Ontario Ombudsman- photo Ontario Ombudsman
The Ombudsman gave a disappointing report on the over whelming amount of Hydro One complaints he received from people not being able to afford their expensive hydro bills issued by Hydro One.

Listen and read the reports from the Ombudsman about the investigation into the transparency of Hydro One billing practices.

Parker Gallant was shocked at the lack of important issues that were not discussed and conveniently left out. Read Parker’s response below:

by Parker Gallant

Ombudsman’s report-the good, the bad and the ugly

As the dust settles from the Ontario Ombudsman’s 119-page report on Hydro One, it is perhaps a good time to step back and take a look at what has emerged from the 15-month investigation. Has Mr Marin and his team captured and reported on all that is or was wrong with Hydro One, has he highlighted the principal issues surrounding the 10,000 complaints, or has he missed some? Did he really focus on the cause of those complaints, or were some of them ignored or simply papered over.

Quotes from the report are excerpted below in italics.

The good:

The report is critical of Hydro One’s internal and “technical” focus, but seems to label the technical issues as “sort of good” but bad only because Hydro One was too busy trying to fix the new billing system instead of communicating with their customers: “Hydro One Inc. should ensure that it has adequate customer service and technical resources to address customer service issues.”

The report is critical also of the message generated by Hydro One that things were getting better when they really weren’t; that was put down as an effort to avoid public scrutiny, which was certainly true:
”Hydro One did develop communications responses based on worst-case scenarios, but it sought to shield the public from negative messages.”

The report was very critical of the rushed training schedule for Hydro One’s twice outsourced1. call centre which was totally inadequate and kind of an afterthought despite the billing project’s delayed implementation: “Hydro One Inc. should consult with and obtain timely feedback from individuals responsible for contact with customers to ensure that training is effective and supplemented if necessary.”

While having nothing to do with the messed up billing system, the report highlighted a failure of Hydro One to consider “rate classifications” in the proper context and to ensure customers were aware of how they were classified. The report should perhaps have noted the Ontario Energy Board (OEB) should have required this for all local distribution companies (LDC). “Hydro One Inc. should post clear and easily accessible information on its website informing customers about the significance of different density classifications and their relationship to rates.”

The report correctly highlighted Hydro One’s lack of customer interaction and failure to show empathy or compassion in circumstances that were clearly their fault: “At times, when our Office asked that Hydro One show compassion for people in difficult and tragic circumstances, we received insensitive responses, some suggesting that to give one person a break would ultimately cost other customers more.”

The report was also critical of the bill design but shows less understanding of the complexity of the electricity system and their recommendation while virtuous is not easily attainable: “Hydro One Inc. should redesign its bills to ensure maximum clarity.”

The Bad:

Customer satisfaction: The report seems to suggest that “customer satisfaction” of 87% is good, as the following from the report would suggest: “For 2013, Hydro One’s scorecard displays its customer satisfaction rate as 87%, based on survey results. This is clearly incongruous with the billing and customer service issues experienced by the company from May 2013 onward.” The missing 13% would represent about 140,000 customers which is less than the 100,000 customers the report said were affected.

A customer satisfaction rate of 87% would be a disaster for a private enterprise in a competitive environment so why isn’t that at least mentioned as being inferior for a monopoly?

Smart meters: The report fails to mention anything about “smart meters” or their impact on customer complaints yet many billing complaints were related to incorrect readings of those meters and thousands of Hydro One’s smart meters have been replaced including mine and one of my sons.

Why does the report fail to note the problem with the meters or at least compare it to complaints about analog meters? Further to the smart meters, why does the report fail to mention anything about the possibility of battery failure affecting the ability to reset their internal clocks causing incorrect TOU billing?

System testing: The report fails to note the billing system was not adequately tested before implementation. A little research would have determined that enterprises that issue credit cards or debit cards in multiples of 1.3 million successfully implement billing systems as or more complex. Why did the report fail to note the inadequate testing of the billing system?

Service agreement: Hydro One has a 134-page “Conditions of Service” agreement that they wave in front of their customers when it suits their purpose, but the report fails to even mention it or why it is so extensive. Why does the report fail to note the size of the COS agreement and its all-encompassing legal jargon?

Outsourcing: The report fails to suggest that the “double outsourcing”1. of the call centres twice removes the customer from the concerns of Hydro One’s Executive and Board which imparts the view there is a disinterest in ensuring customer satisfaction. Why does the report not question the intent of the outsourcing arrangement or at the least raise the issue of its purpose?

Classification: The report admonishes Hydro One for its lack of publication and clarity on the issue of “density classification” but says nothing about the OEB’s apparent lack of discipline to effect that happening. Why does the report tiptoe around the areas of responsibility that clearly rest with the OEB and should have been instituted several years ago when the OEB granted Hydro One the rights to reduce their rate classifications to only eight categories from the prior dozens?

Accountability at Hydro One: The report tries to convey the feeling that many heads have rolled because of the events of the messed up billing system yet report only one termination. The billing system implementation no doubt had dozens of employees (including senior executives) involved.
Why does the report make light of the failure of senior staff to oversee the billing implementation and not suggest more terminations should have occurred based on its obvious disastrous results?
Why does the report not suggest those responsible for directing the “call centre agents” to reduce “average handle time” be terminated?

Benefit to Ontario citizens: The report claims: “Hydro One is in the business of generating hundreds of millions of dollars for provincial coffers, and its financial success is undoubtedly beneficial to Ontario’s citizens.” Why would the report suggest Hydro One’s financial success is beneficial to Ontario’s citizens while admonishing them for causing grief and worry to over 100,000 of their customers? What is the benefit the province receives as each dollar of profit should be destined to retire the “Stranded Debt” as required under the 1998 Electricity Act and benefit ratepayers?

The Ugly:

For some reason the report seems to blame the failings of Hydro One on its “private sector mentality” although it is expressed on a personal basis by the Ombudsman as noted: “I have found that public corporations in the business of selling a commodity or exercising monopolistic technical expertise often reflect a private sector mentality. Why does the Ombudsman suggest a public sector monopoly who messed up their new billing system having the second highest delivery rates in the province and 70% of their staff on the “sunshine list” be even remotely compared to a “private sector” entity?

It is obvious that the Ombudsman has a biased view of the private sector and a narcissistic view of his importance and position. The report is splashed with his claims that “I launched” and “I make” or “my work” or “my view” or “my investigation” and “my observations” including the following: “ Hydro One should use this experience, as well as my observations and recommendations, to instruct its executive, managers and staff etc.”

The Ombudsman’s office budget is $11 million annually so I’m sure there were others involved in producing the report. Had the Ombudsman paid attention to others who have publicly criticized Hydro One many of his recommendations would have been self-evident.

It appears to this writer that humility is not something that Ontario’s Ombudsman suffers from, but perhaps that is one of the characteristics embedded in the job description as noted in the Executive Summary: “I make 66 recommendations in this report, 65 addressed at reorienting Hydro One’s corporate persona and improving its operational practices to better serve the public interest, reflecting the public sector values of openness, transparency and accountability.”

Proper oversight from past and present Energy Ministers and better appointments to the Executive and Board of Hydro One might have prevented this disaster from occurring but, based on all the other numerous mistakes made, perhaps the Ombudsaman’s report was the best Ontario’s ratepayers could hope for.

© Parker Gallant,
May 30, 2015

1. Hydro One retained Inergi LP to run its call centres. That company in turn subcontracted this responsibility to Vertex Customer Management (Canada) Ltd. As of March 1, 2015, Inergi LP is directly responsible for these outsourced services under a new three-year agreement.

A good article to read by Parker Gallant: Serious criticisms of Hydro One missing from Ombudsman report