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Monday 3 February 2014


The Office of the Consumer Advocate (CA) plays a useful role protecting the public from unsupported or excessive charges by our regulated utilities, Newfoundland Power and Newfoundland Hydro.

But, is an advocate’s sole role one that is directed towards keeping our power bills lower by a fractional percentage? 

I prefer to think of an advocate as an ‘activist’, a persistent ‘promoter’ of his mission, an ardent ‘defender’ of consumer interests; one who sees the big picture of change in the power industry, who is fearlessly determined not to let Government secrecy or bullying thwart him in the execution of his public duty.

This is not the image or the record of the current Consumer Advocate, Tom Johnson.
No one has challenged his competence in front of the PUB though the manner of his appointment and whether he is conflicted has been raised. 

Two former senior public servants, David Vardy and Ron Penney, wrote the Minister of Natural Resources recently seeking an alternative process of appointment. 

They expressed concern that “there is an inherent conflict of interest in having a consumer advocate appointed by government…” when the outfit being investigated is a Crown Corporation.    

Telegram Blogger, Geoff Meeker, in a March, 2013 Post entitled "Consumer Advocate Endorses Muskrat Falls Project" also raised questions about the Advocate.  Wrote Meeker:

“And what about the party affiliations of key players?  For example, consumer advocate Tom Johnson – who has endorsed Muskrat Falls – was appointed by the PCs and practices law with Tom Williams, chief fundraiser for the PC Party (and Danny’s brother).”

Anyone who takes on the role of Consumer Advocate must be doubly vigilant, especially when the appointment arrives courtesy of the Government, is of limited duration unlike Judges, and is conducted without competition.

The issue of conflict is important; but one that is borne out of that question is whether Johnson failed to act when major issues regarding security of supply, financial risk, power cost and changes to the Muskrat Falls rationale became increasingly evident.   

First, however, Order-in-Council OC2013-268 appointing Mr. Johnson for a one year fixed term demands explanation.  The Order reads:

Under the authority of section 117 of the Public Utilities Act, the Lieutenant Governor in Council is pleased to reappoint Mr. Thomas Johnson as Consumer Advocate for a one-year term, effective August 12, 2013, to represent the interests of domestic and general service consumers on terms acceptable to the Minister of Justice, in addition to any other appointment the consumer advocate may receive to participate in specific hearings before the Public Utilities Board. (emphasis added)

This appointment is new to many familiar with his Office.  Traditionally, the CA is appointed on a case-by-case basis, usually when Utilities seek approval for new rates that cover capital or operating costs.  I don’t know if 2013 was the first full year appointment; prior Orders-in-Council are not available on the Government’s Web Site. 

The Consumer Advocate should make public the “terms” of his employment.  He needs to inform us how many hours per day he works for us and of the limitations, if any, placed on his advocacy role.  We need to know how much he and his Law Office are paid under the Order-in-Council, and his additional remuneration, if any, for his intervention into on-going PUB Hearings.

Why should this change of status of the Consumer Advocate (CA) matter? 

First, I can find no reference to a Press Release from either the Government or the Consumer Advocate’s Office informing the public that the CA is available all year long to represent “the interests of domestic…consumers…”  One ought to be available.

Secondly, the record of the Advocate’s work in 2013, suggests the Advocate had plenty of time to speak with consumers and publicly raise other pressing issues during the year.

Indeed, we can go back to 2012 when many critics thought Johnson weak in his representations on the Muskrat Falls Project.

The Telegram quoted Johnson in March 2012: "I have concluded based on the evidence in the review that the Muskrat Falls-Labrador Island Link represents the least cost option of the two alternatives examined".

In contrast to Mr. Johnson’s position, the PUB refused to endorse Muskrat Falls stating that Nalcor’s evidence was preliminary and dated. 

Prior to the PUB’s Decision, the Federal/Provincial Environmental Panel also refused to endorse the Project. 

One might ask: what special insight did the Consumer Advocate possess?  Weren’t the Joint Federal/Provincial Panel’s Decision supported by the later PUB Decision a signal to Mr. Johnson to reconsider his position?    Shouldn’t he have entertained input from members of the public?

Johnson was not even in possession of the Power Purchase Agreement (PPA) which contains critical cost information, per KWh, ratepayers will pay for Muskrat power. 

To this day the PPA has still not been made public.

Johnson noted concerns about cost overruns but stated that good management practices should reduce the possibility.  He did not examine Nalcor’s management competence and experience or the sheer size of the cost overruns being met on projects in this Province and on virtually every major mega project in North America.

But, Johnson was quiet on virtually all matters Muskrat after Natural Resources Minister Jerome Kennedy had rebuked him when he agreed with PUB Chairman Andy Wells that more time was needed to review Nalcor's slow drip release of information on the Project.

One of the Dunderdale Government’s key pieces of legislation was Bill 61. It stripped Johnson of any role he might have had in challenging the Muskrat Falls power rate.  Blogger Ed Hollett of the Sir Robert Bond Papers might have only slightly overstated the case when he noted that “…Tom is now redundant”.   Said he:

“Bill 61 passed the House of Assembly…when it comes into effect the provincial cabinet will have the power to direct the public utilities board - in effect - to set electricity rates the way cabinet directs.”

Hollett correctly noted that while Tom Johnson repeatedly fought the rate of return on capital employed by Newfoundland Power, he was silent on Bill 61.

Let’s now turn to 2013 throughout which Johnson was equally quiet even though an activist Consumer Advocate had plenty of big issues over which to cause uproar.

The UARB of Nova Scotia held two Hearings on the Maritime Link.  Following the first, it refused sanction of the Maritime Link stating the Nalcor/Emera deal was deficient by up to $1.433 billion. 

The Energy Access Agreement (EAA) was negotiated to satisfy the UARB, and commits to Nova Scotia more than half of the equivalent power from Muskrat Falls.  

Following that Deal with Nalcor and a second open Hearing the UARB approved the Link.

Did Johnson demand a Hearing, in this Province, as to how that $1.433 billion figure was bridged and whether the EAA might impact this Province’s ability to satisfy local demand?  There was no such call, even though the Deal was not part of Nalcor’s original Submission to the PUB.

Was he not concerned that the EAA had effectively joined the Nova Scotia power system with Newfoundland’s, that the direct relationship with the Maritime Link and Muskrat Falls was obliterated, that our Island power capacity was substantially committed, too, and that local consumers were not consulted?

Did Mr. Johnson complain when Nalcor removed the request for approval of the Capital Budget for the transmission upgrade from the Avalon to Central Newfoundland from the PUB agenda?

These are huge issues any Consumer Advocate should feel obligated to bring to the public’s attention.  He was employed on a full-time basis.  His mandate to protect “…the interests of domestic and general service consumers…” does not seem restrictive.

When did Tom Johnson raise his head?  Not until every member of the public raised theirs, following the power black-outs in early January, 2014.  

Mr. Johnson wrote a brief letter to the PUB asking that it investigate what had occurred. 

Did Johnson demand a public hearing by the PUB in which Nalcor and Hydro officials could be cross-examined under oath?  No.   He requested an “investigation”.  The words “public hearing” are not found in his correspondence. 

Did he demand that the scope of the investigation should be as wide as possible?  No.

Mr. Johnson had noted Manitoba Hydro International’s concern regarding the proposed inadequate standard of the Labrador Island Link, in his 2011 Submission to the PUB. 

Shouldn’t he have raised that issue once again, now that the “black-outs” gave it a real life context and in advance of the Labrador Island Link being constructed? 

Shouldn’t he have also demanded review by the PUB, or at least went public, over the threat to the Water Management Agreement as a consequence of the challenge by Hydro Quebec in the Quebec Superior Court? 

Let’s return to the present.

Did Mr. Johnson voice protest when Government announced that it would also conduct its own “independent” hearing regarding the power “black-outs”? 

Did he state that the “independence” of any such Inquiry is inherently compromised if Government controls drafting of the “Terms of Reference” and the selection of the Panel? 

Did he demand that Government ask a Justice of the Supreme Court to preside over the Panel and oversee the selection of the other Members? 

Not a word was heard from Advocate Johnson on those issues.    

Can anyone say those actions are not within the purview of the Consumer Advocate?  Are they not reasonable and appropriate initiatives of an Advocate?

An ‘activist’ Consumer Advocate would have led the charge not only for the purpose of challenging a secretive and arrogant government, on behalf of consumers; he would have made abundantly clear whose side he is on.

An 'activist' Advocate would have raised the issue of compensation to consumers who suffered financial loss during the 'black-outs' recognizing that the root cause related to management issues and not to 'acts of God'. 

Too many critical issues have escaped his attention.  Efforts to save a cent or two on our powers bills are welcomed but they do not compensate for the profound nature of the issues he has ignored.

In short, I find no cause to regard this Consumer Advocate an activist, a promoter or an ardent defender of the public interest. 

Whatever arguments may be made for the process that appointed him or whether questions of conflict are legitimate, our Advocate has a record of being timid.  

In the current environment in Newfoundland and Labrador, silence and acquiescence from an important Office Holder as the Consumer Advocate, is simply unacceptable.