The Ontario Energy Board (OEB) is charged with regulating the electricity sector in Ontario and that includes resetting the time-of use price (TOU) every six months. One would think that the OEB, who regularly wade through rate increase applications covering thousands of pages, would have the talent and ability to complete that task without outside help--- but they don't. The OEB rely on Navigant Consulting Ltd to present them with data allowing them to make a few calculations that lead to the press release issued on Friday April 5, 2013.
One wonders why the OEB don't do this on their own. Presumably the senior staff at the OEB are concerned that it is better to put the blame on someone else in the event there is a change of parties leading the government in the future and the politicians start looking for some heads to chop. This seems to be the way bureaucrats protect themselves, particularly when they may be in complete disagreement with the ongoing policies of the governing party. Based on the current mess in the energy sector in this province I can't say I blame them. Now, is Navigant doing a good job and providing the OEB with the right data was the question. Before getting into that I think it’s relevant to provide some history.
Early on in my career as a banker I remember someone senior to me asked if I was aware of the difference between a mathematician, a statistician and an economist. When I denied knowing the difference he went on to tell me. He said if you put all three of them in a room and ask them to perform a simple task such as what is two plus two the mathematician will emerge immediately with his answer which will be “four.” The statistician will take a few minutes longer but will emerge with his answer which will be, “somewhere between three and five.” After several hours the economist will exit the room with a question; “What answer did you want?” Read more »
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