Rivers: Do the Hydro One board members have a secret wish to help Doug Ford’s campaign?

Rivers 100x100By Ray Rivers

May 16th, 2018

BURLINGTON, ON

 

The Liberals were trailing in third place so their chances of recovering were pretty remote anyway. And now the part time directors of the board of Hydro One have announced that they’ll be treating themselves to an extra $25,000 raise – on top of their $160,000 casual pay. And their timing is impeccable, doing this mid-way through the provincial election campaign. Didn’t the Premier hand pick the Board? Et Tu Brute?

Do the board members have a secret wish to help Doug Ford’s campaign, the man who has promised to fire them as soon as he wins the election? Do these directors just want to say thanks by kicking Kathleen Wynne where it hurts, as her reward for appointing them to such lucrative positions? Or are they just plain suicidal?

Wynne arm raised

Fighting for the team – which appears to include the Hydro One directors?

And for poor Kathleen, this effectively brings an end to any hope she and her Liberals had of winning the Election June 7th. Damned electricity file! It was that file, after all, which helped the Liberals oust the hapless Ernie Eves. And that same file subsequently took out Dalton McGuinty when he got caught playing politics with gas plants. And now it’s Wynne’s turn.

This greedy decision by the Board to increase the size of the trough they wallow in can only become the icing on the cake for Ms. Wynne’s retirement party. The irony is that privatization has made Hydro One more of a political football than it was in its old life as a crown corporation. And that takes us back to the Harris’ decision to break up Ontario Hydro in the first place and McGuinty’s decision to try to make it work rather than unscramble the messy omelette.

Eleanor Clithero

Clitheroe getting a reported $25,000 per month pension – a very generous pension settlement when they fired her.)

So while Mr. Ford is making much of this Hydro One malady he would do well to recall that the situation today is a consequence of his own PC party’s misadventure. He would no doubt like us to forget that his party established the original Hydro One board structure. And he’ll never mention its first CEO, Eleanor Clitheroe, Ontario’s truly strange ‘two million dollar woman’ who extracted a very generous pension settlement ($25,000 per month) when she also had to be fired. Little wonder our hydro rates are so high.

The PC’s under Harris/Eves had always intended to privatize Hydro One, and even today Ford will not commit to taking back control of the corporation. He just wants to fire the Board and replace it with his own cronies. What are the chances we can expect to see this scenario replay itself were Ford to become Premier.

And just when it seems nothing could be worse news for our embattled premier, the provincial Financial Accounting Office (FAO) has just come in with an assessment. They claim that the province’s overall debt would be lower if the Wynne government had simply borrowed money for new infrastructure rather than selling off 53% of Hydro One – the nominal rationale for the sale.

Towers in Toronto

Hydro has been always been a problem file.

It’s a bit of a mess, but then Hydro has been always been a problem file, running up over $40 billion in debt going back to the Robarts and Davis years. Of course Hydro really lost it’s way during the Bob Rae period when Maurice Strong thought to change it’s main purpose to delivery of environmental policy. Mike Harris was determined to break it up only to discover the $40 billion gap between its assets and liabilities. But we’ve finally paid off the tab.

McGuinty believed in Harris’ dream and was convinced that he could replace coal with renewable energy by harnessing the economics of the private sector. Rather than go into debt to finance the conversion from dirty coal he issued contracts to independent energy generators, giving them long term contracts guaranteeing purchases of electricity in exchange for them investing their own private capital.

Ford-looking-direct

Is blowing smoke when he says he’ll tear up the contracts?

Ford is blowing smoke when he says he’ll tear up the contracts. But even if he could, how would he keep the lights on when the private sector contractors shut down? Would Ontario end up having to buy its energy, including from dirty coal, from its neighbours, while our industry sits idle. Or would he nationalize all energy production?

Speaking of socialism it turns out that one of these Hydro One board members is a former NDP MPP and member of Bob Rae’s Cabinet, Francis Lankin. In addition to filling her face at board meetings she is also double dipping as one of those Trudeau appointed independent senators in Ottawa. It seems even socialists will hop on the gravy train if it avails itself, to borrow a term from Mr. Ford’s late brother.

And the NDP’s Andrea Horwath has promised to buy back and de-privatize Hydro One. This is something which may prove costly, but necessary, as Ontario tries to move beyond its jaded experience of private sector delivery of electricity. But Horwath too needs to be careful as she treads among the ever fragrant meadow muffins on this file.

Rivers hand to faceRay Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.     Tweet @rayzrivers

Background links:

Hydro One Pay –   Liberal Response –    Financial Accounting Office

Hydro One –   Hydro One Board

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10 comments to Rivers: Do the Hydro One board members have a secret wish to help Doug Ford’s campaign?

  • Phillip

    I think their strategy is to line their own pockets knowing they will be promptly removed from office as soon as Ford is elected. And remember, these are all Liberal appointments so their actions do not surprise me!

  • Braz Menezes

    Ray Rivers is a realist. Ford may sack the Board (great photo op made forTV) and replace board with his own cronies. No way he will, nor can, buy back Hydro. Neither will Horwath, inspire of the good intentions.
    Pretty sure that Hydro 1 Board heads will roll. So all compensation packages for early termination will be calculated fro higher baseline. Taxpayers will get screwed yet another time as rates will have to go up to finance payoffs.

  • Mike

    Ray, ….remember that famous animated film line with respect to socialist/egalitarians ….”We are all equal, just some of us are more equal” (or something close to that.

    Wynne and McGuinty had used our provincial credit card to borrow $200 Billion to pay for all their promises. They didn’t have the guts to tax for it as they knew if people saw the real costs, they would be rational and demand the government reduce spending to reasonable levels, or vote them out, as expensive Hydro rates have shown which include the height of their irresponsibility and disregard for Ontarian’s over their own pocket, as the borrowed Billions more the refinance payments for Hydro and defer the cost down the road and tried to hide it by putting on the books of OPG.

    Good riddance.

  • Hans

    I saw somewhere that these compensation increases actually took place in January. If that’s indeed the case, then its board and executives could not have known that they would be helping Doug Ford with their insatiable greed.

    There needs to be a Great Purge and restructuring of Ontario government agencies’ boards and organizations in general. How many electricity agencies does it take to keep the lights on anyway? We have an Energy Board, OPG, Hydro One (whose $6 Million Man can’t keep the power on reliably, as we found out recently), IESO (independent of WHAT, exactly?), and a few more that are so important (not) that I can’t even remember their names. Each agency has a Board, CEO, senior executives, offices, staff, etc. – the duplication is extraordinary, but it provides lots of “jobs for the boys”, I’m sure. It should all be managed under one Manager (not someone called “CEO”) who carries out government policy and manages the budgets as directed by the Deputy Minister of Energy, who should be the only one called a CEO. Since the market is captive and demand is nearly inelastic, there is no risk of business failure and therefore no need to pay anywhere near the big salaries that the private sector pays; in fact, the top Manager should be paid less than the Deputy Minister to whom s/he should report.

    Health care, with its ineffective, and inefficient LHIN system – with 14 “CEOs”, Executive Directors, staff, offices, etc.; more “jobs for the boys” – should be restructured as well, with the Deputy Minister of Health being the real CEO.

  • D.Duck

    And why did Wynne sell 53% of Hydro One??? Where did that money go?? Was that Wynne’s first balanced budget using this Wynne-fall (see the way I used a pun-on-words there)???

    All LEVELS of gov’t use political appointments or political leaning consultants to validate said gov’t in power and its beliefs. That is why I dislike local candidates with political affiliations………..rarely do they have altruistic goals but commonly they have political agendas (generalization here, so please don’t hang me……yet).

    I just want transparency, accountability and responsibility. Mistakes happen and a simple well meaning apology goes along way. The issue is the Hubris of todays politicians (at all levels) makes the apology either non-existent or without meaning.

    Wynne’s “reward for appointing them to such lucrative positions” is the Brutus’s salute. No different than what the Elementary Teachers Union did by endorsing the Provincial NDPs after Wynne’s capitulation to their Union’s monetary demands.

    McWynne’s Liberals created this centralized top-driven proliferative bureaucratic sloth. They own it but we will have to pay for it, in severance handouts, or it will completely devastate the Province’s budget & tax base. When we have more Healthcare bureaucrats than Family Physicians in Ontario, then we should start to worry…….so worry.

    Remember, 65% of Canadians have to save for retirement because they are not civil-servants with pensions and benefits. And who pays for the civil-servants perks………we all do. Please note; civil servants in this context are the political bureaucrats at all levels and not the teachers, fire, police, RNs, etc (being Political Correct all the time is tedious).

    Mike: ‘All animals are equal but some animals are more equal than others” (Animal Farm)

  • Susie

    Governments with their promises, dreams, and such a great platform of nonsense, brainwash the public that don’t ever study the real facts of what is actually going on. For the NDP and PC leaders, they have no clue what is written on documented papers in the house to know what they are even talking about, let alone make any changes. Governments are the way they are because they have allowed such poor judgement for, too long, putting us in a no-win situation. Governments acceptance for CEO’s legal paper salaries, have such wording that they may as well be a God, as they can build a company or they can bankrupt a company and still pull the strings to the max with their pay cheque and bonuses. Sad, sad business practice with legal contracts that allow exorbitant salaries, for what???? Everyone is replaceable, so this is outright robbery with increases to the taxpayers that have gotten out of control, because the Government has approved it!! This will be ongoing no matter who fills the Premiers slot in decisions for Hydro One.

  • Stephen White

    Having worked in the utilities sector earlier in my career I can’t say I’m surprised at the degree of largesse and entitlement that characterizes the behaviour of Hydro One’s Board and senior executives.

    When Ontario Hydro was broken up in the 1990’s the government should have used the opportunity to clean house of Hydro senior management and executives and wipe the slate clean. Instead, they just shuffled all the staff around to the other successor companies. Instead of having one Hydro conglomerate characterized by greed, paternalism and entitlement we ended up with 5 “mini Hydros” all exhibiting the same behaviour. Over the years that culture of entitlement has been abetted and encouraged.

    Tom Adams, writing in today’s National Post (page A6) says: “The electricity system is a mess — it has to be reconceptualized and restructured from the ground up”. He also mentions that politicians aren’t thinking strategically about this issue..and he is absolutely right. Hydro One is a mess, but so too is the entire energy file in this province. It requires a systematic overhaul led by a new management and Board who will put in place a new strategy committed to conservation, cost reduction, accountability and efficiency. Ford’s focus on cutting salaries, bonuses and perques garners headlines and but it only addresses a small part of a much greater problem.

  • Sheila

    There is nothing new under the sun, so I’m not surprised by the greed and self-interest exhibited by most (if not all) levels of government and their agencies/cronies, not to mention the so-called business leaders worshipped for their supposed ‘acumen’. I wish I had the necessary skills to live off the grid so I wouldn’t be at the mercy of these thieves! My only recourse is my vote and, sadly, it seems that even that is a lonely and less powerful thing against the Goliath of greed. I’m looking for a leader I could really support, but so far I haven’t found one who honestly & honourably represents the things I value. I’ll keep looking…

  • Mike

    With regards to Ontario Hydro’s break up into the successor companies…for full disclosure, in 1999 I was hired into a senior manager role at OHSC which became HydroOne, while Eleanor pictured above was CEO.

    Ontario Hydro had a ballooned stranded debt of around $30 Billion at the time. Partly from successive governments that did not want to charge the full cost for power. The organization was massive and very costly i.e. inefficient. Salaries and benefits were above even what the government offered. The division into the various organizations was a strategy to create focus but also allow for better scrutiny over the costs of the organizations against their delivery of services that could be better bench-marked. Without going into a lot of detail, I can assure you, the concerns of inefficiency and high costs were realistic and the creation of the companies allowed for this focus on improving their cost and delivery profile.

    It was also desired at the time to allow for alternative players to get into the market to provide electrical power for the growing province thereby creating some competition on the generation side to get competitive pricing. The transmission and distribution side (HydroOne) was always to remain regulated under the Ontario Energy Board. It did allow for the consolidation of distribution utilities across the province, so HydroOne, like other larger distributors bought up smaller ones from various towns and cities which created more efficient delivery organizations by scaling up these small entities.

    In all it was a good strategy that served the province and taxpayers well. Unfortunately the Green Energy plan which certainly had the promise to help transform how we generate power has not panned out. There were two issues which McGuinty and Wynne following his lead at time did not address, even though there was lots of advice from within the Hydro entities to contrary. The grid was not built to allow many points of generation and “green” generation was not at the time cost effective. The first issue required upgrades to the grid to properly manage loads. Without it, we see us having to shunt power to neighbouring jurisdictions and pay them to take the power when we cannot shut it off. The second was a lack of cost transparency as the government did not want to have to set aside the many billions of dollars it would need to spur the green energy industry as there might have been a revolt if Ontarian’s knew how much was being committed on their behalf. Instead, they buried it into 25 year contracts, paying 10x the going rate for power. These both have caused the acute rise in power prices which impacts everyone and for most businesses is their 2nd largest cost. This has made Ontario expensive to do business in. The is especially costly for areas like manufacturing so it should be no surprise we had and continue to have jobs in areas like these move into the U.S. where power is much cheaper.

    And to add to this mess, Wynne did some “dejavu all over again”. Since the people were getting riled up about power prices, the Wynne government used the Ontario credit card again and borrowed another $40 Billion (Ontario AG Report) to defer the higher prices into the future and attempt to buy another election. To make an utterly stupid decision worse they make one of the Hydro companies put it on their books in an attempt to hide it and not have to report it as part of the deficit (which they continue to not do) and in so, incur extra interests costs (over $2 billion according to Ontario AG report).

    Time for a change.

    These people do not care about Ontario and its future only themselves and clinging to power.

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