Cornerstone Hydro Electric Concepts Association Inc.
April 8, 2013
Alex Killoch
Director, Planning and Agency Relations Branch
Ministry of Energy
Regulatory Affairs and Strategic Policy Division
900 Bay Street, 5th Floor, Mowat Block
Toronto ON M7A 1C2
SENT VIA E-MAIL: [email protected]
Dear Mr. Killoch;
Re: Opportunities in the Electrical Sector:
“Achievement through Collaboration”, is Cornerstone Hydro Electric Concepts
(CHECs) unofficial motto. It is also the reason why CHEC has been so successful for
over a decade. CHEC looks forward to working with the Ministry and other industry
partners to affect positive change within the industry for all customers. CHEC believes
its model of voluntary collaboration is a powerful process to meet these goals.
Definition:
By definition, a cooperative is an autonomous association of organizations and/or
people who voluntarily collaborate for their mutual, social, economic, and cultural
benefit. It is a proven model that has been around for as long as people have been
working together to achieve a goal. CHEC, an association of some of the smaller LDC’s
in Ontario who currently serve over 110,000 customers across the province, has
embraced this collaborative model as the basis for achieving efficiencies and cost
reductions for their customers.
Our History of Success:
CHEC was originally created in 2000 to assist the members to work through the difficult
tasks related to the market restructuring. The member LDCs worked closely together
achieving best practices amongst the members and offering collective input to the
Ministry, the IESO, and the OEB throughout the development of the Market Rules and
the various Codes necessary to establish new market structures.
Over the years, CHEC continued to develop and contribute to the sector. In fact, it was
CHEC that was responsible for the development of the Ontario Utility Smart Meter
(OUSM) working group which ultimately pulled together over 40 LDCs. More than 2.4
million customers were represented to collaboratively test new Smart Meter
technologies in a coordinated manner to help streamline the process and reduce the
costs of identifying the best smart meter technologies for Ontario. The results of this
collaborative effort ended up being adopted by the Ministry for guiding all LDCs in their
selection, procurement and deployment process.
CHEC Today: On-going Efficiencies
With a mentality of continuous improvement and best practices, CHEC continues to
evolve by providing its members with a number of opportunities. Results are achieved
through tactical decisions in areas such as the development of regulatory service
standards, combined training efforts, and standardized resources and processes.
For example, CHEC shares the development of regulatory service standards through
initiatives such as a common “Conditions of Service” document, rate applications,
economic evaluations, generation guides and other regulatory documents. CHEC
believes that additional efficiencies may be possible though a combined rate application
process and is currently reengineering this process to move forward on this initiative.
CHEC has combined training initiatives in the areas of regulatory, finance, health &
safety, and customer service in order to improve expertise at lower costs. In addition,
new initiatives such as coordinated safety services throughout the group are currently
under investigation.
CHEC draws on the expertise of its members to achieve efficiencies and reduced costs
through the sharing of best practices and development of standard resources and
processes. CHEC has collectively hired staff to assist with rate issues, CDM portfolio
management, and a variety of other industry related activities. It utilizes RFP services
to secure a large variety of products and services in a cost effective manner.
Furthermore, joint ownership of billing services such as the Utility Collaborative Services
(UCS) group is another means of achieving collaborative efficiencies. The UCS shared
ownership structure is a not-for-profit way for the LDCs to reduce the costs of
purchasing and maintaining a billing system. Additional benefits of the shared
ownership arrangement come from establishing strict adherence to standards, which
allows for one LDC to step in and assist another LDC in times of need related to
temporary staff shortages.
LDCs are accountable for only 20% of a customer’s electricity bill and CHEC believes
that it can provide input on the other 80% in a positive and constructive manner.
Today, CHEC continues to work collaboratively with the Ministry, OEB, IESO, and OPA
staff. This effort streamlines the dealings between these organizations and the member
LDCs saving all parties both time and costs. Continued collaboration can only improve
on these initiatives. For example, CHEC constituents often serve the OEB through
solicited measures such as comment papers and working groups. In fact, CHEC has
recently had representatives on every working group related to the OEBs Renewed
Regulatory Framework for Electricity (RRFE) initiative. As such, we consider our
expertise a valuable contribution towards helping to shape the future of the electrical
regulatory environment. Reciprocally, Ontario Energy Board Staff have often attended
and participated in CHEC events to ensure OEB efforts receive maximum results.
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CHEC is committed to continue to work within this framework, with the Ministry, and
industry partners to find efficiencies and therefore savings within the electrical energy
sector, for the consumer.
Ontario Distribution Sector Review Panel Report Comments:
CHECs review of the Ontario Distribution Sector Review Panel’s (Panel) Report
concluded that the panel did not incorporate meaningful input from industry experts
such as the Electricity Distributor’s Association (EDA) or the Association of
Municipalities of Ontario (AMO). The Panel’s main thrust was to create 8-12 large Local
Distribution Companies (LDCs) with little empirical evidence justifying their conclusion.
CHEC generally supports some of the other Association viewpoints such as the EDAs
suggestion for improved efficiencies from “Scope of Operations” and the AMOs
suggestion for improved efficiencies from “Shared Service Arrangements”. These
efforts are consistent with CHEC collaborative model and should have been given their
just due by the Sector Review Panel.
Meeting Today’s Challenges:
Going forward, CHEC believes that maintaining the collaborative model is the best way
to achieve the goals and objectives of the association as well as the goals and
objectives of its Regulator and the Ministry. Through collaboration such as with the 13
LDC member CHEC group, we can improve efficiencies equal to or better than
consolidation. The above examples provide the necessary empirical evidence to prove
that this collaborative model is an effective alternative to consolidation. We have a
model that works and we can use this model more broadly across the industry. This is
how CHEC and its members “Put the Consumer First”, and how CHEC intends to meet
the future. CHEC would like to respectfully suggest that the Ministry, the OEB, IESO,
OPA, LDCs and CHEC work together to arrange stakeholder engagement to find
efficiencies and customer savings . CHEC would be pleased to be of further service as
requested.
Respectfully Submitted;
Gordon A. Eamer, P.Eng.
Chief Operating Officer
Centre Wellington Hydro
COLLUS PowerStream
Innisfil Hydro Distribution Systems
Lakefront Utilities
Lakeland Power Distribution
Midland Power Utility Corporation
Orangeville Hydro
Orillia Power Distribution Corporation
Parry Sound Power
Rideau St. Lawrence Distribution
Wasaga Distribution
Wellington North Power
West Coast Huron Energy
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