OEB proposes important reforms to hearing process

November 13, 2006

On October 2, 2006, the Ontario Energy Board released its Report with Respect to Decision-Making Processes at the OEB, a document that is bound to stir debate. The report was prepared pursuant to the OEB's "efficiency agenda" and aims to reform the Board's adjudicative decision-making processes.

The Board states that the purpose of the reforms is to ensure that the Board's decision-making processes are transparent and open, while at the same time being "more focused on relevant issues, timely and results oriented." The Report proposes reforms in four areas:

  • adjudicative hearings;
  • pre-hearing processes;
  • role of staff; and
  • role of parties.

Adjudicative Hearings - The Board recommends that oral adjudicative hearings be limited to those circumstances where they are most appropriate - i.e. where factfinding is necessary to support an order. Further, the Board recommends that other tools, including pre-hearing processes, be used more effectively to circumscribe the scope of oral hearings.

The Board argues that while adjudicative hearings are critical to certain aspects of the Board's mandate, they are not best suited to other aspects; in particular, the development of regulatory policy. Regulatory policy, the Board states, is more suitably addressed through codes, rules or guidelines. The Board suggests that adjudicative hearings are too procedurally rigid to be adept at developing policy. Moreover, the Board's processes for articulating policy through rules and codes does not preclude stakeholders from challenging policy decisions, because draft code/rules are typically circulated for comment and are developed and refined through a consultative process.

Guidelines - The Board argues that guidelines, which are non-binding expressions of the Board's intended approach to the exercise of its statutory powers, may also be used to bring greater predictability to decision-making. The recent Discussion Paper issued by the Board, setting out its proposed guidelines for review of the OPA's IPSP and procurement processes, may be seen as an example of this. It is clear from the Board's Report that it also intends to use guidelines and other non-adjudicative policy instruments (e.g. technical conferences, interrogatories, etc.) to narrow issues and abbreviate adjudicative hearings.

Role of Staff - The Board's proposed reforms regarding the role of staff in adjudicative hearings will likely be the most controversial aspect of the Board's Report.

In the past, the Board has experimented with a two-staff model, whereby one staff team acts as public-interest advocate in the proceeding, and a second staff team supports and advises the Panel. In its Report, the Board proposes a single-staff model, where the same team of staff participates in the hearing and advises the Panel.

The principal rationale for the Board's proposal is that, whereas in non-adjudicative processes staff provides legal, technical and policy advice to Board members, in adjudicative hearings the Panel is quarantined from the Board's institutional expertises. The purpose of the proposed single-staff model is therefore "to integrate the Board's substantive expertises in its adjudicative processes to ensure that processes are consistent with the Board's commitment to procedural fairness."

The Board argues that it is beneficial for staff to participate in hearings so that staff can put forward all matters that are in the public interest, rather than leaving the Panel to choose between the limited options and assessments put forth by the parties. This, the Board argues, is more in keeping with the Board's public-interest mandate. Insofar as procedural fairness is concerned, the Board states that administrative hearings do not warrant the same procedural safeguards as other hearings and, in any event, sufficient procedural fairness can be ensured through transparency - in particular, requiring staff to present its view of the public interest on the record so that parties may respond to it.

Role of Parties - By increasing the role of staff in adjudicative hearings, the Board suggests that the role of other parties, particularly intervenors, may be reduced. To date, the minimal role of staff has required the Board to rely heavily on intervenors to express the range of stakeholder interests. The consequence of this has been lengthy proceedings and high costs through liberal intervenor funding requirements.

The Board suggests that more rigorous procedures be put in place to require proposed intervenors to demonstrate up-front how their participation relates to the specific and particular interests of their constituency. The Board also suggests that the Panel be given more latitude to control intervenors' participation in the hearing process.

Pre-Hearing Processes - The Board has proposed several innovative pre-hearing measures to further streamline adjudicative hearings. First, the Board, says that the interrogatory process has become inefficient because parties write interrogatories independently and at the same time; this causes considerable duplication. As well, there is little cost and no disincentive to asking numerous and irrelevant questions. The Board notes that recent experiments show that technical conferences involving the discovery of witnesses in the presence of other parties is a more efficient way of narrowing the issues. The Board also suggests that pre-hearing examinations, in lieu of an oral hearing before the Panel, may be appropriate in cases where there are no material facts in dispute. The Board has also proposed that the Board become more involved in the pre-hearing settlement processes by identifying those matters the Board believes ought to be settled directly between the parties. Lastly, the Board suggests that as an incentive to settlement, parties at settlement conferences be required to submit their final pre-hearing settlement offers on specific issues, and in the event parties beat their offers to settle, they may be entitled to costs awards; conversely, where parties achieve results at the hearing that were worse than the offer made to them, the Panel may consider disallowing parties a portion of their costs.

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