Tories seeking to remove OPG head
Friday, November 15, 2002
Senior officials in the Ontario government are pushing for the removal of William Farlinger as chairman of Ontario Power Generation Inc.
The move comes as the province lost two more senior energy officials and questions surfaced about whether others will leave as well as the politically charged saga deepens.
Rod Taylor, an executive vice-president at Hydro One, announced internally on Wednesday that he will leave the utility at the end of the year. Mr. Taylor, 49, has been with the company since 1977.
Malen Ng, vice-president of wires operations at Hydro One, has also quit the utility. She and Mr. Taylor were among the company's top five executives.
Ontario's energy policy has been thrown into turmoil in recent months by a series of announcements by Premier Ernie Eves. Last summer, the government prompted the resignation of the former Hydro One board and the removal of then chief executive officer Eleanor Clitheroe, who is now suing. It also cut the salaries of Hydro One executives by 30 per cent and slashed annual bonuses by 60 per cent.
This week, Mr. Eves announced a freeze on electricity prices and a retroactive rebate to residents that is expected to cost nearly $2-billion annually. Mr. Eves also said the government will make changes to the board of directors of Ontario Power Generation, or OPG, and launch an independent investigation into delays at reopening the Pickering A nuclear station. The station was supposed to reopen last year but is now slated to restart next spring. Refurbishment costs have soared from $800-million to $2.5-billion.
Sources say the government is eager to remove Mr. Farlinger, who is a close associate of former premier Mike Harris. In 1995, Mr. Harris appointed Mr. Farlinger chairman of Ontario Hydro, a predecessor to OPG, after he served on an advisory committee that recommended the privatization of Hydro. Mr. Farlinger remained chairman after Ontario Hydro was forced to shut down seven of its 19 nuclear reactors in 1997 because of safety concerns.
"There's a real split in the Tory party right now over the handling of the electricity issue, with the more conservative Mike Harris-types not at all comfortable with what Ernie's doing," said one former adviser to Mr. Harris. He said: "Farlinger is very much part of that Mike Harris group, and the story is he's going to leave OPG."
Mr. Farlinger was unavailable yesterday and an OPG spokesman declined to comment.
Dan Miles, a spokesman for Energy Minister John Baird, said the government's immediate plans are to fill two vacancies on the OPG board. When asked if there would be other changes, he replied: "I'm not prepared to say anything right now. All I can say is at this point the announcement of the two vacancies will be made shortly."
He added that he did not know of any plans to remove Mr. Farlinger.
There are also questions about the future of Ron Osborne, OPG's chief executive officer. Mr. Osborne was named CEO in 1998 just before the Harris government divided Ontario Hydro into five separate companies including OPG, which provides about 75 per cent of the province's power.
Mr. Osborne declined to comment yesterday. Persons familiar with Mr. Osborne said the executive appeared perplexed and upset Monday afternoon when he was given details of Mr. Eves' announcement.
"I'm trying to understand this," an exasperated Mr. Osborne told one small group, according to one source. "I don't know how this is going to work."
Mr. Osborne's employment contract allows him to quit with substantial severance if "there is a fundamental change in the policies of the province relating to the corporation pursuant to which it is not reasonably possible for Mr. Osborne to continue as president and chief executive officer."
Mark de Michele, an OPG director, said in an interview that the board has played an active role in raising questions about the restart of the Pickering station.
"When a unit has been sitting around for a while and not operating, there are a lot of things that come up because the systems haven't been operated," he said. "You can't tell up front just by looking at a piece of equipment whether it is going to operate appropriately. You have to go through the testing of it and then you determine what you need to do to get it back into operation. It is a complex process." |
