ONTARIO
ENERGY
BOARD
FILE NO.:
EB-2009-0138
VOLUME:
1
DATE:
June 12, 2009
Pamela Nowina
Presiding Member and Vice-Chair
Paul Vlahos
Member
EB-2008-0138
THE ONTARIO ENERGY BOARD
IN THE MATTER OF the Ontario Energy
Board Act, 1998, S.O.1998, c. 15,
(Schedule B);
AND IN THE MATTER OF an application
pursuant
to
section
74
of
the
Ontario Energy Board Act, 1998 by
Kitchener-Wilmot Hydro Inc. to amend
electricity distribution licence.
Hearing held at 2300 Yonge Street,
25th Floor, Toronto, Ontario,
on Friday, June 12th, 2009,
commencing at 9:33 a.m.
-------------------VOLUME 1
--------------------
BEFORE:
PAMELA NOWINA
Presiding Member and Vice Chair
PAUL VLAHOS
Member
A P P E A R A N C E S
LJUBA COCHRANE
Board Counsel
JULIE DOHERTY
GONA JAFF
Board Staff
RICHARD KING
RHONDA MOREAU
Kitchener-Wilmot Hydro Inc.
KEITH DRIMMIE
Lear Seating Canada Ltd.
I N D E X
O F
P R O C E E D I N G S
Description
Page No.
--- On commencing at 9:33 a.m.
1
Appearances
1
Preliminary Matters
2
Submissions by Mr. King
Submissions by Mr. Drimmie
Submissions by Ms. Cochrane
Further Submissions by Mr. King
4
16
20
28
--- Recess taken at 10:34 a.m.
--- On resuming at 10:48 p.m.
35
35
DECISION
36
--- Whereupon the hearing concluded at
10:49 a.m.
36
E X H I B I T S
Description
Page No.
EXHIBIT NO. 1: EXCERPT FROM KITCHENER-WILMOT
HYDRO'S CONDITIONS OF SERVICE.
24
EXHIBIT NO. 2: KITCHENER-WILMOT HYDRO'S EDR 2006
MODEL, PAGE 14.
26
NO EXHIBITS WERE FILED IN THIS PROCEEDING
HIS PROCEEDING
U N D E R T A K I N G S
Description
Page No.
NO UNDERTAKINGS WERE FILED DURING THIS PROCEEDING
Error! No table of figures entries found.
NO
1
1
Friday, June 12, 2009
2
--- On commencing at 9:33 a.m.
3
MS. NOWINA:
4
Good morning, everyone.
5
On April 23rd, 2009, Kitchener-Wilmot Hydro filed an
Please be seated.
6
application with the Ontario Energy Board under section 74
7
of the OEB Act to amend its electricity distribution
8
licence.
9
The Board has assigned File No. EB-2009-0138 to this
10
application.
11
section 2.4.6.2 of the Distribution System Code in order to
12
bill a large commercial customer, Lear Corporation, on a
13
weekly basis and to require from Lear Corporation weekly
14
payments.
15
The utility is seeking an exemption from
The Board sits today to hear submissions from both
16
parties.
My name is Pamela Nowina.
17
Board and I'm presiding member in this proceeding.
18
is board member Mr. Paul Vlahos.
19
May I have appearances, please?
20
APPEARANCES:
21
MR. KING:
I'm vice-chair of the
With me
Richard King, counsel to Kitchener-Wilmot
22
Hydro.
Seated next to me is Ms. Gerry Guthrie, the CFO for
23
Kitchener-Wilmot, and Ms. Rhonda Moreau, M-o-r-e-a-u, the
24
manager of customer services.
25
MS. NOWINA:
26
MR. DRIMMIE:
27
28
Thank you, Mr. King.
Yes.
My name is Keith Drimmie.
I'm a
controller for the Lear Kitchener plant and Lear Canada.
MS. NOWINA:
Drimmie, was it?
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
2
1
MR. DRIMMIE:
2
MS. NOWINA:
3
Drimmie.
Thank you, Mr. Drimmie.
You're not
represented by counsel, are you, Mr. Drimmie?
4
MR. DRIMMIE:
5
MS. NOWINA:
6
MS. COCHRANE:
No.
Thank you.
And for Board Staff?
Ljuba Cochrane, counsel for Board
7
Staff, and with me are Julie Doherty and Gona Jaff on
8
behalf of Board Staff.
9
MS. NOWINA:
Thank you, Ms. Cochrane.
10
PRELIMINARY MATTERS:
11
Before we begin, I do have a preliminary question of
12
you, Mr. King, for clarification.
13
your request to be an exemption specific to this customer,
14
Lear Corporation, and our notice reflects that.
15
The Board interpreted
Can you confirm that this is your request and you're
16
not asking for a generic exemption to the section of the
17
Code in question?
18
MR. KING:
That's correct.
We're not asking for a
19
generic exemption from that provision of the Code.
20
submissions, we're going to explain to you sort of what the
21
triggering event was for coming to the Board to request to
22
move to a weekly payment plan.
23
In our
And I think we'll canvas the notion that any of our
24
large -- top 25 customers who we have an insurance policy
25
on, that we be able to institute the same weekly payment
26
plan for any of those customers that our insurer
27
essentially cancels.
28
MS. NOWINA:
That may be an issue for us, Mr. King, in
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
3
1
that our notice only went to Lear Corporation.
2
informed other parties.
3
exemption just for this customer.
4
5
6
MR. KING:
We have not
We had assumed you were seeking an
I understand.
And if that's the Board
view, we're happy with that.
MS. NOWINA:
I think I have to say that we couldn't
7
make a decision generically, unless we reconstituted the
8
notice -- we stood down now and reissued a notice to other
9
customers.
10
11
MR. KING:
Then we'd proceed just with the exemption
specifically for if this customer.
12
MS. NOWINA:
13
MR. KING:
14
All right.
Can I clarify one thing in the opening
statement?
15
MS. NOWINA:
16
MR. KING:
Yes.
It's not -- we're proposing to move to a
17
weekly billing system.
18
in that manner, because some of the charges are demand
19
based, monthly demand based, but it would be a weekly
20
payment plan.
21
22
23
We don't have the capacity to bill
So there would be sort of a rolling delta.
So there would still be a monthly bill, but the notion
is the payments would happen on a weekly basis.
MS. NOWINA:
All right.
Thanks for the clarification.
24
So the way we will proceed, then, is we'll hear submissions
25
from Mr. King.
26
Drimmie, then Board Staff, and then Mr. King can have reply
27
submissions.
28
Then we'll hear submissions from Mr.
Are there any preliminary matters or questions
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
4
1
regarding the process?
Mr. King, you may proceed.
2
SUBMISSIONS BY MR. KING:
3
MR. KING:
Thank you.
Our materials consist of our
4
filing of May 5th, 2009, as well as some materials that
5
were filed yesterday afternoon.
6
And just to quickly note the three items that were
7
filed yesterday afternoon, the first item is the
8
cancellation of our AR insurance coverage as it relates
9
specifically to Lear.
10
That's the first page.
The second of the three items filed yesterday
11
afternoon is a sort of what I would call recent
12
developments.
13
Corporation.
14
further downgrading happened last week.
15
It's reports of further downgrading of Lear
That's the U.S. parent in the US.
And that
And then the final item, the final page, is sort of an
16
illustrative example of how the billing and payment and
17
termination time line works, and it's a real-life example.
18
And we'll have Ms. Moreau go through that.
19
If I can start, it's really the first document that I
20
filed yesterday afternoon that was the precipitating event.
21
A couple of years ago, Kitchener-Wilmot took out insurance
22
coverage for the accounts receivable for their top 25
23
customers, and the way I understand it is the top 12 or 13
24
are specifically named in the insurance policy.
25
12 or 13 are a basket.
The other
26
And in late January, early February the insurer
27
notified Kitchener-Wilmot that they were going to remove
28
coverage for AR related to Lear Corporation, and that is
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
5
1
the first document that was filed yesterday afternoon.
2
the rationale for -- that cancellation became effective
3
after 60 days, so it became effective on April 10th.
4
the rationale for our insurer cancelling that AR coverage
5
was a downgrading, a Moody's downgrading, of Lear's
6
corporate credit rating.
7
And
And
And the rationale behind the downgrading was that Lear
8
had elected to seek a waiver with respect to their primary
9
credit facility and had not paid interest due at the time.
10
And just to give you a bit of background on the AR
11
insurance coverage, as I said, it was taken out a couple of
12
years ago.
13
rationale.
14
And, really, the rationale -- there are a few
In the not-too-distant past, Kitchener-Wilmot had two
15
or their four large users shut down operations, also in the
16
automotive sector, and Kitchener itself is sort of an
17
industrial manufacturing center.
18
And the bulk of those clients are long-term clients
19
with good payment history.
There isn't a lot of security
20
deposits held for those customers.
21
putting in place the AR insurance.
So that's what prompted
22
And the other rationale for putting in place the AR
23
insurance is, you know, it's Kitchener's experience that
24
they don't often get a heads-up when it comes to large
25
users simply shutting down.
26
disappear and they're stuck.
27
28
All of a sudden, they just
In this case, it was slightly different.
One of the
advantages of the AR insurance is, apart from having the
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
6
1
insurance, is it operated in this case to give Kitchener-
2
Wilmot a heads-up that this particular customer was having
3
financial issues.
4
effective April 10.
5
So they were cancelled off of the policy
And in the materials we filed at the beginning of May,
6
you will see the -- and it's also in Mr. Drimmie's
7
materials -- you'll see the exchange of correspondence back
8
and forth.
9
seeking a voluntary security deposit from Lear, which they
And a couple options were canvassed.
One was
10
did not agree to, and the other was moving to this weekly
11
payment plan, which was not agreed to.
12
And we have only applied in this application for the
13
latter relief.
14
would very much mitigate our risk.
15
that they be put on a weekly payment plan.
16
minimizes the risk, mitigates the risk; doesn't entirely
17
eliminate it.
18
We're not seeking a security deposit, which
We're simply asking
That just
And one of the reasons we're doing that is, you know,
19
Lear does have a good payment history.
20
customer, and we don't want to put additional cost on Lear
21
or cash flow issues on Lear by having -- requiring them to
22
put in place a security deposit.
23
that.
24
They're a good
So we're not seeking
The efforts made to resolve this voluntarily fell
25
apart, obviously.
That happened over April, beginning of
26
May.
27
possibly resolve it, and in the materials filed, you will
28
see the letter from Board Staff suggesting that Kitchener-
Ms. Guthrie dealt with Board Staff to seek ways to
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
7
1
Wilmot do one of two things, either pursue a security
2
deposit by way of a licence exemption or seek the relief
3
we're seeking today, by way of a licence exemption.
4
that's what we've chosen to do.
5
And
Since the filing of this application, there have been,
6
I guess, a couple of other developments.
The payment
7
waiver that Lear Corporation sought in January with respect
8
to their primary credit facility, that waiver came due in
9
mid-May and Lear sought a further waiver.
So they didn't
10
meet their payments at June 1st, and they're now on an
11
exemption until June 30th.
12
As a result of that, in early June -- so last week --
13
both Standard & Poor's and Moody's further downgraded them.
14
So Moody's lowered their rating from CAA2 to CA, and
15
Standard & Poor's lowered their corporate credit rating
16
from CCC plus down to D.
17
materials filed yesterday the definition of those ratings.
18
So CA in Moody's refers to companies that are highly
19
speculative and are likely in or very near default, with
20
some prospect of recovery of principal and interest.
21
Standard & Poor's rating definition for D, and that's what
22
Lear was moved to on June 3rd, and I'll read that into the
23
record.
And I've attached to the
And
It says:
24
"An obligation rated 'D' is in payment default.
25
The 'D' rating category is used when payments on
26
an obligation are not made on the date due even
27
if the applicable grace period has not expired,
28
unless Standard & Poor’s believes that such
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
8
1
payments will be made during such grace period.
2
The 'D' rating also will be used upon the filing
3
of a bankruptcy petition or the taking of similar
4
action if payments on an obligation are
5
jeopardized.
6
to 'D' upon completion of a distressed exchange
7
offer, whereby some or all of the issue is either
8
repurchased for an amount of cash or replaced by
9
other instruments having a total value that is
10
An obligation’s rating is lowered
less than par."
11
Lear Corporation's situation, basically, and it's
12
reflected even in the 10K and the 10Q filed by Mr. Drimmie,
13
they're essentially in the process of restructuring with
14
their creditors now.
15
happen.
16
bankruptcy now, but one of two things is going to happen.
17
They're either going to successfully restructure without
18
going into bankruptcy and come out in a different form; or
19
they're going to file for Chapter 11 bankruptcy.
20
And one of two things is going
They're restructuring is essentially outside of
The consequence for anyone with a receivable,
21
obviously, for someone that's gone into bankruptcy is that
22
all amounts due at the time of filing are stayed.
23
outstanding invoice that Kitchener-Wilmot would have is
24
stayed by way of the bankruptcy proceedings.
25
not yet billed up to the date of filing are stayed.
26
then you either get cents on the dollar back from that,
27
either through a liquidation or through a restructuring.
28
So that's the monetary risk that's out there.
So any
Any amounts
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
And
9
1
And to sort of put some numbers to the monetary risk,
2
I'm going to ask Ms. Moreau in a second to go through the
3
last page of yesterday afternoon's filing, and to give you
4
a sense of the scale of the numbers.
5
that was filed uses actual numbers from Lear Canada, and so
6
there's a bill on April 13th -- that's the second box from
7
the left --
8
9
MS. NOWINA:
This particular chart
Excuse me for a moment, Mr. King.
Mr.
Drimmie, you have these materials, do you?
10
MR. DRIMMIE:
11
MR. KING:
Yes.
I just received them.
I'll ask Ms. Moreau to talk about this, or
12
Ms. Guthrie.
My understanding is their consumption has
13
tailed off a bit, lately, that they would typically be a
14
$70,000 a month customer.
15
period bill was for $45,000.
16
load.
17
Wilmot's 10 biggest clients.
18
number 12 or 13.
And this particular 30-day
So they're at a 2-megawatt
They historically had been sort of one of KitchenerThey're now sitting at around
19
So I'd like to have Ms. Moreau go through the table.
20
MS. MOREAU:
21
MS. NOWINA:
Good morning.
22
MS. MOREAU:
It's a busy chart, I appreciate that, but
Good morning.
23
it's actually very straightforward.
24
illustrate here, we have our previous -- and this is actual
25
data, as Mr. King has said -- previous meter reading on
26
March 11th going to a current meter reading of March 13th
27
for $45,000, that's the bill that's issued.
28
What we're trying to
What we're trying to illustrate is anything beyond
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
10
1
that billing, that billing period, financially, what we are
2
accumulating and what we are in addition to the current
3
bill at risk for.
4
So if you just take it -- you know, I appreciate you
5
understand the days in the code that we work under.
But
6
what we've done is we've put dollars to those days.
So
7
that from the beginning of the first reading period, being
8
that bill, to when we can actually legally terminate this
9
service, should there be default, we're at 104 days out,
10
11
but more importantly, $207,000.
We've used on this payment default a graphic.
We've
12
used actual data.
You can see where at the bottom we have
13
the actual to the left, and then the estimate on the right.
14
And the estimated is just merely because at this point in
15
time we don't have pricing for the energy part of the
16
billing only.
So we have used estimated pricing.
17
MS. NOWINA:
Mr. Drimmie, do you understand the chart?
18
MR. DRIMMIE:
19
MS. NOWINA:
20
MR. KING:
Yes.
All right.
Thank you.
And just the final sort of fact I would
21
overlay to this particular table is, you know, working off
22
of the Distribution Rate Handbook and the materiality
23
threshold for recovery of bad debt expense, which is 0.2
24
percent of your distribution expenses for this particular
25
utility, that materiality threshold works out to be
26
$37,000.
27
28
MR. VLAHOS:
Mr. King, how does the materiality
threshold come in here?
Can you help me?
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
11
1
MR. KING:
That is the -- I mean... sure.
2
MS. GUTHRIE:
Good morning.
The materiality threshold
3
is determined by the 2006 EDR application process, which
4
currently is 0.2 percent of our distribution expenses.
5
That materiality threshold is the amount at which anything
6
beyond we are unable to submit to the Ontario Energy Board
7
for any amounts relating to bad debts and the recovery of
8
those bad debts through our rates.
9
MR. VLAHOS:
Okay.
Thank you.
10
MS. NOWINA:
Anything further, Mr. King?
11
MR. KING:
12
MR. VLAHOS:
Nothing.
I'm happy to take any questions.
Mr. King, just a few questions for now.
13
The cost of the insurance, you said that you basically --
14
sorry, your client has issued that a couple of years ago,
15
so that would 2007, I guess.
16
ask your advisors -- whether those costs are part of the
17
cost of service that are reflected in rates, the current
18
rates?
19
MR. KING:
Do you know -- maybe you can
It's not in their -- they'd have to put it
20
in rebasing going forward.
They're scheduled to file this
21
August for next year.
22
I don't know the cost of that policy.
23
deductible is 25,000.
24
MR. VLAHOS:
So it's not in their current rates.
I know the
So from that answer, I take it that the
25
company intends to propose that those monies will be part
26
of the cost of service?
27
MR. KING:
28
MS. NOWINA:
That's right.
Going forward?
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
12
1
MR. VLAHOS:
Going forward.
2
MR. KING:
3
The only other issue I'd raise is, I mean, depending
It's a $60,000 policy, cost policy.
4
on how the Board sort of disposes of this, there's a
5
temporal element to this, as well, and Lear could
6
restructure, come out fine.
7
AR policy, and obviously we wouldn't need this exemption
8
any longer.
9
We could get them back on the
We spoke to our insurer yesterday, before coming here,
10
to see if we could get them back on the policy, and the
11
answer was no, which isn't surprising given last week's
12
downgrading, further downgrading.
13
downgrading caused them to be booted off the policy, the
14
second one wasn't going help get them back on.
So if the first
15
But we're going to continue to do that if we get
16
information that -- think that there's a reasonable chance
17
of getting them back on the policy, obviously.
18
MR. VLAHOS:
Mr. King, slow up.
If it wasn't for your
19
request here today, what would be the normal course, based
20
on the -- based on the history that is depicted on this
21
helpful chart that you gave us this morning that Ms. Moreau
22
spoke to?
23
termination notice produced for June 15th, that's this week
24
coming; right?
25
15th?
26
So what would happen in the normal course?
MR. KING:
The
A termination notice would be produced June
Let me be clear.
27
illustrative example.
28
They are fully paid.
This was made as an
They've paid their May 20th bill.
They've always paid.
We're not
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
13
1
taking issue --
2
MR. VLAHOS:
3
MR. KING:
4
MR. VLAHOS:
5
MR. KING:
6
MR. VLAHOS:
7
8
9
They've always paid?
Yes, they've always paid.
So they're not in arrears?
No.
They have not been late.
They're not
today?
MR. KING:
No.
They have a good payment history.
It's all about mitigating future risk, really, and the
10
prospect that a bankruptcy would put in abeyance any
11
amounts outstanding and any consumption used to the point
12
of filing.
13
MR. VLAHOS:
14
company specifically?
15
the company's evidence, that in the Kitchener area there is
16
a plethora of auto-related plants.
17
customer?
18
MR. KING:
Right.
And help me understand, why this
I take it from your evidence, from
So why this specific
I think the answer is this is the only
19
customer -- you're right.
20
in financial distress, and I expect a number of the
21
customers on our AR policy are in financial distress, or at
22
least are in the automotive sector.
23
The auto sector, in general, is
They're the only ones that our insurer has come to us
24
and cancelled the policy on, and they have cancelled the
25
policy on the basis of significant down-ratings by Moody's.
26
And since they have been cancelled on the policy, there was
27
a further downgrading by Standard & Poor's and Moody's
28
basically to default level.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
14
1
2
3
So our insurer hasn't come to us and cancelled any of
our other 25 customers -- 24 customers.
MR. VLAHOS:
I see.
But the company -- your client
4
does not habitually keep track of the rating agency reports
5
for each of the 25 large customers, I would think?
6
MR. KING:
No.
No.
They wouldn't -- I expect this
7
would have gone completely under the radar screen but for
8
having the insurance policy in place.
9
MR. VLAHOS:
Right.
So what distinguishes this
10
particular application, this request, is the cancellation
11
of the insurance policy for this account?
12
MR. KING:
Just having the knowledge.
And in the
13
past, the experience is not having the knowledge and the
14
company sort of disappearing, and the utility being stuck
15
with whatever receivable is out there.
16
17
18
19
So the company is now at least armed with knowledge
that it can now use to mitigate some of the risk.
MR. VLAHOS:
And are you also suggesting that -- I'm
sorry, the company's name is AIC, you said?
20
MR. KING:
21
MR. VLAHOS:
22
MR. KING:
23
MR. VLAHOS:
This is the insurer?
The insurance, yeah.
Euler Hermes.
Okay, Euler Hermes.
So you're suggesting
24
that any insurance company would act exactly the same way
25
as Hermes?
26
MR. KING:
I think that's right.
27
MR. VLAHOS:
28
MR. KING:
And how do you know that?
We don't have any evidence.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
15
1
2
3
MR. VLAHOS:
Okay.
for now, Mr. King.
MS. NOWINA:
Those are all the questions I have
Thank you.
So I just want to make sure this is clear
4
on the record.
5
amounts are accurate in terms of the history and the
6
billing for Lear, but the scenario - and that is that
7
payment hasn't been made - is fictional or --
8
MR. KING:
9
MS. NOWINA:
10
MR. KING:
So the chart that you have given us, the
No, this is illustrative.
Right.
What would have happened, had the May 20th
11
payment had not been made.
12
the magnitude, the quantum, builds up before the utility
13
has any legal rights to do anything about it in the normal
14
course, without a Code exemption.
15
16
MS. NOWINA:
It's just merely to show how
In the scenario that they have not paid
the May 20th --
17
MR. KING:
18
MS. NOWINA: -- then you can extrapolate that forward
19
Correct.
if they don't make a future payment?
20
MR. KING:
Right.
21
MS. NOWINA:
Thank you.
22
MR. VLAHOS:
And the $207,000, can somebody put that
23
into perspective as to what that represents in terms of the
24
size of the utility, revenue requirement or otherwise?
25
MR. KING:
Percentage-wise?
I can tell you that --
26
well, you've heard the materiality threshold is $37,000.
27
The utility's revenue requirement is roughly $30 million.
28
That -- you know, I will say these numbers are also a
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
16
1
little bit low to the extent that, you know, as I said, the
2
typical bill would be $70,000 a month, and we're using a
3
bill that was $45,000 a month, because consumption has
4
tailed off a bit at Lear.
5
MS. NOWINA:
6
All right.
7
Production's down.
Right.
Mr. Drimmie, would you like to make your
submissions?
8
SUBMISSIONS BY MR. DRIMMIE:
9
MR. DRIMMIE:
I think if you look at our 10-Q, the
10
fact is that Lear currently has $1.2 billion in cash and
11
cash equivalents.
12
Kitchener-Wilmot Hydro.
13
requirements of the regulations, in terms of having a good
14
payment history.
15
We've made all of our payments to
We believe we've met all the
And, currently, while we are in credit default, the
16
reality is we have been since, you know, the early part of
17
the year and our lenders are working with us.
18
given us two waivers against that, our bank covenants.
19
They've
And currently the company is working with their
20
lenders and expects to finalize a restructuring by the end
21
of the month.
22
MS. NOWINA:
23
MR. DRIMMIE:
24
MS. NOWINA:
The 1.2 billion in cash -Mm-hm.
-- Mr. Drimmie, that's -- help me
25
understand your organization.
26
U.S.-based?
27
28
MR. DRIMMIE:
You're a large company,
A large U.S.-based company with a
wholly-owned subsidiary in Canada.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
17
1
2
MS. NOWINA:
MR. DRIMMIE:
4
MS. NOWINA:
6
7
And what proportion of the
company would the Canadian company represent?
3
5
All right.
Currently, maybe about 10 percent.
And you have more than one facility in
Canada?
MR. DRIMMIE:
We have -- we currently have four
facilities.
8
MR. VLAHOS:
9
MR. DRIMMIE:
What are the others?
We have a facility in Ajax which we are
10
just in the process of closing.
11
some additional business.
12
business that could end up there.
13
14
15
16
MS. NOWINA:
18
MR. VLAHOS:
21
22
And have you had any discussion with your
electricity providers in those other areas?
MR. DRIMMIE:
20
We have a plant in
And we have one in St. Thomas.
17
19
We are working on a piece of
We have a plant in Whitby.
Kitchener.
It potentially will get
No, we have not.
They have not approached you at all, they
have not expressed any concerns?
MR. DRIMMIE:
They have not approached us at this
point.
MR. VLAHOS:
And can you give us an idea as to the
23
relative size of the Kitchener facility, vis-à-vis the
24
other three?
25
MR. DRIMMIE:
The Kitchener facility in terms of
26
square footage is about 300,000 square feet.
27
facilities would be probably anywhere from 100 to 200.
28
The other
Currently, employment in Kitchener is running around
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
18
1
100 hourly staff.
2
fact that our hydro bill is at 45,000 now is probably
3
pretty representative of what's going to -- what it's going
4
to be, going forward, at least until later in the third
5
quarter of this year, maybe the fourth quarter, based on
6
what we see with the automotive sector at this point.
7
MS. NOWINA:
It's down from 800 at our high.
The
So your Kitchener facility in terms of
8
its electricity usage, how does it compare with the other
9
Ontario facilities?
10
MR. DRIMMIE:
Kitchener would be a higher usage than
11
the other facilities simply by the nature of the work
12
that's done there.
13
the facility.
There's a lot of heavy automation in
14
I don't actually have the hydro consumption at the
15
other facilities but I would guess it would probably be
16
about half what it is in Kitchener.
17
MS. NOWINA:
18
MR. DRIMMIE:
19
MS. NOWINA:
20
In each of the other facilities?
Yes.
Or in aggregate?
In each of the other
facilities.
21
MR. DRIMMIE:
22
MR. VLAHOS:
Yes.
Mr. Drimmie, maybe it's not a fair
23
question for you to answer, but do you have any notion with
24
respect to the other electricity providers, whether your
25
facilities in Ajax, Whitby, and St. Thomas -- let's go with
26
Ajax and Whitby, I guess those would be the same providers.
27
28
MR. DRIMMIE:
I can't -- I don't know whether the same
provider of the utility is the same.
They are quite close
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
19
1
together.
2
apart.
3
I would say distance-wise they may be ten miles
MR. VLAHOS:
Yeah, I just -- I guess my question is
4
whether you had any notion whether, if we were to assume
5
that the Ajax and Whitby facilities are served by the same
6
supplier, the same distributor, whether proportionally that
7
would be about the same or less or higher importance to
8
that system than it is the case with Kitchener-Wilmot?
9
MR. DRIMMIE:
Yeah.
Going forward, I would say it
10
would still be less than Kitchener, given the fact that the
11
Ajax facility is idle at the current time.
12
13
14
MS. NOWINA:
Right.
What else do you want to tell us,
Mr. Drimmie?
MR. DRIMMIE:
Basically, I guess from our perspective,
15
you know, the company has always met its obligations.
16
We’ll continue to do so.
17
to do so and we're working towards a restructuring.
18
We believe we have the liquidity
In terms of a Chapter 11 filing, just because that
19
would happen in the U.S. with Lear, that does not
20
necessarily mean it would happen in Canada, similar to
21
General Motors.
22
Even if it did, General Motors and Ford are our
23
biggest customers.
They're going to continued to build
24
vehicles.
Lear is a critical supplier to General Motors
25
and Ford.
All of our receivables with General Motors, even
26
though they are in Chapter 11, were insured either by EDC
27
or the treasury program in the U.S.
28
for those.
So Lear will be whole
So there's no risk to Lear in terms of the
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
20
1
2
actual, you know, fallout of General Motors' situation.
Since we're a critical supplier, all of our shipments
3
going forward will be guaranteed.
4
from a financial risk point of view, because of the
5
industry, the state it's in, that it's going to pose any
6
additional risk to Lear; and essentially, Lear is going to
7
continue to operate and be able to meet its obligations
8
going forward.
9
10
11
MS. NOWINA:
So we don't believe that
Is what's being requested of you, Mr.
Drimmie, a financial hardship at this time?
MR. DRIMMIE:
In itself, one request is not, but you
12
have to understand that in the automotive industry, there's
13
many requests like this, and if we were to give into those
14
requests or not challenge them, it creates a competitive
15
disadvantage for us.
16
MR. VLAHOS:
17
MR. DRIMMIE:
So it's the principle?
Given our situation and the economic
18
conditions that surround the automotive industry, it's
19
imperative that Lear maintains its liquidity in any fashion
20
that it can.
21
22
MS. NOWINA:
All right, Mr. Drimmie, if that's it,
we'll move on to Board Staff.
23
MR. DRIMMIE:
Sure.
24
MS. NOWINA:
25
SUBMISSIONS BY MS. COCHRANE:
26
MS. COCHRANE:
Ms. Cochrane.
Well, first of all, I would just like
27
to draw the Board's attention to a couple of the Board's
28
reports and decisions that peripherally touch on this
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
21
1
issue, although in my respectful submission, they're not
2
terribly helpful.
3
As you are aware, in 2004, there was a Board summary
4
report with respect to the June 2004 proposed amendment to
5
the Distribution System Code in respect of unpaid
6
electricity charges.
7
Basically, in that summary report, the Board said that in
8
the event, I'm quoting from page 13 of that report:
9
That file number is RP-2004-0166.
"In the event that a distributor becomes
10
concerned regarding the ongoing creditworthiness
11
of a customer, which nevertheless maintains a
12
good payment record, and wishes to institute more
13
frequently billing, the distributor is entitled
14
to bring the matter to the Board if it is not
15
able to reach agreement with the customer."
16
So that is the context framing this application.
17
Now, as I believe hopefully everyone here is aware,
18
the Board has been also working on some revisions to the
19
Distribution System Code, as part of a consultation process
20
for the past couple of years, and that reference, the file
21
number is EB-2007-0722.
22
Part of the revisions to the Code either have been
23
released in the past couple of days or are just about to be
24
released today and that again does not provide too much
25
guidance, unfortunately, but it does unequivocally state
26
that a distributor cannot unilaterally impose more frequent
27
billing on a customer unless that customer's consumption
28
represents at least 51 percent of the distributor's revenue
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
22
1
requirement.
2
qualify, and this certainly is not one of them.
3
So there's very few distributors that would
However, I would like to draw the Panel's attention
4
back to the 2004 report, because there is some discussion
5
there that may be useful to the Panel in framing the
6
issues.
7
The discussion about frequency of billing in the 2004
8
report happens in the context of the discussion about
9
security deposits.
So I would suggest to the Board that
10
the issue of security deposits and frequency of billing or
11
payment -- I know counsel for the utility has framed it as,
12
you know, it's not a question of frequency of billing but
13
of payment -- with all respect, I don't fully appreciate
14
the distinction there.
15
Nor do I think it's appropriate to completely sever
16
the issue of frequency of billing from that of security
17
deposit.
18
to pay a security deposit of a certain significant amount,
19
and in the alternative, they could agree to more frequent
20
payment arrangements.
So they are two sides of the same
21
coin, I would submit.
And counsel for Kitchener-Wilmot
22
Hydro will have an opportunity, obviously, to address my
23
submissions in this regard.
24
The request that was made to Lear Corporation was
And in the 2004 report, the Board agrees and accepts
25
the parties' submissions that in that proceeding,
26
generally, LDCs agree the more frequent billing would be of
27
assistance in a pre-bankruptcy situation.
28
But -- and the EDA representative in that case also
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
23
1
stated that, quote, and this is on page 11:
2
"It would be difficult to assess the requirement
3
for more frequent payment if a customer's payment
4
history is good."
5
And in the evidence that has been filed in this case
6
on behalf of Lear Corporation, the case is their payment is
7
good and this has not been challenged by Kitchener-Wilmot.
8
9
So, you know, I just draw the Board's attention to
that discussion.
I mean, this has been an ongoing
10
discussion, but in that proceeding, you know, we have it on
11
-- the representative of the Electricity Distributors
12
Association saying that there is difficulty here in
13
imposing this where you've got a customer with a good
14
payment history.
15
In that 2004 report, the Board also states -- it
16
points out that the risk of non-payment has to be looked at
17
in the context between -- the relationship between the
18
contracting party - that's the specific customer - and not
19
the parent company or the shareholder of the contracting
20
party.
21
And, you know, the relevant of the relationship, I
22
would submit, in this case is between Lear Corporation and
23
Kitchener, and Kitchener-Wilmot Hydro.
24
a lot of evidence being presented about the financial
25
condition and the downgrading of the credit rating of the
26
parent company, the one that's the -- if I read the
27
evidence correctly, you know, the U.S. parent company.
28
And I know there is
So, you know, the 2004 report, I think, you know, I
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
24
1
just wanted to draw the Board's attention that there are
2
some aspects, some issues, raised in that report that may
3
be of assistance to you in framing the issue or the
4
question.
5
And another fact that the Board should be aware of is
6
the conditions of service of Kitchener-Wilmot Hydro, which
7
is not part of the evidence that's been filed, but it is --
8
I've discussed it with Mr. King, and he doesn't have any
9
objection to reviewing his own client's conditions of
10
11
12
service.
We haven't been very good about making things
exhibits, but I think we'll --
13
MS. NOWINA:
We'll make this an exhibit since it is
14
being presented now.
The other things came in last night.
15
Do you have an exhibit number for me, Ms. Cochrane?
16
MS. COCHRANE:
17
Okay.
do I have a copy now?
This will be Exhibit No. 1.
Oh,
Okay.
18
EXHIBIT NO. 1:
EXCERPT FROM KITCHENER-WILMOT HYDRO'S
19
CONDITIONS OF SERVICE.
20
MS. COCHRANE:
So it's section 2.4.3 of Kitchener-
21
Wilmot Hydro's conditions of service, and on page 36, point
22
number 5, this is in the context of security deposits.
23
condition states:
The
24
"For existing customers where a security deposit
25
has not been collected or a customer who
26
previously was granted a security deposit waiver,
27
a security deposit will be required if the
28
customer has not maintained a good payment
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
25
1
history for the required time period relevant to
2
their rate class."
3
Now, I know that counsel for the distributor says, you
4
know, We're not talking about a security deposit.
5
not what they're looking for in this case.
6
That's
And, you know, if we were talking about that, I would
7
submit that they might be caught by their own conditions of
8
service, which states that they shouldn't -- they can't
9
insist on a security deposit if the customer shows a good
10
11
payment history.
But that's, you know, how the counsel for the utility
12
has chosen to frame this, as not an issue of security
13
deposit, but just more frequent payment.
14
And as I pointed out earlier, I think it seems to be
15
something of a superficial distinction, because you're
16
wanting some sort of -- some form of security, whether it's
17
in the form of more frequent payments or a lump sum
18
security deposit.
19
Finally, just to point out the -- with respect to the
20
bad debt provision in Kitchener-Wilmot Hydro's 2006 EDR,
21
the total was $116,000 -- sorry, $115,474.
22
of that if you need to see that or if there's any --
23
24
MS. NOWINA:
I have copies
Let's mark it as an exhibit, if you have
copies.
25
Thank you.
26
MS. COCHRANE:
So this will be Exhibit 2, and the
27
reference is on page 14 of 14, under "Distribution
28
Expenses" in the eighth item down.
It's "bad debt
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
26
1
expense."
2
EXHIBIT NO. 2:
3
MODEL, PAGE 14.
4
MS. COCHRANE:
KITCHENER-WILMOT HYDRO'S EDR 2006
So, you know, if I'm interpreting this
5
correctly, the total bad debt expense allowed for
6
Kitchener-Wilmot Hydro is $115,000, but we haven't heard
7
anything, and maybe there will be some submissions in reply
8
as to where -- you know, what the bad debt total is at this
9
point, or what they're expecting.
I mean, if this is the
10
only customer that they have concerns with, that may be one
11
issue, but if they've got several, you know, that have
12
considerable bad debt exposure, then that might change the
13
weighting that this particular customer should be given.
14
And just to wrap up, because, as I said, we weren't
15
very good about marking exhibits, I think we should go back
16
and make all the evidence in this hearing proper exhibits,
17
starting with Kitchener-Wilmot Hydro's original application
18
filed May 5.
19
20
21
22
And that will be Exhibit No. 3.
MS. NOWINA:
as an exhibit?
MS. COCHRANE:
with it.
MS. NOWINA:
24
MS. COCHRANE:
26
Well, because there's evidence filed
Like, there's --
23
25
I'm sorry, you're marking the application
No, we wouldn't normally do that.
Okay.
I just thought evidence should
be marked.
And then we have Lear Corporation's responding
27
evidence filed on June 4th, 2009, and that also has several
28
attachments.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
27
1
MS. NOWINA:
Ms. Cochrane, I'm not going to mark as
2
exhibits materials that we received prior to the oral
3
hearing.
We'll just mark the things we received today --
4
MS. COCHRANE:
5
MS. NOWINA:
Okay.
-- as exhibits.
We can refer to them --
6
I think it's a small enough case we can accurately
7
reference them without exhibit numbers.
8
9
10
MS. COCHRANE:
All right.
Those are all my
submissions.
MS. NOWINA:
Ms. Cochrane, the bad debt allowance that
11
you referred us to, the 115, can you explain to me what you
12
think the relevance of that number is?
13
MS. COCHRANE:
Well, we heard discussion about the
14
materiality threshold for this, you know, the 2 percent
15
figure and the 37,000, which would make it sound like, you
16
know, Lear, which has about $100,000 a month of electricity
17
consumption, could in one month go under and more than
18
double the bad debt.
19
look looking at, that could -- you know, they would not be
20
able to recover anything over the 37,000.
21
If the 37,000 figure is what you were
And, again, I'm sure you will have reply submissions
22
on this, but I was directed by Staff to the fact that, you
23
know, in the application, they've actually got a $115,000
24
allowance.
25
companies in Kitchener that are similarly positioned and
26
the utility may be looking at a $1 million bad debt expense
27
that it's not going to be able to recover, or whether this
28
-- you know, it's not actually as -- you know, there isn't
So I don't know if there's, you know, ten
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
28
1
a flood of companies going under that they're looking at
2
large exposure of unrecoverable bad debt expense.
3
So I just put that before you to complete the record.
4
MS. NOWINA:
5
Mr. King, are you prepared for reply submissions?
6
MR. KING:
7
MS. NOWINA:
8
FURTHER SUBMISSIONS BY MR. KING:
9
MR. KING:
All right.
Thank you.
Yes.
Okay.
I'll touch on the last issue first.
Well,
10
I'll touch on four issues, one, the relief; two, this
11
question that arose in the discussion with Mr. Drimmie
12
about what other utilities are requiring from Lear
13
facilities elsewhere in the province; and then this issue
14
about parent corporation and bankruptcy.
15
But on this bad debt issue, the 115,000 is a number --
16
it's a historic number, right, that they would have put in
17
their rate application?
18
utility with a $30 million distribution revenue
19
requirement, 115,000 is actually a pretty modest bad debt
20
expense, historically.
21
And, from my perspective, for a
And that is, remember, the aggregate.
22
utility's aggregate bad debt expense,
23
customers.
24
That is the
all of our
So to give you a sense, if you pull that table back
25
out, we're talking one customer blowing through the
26
aggregate bad debt expense for the utility, potentially.
27
So it is -- I'm glad Ms. Cochrane brought that up.
28
material amount that we're talking about.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
It's a
29
1
In terms of the relief requested, I'll reiterate,
2
we're talking about a request for moving to a weekly
3
payment plan.
4
our initial letter exchanges with Lear Corporation, we did
5
ask for a security deposit, and in the alternative,
6
movement to a weekly billing plan, but the application
7
itself is clear.
8
and that's what we're here asking for, and in part we've
9
taken that approach because we don't want to put additional
10
11
We're not requesting a security deposit.
In
We're asking for a weekly payment plan,
financial burden on one of our customers.
MS. NOWINA:
Just to be clear, Mr. King, I think
12
everyone understands this, but when you're talking about a
13
weekly payment plan, you mean for services already
14
received.
15
MR. KING:
16
MS. NOWINA:
17
MR. KING:
18
Yes.
And electricity already received.
Yes.
And I'll take issue with the notion
that we're somehow caught by our Conditions of Service.
19
Our Conditions of Service state what the standard
20
policy is in the Code with respect to security deposits and
21
customers with good payment history.
22
We're only caught in the sense that we can't unilaterally
23
do it.
24
be here.
25
and our conditions of service, like our licence, binds us
26
to the Code.
27
Code.
28
That's correct.
We're caught to the extent that we actually have to
We can always is seek an exemption from a Code,
We're here seeking an exemption from the
We can't automatically do this.
So we're not in any way precluded from obtaining the
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
30
1
relief we're seeking here by our Conditions of Service;
2
we're in effect, asking to be exempted from that, for the
3
grounds that we talked about in our submissions.
4
In terms of the dialogue with Mr. Drimmie around
5
whether other utilities in Ontario are asking Lear for
6
similar relief, I expect, because not many utilities have
7
AR insurance, that we're into this scenario I spoke of,
8
that they have no idea as to the financial health of their
9
customers.
10
And I find it interesting Mr. Drimmie has said that
11
certainly other customers are seeking from Lear the ability
12
to move to a weekly payment schedule or more frequent
13
payments.
14
business people are doing.
15
risk out there, and we're asking to mitigate it.
16
can't do it unilaterally because we're a regulated utility.
17
And I expect Mr. Drimmie has moved to weekly payments for
18
some of his customers.
19
submissions on the relationship between the parent
20
corporation and the quote from the previous Board report,
21
in a pre-bankruptcy situation, it is very relevant what the
22
parent corporation is doing.
23
filing in the U.S., and I'll take you to Mr. Drimmie's 10Q
24
form, there are a number of ways that Lear Canada gets into
25
bankruptcy.
26
They can do a long-arm bankruptcy and essentially file for
27
protection here.
28
common for Canadian subs to get put into bankruptcy when
We're doing precisely what other prudent
We're asking -- we're seeing
We just
With respect to Ms. Cochrane's
And if this were a Chapter 11
They can get dragged into the US bankruptcy.
There's a myriad of ways.
And it is
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
31
1
the American parent does.
2
And if you go to -- and indeed, Mr. Drimmie, in his
3
defence, is using the financial health of his -- alleged
4
financial health of his parent as a shield to say, Look at
5
all the cash we have.
6
pointing to the same 10Q or the same 10K reports.
So I can't be precluded from
7
If you look at the 10Q that Mr. Drimmie filed, you
8
will see, on page 8 of 77, the notation that: As at the end
9
of the past year, as of December through, the company was
10
in default under its primary credit facility.
On March 17,
11
the company entered into an amendment and waiver with their
12
lenders on that facility through to May 15th. So the
13
lenders waived the existing defaults.
14
approached, on May 13th the company entered into a further
15
waiver, and then it said that the 10Q states, and I'll
16
quote:
As May 15th
17
"As a result of these factors, the company's
18
independent registered public accounting firm
19
included an explanatory paragraph with respect to
20
the company's ability to continue as a going
21
concern in its report on the company's
22
consolidated financial statements."
23
And then further down it says:
24
"If the company does not make the interest
25
payment on either series of senior notes by June
26
30th...
27
That's the expiration period for this second waiver with
28
their lenders.
If they don't make the payment by June
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
32
1
30th --
2
"...the holders of at least 25 percent in
3
aggregate principal amount of those notes will
4
have the right to accelerate the obligations
5
thereunder.
6
facility could result in a cross default or the
7
acceleration of the company's payment obligations
8
under other financing agreements.
9
event, the company may be required to seek
10
11
Furthermore, a default under their
In any such
reorganization under chapter 11."
That's in their most recent 10Q from their first
12
quarter.
So it's a material risk we're talking about.
13
that's why Mr. Drimmie, in his submissions, teed off at the
14
June 30th date.
15
either going to be a Chapter 11 filing or they're going to
16
seek a further waiver or they're going to come out
17
restructured.
June 30th is the drop-dead date.
18
Those are my submissions.
19
MS. NOWINA:
we will all know what's going to happen to Lear
21
Corporation.
MR. KING:
23
MS. NOWINA:
There's
Mr. King, if that's the case, by June 30,
20
22
And
Yes.
And they may be in bankruptcy after that
24
point.
25
if we said, yes, you can do weekly payments at this point?
26
How much benefit is what our ruling be to you even
MR. KING:
We would take them current as at the date
27
of your ruling, and then we would start them on a weekly
28
payment plan.
So we would be out a very small amount,
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
33
1
going forward.
2
MR. VLAHOS:
3
MR. KING:
4
MR. VLAHOS:
5
MR. KING:
You will take them current?
Yes.
What does that mean?
Well, at the very first we would issue them
6
a bill for, basically, consumption to date.
7
would start with weekly bills, weekly invoices.
8
MR. VLAHOS:
So how would you do that?
9
trying to understand?
And then we
I'm just
Under what authority would you be
10
able to say that:
11
may have three weeks to pay, it's payable today?
12
what you have in mind?
13
MR. KING:
14
MS. NOWINA:
15
16
17
18
The bill that I've sent you, that you
Is that
Yes.
You're asking for a weekly payment
schedule.
MR. KING:
Yeah.
But to start the weekly payment
plan, we would have to bring them current.
MS. NOWINA:
So you would have an immediate -- so what
19
you're asking for is an immediate payment, or an immediate
20
invoice --
21
MR. KING:
22
MS. NOWINA: -- with expectation of payment
23
immediately.
24
MR. KING:
25
MS. NOWINA:
26
27
28
Correct.
Correct.
And then one -- another one in a week and
another one in a week.
So you're expecting a payment of all the monies owed
to date immediately.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
34
1
MR. KING:
Yeah.
Ms. Guthrie's telling me, the other
2
thing we could do is we could just, in lieu of the first
3
item, simply increase the weekly amount.
4
The weekly amount is, it would be an estimate.
5
MS. NOWINA:
Right.
6
MR. VLAHOS:
But that's -- and I didn't have a reading
7
of this at all, Mr. King, when I looked at your evidence.
8
I didn't know how you were going to implement the Board's
9
decision, if it was favourable to your client.
So now
10
you're suggesting that -- two options.
11
company current, that is, to ask payment as of the day of
12
the decision.
13
MR. KING:
14
MR. VLAHOS:
One is to make the
Right.
Or we're going to inflate or we're going
15
to have the appropriate amounts in the weekly payments to
16
take care of the outstanding bill.
17
saying?
18
MR. KING:
Correct.
Is that what you're
There will always be a delta with
19
the weekly payment plan, because it's not a weekly -- it's
20
not a true bill, because there are demand charges in the
21
monthly bill that you can't sort of disaggregate down to --
22
on a weekly basis, right?
23
So it is -- the weekly invoice will always have -- it
24
won't be -- that's why I use the term "weekly payment" as
25
opposed to weekly bill.
26
MS. NOWINA:
27
MR. KING:
28
Because it will require a true-up.
And there will always be a delta going
forward.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
35
1
MR. VLAHOS:
But this is separate from a delta going
2
forward.
3
would like payment as of the date of the decision of the
4
outstanding amount.
5
6
This is different:
MS. NOWINA:
Under your first option, you
And from there forward, a weekly payment
amount.
7
MR. KING:
8
MS. NOWINA:
9
MR. KING:
Correct.
Thank you.
That's the way I think it makes most sense.
10
Otherwise you're on a weekly payment plan, and you have
11
this sort of legacy bill amount out there.
12
13
MS. NOWINA:
Which is my question:
If June 30th is
the date, what assurance will they give you before then?
14
MR. KING:
15
MS. NOWINA:
Right.
All right.
Thank you, everyone.
What
16
we're going to do is we'll break for ten minutes for Mr.
17
Vlahos and I to have an initial discussion to see whether
18
or not we can make an oral decision today.
19
know in ten minutes whether or not you should hang around
20
for an oral decision, which will take longer to put
21
together, or whether or not we should simply adjourn, and
22
we'll issue a written decision.
23
moment.
We will let you
So we'll break for a
24
--- Recess taken at 10:34 a.m.
25
--- On resuming at 10:48 p.m.
26
MS. NOWINA:
Please be seated.
The Board has made a
27
decision in this application, and we will give it to you
28
now.
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720
36
1
DECISION:
2
MS. NOWINA:
The Board does not grant the exemption
3
requested by Kitchener-Wilmot Hydro.
The reasons for this
4
finding are as follows.
5
found, has had a good payment history over many years.
6
Lear Corporation is not currently in default with respect
7
to its current electricity bill.
8
appreciates Kitchener-Wilmot's attempts to reduce its risk
9
by acquiring insurance, the inability to insure for a
Lear Corporation, as we have
Although the Board
10
particular customer’s risk is not determinative in
11
providing the relief being sought.
12
In making this finding the Board considered whether a
13
potential default of Lear Corporation would jeopardize the
14
financial integrity of Kitchener-Wilmot Hydro.
15
applicant has not made such a claim, and the Board notes
16
that the evidence does not support such a conclusion.
17
18
19
Those are our findings.
The
We're now adjourned.
Thank
you very much.
--- Whereupon the hearing concluded at 10:49 a.m.
20
21
22
23
24
25
26
27
28
ASAP Reporting Services Inc.
(613) 564-2727
(416) 861-8720