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Ontario's Failed Experiment (Part 2)

Service quality suffers under PBR framework.

Fortnightly Magazine - August 2009

and 2 present these results for both municipal utilities, as well as for a composite index representing both municipal and non-municipal distributors. For municipal utilities the mean of SAIDI is 1.22 and the mean of SAIFI is 1.46—quite consistent with the results of non-municipal distributors. Looking at the PBR performance standard, for SAIDI the average three-year high value is 1.59; for SAIFI, the average three-year high is 1.84. For the industry composite index, the mean SAIDI figure is 2.07 with an upper bound of 2.53. For SAIFI, the mean is 1.36 with an upper bound of 1.75.

Reliability Under PBR

In January 2008, the OEB released its discussion paper on reliability, its only publicly-released analysis of LDC performance since the 1999 task force report. The paper employs only data from 2004 through 2006 to examine LDC performance. Further, no pre-PBR data and no data for the first three years of the PBR are examined. The paper states:

The following information is based on the reliability data filed under the RRR for the three years 2004 - 2006. Because the data reported in the earlier years may not have been reported consistently or calculated properly, staff has removed any statistics that appeared to be unreliable. This approach may result in a slightly less than completely precise and comprehensive analysis, but staff believes that the analysis based on this more selective data represents a more accurate picture of general trends. 11

Note the OEB’s use of the term “may not have been reported consistently or calculated properly.” There’s no discussion regarding what tests have been performed to determine that the data reported in the earlier years “may not” have been reported consistently or calculated properly. It’s unclear what methodology was used to remove statistics that appeared to be unreliable. The adjustments to the data by OEB staff need to be explored in more detail.

The OEB’s 2008 discussion paper doesn’t examine the reliability performance of LDCs relative to the mandate ordered in its 2000 PBR Decision ; what the Paper does do is casually examine performance against several external averages calculated over the latest three years. What about performance under IR versus the 2000 to 2007 period?

As noted above, within its service-quality proceeding, the OEB questioned the robustness of the 2000, 2001, 2002, and 2003 data and refused to include this in its analysis. These data were filed by LDCs as part of their regulatory requirements ( i.e., initially under PBR data-filing requirements and then under reporting and record-keeping requirements (RRR), which incorporated the data-filing requirements initiated under the first-generation PBR). Such data had been published by the MEA for a decade and a half without any concerns being expressed by stakeholders. Individual municipal utilities had been collecting this data for 20 years or more. No evidence of any kind has been offered by the OEB to support their contentions. No information has been provided by the OEB as to why, prior to 2004, the reliability data isn’t acceptable.

In fact, the OEB has employed the 2002 to 2006 RRR data, among