeding, to file witness statements, interrogatories on those witness statements, cross-examinations, oral evidence, and reply. 282 I'm still not certain where my friend stands in terms of the reply. It appears that he was suggesting that Wirebury is an applicant to this proceeding. That has not been our understanding. But if he's saying that Wirebury will have the last word and that no other party will, well, perhaps that would be something we would agree to. But it was our understanding that, at least in respect of part B, the procedures and policy portion of this proceeding, that we were all being treated on equal footing and that we would all file submissions and make oral argument on the same basis. So that it's simply not that type of proceeding where an applicant has to go up and reply to that of others. 283 MR. SOMMERVILLE: Mr. O'Leary, I think we have a technical problem, an interruption -- Mr. O'Leary, with your leave, we will... 284 MR. O'LEARY: Certainly. 285 [Brief pause to deal with room temperature] 286 MR. SOMMERVILLE: We're back on the record, Mr. O'Leary. 287 MR. O'LEARY: There's supposed to be a lot of cool air a little later tonight, I understand. 288 MR. SOMMERVILLE: There was enough of it for my liking this morning. 289 MR. O'LEARY: Thank you, Mr. Chair. 290 Our submission is that the moving parties have failed to indicate sufficiently why leave should be granted to file evidence at this late date. The issues list was agreed upon by all parties, including the LDC Coalition and Toronto Hydro, and that's dated May first, 2003. 291 Even if they had a problem with Mr. Todd's submissions coming in with Wirebury's responses to interrogatories, they still waited six weeks to complain about it. And it has led to a situation where now this proceeding is at risk of going into 2004. We have a great deal of difficulty with hearing that the reason why that occurred was because Toronto Hydro One and the LDC Coalition, which represent, as I understand from my friend, a substantial majority of the non-Hydro One customers in this province, wanted to save money and not fully participate in this proceeding. 292 Sir, we consider that unacceptable, and that submission should be disregarded, and certainly not used as any basis to allow additional evidence to be filed. 293 My friend made a point of indicating that Wirebury, in prior letters to the Board, had indicated that we might have expected to cross-examine. There's no question that we indicated that in lieu of asking interrogatories of Mr. Todd we suggested that any questions could be dealt with in cross. The Board ruled that interrogatories should be asked, and they were asked, and they were answered. And therefore, that put to rest that. 294 But all of our letters to the Board simply indicated is that we understood that the Board's decision as to how it was going to proceed in the future in respect of part B was still undecided by the Board. We did not believe one way or the other as to what the Board wished to do. 295 In terms of part A, which are the specific applications, Wirebury submits that it should come as no surprise to my friend that witnesses would be called and there would be cross-examinations. Back in the middle of May in respect of the urgent applications, those proceeds went forward as oral hearings with witnesses and cross-examinations if the parties were so inclined. And one would not expect that the balance of those specific applications would be treated any differently. 296 So my friend has known since at least May that, in respect of those applications there would be an oral hearing, but there has certainly been nothing in any of the procedural orders that the Board has issued which would lead, in our respectful submission, to the conclusion or the expectation that there was definitely going to be oral evidence and cross-examination. Indeed, in reviewing all of the record, it's clear that what the parties filed were submissions, which is more akin to making final argument than it is to asking witnesses to go up and adopt the submissions of their counsel. 297 Our motion materials also question the helpfulness of Dr. Yatchew, and I won't walk you through our written submissions, sir, because I understand that the panel has had an opportunity to review them. But our position, succinctly stated, is that Dr. Yatchew's affidavit amounts to a critique of Dr. Todd's evidence that what was done by Dr. Yatchew could have been done in oral submissions to my friend, who said that these are important issues, such as, you know, where's the empirical evidence? I made a note of some of his points. But the kind of points that my friend made are the kind of pints that counsel would make in their oral submissions, in final oral argument. You don't an expert's report to say that there is a fault here or a concern there, and that you shouldn't adopt it. 298 Wirebury therefore submits that the motion materials do not indicate that Dr. Yatchew would be of any additional assistance to the Board in its deliberations in this matter. 299 Finally, Mr. Chair, I just wanted to highlight the importance of timing to Wirebury. Wirebury has filed a license application many months ago, and is in line for a rate approval order with the letter from the Minister, as my friend has referred to in his submissions. 300 They have, expecting that we'd be successful with the license application, marketed themselves, and indeed, have two Connection Agreements that have been signed with significant customers. Others are in the wings. 301 Delay will be prejudicial to Wirebury. I might add the word very prejudicial to Wirebury. And that is why, in part, Wirebury is opposing these motions, although as I indicated in our submissions in the alternative, we would be prepared to live with some tight time frames and allow the experts in. However, to open the proceeding up to allow every party to now put forward an "unexpert" panel, if there is such a word, to give viva voce evidence, to be subjected to cross-examination, would mean that we're looking at a hearing, the oral portion on its own will be at least, in my opinion, another three weeks. So we'd be looking at, I would think, February at the earliest before this proceeding would be completed. That would be, I can't use the word "disastrous" but certainly very prejudicial to Wirebury. 302 Mr. Chair, those are our submissions. 303 MR. SOMMERVILLE: Thank you, Mr. O'Leary. 304 Ms. Godby. 305 MS. GODBY: Thank you, Mr. Chair. 306 MR. SOMMERVILLE: In view that we would like to rise at 12:15, we have a pressing matter, do you think you can conclude your remarks or will you find a punctuation point around that point? 307 MS. GODBY: I think I could probably conclude at 12:15. 308 MR. SOMMERVILLE: I certainly don't want to restrain you in whatever way. Do it whatever way you want, but around 12:15 we need to rise. 309 MS. GODBY: I appreciate that. Thank you. 310 SUBMISSIONS BY MS. GODBY: 311 MS. GODBY: Mr. Chair, I should point out first of all that to the extent that any alternative is entertained, and we submit that it should not be, that these motions should be dismissed. We would agree with the one put forward by Mr. O'Leary that, certainly from our perspective, the Southwestern Applicants' perspective, Mr. Southam be allowed to participate and give direct evidence and be cross-examined as one of the experts. 312 We do not agree with the proposal that there be, and I'll use the phrase, the "non-expert" panel. We do not believe that the issues with respect to the embedded, if you will, the embedded distribution hearing, that they not proceed as a separate hearing; that, for one, it would be very difficult to do that given the intertwining of the issues; and secondly, we're not sure how the Board might be able to consider, for instance, a full oral hearing on the general principles applicable to that, but not allow a full oral hearing on the general principles in this particular application. So those would be my submissions with respect to that. 313 The Southwest Applicants are strenuously opposed to the motions to amend the process delineated in Procedural Order No. 7. Mr. O'Leary has done a very adept job at outlining the statutory reasons for that, and I will simply say that, first of all, the Board may determine its own process, and neither its parent legislation, the Statutory Powers Procedure Act nor, I would submit, the common law support or require the Board to grant the moving parties the relief that they are requesting. 314 Secondly, in this combined proceeding, the Board did determine that they would consider matters of general principle first. And this was to be done through the submissions that were filed, the interrogatory process that was completed, and now you're looking for oral submissions to be made. 315 We would submit that this process that you have outlined is entirely appropriate. The positions taken on legislative objectives, on public-interest objectives and the mandate of the Board, these are matters of principle. They are not factual matters that are suited to cross-examination or direct examination, and, in fact, cross-examination, we would submit, is not absolutely integral to the fairness in this hearing or any other broad public-interest hearing. 316 In this fashion, when the Board determines these types of broad public-interest matters, it is exercising, we would say, more of an administrative type role as opposed to a judicial or a quasi-judicial type role and therefore you would be inclined to entertain just oral -- sorry, just submissions as opposed to a full-blown oral hearing. 317 The arguments articulated to the Board speak to a proposed licensing regime. And as that regime is not currently in place, there is, we would submit, little value in putting forward hypothetical facts or cross-examining on hypothetical evidence and therefore it's of less value to hear the Board -- or for the Board to hear cross-examination on argument. 318 The process which has been adopted in this instance is the same or similar to the process that has been adopted by the Board in other generic proceedings. And we would refer you in particular to the oral hearing which was held on the Minister's Directive, I believe it was June 7th of 2000. 319 In your decision with reasons at page 6, a party there, it is specifically referred to that a party there raised the issue of whether or not it would be appropriate to lead evidence and to cross-examine on that evidence. And, in fact, the Board found that the process, similar to the process here adopted in Procedural Order No. 7, was sufficient. 320 This kind of approach to the oral hearing was further adopted in this process here that we have before us today, in the jurisdictional issue. And I would submit it was also entertained in, I believe it was, the proceeding 1999-0034, which was the generic proceeding with respect to the development of the Distribution Rate Handbook. 321 In any event, all parties to this proceeding are on the same level playing field. The Board has given each and every party here the right to file submissions, to participate in the issues conference and the interrogatory process, and to make oral submissions. No party has been given greater rights than the other. 322 This is a combined proceeding, wherein the more factual site-specific applications are to be heard at the end of the day. And the parties at that time have every opportunity to lead evidence, to challenge evidence, to put whatever submissions they feel are appropriate and whatever evidence they feel is appropriate before the Board at that time. 323 The argument on the principles is not the appropriate juncture to have examinations and cross-examinations. If you remember, this process is not a surprise, as my friend has indicated in his submissions on behalf of Wirebury. It was put in place eight months ago. It was confirmed in Procedural Order No. 1, and the subsequent procedural orders issued by the Board thereafter. And we would submit it lies ill in the mouths of the moving parties to claim to rely on the doctrine of legitimate expectations when, at this late date, they are the ones seeking to amend or change the process. 324 We would submit that the process, given the Board's previous practice, and given the procedural orders that have been before the Board, and given the opportunity to present evidence at the combined applications, they've known about it, they've acquiesced to it, and it would be in the interests of fairness to stick to the procedure that's been outlined in Procedural Order No. 7. 325 One further item we'd like to address is the fact that this issue of, essentially, bifurcating the proceeding was addressed by Hydro One in their letter, which is attached as Exhibit A to our affidavit of the Southwest Applicants. And in that letter they specifically asked for a separate hearing, essentially, to be tendered, if you will, and that a decision rendered thereon, and thereafter they would proceed -- we would proceed with the site-specific applications. That request was not granted. In fact, rather than a positive response, the Board issued Procedural Order No. 7. 326 Just a word on the affidavit of Dr. Yatchew. In our view, that affidavit as well the request, we think, to amend the issues for hearing to grow larger than those that appear on the issues list should be denied. We would submit that this evidence cannot be allowed at this late date, and certainly the issues list should not be amended at this late date. These intervenors have requested -- the LDC Coalition and Toronto Hydro have requested to file evidence in response to Dr. Todd's report in a letter to the Board, and that request was not granted. They were entitled to file interrogatories and Dr. Todd was to answer those interrogatories, and that's the end of it. And simply because they don't like the answer, it's not appropriate then to file such evidence as part of a motion to support a change in this process. 327 Finally, I would submit that the Board cannot allow the intervenors to appropriate this process. The motions, in our view, serve two purposes; one, to obfuscate the general policy issues before the Board, and the second is to bury everybody in so much technical detail and to encumber an already cumbersome process. 328 For the reasons that I've put forward and also, I would support my friend, Mr. O'Leary's submissions, to grant these motions to the moving parties would mean excessive delay and increased costs, and would cause extreme prejudice to our clients. 329 Thank you, sir. Those are my submissions. 330 MR. SOMMERVILLE: Ms. Godby. 331 It being 12:10, we will adjourn until 2:00. Thank you very much. 332 --- Luncheon recess taken at 12:09 p.m. 333 --- On resuming at 2:00 p.m. 334 MR. SOMMERVILLE: Thank you. Please be seated. 335 Mr. Lokan. 336 SUBMISSIONS BY MR. LOKAN: 337 MR. LOKAN: Thank you. 338 The Power Workers' Union supports both motions, the motion from Hydro One for oral testimony and cross-examination of experts, and the motion of Toronto Hydro and the LDC Coalition to, in addition to those matters, be permitted to introduce a report of Dr. Yatchew. The Power Workers' Union takes no issue on the further aspect of Toronto Hydro and the LDC Coalition's motion to introduce further evidence of non-expert witnesses. 339 And to the extent that we support those two motions, we adopt the submissions that have been made by those parties. With regard to the Hydro One motion, on oral evidence and the cross-examination of experts, we submit that section 10.1 of the SPPA does apply, and fairly straightforwardly. If you look at that section, it says: 340 "10.1. A party to a proceeding may, at an oral or electronic hearing, 341 "(a) call and examine witnesses and present evidence and submissions; and 342 "(b) conduct cross-examinations of witnesses at the hearing reasonably required for a full and fair disclosure of all matters relevant to the issues in the proceeding." 343 That's all that Hydro One is asking for here, and regardless of the cases that were raised by Mr. O'Leary, which do point to a certain flexibility in the application of those standards, they are, basically, matters of right. 344 We agree that there are natural justice concerns if there is a curtailment of the parties' ability to elaborate upon, to probe, and to test the expert opinions that have been put forward to this Board. And we would suggest that it would be very helpful to the parties and to the Board itself to be able to go through this probing, testing and elaborating process in a live setting. And in this context, the suggestion that interrogatories, as they are drafted in a very guard way by counsel as opposed to out of the witness' mouth, we don't think that's any substitute, realistically, for live cross-examinations. 345 We submit that it's contradictory for Wirebury and the Southwestern applicants to say that the expert reports that are filed or really just argument, and therefore, it's not worth having cross-examination. If that's, indeed, the case, why did they go to the trouble and expense of putting those matters in through experts? 346 And in any event, if that's the case, what are they doing as part of the Board record to date? The Board has not yet called for submissions or argument from parties. It has called for, in its procedural orders, evidence to be filed, interrogatories to be asked on that evidence, and evidentiary responses to be given. And it's in that way that the Todd report, for example, has been put before this Board. 347 We say that it is not at all true that it is somehow less important to be able to cross-examine an expert on expert opinion than it is to cross-examine a factual witness on factual matters. If anything, it is more important to be able to cross-examine experts. Only by cross-examination can you test and probe the underlying assumptions that are used, the limits of the expert's opinion, the scope of the agreement or disagreement between competing experts, and these matters are of fundamental importance to this hearing. 348 We suggest that it would be fundamentally unfair, as a matter of process, to allow the expert reports to be filed with no meaningful opportunity to cross-examine upon them. That would become litigation by last word, and would give a significant and unwarranted tactical advantage, particularly to Wirebury. 349 Now, in regards to the Toronto Hydro/LDC Coalition motion, we submit that Dr. Yatchew's expert opinion evidence will be very helpful to the Board for the reasons that were given by Mr. Rodger. It hardly needs to be said that the Board does not at this stage need to prejudge how the potential evidence of Dr. Yatchew will stack up against the evidence of Dr. Todd. That determination and that measurement will come in good time. Suffice it to say, at this point, that the Board and the parties will benefit from the range of views that are presented by those experts, if Dr. Yatchew's opinion goes in. 350 We suggest that the explanation for why the request is made at this stage of the proceedings is a reasonable one. It is true to say that the Todd report of September 26th changed the hearing in very significant ways. And I think I can observe that the Todd report, if it didn't exactly go in by the back door, it at least came into the proceeding through a side door, through the response to interrogatory process. 351 Slowing down the hearing and the brief adjournment requested to allow Dr. Yatchew's evidence to be filed is unfortunate, but it is manageable, particularly if the alternate procedure discussed by Mr. O'Leary is adopted. 352 Let me finally make some comments on procedure. 353 In our submission it does not make any sense if expert evidence is to be received, to have submissions from parties before the expert evidence goes in. It will be of benefit to the parties and to the Board to be able to incorporate references to the expert testimony in cross-examination into their submissions, and you're just going to end up having to do the thing twice and expose people to putting forward submissions that they later have to modify, if you try to put the cart before the horse in that way. 354 We also accept that it makes no sense to try to separate out the Wirebury aspects or the embedded distributor aspects of the hearing from the other general principles for the reasons given by Mr. O'Leary and Ms. Godby. There is so much overlap that they really do belong together. 355 In terms of how the proceedings would go, the suggestion that the November dates or some of them be used for a fact-finding or fact-narrowing process, I think, is a very constructive one, particularly if Board counsel was able and willing to take the lead in that process. I think the experience with the May expedited hearings was that it became fairly apparent through those hearings what factual matters were useful to the Board and of interest to the Board, things like who has what assets in what areas? What are costs of connection? What are capital costs? What communications have occurred between applicant and incumbent utilities and potential customers? That list of issues, I think, could be drawn up fairly simply and a lot of groundwork be done that would mean when the evidentiary phase of those hearings did come before the Board, they would go much more smoothly. So I think there would be real value in proceeding in that way. 356 And we also suggest that if the alternate procedure is adopted by the Board, that there be quick time lines as quick as reasonably possible, for the submission of the Yatchew report and for the interrogatory process arising so that we can be back in early to mid-December before the Board, if at all possible. 357 Subject to any questions, those are my submissions. 358 MR. SOMMERVILLE: Thank you, Mr. Lokan. 359 Mr. McGregor, I believe. 360 MR. McLEOD: McLeod. 361 MR. SOMMERVILLE: My apologies. 362 MR. McLEOD: Thank you, Mr. Chair. 363 SUBMISSIONS BY MR. McLEOD: 364 MR. McLEOD: Thank you, Mr. Chair. 365 On behalf of Veridian Connections and Centre Wellington Hydro, I have some comments to make, and I'll be brief. 366 The parties have made valid points today in respect of the motions and we appreciate those comments. From our perspective, we have understood the process from this proceeding from the beginning, and have been in agreement with it. The procedure orders have been quite clear. 367 We dealt with the issues of the urgent connections back in the spring, and those are very important and helpful for us. And we were aware of the principles that would be dealt with going forward, and that a fuller exploration of the expansion area matters would be commenced this fall. 368 We have four key points to make in respect of the motions we are dealing with today. The first one is that we are of the opinion that the nature of our applications, those of Centre Wellington Hydro and Veridian Connections, currently before the Board, requires that the principles need to be dealt with first. For example, Veridian's application proposes competition in distribution services at the boundaries of existing licenced distributors and does not deal with specific customers per se. The determination of principles on this issue then becomes very important. 369 Our second point is, once the principles have been addressed, it would be fair and, in our opinion, that the specific issues and facts associated with our applications be addressed. 370 Number 3: We submit that it is very important that we have the opportunity to hear and cross-examine the experts on the issues. We do not oppose the introduction of experts in this proceeding and support the opportunity to participate in the oral hearing process. 371 And finally, we are concerned about the delays and the increasing costs related to the proceeding, but we would support a reasonable and fair extension to ensure a full and complete hearing process in this matter. Those are my submissions, sir. Thank you. 372 MR. SOMMERVILLE: Thank you, Mr. McLeod. 373 Ms. Young. 374 SUBMISSIONS BY MS. YOUNG: 375 MS. YOUNG: Newmarket Hydro Limited supports and adopts the positions submitted by both Southwest Applicants and Wirebury with respect to just the opposing the motions. But we would have no objections to an alternative that was proposed today, to extend it to a reasonable time but no further than January, 2004. 376 MR. SOMMERVILLE: Thank you, Ms. Young. 377 Ms. Friedman? 378 SUBMISSIONS BY MS. FRIEDMAN: 379 MS. FRIEDMAN: I will begin by putting the position of Great Lakes Power on the record as I have been requested to do by its counsel. Great Lakes Power's position is simply this: It supports Hydro One Networks motion for all the reasons stated by Hydro One Networks' counsel. 380 The EDA would just like to make two general points. The first one is that the EDA views this proceeding as setting the general principles that will structure the distribution sector. And, because of that, it supports the fullest airing of all the issues as is possible. 381 The EDA does not propose any specific procedure, and appreciates that there are many different procedures and the parties have legitimate different views on what procedure would be best under these circumstances, but simply makes this point. Where a significant number of stakeholders argue that their procedural rights are not being respected, it's the EDA's view that the Board should make an attempt to modify its procedure simply so that its ultimate decision can withstand challenge on procedural fairness grounds. Thank you. 382 MR. SOMMERVILLE: Thank you very much. 383 Mr. Kenney. 384 MR. KENNEY: Thank you, Mr. Chair. We have no comments to make. 385 MR. SOMMERVILLE: Thank you. 386 I believe that exhausts the potential submissions in reply. Ms. Aldred? 387 MS. ALDRED: Thank you, Mr. Chairman. 388 REPLY SUBMISSIONS BY MS. ALDRED: 389 MS. ALDRED: Networks is not suggesting that the Board cannot design this hearing as it sees fit. We simply reiterate that it would be helpful to hear the experts further amplify their principles. 390 Mr. O'Leary has said that there is really no requirement for cross-examination on the general principles because he thinks that there is no issue of credibility with the expert evidence. Mr. Lokan has already covered this, so I'll be brief on this point, but we take issue with Mr. O'Leary's characterization of the expert testimony as not involving issues of credibility. The issue of the credibility of the expert and his opinion is very much at stake here, and our view is that the proper way to test that evidence is through cross-examination. 391 As you know, tribunals always undertake an exercise of weighing the credibility of one expert as opposed to another expert, whenever experts are adduced. The experts thus far received in the proceeding have filed testimony which purports to assert facts of economic theory, and they assert contrary views. There would therefore, in our view, need to be -- these views need to be aired so that the Board can decide who to believe. Networks is not seeking, as Ms. Godby suggests, to obfuscate but rather to clarify the record and to be helpful to the Board, and therefore simplify the subsequent fact-based hearings, having heard the principles in full. 392 Further, we're a bit troubled by Mr. O'Leary's characterization of the nature of the hearing on the general principles. He seems to imply that the results of this hearing and the principles chosen by the Board will not bind his client. This is worrisome for all the parties to this proceeding, I would submit, and it should also be worrisome to the Board. Surely we do not want to go to all this evident for naught, and we would ask the Board to consider clarifying its understanding of the nature of the principles which will flow from the proceeding. 393 In Networks' view, this proceeding will determine what circumstances LDCs can take territory or customers from an incumbent and when they do, how the incumbent and its customers will be treated. This may change the economics for a certain type of distributor, and it would be up to that type of distributor to decide, when this hearing is finished, whether the business proposal which now have in the works is going to make sense given the principles that have been established. But that would be for that type of distributor to decide after the principles have been established. 394 Now, Mr. O'Leary outlined a compromise process which is not his preferred process, but, as you know, counsel spoke at the break, and we would concur with that process, as it is a process which we think is most appropriate. However, I would like to ensure that it's clear on the record that Mr. Todd would be testifying and be subject to cross-examine, as I think when Mr. O'Leary originally outlined the process, he omitted Mr. Todd from the list of people who would testify. 395 We do feel that, given the nature of the timing issues in this proceeding, that the experts should be limited to those who have already filed material. That would be Mr. Todd and Kema, and to Mr. Southam, and also to Dr. Yatchew. Otherwise, we're afraid that if the hearing is expanded and other parties who hadn't previously contemplated filing expert evidence file it now, it may drag things on even further. 396 In terms of the Board proposal to perhaps hear some of the individual applications before all the generic principles have been heard, we do have some serious concerns with that. Although the applicants no doubt want to get on with their applications, none of the applications actually has a critical connection, as we saw at the May hearings. In fact, many of these applications do not even have a customer. So there would be no critical urgency. 397 In fact, some of these applications do not really have facts on ground, but they rely almost entirely on policy arguments. And it would be therefore, in our view, important to hear the expert evidence and submissions first, even if there is no decision made on the principles, before we go into the individual applications. At least at that point we would have had the context and the expert testimony upon which the other hearings could then flow from that basis. 398 Networks feels it could be prejudiced if the smaller hearings were to be put before the principle hearing because there could be evidence heard at the individual hearings which would not have been heard had the principles been heard first and determined. 399 And you could also be subjected to multiple layers of expert testimony, if there were to be expert testimony on the individual hearings or even policy testimony on the individual hearings, and then we went into the generic hearing. You might have conflicting expert testimony. So, in our view, it wouldn't be very workable like that. 400 And if I could just take a minute to address the nature of the individual hearings, when they do happen. They should, in our view, be limited strictly to factual matters, such as location of assets and boundaries, proposals to serve customers, the general application area, the system capability for that area, and the customer impacts where urgent or proposed customers are identified. We believe that the individual hearings should not treat matters such as customer preference, shareholder preference, the merits of competition, the connection of existing customers, not just new customers, interpretation of legislation or the white paper or the McDonald committee report, nor should it treat the impact on LDCs, whether beneficial or detrimental. So, in other words, we'd like to streamline the individual hearings. 401 And on that point, we would be quite happy to participate in a process, whether with Board counsel or otherwise, in order to try to streamline these individual applications, excluding, hopefully, agreed statements of fact. 402 One more point on the generic hearing. There was some notion to perhaps a splitting of the expert testimony, so that certain experts would be heard, and then we'd adjourn, and then we would hear other experts. We had a concern with that in the sense that we thought that that type of procedure would inevitably benefit the parties whose testimony goes last. In the sense that two experts would testify, there would then be an adjournment, and the experts that were going to after that would have had the benefit of hearing the other testimony. 403 And then finally, we have some concern with Ms. Godby's assertion that the evidence to be heard in the individual applications should not be limited. And I don't know if she was implying that there should be principles' evidence heard at those individual applications, but if she was making that point, we would oppose the hearing of policy evidence in the individual applications for the reasons I have stated already. 404 Those are my submissions. 405 MR. SOMMERVILLE: Thank you, Ms. Aldred. 406 Mr. Rodger. 407 REPLY SUBMISSIONS BY MR. RODGER: 408 MR. RODGER: Thank you, Mr. Chairman. 409 Just to first speak to what I will call the Wirebury offer, which my friend from Hydro One has clarified, which I thought was very helpful. 410 It appears that the only sticking point is in what was referred to as our LDC panel. So maybe I could first clarify that. 411 What I envision is one, maximum two, witnesses in addition to Dr. Yatchew that would speak to the LDC issues. And I would propose, as has been done in various other OEB proceedings, to present one witness panel. That would be comprised of Dr. Yatchew and the one or two LDC representatives. There was a lot of discussion about whether this would be appropriate. My bottom line is that the question for the Board is, will such evidence be helpful to you in your deliberations? And that is the standard which you must apply against possible evidence. 412 And that will be our risk. We filed this evidence, the LDC representatives, on December 1st. You may say: This is not helpful. We don't want to hear it. But we'd at least like to present that and file that with the Board and the parties. 413 In terms of the issues, once again, we feel that the evidence of the LDC representative, which fundamentally will go to issues of system investment and system planning, go directly within the principles that Wirebury has asked you to deal with, and again, the reference is paragraph 25 of our notice of motion. Issues such as customer value and reliability, energy efficiency and quality of electrical services, economic efficiency and distribution. As you've heard, all these matters were subsumed in the current issues list, and that's what we would speak to. Our submission is it would be helpful, because it would be the only witness in this whole proceedings that is actually directly with an existing LDC. 414 Now, I'd like to pick up on a point that my friend from Hydro One raised which we think is an absolutely critical matter that was identified by Mr. O'Leary in his submissions prior to the break. 415 The parties seem to have a fundamental disagreement on why we are here. Wirebury reiterated the two-part purpose of this proceeding, which we entirely agree. First, to determine principles for service area amendments, the policy piece, if you like; and secondly, determine a process, the technical aspect, the fact-based portion of this proceeding. 416 Wirebury basically said that it's not the role of this Board to determine whether an entity is allowed to exist in terms of being a distributor. That is, whether the Wirebury concept is appropriate. And Toronto Hydro and the LDC Coalition have exactly the opposite view. We think the principles established on the policy questions should have exactly that effect. 417 What is the Board's view of things like the Wirebury concept? We are all participating in this proceeding because we all know that something very important is going to come out of this decision. The approved guiding principles should be presumptive answers to enable Wirebury and all other parties to make sense of whether, in fact, they should be making such applications for things like licensing and rates. 418 It is why administrative tribunals issue guidelines. The principles must mean something; otherwise, we will have a principles hearing in every single service-area amendment proceeding here on in. That's why we're here. These principles to be determined are to mean something. 419 Now, I want to refer to the Southwest response, because I think my friend for Southwest captured it well in her response to our motion, in paragraph 14. And this is of the affidavit from Mr. Southam. And 14 reads in part -- and this is now talking about the general principles that have to be established: 420 "This stage of the combined proceeding involves a considered approach to and interpretation of the governing legislation, its objectives and the mandate of the Board." 421 And we agree with that. 422 Where we disagree is Southwestern's submission that somehow the principles are, like in Ms. Godby's words, it was hypothetical. We think there is nothing hypothetical whatsoever about the principles before the Board. And let me give you one example, one specific example. 423 Again, going back to Wirebury's April 24th letter, where we referenced in paragraph 25 of our motion record where Wirebury asked the Board to consider adopting the following principles for dealing with applications for district service area amendments, and the second is: 424 "Non-discriminatory access to distribution systems." 425 I beg your pardon. 426 By letter dated April 24, 2003, counsel to Wirebury requested that: 427 "The Board consider adopting the following principles for dealing with applications for distribution service area amendments." 428 And the second one was: 429 "Non-discriminatory access for distribution systems." 430 Now, Mr. O'Leary put some meat on these bones back earlier this year at the May 20th proceeding on the jurisdiction question. And I just want to read, starting at line 344 which deals with this issue. Reads as follows: 431 "And that leads to the second objective under section 1, which reads 'to provide generators, retailers and consumers with non-discriminatory access to transmission and distribution systems in Ontario.' We respectfully submit that that means that -- non-discriminatory means competition within the distribution business. Accordingly, Wirebury submits, although we do somewhat agree with Hydro that, the Board does not have jurisdiction to unreasonably make orders which transfer incumbent distributors and takes the position that there may be situations where such transfers, when requested by the customer, would be permissible. And that's the customer choice, as we say, under the Electricity Act." 432 In our view, if the Board says: No, Wirebury, we do not accept that non-discriminatory access means what he says it means, then Wirebury should take that as a very clear signal that there's little point in applying for a distribution license or a rate order. 433 Again, the principles established by you must be the presumptive answer for all the parties, and this is in everybody's interest. It's for the interests of all parties in this room and for the interests of your own staff, who will need this framework should the Board decide to delegate certain authority for certain licensing and so on. And presumably that's one of the other reasons for establishing the guidelines. 434 So I would like to echo the Hydro One request that, in your decision on this motion, you identify the purpose and the application of the principles you intend to adopt. And my submission is that the principles must interpret your governing legislation, including the mandate and objectives of the Board. 435 Now to reply to some comments that were made on the fairness oral hearing issues. You have our earlier submissions on legitimate expectations. Those stand; I don't need to repeat those. Wirebury seemed to suggest that the previous submissions of the parties, like Toronto Hydro on August seventh, somehow defined the process or determined the process, because we filed a submission of counsel, therefore we somehow waived our right to cross-examination. And we believe that should just be rejected outright. It's the Board-selected process which establishes procedural rights. The oral hearing created an expectation of a particular process, and as my friend from the Power Workers' Union said, thus you get the protection of section 10 of the Statutory Powers Procedure Act. 436 What we're seeking to do is to restore the process of Procedural Order No. 1, to have a true oral hearing, and not to try and short-circuit the process by limiting the introduction and testing of evidence. 437 And, as others have said, the reason we're here is that the Todd report was filed at the end of September. 438 I'd also like to close the loop. My friend from Wirebury also referenced the Town of Innisfil case. And I just wanted to complete one part of the paragraph that Mr. O'Leary started. This is page 13. And I'll pick up where Mr. O'Leary left off: 439 "On the other hand, where the rights of the citizen are involved and the statute affords him the right to a full hearing, including a hearing of the demonstration of his rights, one would expect to find the clearest statutory curtailment of the citizen's rights to meet the case made against him by cross-examination." 440 And then across the page, page 14, the first full paragraph: 441 "It was said long ago, Cooper v. Wandsworth Board of works, that the common law must introduce into the administrative process through the concept of natural justice safeguards of the interests of the community where the legislation has neglected to do so, whether or not that function of the administrative tribunal was classed as a judicial function. Here the rights of the parties stand to be permanently affected whatever the character in law be of the Board's function; hence, the action by the Legislature in assuring a right to all affected to be heard." 442 As we said at the outset, our belief is that fundamental rights will be determined and affected by this proceeding, and that is why we need complete due process and an oral hearing as I have described. 443 There was also comments from some of my friends that the real goal here of Toronto Hydro and the LDC Coalition is to somehow expand the hearing. And there was some criticism of my description of the approach we took in August to avoid preparing evidence and waiting to see the case we had to meet. 444 Just to say that if there is any blame, I hope the Board would blame me and not my client. As a Scottish immigrant with a good Presbyterian background, I'm very sensitive about thrift, and as I say, if there's any blame on that one, it's me alone. 445 But there is another course which we could have taken, Mr. Chairman, which I want to explain which we didn't. If the parties really believe that that August 7th date was sacrosanct, our motion could have been different. We could have been here today saying, We would like the Board to expunge the Todd report in its entirety, and expunge all the interrogatories asked and the answers given, and let's go right to final argument. But we didn't do that because it's not in the public interest. The public interest is to hear the Todd report, it's to hear the Yatchew report and the LDC witness, and only on that basis can you get a fulsome review of the matters before you. 446 Finally, just on the question of urgency, one of the submissions of Wirebury is that they need this matter settled and our adjournment would be undue delay because they have signed connection agreements. Our view is that's no reason to not grant our motion. Wirebury is not a licensed distributor; it has no approved rates in place. The principles to determine whether Wirebury should even exist have not been heard. 447 Last time I checked, section 57 of the OEB Act was still in place, which said that only licenced distributors could do certain things. I'm not going to raise the issue of the legal authority of certain activities or not - I don't have the facts - but in any event, it's no reason to try and force our process because of the situation that Wirebury faces, which may or may not ever come to fruition as being a viable option for this province. 448 So those are my reply, Mr. Chairman. Thank you. 449 MR. SOMMERVILLE: Thank you very much. 450 The Board will adjourn until 3:00, at which time we will hope to have a decision on these motions. If we are unable to arrive at a decision by that time, we will advise you accordingly, but we will rise until 3:00. Thank you. 451 --- Recess taken at 2:39 p.m. 452 --- On resuming at 3:05 p.m. 453 DECISION: 454 MR. SOMMERVILLE: Thank you. Please be seated. 455 The Board has reached a decision in the matter of these motions. The Board is greatly assisted by the very able argument of the parties. 456 First with respect to the motion of Hydro One Networks, the motion will be granted according to a timetable I will address shortly. The provisions made in Procedural Order No. 7 will be varied so as to provide for an opportunity for the oral testimony of the following persons: Kema-Quantec, Dr. Yatchew, Dr. Todd, and Mr. Southam. The Board will require Dr. Yatchew to file his report on or before November the 27th. Interrogatories will follow December 3rd, replies to the interrogatories should be provided no later than December 10. 457 Oral proceeding will reconvene on December 15 for the oral testimony of the experts. 458 The Board has arrived at this decision on this motion because it considers that hearing this evidence viva voce and hearing the cross-examination of the expert witnesses will assist us in arriving at the best possible decision in this important matter, and not because we have identified or considered that any procedural unfairness was imposed by Procedural Order No. 7. 459 The Board has broad discretion to order the proceedings before it, and in our view, the changes we have approved in this order will result in an improved process. And that's why we have decided as we have. 460 We are concerned about the delay occasioned by this ruling, and wish to signal our intention to ensure that the parties adhere to the time frames assiduously, and order their examinations and activities in this matter so as to limit or eliminate duplication and delay. 461 With respect to the Toronto Hydro/LDC Coalition motion, obviously, we grant this motion in part, and have already in this ruling made provision for Dr. Yatchew's report, his examination and cross-examination by the parties. We do not grant the request for the inclusion of any other filings or any other witnesses in addition to Dr. Yatchew and his report and testimony. 462 We direct the parties to the individual applications to develop to the extent reasonably possible, agreed statements of fact to be submitted as evidence in the individual applications which are to follow. 463 Ms. Lea and Board Staff will assist the parties as necessary and advisable in this regard. 464 The hearing of the individual applications will follow the inclusion conclusion of the principles portion according to a timetable to be established in due course. But we want to indicate that those individual cases will follow as closely upon the conclusion of the principles portion of the case as can reasonably be accommodated. 465 That is the Board's ruling in this matter. 466 Are there any submissions arising? 467 MR. RODGER: Thank you, Mr. Chair. 468 I would just like to make an inquiry. In one of my submissions in reply I had responded to my friends as to the nature of the hearing in terms of the purpose of the principles. Would that be a matter that the Board would care to address at some point, prior to the proceeding? 469 MR. SOMMERVILLE: I think the import and impact of the matters before us in this proceeding are clear to the parties. The Board is not going to, in the abstract, describe the importance of the principles in terms of how they will play out in application after application. The whole purpose of ordering the proceeding in this way is to arrive at the principles, which will then inform individual applications, not simply the ones that are currently before us but those applications which will follow with respect to service area issues. 470 So the principles are certainly going to be extremely influential in those matters, but beyond saying that, I don't think the Board needs to, wants to, or ought to provide any other amplification of that aspect. 471 MR. RODGER: Thank you very much, sir. 472 MS. GODBY: Mr. Chair, if I could have one matter clarified. It was suggested by Ms. Aldred in her submissions that the evidence before the Board on the individual site-specific applications be limited or restricted. And, as I understand the Board's order today, we are to endeavour as much as possible to streamline these cases. However, the Board's order does not restrict the type of evidence that will be before the Board. 473 MR. SOMMERVILLE: Let me say this. I took Ms. Aldred to be saying, using the broadest possible construction of the words on one side of that equation and the narrowest possible meaning of the words on the other side. 474 The purpose of the agreed statement of facts is to streamline the process, and not to engage in an argument about policy issues and matters of that nature. But certainly the factual underpinnings of the applications is the proper subject matter of those agreed statements of fact. And if one party or another wants to take it into the realm of what someone may characterize as policy, well, that's where the agreement stops. 475 So the good offices, and I'm sure the very co-operative and reasonable attitude that I've seen here today, will extend into that process, and I'm sure we'll end up with very useful agreed statements of facts, although there may be some disagreements along the way. And that's to be expected too. 476 MS. GODBY: I appreciate that clarification. Thank you. 477 MR. SOMMERVILLE: Is there anything further? 478 In which case, we will stand adjourned until December the 15th in terms of the oral portion of this proceeding. But there will be a series of incidents, as we've described, in the interim. Thank you very much. 479 --- Whereupon the hearing adjourned at 3:12 p.m.