Editor's note: Mr. Rennick makes reference to these previous BayToday stories.
Opinion: City officials treating NB Hydro like an ATM machine
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The Ontario Energy Board’s (OEB) recent decision on electricity delivery rates has ignored the interests of consumers in favour of the bureaucrats in charge of the bloated monopoly at North Bay Hydro Distribution Limited (NBHDL). This result flies in the face of the OEB’s first legislated responsibility to protect consumers with respect to prices.
The ruling approves an increase of 23.5% in OM&A expenditures which compares to an increase of 9.3% in inflation for a similar period. This ruling is further evidence of disconnect between consumers, our local council and provincial officials who are mandated to protect their interests.
In arriving at its decision, the Board simply ignored the recommendations and comments of the consumer advocates who were paid almost $100,000 to intervene and advise the Board.
Part of the reason for this massive increase is the number of employees and their current compensation. Management employees’ average compensation now costs consumers over $160,000 per year for each of 13 people which is an average of over $3,000 per week per person.
In 2004, NBHDL operated with a total of 35 employees and is now suggesting they require 53 people even though the customer base and the service provided are unchanged. Apparently, the OEB did not feel that these facts were reason enough to curtail the ever-increasing burden on customers.
The management at NBHDL apparently did not feel qualified enough to sell this budget to OEB officials and hired a legal team to do so on their behalf. They paid over $450.000 for this service and the costs will be included in customer rates.
Additionally, customers once again will be forced to contribute $2.5 million in additional funds so that NBHDL can pretend to be profitable. This yearly return on equity, as it is euphemistically called, amounts to a Ponzi scheme where investors supply funds to show a return on their own investment. Imagine a bank offering an 8% GIC that requires you to contribute the 8% in order to earn that amount. This amount will be taken out of customers' pockets over the next year and yearly after that while over 25% will be paid out in taxes to the provincial government.
The reorganization of Ontario Hydro in the late ’80s resulting from the billions in stranded debt amassed by that organization is an example of what happens when governments fail to put the brakes on spending and we all know who picks up the tab for this failure.
The OEB web site is rife with flowery language professing their diligence in ensuring that the customer is treated fairly. I have seen scant evidence of this during my ten-year interaction with the organization.
Taxpayers contribute ever-increasing amounts to government institutions such as municipal councils and the OEB to protect them. The reality is that the bulk of the millions spent to support these bureaucracies is a charade and customers would be better served regarding the setting of rates by throwing darts against the wall.
Don Rennick
North Bay
