New chair of Hydro One to cut costs

Hydro One is getting a new $120,000-a-year chairperson following a year of turmoil that saw Premier Doug Ford’s government oust the previous chief executive, replace the board of directors and trump its new members by imposing a salary cap for top executives.

Investment industry veteran Tim Hodgson will move into the chair’s job Aug. 1, a year after he was first named to the board in the wake of CEO Mayo Schmidt’s dramatic departure and before U.S. regulators scuttled Hydro One’s purchase of American energy firm Avista Inc., costing the Toronto-based company a $140 million termination penalty.

Hodgson replaces Tom Woods, another Ford appointee who is stepping down from the board after a year as interim head.

Hodgson signalled that keeping expenses down is a priority at Hydro One, owned 47 per cent by the province after the previous Liberal government partially privatized the transmission and distribution utility to raise $9 billion to pay down energy sector debt and fund infrastructure projects.

“This company is committed to outstanding service to nearly 1.4 million customers, reducing costs and continuing to invest in a safe and reliable electricity system that supports Ontario’s growing communities and thriving economies,” Hodgson said in a statement released Tuesday by Hydro One.

The Ontario government has promised to cut electricity prices 12 per cent but has yet to make a substantial dent in customers’ bills.

The former CEO, Schmidt, became a lightning rod in last year’s provincial election campaign in which Ford dubbed him the “six million dollar man” for his annual salary. He was ousted last July and left with about $10.7 million in severance and stock options.

The Avista takeover fell through in January after U.S. regulators said Ford’s efforts to force Schmidt out signalled the province was willing to put political interests ahead of shareholder interests. The salary cap of $1.5 million for the new chief executive was ordered by the government in March after the board at Hydro One proposed $2.78 million.

Green Leader Mike Schreiner said the change in chairs follows “a year of chaos” at Hydro One in which Hodgson was a member of the board during the Avista and salary cap showdowns.

The government passed legislation last summer giving it the power to control executive salaries at Hydro One until 2022. Energy Minister Greg Rickford has said it is important to get pay packets “down to acceptable levels.”

Pay for board members was reduced and senior executives were limited to 75 per cent of the maximum $1.5 million for the chief executive. Former BC Hydro executive VP Mark Poweska started the job in May.