Building a Modern, Efficient, and Effective Energy Regulator for Ontarians
Ontario's Government for the People is taking steps to modernize the Ontario Energy Board (OEB) by improving organizational governance, promoting regulatory excellence, and cutting red tape.
The government is proposing amendments to the Ontario Energy Board Act, 1998, which would, if passed, reform the governance structure of the OEB and address immediate opportunities for improvement. The amendments would:
- Establish a new governance structure, including a board of directors and a CEO, and better separate the OEB's management, administration, and adjudication responsibilities.
- Streamline processes by amending the OEB's consumer education objective and reducing duplicate responsibilities in transmission procurement between the OEB and the Independent Electricity System Operator (IESO).
- Promote efficiency and reduce the regulatory burden by requiring the OEB to report annually on its efforts to simplify regulations for the energy sector.
The OEB would be transitioned to the new governance structure in a responsible and timely manner. Applications before the board would not be affected.
These proposed changes were informed by the recommendations of the OEB Modernization Review Panel, stakeholders, and regulatory experts. They reflect best practices and support independent decision-making.
The OEB Modernization Review Panel consulted with over 45 organizations and individuals and received 60 written submissions from stakeholders across the energy sector, from industry associations to consumer advocacy groups. The Panel heard broad support for a modernized OEB with a focused mandate and enhanced governance structure.
The proposed changes would allow the OEB to better serve Ontarians and operate more effectively and efficiently to protect the rights of consumers and ensure that Ontario's energy system remains sustainable and reliable.
The government is proposing to introduce legislative changes that would reform the governance structure of the Ontario Energy Board (OEB) and ensure a greater separation of its administrative and adjudicative functions. The proposed changes, which would provide for stronger governance and accountability, include:
- The creation of a board of directors, led by a chair, who would be responsible for governance and strategic oversight of the organization, interfacing with the Minister and the provincial government. The chair would ultimately be accountable to the Minister of Energy, Northern Development and Mines for ensuring the independence and effectiveness of the OEB's adjudicative process.
- The creation of the role of CEO, separate from the Chair, who would provide executive leadership for all operational and policy aspects of the organization.
- The creation of the role of commissioners, who would assume an adjudicative role in hearing and determining matters within the OEB's jurisdiction.
- The creation of the role of chief commissioner, accountable to the CEO, who would be responsible for assigning casework and ensuring the timeliness and dependability of the regulatory process.
The legislation would include various transition provisions to address the transition from the current governance structure to the proposed new structure.
The legislation would also include amendments for immediate changes to the OEB's mandate to improve functioning, enhance performance, and reduce regulatory burden, by:
- Amending the OEB's objectives to remove the requirement to promote the education of consumers, and instead include education as a consumer interest that the OEB should protect.
- Requiring the OEB to include a section in its annual report on its efforts to simplify regulatory requirements.
- Requiring the OEB to accept the outcomes of the IESO's competitive procurement process as it relates to price and include the related costs in transmission rates. The OEB would still review the need for the project and compare it to alternatives through the leave to construct process.
According to the Electricity Distributors Association:
- One medium-sized local distribution company spent the equivalent of almost 1,000 business days on its 2016 cost of service rate application.
- Another local distribution company's application and interrogatory responses to the OEB totaled almost 3,500 pages of evidence.
- For several local distribution companies, the cost of preparing recent rate applications increased by over 200 per cent - in some cases, over 300 per cent - because of increased reporting requirements.