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Document
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P-689
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File #
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P-9200442
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Institution/HIC
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Ontario Hydro
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Summary
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ORDER
BACKGROUND:
Under the Power Corporation Act, Ontario Hydro (Hydro) has regulatory responsibilities
associated with municipal electrical utilities and private distributing companies that buy power
from Hydro and resell it to their own customers. These municipal utilities and the distributing
companies make submissions to Hydro to support their requests for approval of changes to rate
structures or rate levels. The role of Hydro is to establish a rate of return on investment such that
the ratepayers are treated fairly and the company being regulated is not financially
disadvantaged.
Hydro received a request under the Freedom of Information and Protection of Privacy Act (the
Act) for access to records relating to "required rate of return in common equity submitted by [a
named company] for the years 1991 and 1992".
Hydro identified the responsive record as the submissions made by the named company to Hydro
for 1991 and 1992 as well as the covering letters for each submission. The record also includes
letters from a number of customers of the named company and a securities company,
commenting on the content of the rate submissions.
Hydro notified the named company of the request pursuant to section 28(1) of the Act and it
objected to the disclosure of the record. After considering the named company's representations,
Hydro granted partial access to the record but denied access to the remainder under sections
17(1)(b) and (c) of the Act. The named company informed Hydro that it agreed with the
decision to grant partial access. The requester appealed Hydro's decision to deny access to parts
of the record.
Mediation was not possible and notice that an inquiry was being conducted to review Hydro's
decision was sent to the appellant, Hydro, the named company and five companies who had
provided comments on the submissions. Representations were received from the appellant,
Hydro and the named company.
The majority of the record which remains at issue contains information about the named
company such as the requested rate of return, sales forecasts, operating margins, power
purchases, business risk, capital structure, financial and operating data, assets and liabilities.
Also at issue is information about one of the named company's customers contained in the
submissions themselves, in the letters from the customer and in one of the letters from the
securities company commenting on the submissions. The customer whose information is at issue
was one of the companies who commented on the submissions of the named company.
Although Hydro did not claim section 17(1)(a) to exempt the information about the customer, its
representations relating to this information appear to focus on the harm set out in that section.
Since section 17(1)(a) is a mandatory exemption, I will also consider its application to the
customer's information.
- 2 -
[IPC Order P-689/May 25, 1994]
PRELIMINARY ISSUE:
In its representations, the named company states that it believes that the request may be related to
a hearing in which it is involved before the Assessment Review Board. If such is the case, the
named company submits that the request represents "an abuse of the Act, as well as an abuse of
the process in which it is presently involved pursuant to the provisions of the Assessment Act."
In my view, the fact that information which is the subject of a request under the Act may also be
at issue in another proceeding does not prevent a request from being made under the Act.
Former Commissioner Sidney B. Linden reached a similar conclusion in Orders 48 and 53. In
Order 48, he stated:
[I]n my view, the existence of codified rules which govern the production of
documents in other contexts does not necessarily imply that a different method of
obtaining documents under the Freedom of Information and Protection of Privacy
Act, 1987 is unfair.
In my opinion, had the legislators intended that the Act not apply to records held by government
institutions whenever circumstances such as those described by the named company existed, they
could have done so through use of specific wording to that effect. I find no such wording in the
Act and the named company has not drawn my attention to any section of the Act which might
be interpreted in such a manner. In my view, the Act can and should operate as an independent
piece of legislation.
ISSUE:
The issue for me to determine in this appeal is whether the mandatory exemption provided by
sections 17(1)(b) or (c) of the Act applies to the record. I will also consider whether section
17(1)(a) applies to the information about one of the named company's customers. Sections
17(1)(a), (b) and (c) read as follows:
A head shall refuse to disclose a record that reveals a trade secret or scientific,
technical, commercial, financial or labour relations information, supplied in
confidence implicitly or explicitly, where the disclosure could reasonably be
expected to,
(a) prejudice significantly the competitive position or interfere
significantly with the contractual or other negotiations of a
person, group of persons, or organization;
- 3 -
[IPC Order P-689/May 25, 1994]
(b) result in similar information no longer being supplied to the
institution where it is in the public interest that similar
information continue to be so supplied;
(c) result in undue loss or gain to any person, group, committee
or financial institution or agency;
For the record to qualify for exemption under section 17(1), Hydro and/or the named company
must satisfy each part of the following three-part test:
(1) the record must reveal information that is a trade secret or scientific,
technical, commercial, financial or labour relations information; and
(2) the record must have been supplied to the institution in confidence, either
implicitly or explicitly; and
(3) the prospect of disclosure of the record must give rise to a reasonable
expectation that one of the harms specified in section 17(1) (a), (b) or (c)
will occur.
Failure to satisfy the requirements of any part of this test will render the section 17(1) claim
invalid (Order 36).
Part One
I agree with the parties that the record contains commercial and financial information.
Therefore, part one of the test has been met.
Part Two
In light of my conclusion with respect to part three of the test, I have not made a specific finding
with respect to this part.
Part Three
In order to satisfy the third part of the test, Hydro and/or the named company must present
evidence that is detailed and convincing, and must describe a set of facts and circumstances that
would lead to a reasonable expectation that the harms described in sections 17(1)(b) and (c)
would occur if the information was disclosed. Generalized assertions of fact in support of what
amounts, at most, to speculation of possible harm do not satisfy the requirements of the third part
of the test (Orders 36, P-373, P-394, P-400, P-583).
- 4 -
[IPC Order P-689/May 25, 1994]
Hydro, the named company and the appellant have all commented on the application of sections
17(1)(b) and (c) as they relate to the information of the named company. I will first address the
application of sections 17(1)(b) and (c) to this information. I will then consider the information
which relates to the customer.
Section 17(1)(b)
In order to meet the requirements of section 17(1)(b) of the Act, the Ministry and/or the named
company must demonstrate that:
1. the disclosure of the information in the records could reasonably be
expected to result in similar information no longer being supplied
to the institution; and
2. it is in the public interest that similar information continue to be
supplied to the institution in this fashion.
(Order P-604)
In its representations, Hydro states:
Since the information supplied to Ontario Hydro exceeds the minimum
requirements, [the named company] (or any of the 300+ municipal customers of
Ontario Hydro) may cut back detail provided to Ontario Hydro if the information
was subject to general release. This would not be in Hydro's best interest nor the
interest of the public as it would significantly impair the ability of Ontario Hydro
to regulate rates under the Power Corporation Act.
In its representations, the named company supports Hydro's position, stating that:
... it [the named company] will have to give consideration to discontinuing the
provision of such information in its present form and seek, with the assistance of
Ontario Hydro, other means by which a determination of an appropriate rate can
be made.
However, in their representations neither Hydro or the named company specifically identifies the
kinds of information which the named company included in its 1991 and 1992 submissions that
would no longer be included in future submissions, if the information might be subject to
disclosure under the Act.
The named company submits that there are no specific requirements that define the particular
information that it must provide to Hydro and takes the position that:
- 5 -
[IPC Order P-689/May 25, 1994]
all information that is contained in the record was provided to Ontario Hydro on a
voluntary and consensual basis and not subject to any specific contractual
requirement.
However, the representations of Hydro indicate that a practice concerning the content of rate of
return applications has developed over the years. Hydro states that, as a result, some types of
information are expected to be provided as minimum and there is an understanding as to the
common components of a rate of return application. According to Hydro,
a "typical" study has several distinct phases that are built up to draw a conclusion
as to the range of an acceptable rate of return. These can be roughly portrayed as:
- Risk assessment;
- Capital structure;
- Selection and comparison to a reference group of
companies;
- A description of the methods available to evaluate a rate of
return;
- The general and specific economic conditions that are faced
by the company and industry;
- Estimate of a fair rate of return and the relative
effects it would have on the capital structure.
Hydro then elaborates on some of these phases. For example, Hydro explains that risk
assessment would involve assessment of business risk, financial risk and investment risk. Hydro
concludes by stating:
... [T]he rate of return on common equity is a judgemental process and, as a result,
the supporting information is provided to convincingly persuade the regulator that
the application is valid. To this extent the amount of information submitted to
support the application is open to judgement and discretion. Generally speaking,
the more detailed and specific the information is to the rate of return components
being advanced, the regulator is better able to assess the merits of the application
...
The appellant maintains:
In the future, regardless of disclosure in this case, [the named company] will
continue, out of business necessity, to provide the information which is the
subject of this appeal. It must in order to obtain its regulated return on
investment.
I have carefully considered the representations of all parties. The representations of Hydro and
the named company suggest to me that while there is an element of public interest in the
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[IPC Order P-689/May 25, 1994]
continued supply of the information, it is also very much in the interests of the named company
that it provides sufficiently detailed information to Hydro in support of its rate application.
As I have noted, neither Hydro or the named company has identified the kinds of information
that would no longer be supplied. As well, in my view, it is reasonable to expect that a party
making a rate application submission will continue to provide information which will be of
assistance in obtaining a favourable response from Hydro to its application.
In addition, in my opinion the fact that not all the information contained in the record may be
"required" by the practice that has built up around the content of rate submissions does not mean
that similar information will no longer be supplied to Hydro.
Therefore, in my view, the third part of the test has not been met and the record does not qualify
for exemption under section 17(1)(b).
Section 17(1)(c)
In its representations, the named company claims that disclosure of the information in the record
could result in potential prejudice to the company and its business and financial position. The
named company also maintains that:
... revealing of such information is unnecessary, unwarranted and could result in
possible loss to [the named company] or gain to other persons. Such information
might conceivably be used in a manner to embarrass [the named company] in
such a way as to injuriously affect the value of the Company and impact adversely
upon its undertakings.
However, in my view, the named company does not provide any additional details or facts which
would support these representations.
Hydro states:
Disclosure of the ... information would provide exact details of the operation of
[the named company] and the release of detailed information about the operations
of the third parties, would reveal to competitors, valuable information about
management strategies.
The appellant points out that the named company's customers have no alternative but to purchase
electricity from it as a result of the regulatory scheme governing the provision of electric power
in Ontario and that entry into the market served exclusively by the named company is controlled
by Hydro. More specifically, the appellant states:
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[IPC Order P-689/May 25, 1994]
As the information is disclosed annually to a public body, by a monopolist, the
appellant cannot conceive of a possible scenario wherein release of the
information could cause any loss or gain to any person, group, committee,
financial institution or agency.
I have carefully reviewed the representations and the record itself. The representations of both
Hydro and the named company with respect to section 17(1)(c) set out general assertions without
providing any detailed and convincing evidence or describing a set of facts and circumstances
which would support the general assertions.
I have also reviewed copies of the publicly available Annual Report of the named company for
1990 and 1991 which it provided to me. It would appear that some of the same types of
information that are found in the record are also contained in the Annual Reports.
In my view, both Hydro and the named company have failed to provide sufficient evidence to
establish that disclosure of the record could reasonably be expected to result in undue loss or
gain to any person, group, committee or financial institution or agency. Therefore, the record
does not qualify for exemption under section 17(1)(c).
Customer's Information
No representations were made by the named company about how the harms enumerated in
sections 17(1)(b) or (c) might arise in relation to any of the information about its customer. All
who commented on the named company's rate submissions, including the customer whose
information is at issue, were notified of the appeal and none made representations.
Hydro states in its representations that information commenting on the viability of major
customers of the named company:
... is commercially sensitive in nature and can be directly linked to the customers'
competitive positions within their respective industries ... and the release of
detailed information about the operations of the third parties would reveal to
competitors, valuable information about management strategies ... Competitive
positions of third party retail customers would be adversely impacted if the
information were released. The result would be to disadvantage the retail
customer(s) ... through an impact on future sales revenues and profits ... Other
retail customers including residential, commercial and industrial would likewise
be adversely impacted by any requirement of the distributing company ... to
redistribute the legitimate costs, if a major retail customer were to lose contracts
and reduce power demand.
Hydro's representations appear to focus on the harms set out in sections 17(1)(a) and (c). In my
view, taking into account the nature of the information which is at issue, the representations do
not provide sufficient evidence to meet the requirements of the third part of the section 17 test.
- 8 -
[IPC Order P-689/May 25, 1994]
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Legislation
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Signed by
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Tom Wright
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Published
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May 25, 1994
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Type
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Order
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Judicial Review
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Affected party's application allowed and IPC order quashed May 17, 1996
Great Lakes Power Ltd. v. Ontario (Information and Privacy Commissioner), Toronto Doc. 409/94 (Div. Ct.)
Divisional Court Decision
Division Court Decision - Re: Motion to Strike
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