A multi-channel stakeholder consultation process for transmission deregulation

Deregulating Ontarioʹs energy market required designing a rate structure for transmission costs that previously had been bundled with other electricity services. The Ontario Hydro Networks Company (now called Hydro One Networks, or “Hydro One”) owns and operates the transmission lines. It sought input from a full spectrum of stakeholders in preparing a proposed rate structure for submission to the regulator, the Ontario Energy Board (OEB). Securing that input meant accommodating great differences in stakeholders’ familiarity with the (often highly technical) issues of rate setting. Hydro One drew on recent developments in stakeholder processes, integrated assessment, and risk communication to create a multi-channel process for eliciting and responding to stakeholder input. That process included (a) detailed background documents, (b) dedicated briefings and workshops, (c) mental models interviews, (d) focused meetings, and (e) mail (and email) boxes. The process was coordinated with a formal expert model, summarizing the factors determining the multiple impacts of the rate structure and the regulatory process producing it. The model analyzed these impacts, structured communications, and organized inputs, in a comprehensive and coherent way. This process facilitated developing proposals that were both technically sound and widely accepted by stakeholders, including the OEB. The case study provides a model for addressing other problems requiring stakeholder input on complex technical issues. It contrasts with other consultative processes with a less formal structure for eliciting concerns, less ability to encourage learning, and greater emphasis on achieving consensus.