On December 17, 2015, the Ontario Energy Board issued a letter
in which it rejected a request that it review the sale of part of
the Province of Ontario's interest in Hydro One. A complaint
and a request for review had been filed with the Board by the Keep
Hydro Public Coalition and the National Farmers Union –
Ontario. The complaint related to the transfer of all of the Hydro
One Inc. shares held by the Province to Hydro One Limited and the
ultimate acquisition of 60 per cent of the shares in Hydro One
Limited pursuant to a public offering. A copy of the Board's
response to the complaint and request for review can be found here.
Section 86 of the Ontario Energy Board Act, 1998
requires that leave of the Board be granted in order for any person
to acquire such number of voting securities of an electricity
transmitter or distributor that will result in ownership of more
than 20 per cent of the voting securities of the transmitter or
distributor. Interestingly, this requirement does not apply to an
underwriter who holds voting securities for the purpose of
distributing them to the public.
The Board concluded that approval under section 86 is not
required for the Province's sale of shares of Hydro One. In
this regard, the Board noted that the Initial Public Offering
involved 15 per cent of Hydro One's shares, that no further
shares have been offered for sale at this time and, further, that
the Provincial government has made clear that no single person will
be allowed to purchase more than 10 per cent of the shares offered
to the public.
The Board was also asked to exercise jurisdiction under section
19 of the statute to initiate a review of the Province's sale
of shares. The Board said, though, that its power to
"determine all questions of law and fact" under section
19 applies only in respect of a matter otherwise within the
Board's jurisdiction that could be decided in the context of an
application. Inasmuch as the issues raised with respect to the
Province's sale transactions are outside the scope of section
86, there was nothing to trigger the Board's powers under
In its December 17th letter, the Board confirmed that
it has all the tools it needs to set just and reasonable rates for
subsidiaries of Hydro One Inc., irrespective of their ownership,
and that it retains independent and robust oversight over the rates
charged by Hydro One subsidiaries, as well as the reliability and
quality of service that these subsidiaries provide to their
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