The Ottawa Citizen
May 15, 2012

Time for Change at OPG

A new report on Ontario’s nuclear stations says the province’s Pickering reactors are among the worst in the world for cost-effective operation and reliability.

That’s bad news for Ontarians. This inefficiency not only contributes to increasing power prices, it reduces profits for government-owned Ontario Power Generation.

The report was commissioned by the Ontario Energy Board, the government body that regulates power prices. The board wants to improve efficiency at all the publicly-owned hydroelectric and nuclear facilities in Ontario.

That’s quite a challenge. The poor performance described in the most recent OEB report was first detailed in 2008. Since then, the OEB and OPG have been arguing back and forth about staffing levels and efficiency, presenting competing expert analyses, all at public expense. The board has ordered some reductions in OPG staff.

In effect, the energy board is doing the work that OPG’s own management and board should be doing. In a normal, private sector company, this kind of performance would lead to a management shakeup, but at OPG it has led to a years’ long battle with the energy regulator. Meanwhile, the people who run OPG are among the highest paid in the Ontario public sector. For them, what’s the downside of inefficiency?

OPG says its performance has improved somewhat at the Pickering plant, but the problem with a government-owned company is that it doesn’t have to answer to shareholders for its performance. That could change if Ontario PC leader Tim Hudak gets his way. On Tuesday, Hudak released a white paper on the future of Ontario’s energy sector. One of the key proposals was selling part of OPG to big pension plans, to bring private sector expertise to the board and ultimately to senior management. Government seems willing to tolerate poor performance by its power generator. People with their own money on the line will not.

The automatic reflex in Ontario is to argue that power generation must be public, even though the new wave of solar and wind power is mostly private-sector owned. For that matter, a private consortium already operates the publicly-owned Bruce Nuclear plant.

The PC paper asks what role government should play in the power sector. Good question. People are buying power now from both public and private companies. For most consumers, key considerations are price and reliability. The kind of management OPG is demonstrating with its nuclear fleet doesn’t lead to either good prices or reliability.

The fact that nuclear plants elsewhere are run far more efficiently shows that it can be done. Ontarians shouldn’t accept second-rate performance. Maybe it’s time for a new direction at OPG.