Holdco and Lakefront Utilities Report

On Tuesday at 2:00 pm, Cobourg Council had a special meeting to hear a report from Holdco and its subsidiaries (Lakefront  Utilities Inc – LUI – and Lakefront Services Inc – LUSI) on how they are doing. The new chair of Holdco, David Tsubouchi, spoke strongly about the need for better governance and is putting procedures in place to make sure that happens.  This was the only thing that needed significant fixing – all other measurements and performance factors were positive and councillors asked few questions.  LUI chair Gil Brocanier reported that reliability is good and getting better (more below) and that businesses want reliability and are attracted to Cobourg by reliable electricity.  Gil said that only 25% of a residential bill is actually for LUSI services (Distribution of electricity – see page 23 of the full presentation) – he said that their costs are low and rates are low.

The report was no doubt full of useful information but I had a hard time staying awake.  But let me report on a few highlights.

LUSI looks after water, the Fibre Optic service to Town departments, some HR services and a solar panel joint venture.  Details were only provided for water rates: in 2022, the average residential service will use 160 cubic meters of water per year and Cobourg charges $440 for that.  By comparison Port Hope charges $790 for that amount (see page 15 of the full presentation in Resources below).  Unlike electricity which is managed by LUI, water rates are not regulated.

There was no detailed report on other LUSI activities.

LUI looks after electricity and Gil (and the printed report) make a major point about how OM & A is low.  You would be forgiven for not knowing what that is – nowhere did I see the acronym explained.  I did a Google search and found that it stands for Operating, Maintenance and Administration – seems like mostly personnel costs.

Gil talked about reliability and how they are using technology to improve things.  A recent personal experience did not leave me with a good impression:

Last Friday, there was a failure in the South end of Cobourg – 995 commercial and Residential customers (including my place) were without power from 5:00 pm.  Since I’m a techie, I immediately used the “Lakefront Utilities” App and reported the outage.  I noted that the App said “no outages”.  I received an email acknowledgement but the app continued to say “no outages” all the time when there obviously was a continuing outage.  There was no storm (or even wind) at the time and the outage was eventually blamed on a fallen tree branch.  It took about 1 ½ hours to fix and the only updates I could get were via Twitter.  Better than nothing but what happened to the wonderful app technology?  Technology is good but needs updates.  Gil talked about their “aggressive tree trimming program” – seems it was not aggressive enough.  Gil said that LUI’s “index of reliability” was one of the best in the industry.

Looking to the future, LUI is aware of the move to Electric vehicles and in fact plans to convert all its fleet to Electric by 2035 and plans to increase capacity to cope with all the EV chargers.

The only significant question by a Councillor was by Emily Chorley who asked if it’s still planned to put a new water Tower at the CCC for zone 1. (Yes).

One key financial number is the benefit to Cobourg: $21.7M from 2001 to 2021. No further breakdown by year was provided. Neither was there any indication of a trend.

Resources

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Gailr
27 July 2022 11:14 am

The name of the new chair of Holdco, David Tsubouchi, rang a bell, so I googled him. He was a minister in both the Harris and Eves PC Ontario governments and achieved a certain amount of notoriety when Minister of Community and Social Services. Google his Wikipedia entry.

ben
Reply to  Gailr
27 July 2022 9:01 pm

He was the author of the infamous ‘welfare diet’, nasty person as a Minister

SW Buyer
Reply to  ben
27 July 2022 9:39 pm

Yes, Tuna Tsubouchi.

Go to the grocery store, find dented cans of tuna and negotiate with the manager for a big discount.

This aside, a very competent person.
Likely the best director on the Holdco board

Tom Holden
27 July 2022 10:05 am

Likewise opinion from me re the app. I couldn’t even report the outage using it as it gave a false invalid email address error every time I tried. I was able to get a phone response which was uninformative. Best was on their Facebook page where it was possible to see comments from others experiencing the outage and there were timely updates from the office.

As to reliability, I find the frequency of very short outages rather high. Lasting only a second or two, it’s sufficient to require clocks, set top boxes, routers, computers to be reset which can be quite disruptive.

Ken Strauss
Reply to  Tom Holden
27 July 2022 11:56 am

At the most recent Ontario Energy Board rate setting hearings for Lakefront it was recognized that reliability was poor and LUI promised to do better. Hopefully they will deliver on their promise!

JimT
Reply to  Ken Strauss
30 July 2022 12:46 am

Yes, indeed. But “hope is not a strategy”.

Last edited 20 days ago by JimT
David
27 July 2022 9:08 am

Can anyone give an overview of the corporate structure of Holdco etc? Specifically, why such entities exist? Please feel more than welcome to “explain it to me like I’m 8 years old” because while I’m interested, I don’t know how all the moving parts work. Or, if you know of a resource that is like a municipal holding companies and their subsidiaries for dummies, let me know! Thanks in advance!

Ken Strauss
27 July 2022 8:32 am

Right, Leweez!

As a regulated local distribution company LUI must divulge executive compensation but for “privacy reasons” any utility with fewer than 3 FTEs (Full Time Equivalents) is exempted by the Ontario Energy Board. LUI claims to be exempt because they have fudged their numbers to have only 2.95 FTE executives. So much for their transparency!

For the curious, the Mearie Group Management Salary Survey of Local Distribution Companies which includes LUI and six others provides some eye watering compensation numbers.

Deb Campbell
27 July 2022 8:14 am

Unable to use what little tech I have I called radio station and they knew nothing about outage. Communication is important so users keep aware of what’s wrong and repair being done. Disappointing to be able to access info!!!

Leweez
26 July 2022 11:11 pm

Kudos to Emily Chorley for asking the question of the proposed increased transparency, “ Will you now disclose executive salaries of your company?
Havent been much of a fan of Councillor Chorley, but good on her for asking the question.