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Document
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P-1210
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File #
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P-9600101
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Institution/HIC
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Ontario Hydro
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Summary
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NATURE OF THE APPEAL: Ontario Hydro (Hydro) received a request under the Freedom of Information and Privacy Act (the Act ) for access to: 1. Any and all financial impact studies of ownership scenarios conducted by Ontario Hydro within the last six months. 2. Any and all financial analysis and associated conclusions conducted by Ontario Hydro in reviewing the findings of the June 22, 1995 report of the Financial Restructuring Group (the FRG). 3. Any and all financial analysis and studies leading to observations and conclusions respecting costs or rates such as those on: page 12 of the September 30, 1995 version of the Competition, Convergence and Customer Choice report; and pages 14, 77, 87, and 90 of the January 25, 1996 version of the Competition, Convergence and Customer Choice report. The requester is an association representing certain employees of Hydro. Hydro granted access to some records identified as responsive to part three of the request, and denied access to all other responsive records, on the basis of the following exemption claims: economic and other interests - sections 18(1)(c) and 18(1)(e) The requester (now the appellant) appealed Hydro's decision, and also raised the possible application of section 23 of the Act , the so-called "public interest override". During the course of mediation, Hydro disclosed the only remaining record responsive to part three of the request. With respect to part one, Hydro states that it has not performed any formal studies relating to the financial impact of ownership scenarios within the last six months. However, it identified a series of 12 "Illustrative Scenarios" as being responsive to this part of the request. Each scenario consists of a computer spread sheet containing financial modelling scenarios based on combinations of various assumptions. Hydro provided a representative sample of these scenarios (Record 1), and, with the agreement of the parties, my findings with respect to this sample record will apply to all of the "Illustrative Scenarios" identified by Hydro. In response to part two of the request, Hydro identified one responsive record entitled, "DRAFT WORKING PAPER - Financial Analysis of the Model and Assumptions Used by Nesbitt Burns to Support the [Financial Restructuring Group] Report" (Record 2). A Notice of Inquiry was provided to the appellant and Hydro. Representations were received from both parties. DISCUSSION: ECONOMIC AND OTHER INTERESTS Sections 18(1)(c) and (e) of the Act states: A head may refuse to disclose a record that contains, (c) information where the disclosure could reasonably be expected to prejudice the economic interests of an institution or the competitive position of an institution; (e) positions, plans, procedures, criteria or instructions to be applied to any negotiations carried on or to be carried on by or on behalf of an institution or the Government of Ontario; To establish a valid exemption claim under section 18(1)(c), Hydro must demonstrate a reasonable expectation of prejudice to its economic interests or competitive position arising from disclosure. In their representations, both parties provide background and context to the creation and purpose of the two records. The Government of Ontario is currently reviewing the structure of Hydro, a publicly owned utility. It is considering options, including the privatization of all or parts of Hydro. As part of this review exercise, the Ministry of Environment and Energy established The Advisory Committee on Competition in Ontario's Electricity System (the Advisory Committee), headed by the Honourable Donald Macdonald. To quote from the Advisory Committee's literature, its mandate is, in part, to: Make recommendations on the structure, legislative, regulatory and, potentially, ownership reforms required to ensure that Hydro and the provincial electricity system are poised to meet the competitive challenges of the 21st century. The Advisory Committee recently tabled its report, and the Government is in the process of considering it as part of the overall review of the future structure of Hydro. In its representations, Hydro describes Record 1 as consisting of a balance sheet, income statement, and cash flow projections for Hydro's business units. These projections cover the ten-year period from 1996 to 2005, and deal with various scenarios based on different assumptions for the electricity industry structure and the privatization of all or parts of Hydro. According to Hydro, in order to estimate market values for the purpose of privatization, judgements were applied to the earnings projections under various scenarios. Hydro states that Record 2 is a financial critique of the various earning assumptions and valuations made by the FRG report. According to Hydro, this critique makes observations and comments on the impact of the various assumptions and valuations contained in the FRG report, relative to its various ownership scenarios. In support of the section 18(1)(c) exemption claim, Hydro submits that, because the privatization of Hydro's assets may be conducted through a bidding process, public disclosure of information at this early stage could influence future dealings with potential investors or purchasers. Hydro contends that disclosure of the records would reveal Hydro's preliminary judgements on the value of generating assets, which could influence the bids by various potential investors, thereby negatively impacting the potential sale proceeds to Ontario Hydro and/or the Government of Ontario. Hydro also submits that the records contain detailed cost projections which could be analysed by potential competitors and used in developing competitive strategies that could impact negatively on the competitive and economic interests of Ontario Hydro. The appellant focuses its representations on the speculative nature of the information contained in the records, and the similarity to information already released by Hydro in response to part three of the request. The appellant also points out that Hydro is currently a monopoly and that any harm to its competitive position could only exist if the province moves to a non-monopoly utility structure. The appellant submits that the information contained
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Legislation
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FIPPA
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18(1)(c)
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Section 23
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Subject Index
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Signed by
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Tom Mitchinson
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Published
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Jun 19, 1996
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Type
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Order
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