In March 2019, the Ontario Government announced a series of plans aimed at reforming the structure of the Ontario Energy Board (OEB), as well as lowering electricity costs for consumers.¹ Some of the Government’s proposed plans will be implemented through legislative amendments set out in the now-passed Bill 87² (which amends the Ontario Energy Board Act³ (OEB Act) and other statutes), while other changes are to be implemented through regulatory and policy updates. The changes to the OEB Act were passed by the Legislature and received Royal Assent on May 9, 2019.⁴ As of July 2019, no date has been provided as to when the changes will be proclaimed into force.

A main part of the planned changes is to update the governance and accountability within the OEB, assigning the strategic oversight to a board of directors, with administration to be coordinated by a chief executive officer and adjudication to be undertaken by commissioners (overseen by a chief commissioner). These changes are intended to “reform” the governance structure of the OEB, and “ensure a greater separation of its administrative and adjudicative functions”.⁵

BACKGROUND – THE OEB MODERNIZATION REVIEW PANEL

As explained by the Government when Bill 87 was released, the planned changes to the structure of the OEB were “informed” by the recommendations in the Ontario Energy Board Modernization Review Panel Final Report.⁶

The OEB Modernization panel was appointed by the previous Ontario Government in December 2017 as an expert panel to conduct a review of the OEB, examine best practices from other jurisdictions and report back about potential changes and improvements. The Panel began its work in early 2018, meeting with many interested parties, and gathering information. In August 2018, the Review Panel was asked by the current Ontario Government to continue its work. On March 15, 2019, the Ontario Government published the OEB Modernization Report. No explanation is provided as to why the Report (which is dated October 2018) was not released until March 2019.

The key recommendations in the OEB Modernization Report include the following:

• The OEB should be renamed the Ontario Energy Regulator (OER) and should adopt a new governance framework. This governance framework is proposed to include a president, a chief commissioner responsible for adjudication and a board of directors. The proposed governance structure is shown in the image below.⁷
• The OER’s president and chief commissioner should develop a plan “to enhance the independence, the certainty and the efficiency of the adjudication process”.
• The OER should be required to report to a committee of the Ontario Legislature about the OER’s “plans, priorities and performance” on a periodic basis.
• The OER should develop new performance indicators focused on matters like decision time, stakeholder satisfaction and organizational excellence.
• The OER should develop and maintain a prioritized list of emerging policies to address and a related schedule. This should be developed through consultation with stakeholders.
• The OER should address regulatory treatment of innovation within its first year.⁸

Details about how each of these recommendations could be implemented are set out in the body of the OEB Modernization Report. The Appendices to the Report describe the roles and responsibilities and experience of other energy regulators in Canada and elsewhere and summarize the information and comments provided to the Review Panel by stakeholders.

CHANGES TO THE OEB ACT THAT WILL REFORM THE OEB

Bill 87 includes a series of amendments to the OEB Act to amend its governance structure and operations. To large extent, these amendments are consistent with the recommendations of the OEB Modernization Report.

Among the key changes to the OEB’s structure and governance are the following⁹:

• A board of directors will be created, and they will be responsible for governance and strategic oversight of the OEB, “interfacing” with the Minister of Energy and the Government. The board of directors will be composed of between 5 and 10 members, including a board chair.¹⁰
• The board chair will “oversee the efficient administration of the business of the board of directors” and “be accountable to the Minister for the independence of persons and entities hearing and determining matters within the Board’s jurisdiction in their decision-making”.¹¹
• The board of directors will establish an “adjudication committee” that may require the chief commissioner to provide information “respecting the efficiency, timeliness and dependability of the hearing and determination of matters over which the Board has jurisdiction.¹²
• The board of directors will appoint a chief executive officer (CEO) to provide executive leadership for all operational and policy aspects of the OEB.¹³
• The board of directors will appoint between 5 and 10 commissioners to take on the adjudicative roles for hearing and determining matters within the OEB’s jurisdiction. No person who has any material interest in any market participant or who is a director or officer of a market participant, generator, utility or similar entity is eligible to be a commissioner.¹⁴
• The board of directors will, on the recommendation of the CEO, appoint a commissioner to the position of chief commissioner. The chief commissioner will assign cases and “ensure the efficiency, timeliness and dependability of the hearing and determination of matters over which the Board has jurisdiction”.¹⁵

Implementation of the new roles at the OEB will require some transition, as described in the amendments to the OEB Act. Among other things, the initial appointments of a CEO and commissioners will be made by the Lieutenant Governor in Council, rather than by the OEB’s new board of directors.¹⁶

The transition has already begun. The prior Chair/CEO of the OEB has now departed her role. As set out in the new provisions of the OEB Act, that role will be filled by several different people in the future. No announcements have yet been made as to when the changes to the OEB Act will be proclaimed into force, nor about who will be appointed to the OEB’s CEO, board chair or chief commissioner roles.

1. Ministry of Energy, Northern Development and Mines, News Release, “Ford Government Taking Bold Action to Fix Hydro Mess” (21 March 2019), online : <https://news.ontario.ca/mndmf/en/2019/03/ford-government-taking-bold-action-to-fix-hydro-mess.html>. See also David Stevens, “Ontario Government Releases Its Plan to Reform the OEB and Reduce Electricity Costs”, (2 October 2012), energy insider (blog), online: <https://www.airdberlis.com/insights/blogs/energyinsider/post/ei-item/ontario-government-releases-its-plan-to-reform-the-oeb-and-reduce-electricity-costs>.
2.  Bill 87, An Act to amend various statutes related to energy, 1^st Sess, 42^nd Leg, Ontario, 2019, online: <https://www.ola.org/sites/default/files/node-files/bill/document/pdf/2019/2019-05/b087ra_e.pdf>.
3.  Ontario Energy Board Act, SO 1998, c 15, Schedule B amended RSO 2019, c 6, Schedule 2, online: <https://www.ontario.ca/laws/statute/98o15> [OEB Act].
4.  Bill 87, An Act to amend various statutes related to energy, 1^st Sess, 42^nd Leg, Ontario, 2019 (assented to 9 may 2019), SO 2004, online : <https://www.ola.org/en/legislative-business/bills/parliament-42/session-1/bill-87/status>.
5.  Ontario, Ministry of Energy, Northern Development and Mines, “Building a Modern, Efficient, and Effective Energy Regulator for Ontarians”, Backgrounder (Toronto: Queen’s Printer for Ontario, 21 March 2019), online: <https://news.ontario.ca/mndmf/en/2019/03/building-a-modern-efficient-and-effective-energy-regulator-for-ontarians.html>.
6.  Ontario Energy Board Modernization Review Panel, (Toronto: October 2018), online: <https://files.ontario.ca/endm-oeb-report-en-2018-10-31.pdf>.
7.  Ibid at 12.
8.  Ibid at 12–13.
9.  Other changes to the OEB Act are intended to reduce “duplicate responsibilities in transmission procurement” between the OEB and the Independent Electricity System Operator (IESO), and to take away the OEB’s statutory obligation to promote the education of consumers. See OEB Act, supra note 3, ss 97(1), 97(3).
10.  Ibid, s 4.1.
11.  Ibid, s 4.1(9).
12.  Ibid, ss 4.1(15)–(16).
13.  Ibid, s 4.2.
14.  Ibid, ss 4.3(1)–(2).
15.  Ibid, ss 4.3(3), 4.3(11).
16.  Ibid, ss 4.2(8), 4.3(16).