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Ontario's Failed Experiment (Part 2)

Service quality suffers under PBR framework.

Fortnightly Magazine - August 2009

for 2004 through 2006 only. The paper indicates, “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.” 8

Yet, this is data collected by these same utilities for at least 15 years and reported to the Implementation Task Force in 1999 and to the OEB in its required filings since 2000. 9 However, in choosing to reject use of its own data prior to 2004, the OEB not only misses a significant degradation in 2004 through 2006 compared with 2000 through 2003, it misses an earlier an equally significant degradation in 2000 through 2003 compared with the pre-IR 1993 through 1997 period. Only by examining the performance relative to the pre-IR period could the OEB determine compliance. The OEB sees no degradation in large part because it has chosen to eliminate the periods of higher reliability performance in its comparison.

The OEB doesn’t report what tests had been performed to determine that the data reported in the earlier years hadn’t been reported consistently or calculated properly. It’s unclear what methodology was used to remove statistics that appeared to be unreliable. The earlier data comes from the same population as the later data and therefore can be jointly used to assess the 2000 to 2007 trend, as well as to assess performance relative to the pre-IR period used in 2000 to set standards.

Reliability of Ontario LDCs

What has been the performance of the electricity distributors in Ontario relative to the minimum standards established in 2000? This question is, unfortunately, not addressed in the discussion paper, nor in any public OEB analysis. Based on the first-generation standards, each LDC must keep its reliability performance within the range of the three-year period preceding the PBR. The OEB evidently has conducted no analysis on LDCs’ compliance with the standards.

What was the reliability of Ontario distributors in the mid-late 1990s prior to the start of the OEB’s PBR? Two sources of data exist to examine this question. One set of data from the industry was published from 1991 onwards. A second set of data was collected by the OEB’s Implementation Task Force in 1999.

Since 1991, the former Ontario Municipal Electric Association (MEA) collected and published performance metrics from its members, including reliability indices. This data included returns from almost all large and medium sized utilities serving 75 to 85 percent of customers in the province (see Figure 1) .

During development of its first-generation PBR, the OEB’s Implementation Task Force undertook several surveys of the utilities, including reliability performance. Responses from more than 60 utilities serving 81 percent of customers provided annual data on reliability (see Figure 2) .10

Figures 1

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