Shine the spotlight on Hydro Ottawa
With the power back on, it’s time to ask questions, Lewis Auerbach says.
Some important questions about Hydro Ottawa need answers now more than ever:
Are Hydro’s disaster plans adequate?
Are the plans and large projected expenses for long-term infrastructure improvements appropriate?
Could the interest rate on Hydro’s debt be lowered?
Does Hydro spend its $1.2 billion of revenue from Ottawa residents and businesses with due regard for efficiency and effectiveness?
Could its rates be lower or be more fairly constructed?
Is Hydro sufficiently transparent about its contracting and other financial arrangements?
Independent assessment and performance audits of Hydro’s operations and practices could begin to answer these questions and others. They would hopefully increase our appreciation for how well it is managed. They could assess the degree to which we are getting good value for money and recommend opportunities for improvement. They would promote greater transpar- ency and public discussion of where improvements are needed to its operations.
Unfortunately, there is a huge problem. Neither the Auditor General of Ottawa, nor the Auditor General of Ontario has a legislative mandate to audit Hydro Ottawa. Further, its $1.2-billion budget is not even part of the city’s budget. Some may argue that since Hydro Ottawa was set up by the city as a private corporation and is not a part of the city’s government, it should not be included in the mandate of the Auditor General of Ottawa. This would be disingenuous. All of Hydro Ottawa’s shares are owned by the City of Ottawa which also appoints all the members of the board.
Two examples illustrate why more transparency is needed. Hydro’s profit last year was $50 million, of which it paid $14 million in income taxes and $20.6 million to the city as a dividend. The city used the extra dividends for discretionary expenditures not otherwise provided for in its budget, such as filling unexpected potholes or installing fast charging stations for electric vehicles.
As David Reevely wrote in the Citizen, “There’s no earthly reason for a company to be spinning out tens of millions of dollars in dividends while borrowing money it’ll have to pay back with interest.” A performance audit could offer an objective opinion on whether any of this makes sense.
A second example — and there are others
— is Hydro’s donation of $1 million to The Ottawa Hospital’s new Breast Health Centre. As Hydro CEO Bryce Conrad said, “As a local company, I believe it is our responsibility to help make our community a better place. Directing funds raised through our annual charitable workplace campaign towards The Ottawa Hospital’s new Breast Health Centre will absolutely achieve that.”
This was an admirable donation to a worthy cause — much like any private corporation might make. But, given that the shareholders of Hydro are the City of Ottawa, one might well ask, why did it not donate to the food bank, the Heart Institute, or more housing for the homeless, or even the United Way? Are not these other causes equally important? Why should an unelected board should make these decisions on behalf of Ottawa citizens? Performance audits could address the issue of accountability and transparency for this kind of decision.
Let’s be clear. Without a mandate to perform periodic performance audits, the citizens of Ottawa and its councillors have no way of knowing whether improvements are possible which would reduce costs or increase transparency and accountability. Undertaking them will require a relatively small investment whose findings and recommendations might have a large impact and/or provide assurance that this enormous corporation is being run in a manner which is not wasteful, risky, or unnecessarily expensive.
Given the critical importance of Hydro Ottawa, candidates for mayor and council should state their positions on whether citizens of Ottawa deserve more information, transparency and accountability with respect to Hydro’s plans, billing practices, expenditures, and debt.