On July 28, the Ontario Energy Board (OEB) issued a decision on how carbon pricing under the Wynne government’s new cap-and-trade program will be reflected on a consumer’s bill for natural gas.

OEB decisions are not typically my favourite reading. But this was a very big and very important decision. It has lots of political impact.

Next to the partial privatization of Hydro One - which will give a temporary assist to the government’s balanced budget target - the cap-and-trade program now has to be considered the single most important initiative of the Wynne government.

Cap and trade will affect everything that uses energy in Ontario, for a very long time into the future. It will impact both our economy and our provincial budget. And while it will start modestly, the intent is for its impact to grow dramatically.

In fact, Premier Kathleen Wynne takes every opportunity to trot out her government’s “green” credentials. And her government is fond of outlining all the wonderful environmental “goodies” they are going to buy with the proceeds from the sale of carbon emission rights.

Alas, there is a political downside. It will cost; and the cost has to be confronted before any possible benefits could ensue.

Ontario is still overwhelmingly dependent on fossil energy. Most Ontarians heat with natural gas; and the transportation sector is even more dependent on oil. We have to give a lot of that up.

Needless to say, the Wynne government is not inclined to remind ordinary voters of the cost. That’s why they chose “cap and trade,” as opposed to a carbon tax, in the first place. Very few know what cap and trade means, let alone how it works.

So the OEB ought to be embarrassed, if not - depending on their true motivation – even ashamed, that it chose to aid and abet the government’s preference for stealth and lack of transparency in this matter.

The OEB decided that the cost of carbon emissions will not be given its own line item on a consumer’s bill. Instead, it will be buried in the “delivery charge."

The decision to bury the cost is a bad public policy choice; but to bury it in the “delivery charge” is downright ludicrous. It shows how far the OEB had to stretch with this decision.

It is the amount of natural gas a customer uses - not how much it costs to deliver to their home or place of business - that will determine the vast bulk of the associated carbon emissions and their cost. And it is only that usage that each consumer can individually control.

This is how carbon pricing works – getting the individual to consume less fossil fuel because it costs too much. How can they hope to make those choices without clear and precise information feedback?

If all that matters is the final price, then why bother to show any component details on an energy bill? But billing details do matter. They assign “accountability;” and that is the dreaded word here. Some may hold the government to account for what it has mandated.

The OEB is usually a technically competent organization; and it’s supposed to be independent. So why did it give the government this gift of obfuscation?

I can only speculate.

I do know that the OEB decision has no sound basis in logic or fact.

For a clearly-worded, logical and fact-based analysis, read the Independent Electricity System Operator’s (IESO) submission to the OEB on this question. It is effectively a rebuttal of every rationale given for the OEB decision - by another independent agency of government.

The IESO letter also intimates a potential competitive distortion in the electricity market if the OEB proceeds as announced. How long will it be before someone unearths yet another scandal?

The government should overrule the OEB. It should insist on complete transparency on customer bills. Premier Wynne could then fully embrace what has become her government’s flagship initiative.

She won’t of course. And so a bad public policy design is made even worse. But this time thanks to the OEB.

I am struck by the contrast between the OEB decision and last week’s story out of the Financial Accountability Office (FAO) seeking more transparency and less encumbered access to government financial modelling, in order to enhance government accountability.

But then Premier Wynne didn’t want the FAO in the first place. Makes me think we need to reform the appointments process across all “independent” agencies.

Purchase: The OEB ought to be embarrassed, and maybe ashamed

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