How long does Ontario need to turn around OPG? – by Konrad Yakabuski (Globe and Mail – December 12, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

How long should it take to turn the Titanic around? Is five years a reasonable amount of time to allow for the transformation of a bloated and poorly run government-owned utility into a disciplined, high-performing one? Surely 10 years should be enough?

A decade ago, Ontario’s newly appointed energy minister promised to fix the mess at Ontario Power Generation. Dwight Duncan vowed to end to the years of “indecision and ideology” that had hamstrung electricity policy under the Progressive Conservatives and New Democrats. Job One was ending the excesses at OPG.

Mr. Duncan hired a bank chairman and two former federal cabinet ministers to examine the utility that managed a motley stable of publicly owned energy assets, including the Adam Beck hydroelectric station at Niagara Falls that once made Ontario an energy leader and the problem-plagued fleet of nuclear reactors, which had become the bane of Mr. Duncan’s predecessors and saddled power consumers with the utility’s atomic-sized debt.

The group led by former Liberal minister John Manley, former Tory minister Jake Epp and Bank of Nova Scotia chairman Peter Godsoe, sized up their task: “There are those who would argue that OPG’s problems are so severe that it is no longer capable of handling the complexities of running and maintaining one of the largest portfolios of generating assets in North America … OPG looks, to people on the inside and outside, like a company that is neither well-run nor well-governed.”

The real question was whether OPG could ever be truly fixed as long as it remained in government hands. But the botched attempt at privatization under the Tories may have prevented the Manley committee from properly considering the option. In the end, it concluded OPG should remain public, though “commercially oriented” and free of political interference.

How’s that worked out? Ontario Auditor-General Bonnie Lysyk gave us a hint this week with a damning report on OPG’s management practices that portrays the utility as an amateurish operation where possibly the only obstacle between employees and the public trough is the long lineup in front of them. Whereas the Manley committee found only weak links between employee achievement and bonus payments, Ms. Lysyk noted that this is “still the case.”

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