Who Can Do What for LDCs and Their Affiliates?

On July 10, 2006, the Chief Compliance Officer (the "CCO") of the Ontario Energy Board issued two Compliance Bulletins¹ with respect to what activities could and could not be done by electricity distributors and their affiliates. The CCO has interpreted the Affiliate Relationships Code (the "Code") and s.71(1) of the Ontario Energy Board Act, 1998, in a manner which, if enforced, will have an important structural and operational impact on municipally-owned electric distributors ("LDCs"), their affiliates and their municipalities. Below we summarize the CCO’s positions and give our views.

Some of the activities sought to be prohibited by the CCO are:

• Contracting out of LDC employees (even if contracting out would reduce excess human resource capacity)