Parker Gallant: Commentary on Distribution Sector Report

Commentary on:

“Ontario's Electricity Distribution Sector: Putting the Consumer First”
By Parker Gallant

Comment: Preface

This preamble to the report sets out the purpose of the report and in one section has the following statement:

“The Panel has also determined that Ontario’s electricity distribution system will require significant additional resources if it is to replace aging equipment and provide new services. The current structure of electricity distribution is a barrier to this required investment and needs to be changed.”

In order to support that statement, the panel cites the Conference Board of Canada (chapter 3, page 24):

“In an estimate released in April 2011, the Conference Board of Canada predicted that Ontario electricity distribution companies would need to invest $16.6 billion over the next 20 years to maintain their current networks, and an additional investment of close to $4 billion to grow and serve new customers, new requirements, and new territories.” 

Had the panel members reviewed the Ontario Energy Board or OEB's Yearbook of Distributors they would have realized that the approximately $1 billion per year that the Conference Board suggests needs to be invested in capital goods is already happening. For the four years 2008 to 2011, Ontario's electricity distributors reported to the OEB that they spent a total of $6.6 billion, or an average of $1.6 billion for each year.

Conclusion: Whatever “barrier” the panel perceives is not present based on the spending over the past four years!

(Parker Gallant's submission can be read/downloaded as a .pdf here)

Comment: Chapter 1 The Imperfect World−How We Got Here

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