The Great Energy Transition, Challenges and Opportunities

June 12, 2024

The Empire Club of Canada Presents

The Great Energy Transition, Challenges, and Opportunities

Chairman: Sal Rabbani, President, Board of Directors, Empire Club of Canada

Moderator
The Honourable Lisa Raitt, P.C., Vice-Chair, Global Investment Banking, CIBC Capital Markets

Distinguished Guest Speakers
Lesley Gallinger , President & CEO, IESO
Shelley Babin , President & CEO, Atura Power
Indrani Butany, MBA, BSc(HONS), ICD.D President & CEO, Lexicon Energy
Jennifer Edey, Senior Vice President, Operational Services & Business Development, Bruce Power
Heather Ferguson, SVP Business Development & Corporate Affairs, Ontario Power Generation

Head Table Guests
Marco Barbosa, VP Grid Technologies, Siemens Energy
Scott Gray, EVP, Projects and Field Services, BWXT Canada
Bonnie Hiltz, Vice President, Energy Practice Lead, Sussex Strategy Group
Michael Kobzar, National Director of Sales, Transmission Systems, Siemens Energy Canada, Director, Empire Club of Canada
Sandra Levy, Corporate Director, GFL Environmental Inc., and SIR Royalty Income Fund
Sean McCaughan, Executive Vice-President, Chief Operating and Strategy Officer, OEC, Director, Empire Club of Canada
Bevie Thomas, CPA, CA, Senior Director of Finance, BST Canada Ltd.
Brent Tyers, Director Business Development, Bird Construction
Mike Van Soelen, Past President, Empire Club of Canada

Introduction
It is a great honour for me to be here at the Empire Club of Canada today, which is arguably the most famous, and historically relevant speaker’s podium to have ever existed in Canada. It has offered its podium to such international luminaries as Winston Churchill, Ronald Reagan, Audrey Hepburn, the Dalai Lama, Indrani Gandhi, and closer to home, from Pierre Trudeau to Justin Trudeau; literally generations of our great nation's leaders, alongside with those of the world's top international diplomats, heads of state, and business, and thought leaders.

It is a real honour, and distinct privilege to be invited to speak to the Empire Club of Canada, which has been welcoming international diplomats, leaders in business, and in science, and in politics. When they stand at that podium, they speak not only to the entire country, but they can speak to the entire world.

Welcome Address by Sal Rabbani, President, Board of Directors, Empire Club of Canada
Good afternoon. Welcome to the Empire Club of Canada, the country's go-to forum for conversations that matter, for 120 years, and counting.

To formally begin this afternoon, I want to acknowledge that we are gathering today on the traditional and treaty lands of the Mississaugas of the Credit, and the homelands of the Anishinaabeg, the Haudenosaunee, and the Wendat Peoples. We encourage everyone to learn more about the Traditional Territory on which you work and live. This is an essential step to Reconciliation, and each and every one of us has a role to play. June is National Indigenous History Month, a month dedicated to recognizing the immense contributions, and diverse cultures that First Nations, Inuit, and Métis People have made to our society, to honouring the progress that has been made towards Reconciliation, and to acknowledge the work that remains to be done.

Moving to today's program, please join me in welcoming Shelley Babin, President and CEO of a Atura Power, Indrani Butany, President and CEO of Lexicon Energy, Jennifer Edey, Senior Vice President, Operational Services and Business Development at Bruce Power, Heather Ferguson, Senior Vice President of Business Development and Corporate Affairs at OPG, and Lesley Gallinger, President and CEO of IESO, who will deliver special remarks, and the Honourable Lisa Raitt, Vice Chair, Global Investment Banking, CIBC Capital Markets, who will masterfully moderate today's conversation. Welcome to the Empire Club.

Our energy system is undergoing extraordinary change, transitioning from fossil fuels to renewables, and finding ways to balance our energy mix to ensure our future as clean as possible is one of the biggest challenges of our time. A generational endeavour that will put pressure on supply chains, the labour market, and that will test our ability to work together to be agile, to mobilize capital, and innovation. The energy transition is also a unique opportunity; a massive undertaking that will create jobs, business growth, and that will accelerate our competitiveness. You know, just think of how Ontario is leading the way in EV battery production, bringing jobs, innovation, and investments to the province, and positioning us to be world leaders in this space for decades to come.

You know, we accept questions from the audience for our speakers, so those of you in the room you can undertake to scan that QR code found on your program booklet, or for those of you online through that Q&A, under the video player. If you require technical assistance for those online, please start a conversation with our team using the chat button on the right hand side of your screen.

The Empire Club is your forum for sharing ideas, lessons, and best practices. As a not-for-profit organization, we would like to recognize our sponsors who generously support the club, and make these events possible, and complementary for our online viewers to attend. Thank you to our VIP Reception Sponsors: Bird Construction, and BWXT Technologies. We also extend our gratitude to our Supporting Sponsors: the Nuclear Waste Management Organization, and OEC. And thank you to our In-Kind Sponsor, the Organization of Canadian Nuclear Industries. Lastly, thank you to our Season Sponsors: Amazon Web Services (AWS), Bruce Power, and Hydro One.

I would also like to take this opportunity to recognize the club’s Board of Directors, staff, and all of you, the members of our incredible community. Thanks for being here today. A special mention goes to my dear friend Michael Kobzar on our board for your leadership. You know, none of this would be possible without your commitment to making this a reality. I also want to thank some of our younger colleagues, the students, and young leaders in the room. This is important, so, you know, thank you all for being part of our community, and advancing public dialogue on topics that matter.

I would now like to invite Lesley Gallinger, President and CEO of the Independent Electricity System Operator, IESO, to offer remarks. Lesey.

Opening Remarks by Lesley Gallinger, President & CEO, IESO
I'll try not to knock these over. Thank you, Sal, and thank you very much for inviting me to provide context for today's conversation. We are delighted to have our new Associate Minister of Energy Intensive Industries, the Honourable Sam Oosterhoff, here with us today. Sam, thank you for joining us. And we're all looking forward to working with you.

I certainly appreciate the Empire Club facilitating this important dialogue on the energy transition, which is a key to the economic and social well-being of everyone in Canada, with lasting impacts on the legacy we will leave for future generations.

The great energy transition is transforming our communities, our economy, and our society. After decades of stable demand, and energy surplus, Ontario's electricity system faces unprecedented growth. The IESO's latest forecasts predict that demand will increase at a rapid rate over the next 25 years in response to growing upward pressure to support more people, more homes, significant economic growth, and the electrification, broadly, of our economy.

At the same time, we are working to decarbonize Ontario's electricity system, which means expanding our non-emitting fleet by building more nuclear, hydro, wind, and solar. To decarbonize the broader economy, though, is a much bigger undertaking. It requires transforming entire sectors, like transportation, industry, and agriculture, and extends to the way we heat, and cool our homes, and other buildings. All of this equates to a 60 percent more electricity being consumed by 2050, versus the amount that we're using today. And therein lies our challenge: to grow, and decarbonize the grid simultaneously during a period of significant change, while balancing reliability, affordability, and sustainability.

Based on the IESO's Pathways to Decarbonization Report, upsizing the system to the extend needed is a monumental task. We will require a potential sixfold increase in the existing workforce to build these projects, we will need land, with siting requirements estimated to be 14 times the size of the city of Toronto, and most importantly, we'll need capital, to build new resources and upgrade existing technologies. At the bulk system level alone, the IESO estimated the cost to be 400 billion dollars. And what is critically important, as we embark on this option, on this build-out of our system, is the pace at which we do so, in order to maintain reliability, and affordability. We must stay ahead of demand, building the system, anticipating economic growth, and seizing opportunities to maintain Ontario's clean energy advantage, and to position ourselves as energy leaders, long into the future.

So, that's the challenge, and the opportunity of the great energy transition: strengthening the system in an orderly, and thoughtful manner, to balance reliability, affordability, and sustainability, in every step of the process, as we capitalize on the significant economic opportunity that the energy transition presents. I'm pleased to say from the perspective of a system operator and planner, that Ontario is in a strong position. This is thanks to the hard work of our sector, which includes generators, transmitters, local distribution companies, municipalities, and Indigenous communities, and to my colleagues at the IESO, that I'm privileged to work with every single day.

Our collective efforts to prepare and manage the transition are proving successful, demonstrated by the flurry of investments in our province. The strength and diversity of the of the current grid has proved to be both an enabler for and a catalyst for significant economic growth, evidenced by some 50 billion dollars being invested by in our province by Volkswagen, by Honda, Stellantis, and many more. The momentum of that investment will attract even more, and serves as an important signal that our work to facilitate the great energy transition should continue.

And that's why, as the entity at the heart of the sector, the IESO is doing its upmost to ensure an orderly transition. We are leading the sector during a period of unparalleled growth, the likes of which Ontario hasn't seen before. And we're focused on expanding Ontario's electricity system responsibly—at the right pace, in the right place, to meet rapid growth, and to make sure electricity is available where and when it is needed, at a cost that is affordable.

At the IESO, we recognize we cannot do this alone. It will take the shared contributions from everyone inside, and outside our sector. We need to work with our generators, we need to work with financial institutions, municipalities, Indigenous communities, transmitters, and distribution companies, to find compromise, to share risk, and to find better solutions to build out our electricity system.

That is why I am so pleased to have been invited here to introduce today’s panel, who can provide their perspectives from their space in the system, as leaders in the sector, on how to facilitate the Great Energy Transition. I'll start by introducing today's moderator—who probably needs no introduction—I'd like to introduce the Honourable Lisa Raitt, Vice Chair of Global Investment Banking at CIBC Capital Markets. Lisa joined CIBC in January 2020, and currently focuses on senior client coverage, business development with clients, and in the energy, infrastructure, and industrial sectors. And prior to that, Lisa was President and CEO of the Toronto Port Authority, and in 2008, elected to the House of Commons, where she went on to hold three senior portfolios, serving as the Minister of Natural Resources, the Minister of Labour, and the Minister of Transportation. Lisa, thank you for joining us. I look forward to today’s discussion, and I'll turn things over to you.

The Honourable Lisa Raitt, P.C. Vice Chair, Global Investment Banking, CIBC Capital Markets
Thank you, everybody. It's a pleasure to be here. I’m going to ask my panel-mates to come on up here. As you know from your program, we have with us today Shelley Babin, the President and CEO of ATRA Power; we have Indrani Butani, President and CEO of Alexa on Energy; Jennifer Ezzy, Senior Vice President of Operational Services, and Business Development at Bruce Power; and Heather Ferguson, Senior Vice President Business Development and Corporate Affairs, Ontario Power Generation. Welcome, everybody. Now, as you’re settling in, I will state the obvious: this is not a "Man-el." And just to put you in the right timeframe, it’s not International Women’s Day—that's not why we're here. We just happen to have the top leadership voices in Ontario on electrification today, and they all happen to be women, which is a pretty awesome thing. And because I know they're tough, we're going to start right away, and I'm going to start with a tough question to Heather Ferguson.

Heather Ferguson, SVP Business Development & Corporate Affairs, Ontario Power Generation
I thought I picked the right seat at the end...

The Hon. Lisa Raitt
Not, not a chance.

Heather Ferguson
...and it's debatable whether I was even supposed to be here, because I'm not on the picture. So I thought I'd get an easy run.

The Hon. Lisa Raitt
You're on my picture—oh, you are, yeah. Okay. Heather, when you undertake a project at OPG, your timelines are super long. And I know from experience that government administrations don't last as long as the build-out of some of these projects—because I started in natural resources with the hope of building a nuclear power plant, and I finished without any hope at all. I'm wondering if you can bring us through how OPG thinks about these kinds of projects, when you know that the decision-makers may very well change, halfway through your build.

Heather Ferguson
Ooh, okay. I mean, you're not wrong. The, the types of projects that OPG has traditionally undertaken, and I'm looking right over there—do I sound weird?

Indrani Butany, MBA, BSc(HONS), ICD.D, President & CEO, Lexicon Energy
Yes, you do.

Heather Ferguson
Okay. Is somebody gonna to work on that? Okay great. I'm looking over there at Mike Martelli, who used to run our projects organization—you're right. They take, they take a long time. A hydro project's going to take about a decade; a nuclear project, longer. You just better prepare for the fact that your—whether it's provincially or federally, that government is probably not going to be there at the end of it. When you start on a project, you also aren't starting from a baseline of nothing. I think your best way to kind of insulate yourself from those changes is to think about the community in which you probably operate already. So, OPG has got assets all across the province, their hydro assets, and certainly in Durham, we've got great relationships with the community. So, how are you building those relationships with your municipal community? How are you building those relationships with the Indigenous communities? Because when you start your project, you are not starting the relationship with them; you should be at a very, very good place with that. And those relationships are going to what's insulate you, and help secure a quicker path forward—and particularly on the Indigenous side. I say it often like a broken record: everyone should be thinking about how do you form those partnerships, those true partnerships. So, whether that's an equity partnership, or something, but that true partnership with that community, because they will help carry you through some of those changes.

The Hon. Lisa Raitt
So, sticking to partnerships, Jennifer, Bruce Power has done an awful lot of work with municipalities, with local Indigenous groups, just to make sure that everyone's in lockstep, in terms of what the plans are. Tell us a little bit about the importance of municipal—working together with municipalities.

Jennifer Edey, Senior Vice President, Operational Services & Business Development, Bruce Power
Well, it's, I mean, to echo what Heather said, it's paramount. It's the communities that we live in. And so, they have to be comfortable with our operations, and we see this on a regular, ongoing basis. Every day, we're looking at our local external communities, whether it be municipalities, or our Indigenous communities, as well. And, you know, to echo what Heather said, like when we look at our roadmap for the opportunity for new nuclear, yes, we have elections on there—it’s, it's certainly on there so we have visibility, and consideration—but if you think about the duration, it takes more than a decade to build a nuclear plant. And the promising part for stable energy policy is that we know that the province needs a lot of power, and it will, it doesn’t matter what parties, what party is elected—the need for electricity doesn’t change. So, I'm, I'm hopeful that we'll see very strong, stable energy policy.

The Hon. Lisa Raitt
Indrani, you’re sitting amongst a lot of power generators here, today...

Indrani Butany
I am.

The Hon. Lisa Raitt
... and you’re the distribution person. Tell us a little bit about how you view distribution, as part of the energy transition.

Indrani Butany
It's such a wonderful question. And certainly, as a sector, we have focused at the top line—if I can call it that—at generation first. And certainly, we knew, coming out of the last few years—certainly over the last three years—there's been a full recognition, as Lesley introduced our panel, and with her opening remarks, that we are upside down on the amount of generation that we have and the amount of generation that we need. So, it was the right place to focus. We also, then, focused on transmission. But as I say over, and over again, if you can't get all of those electrons to homes and businesses, then it doesn't matter. It's all for naught.

And so, it's interesting, because when you look at distribution: yes, we're the last mile—so, that part is the foregone piece. We need to get the electrons to people, to their businesses. But the other part of it is, when we consider how we got here, like, why are we upside down on generation? Why do we need more power? We need more power because, as we've talked about, it's the, this is the energy transition, the great transition, it's the Energy Transition Panel—what's causing that? Well, the mitigant—sorry, the catalyst, is climate change. And generally speaking, when business talks about climate change, we talk about it as—or, you know, business in general, the business sectors, talk about it as the existential threat to humanity. The interesting thing when it comes to energy, and certainly, when it comes to distribution, is that it's not an existential threat. It's the immediate threat to the way that we deliver electrons.

And I say that because our distribution system has not been built to withstand the kind of storms, the kinds of changes that climate change is imposing on us. And we say that, and we understand that, and we need to storm harden, et cetera, and we are transitioning the—so the broader economy wants to transition away from carbon-used, carbon-based fuels, and therefore decarbonization electrification enter the conversation that we're having.

But the last piece, and the piece that we don't talk about, is certainly distribution-focused, and that's that climate change is having a very real threat, as we all know, on our natural environment. Okay, so, Indrani such a great light bulb—pun intended. No, it's a—the light bulb is, in fact, the vegetation is changing. When temperature changes, vegetation growth changes; when vegetation growth changes, how much you need to do to vegetation-manage changes, how you manage your system changes, the investment you need to make changes. And so, it's not just about a renewal of our distribution system, but it's a distribution system that is now fit for purpose. I think Lesley said six times as much energy as we have been using currently. Well, our system isn't built for that, and we can't get to that last mile. So, the investment in the distribution system has a twofold impact. First, what it will do is get the electrons to people's homes, and renew the distribution system so that it is fit for purpose, to withstand the effects of climate change. But the other piece is, make the investment in generation, make the investment in transmission—and distribution, it's untapped. We can provide electrons back. And that's the last piece, to shore up the whole picture. We are an ecosystem. And so that is the piece where distribution fits in—not just the last mile, but a contributor overall.

The Hon. Lisa Raitt
Okay. For your part, for your part Shelley, at Atura, it's not only power generation; you're also doing some really neat things in battery. So, tell us a little bit about that. And, and if I could, one of the things that you brought up in our pre-call was the importance of remembering the supply chain.

Shelley Babin, President & CEO, Atura Power
M'hm (affirmative).

The Hon. Lisa Raitt
So, if you can expand on that a little bit.

Shelley Babin
Sure, yeah. Thanks, Lisa, for the question. And for those who don't know, Atura Power is the largest natural gas power generator in the province. We've also been, and we see ourselves as having a really critical role to play in the energy transition as a gas producer. But we also want to participate in diversifying, and contributing to the energy transition in other ways. And one of those ways is through battery energy storage. And so, through the IESO's recent procurement, we were successful in picking up a battery energy storage project. So, it will be a grid-connected, 250 megawatt, four-hour battery; we're going to site it next to one of our existing stations, which gives us the ability to leverage existing infrastructure, a great relationship with our host community there, already, relationships with Indigenous First Nation—or Indigenous Nations, as well. And we see the battery project as being able to complement the needs of the system. So, gas still continues to be incredibly useful, and necessary to support reliability, and affordability. The storage that's available today can provide the ability to shave off some of those peak needs for four hours at a time. So, there's potentially more work to be done in advancing that technology, but this is a really great place to start. And so, are very excited to be—we're going to be breaking ground later this year on that project, have it in service by 2026, and be grid-connected. We also have a hydrogen program, which, you know, I think is another way that we're looking to diversify, and understand how hydrogen can be an application for use in supporting the power sector, as well as other sectors.

And, yeah, on the supply chain, I think, you know, we heard, we heard Lesley, and Sal talk about the energy, the Great Energy Transition. It's happening in Ontario, happening in Canada, and it's also happening everywhere in the world. So, we have huge needs. But our needs are small, compared to what's happening elsewhere. And so, when we look at our needs for major equipment, whether it's for our gas projects, or for our other projects, we are competing with Europe, we're competing with, you know, the Middle East, we're competing with the United States. And so, it has been challenging, because timelines are tight, and so, we need to be creative, and innovative, and I think this is something that the sector is finding is necessary. We're looking to leverage relationships with our OEMs where we can. I think there's a great amount of collaboration in the sector to leverage buying power. You know, and we need to plan, and plan early, and plan often—and sometimes, that’s hard when timelines are tight, and things are moving quickly. But I think it’s, you know, really just about getting ahead of—getting your slot in the queue, so that you know that you're going to get the equipment onto your site on time, so that your projects can be put into service when, when the system needs them.

The Hon. Lisa Raitt
The, all levels of government, all orders of government, are pegging their policy choices around three very similar, I would say, anchors: reliability, affordability, and a variation on sustainable or clean, depending upon what government you're talking about. And the one that actually gets the most attention—not that there's a particular order—but surely, affordability, Heather, is a big, big question mark when it comes to motivating decision-makers, because of what they're hearing at the door. So, can you tell us a little bit about how you're thinking about affordability? Because yesterday we heard from, we heard from Phillippe Dunsky, who was the chair of the Canadian Electrical...workshop?

Heather Ferguson
Council?

The Hon. Lisa Raitt
...council? Workshop? You know what? Federal government has a lot of acronyms. But it was a really great, impressive panel of advisors, who came together to issue a report that was actually issued on Monday—and I know that there are a couple of members of that advisory group right now. But within that document, they said that they believe the total budget, or the total investment that's gonna be needed for electrification in Canada is 1.4 trillion with a "T." There's only so many taxpayers, and ratepayers in the country. How do we afford all this?

Heather Ferguson
Well, I’m, I'm not going to pretend to have the answer to this—because if I did, it would, you know, I'd be in a different job—but I'll, I'll sort of build off some themes, or some ways of thinking about it. And Lesley referenced, you know, in Ontario, it's a 400-billion-dollar price tag. So, I mean, I think unquestionably, electricity rates are, are going to increase. But it's, it's something to do with the pace at which you move things. So, you need to be planning the system out and moving at a decent clip, because if you move slow, that only is gonna cost more. So, there's got to be the right pace, but it needs to be efficient. Shelley raised a point, and I mean, this is one of the things that's going to definitely be able to keep our rates in check, and our reliability there, is, is making sure that we have enough gas for the timeline that we need it for—and I don't know exactly what that looks like, but there is gonna need to be a fair bit of flexibility around this 2035 timeline. So, you really, really need to keep the gas in there. And we've done modelling—I'm sure everyone in this room has done modelling—that shows what happens when you take that gas out: the rates go through the roof, you need to excessively overbuild your renewables, your battery storage, you probably don’t have enough land mass to do that, and you don’t have a reliable grid that can electrify all the other sectors that are the heavier-emitting. So, you don't get your climate change goals, and you sort of haven’t really advanced things. So, that’s how we need to think about it.

So, what does that come back to? And, you know, maybe I'll let Shelley, in a second, talk about the importance of gas, and how she's thinking about that for her fleet. But there's other things that are gonna happen, too, here. So, you know, as things electrify, you're gonna be adding more and more customers. So, yeah, there's big, heavy, fixed costs associated with the electricity system. The more you can spread that out across customers and have a very measured pace for electrifying, that helps diminish things—numerator-denominator, type of an equation. And then just thinking about your total energy costs over time. I mean, yeah, our electricity bills are going to go up, but what will the total energy bill gonna—what parts of it are gonna come down? And I don't, I haven't seen the magic equation that shows how that all levels out. But those are maybe some of the ways we as a sector need to think about it. And Shelley, I don’t know if you have more on the CER, or the gas, the value of gas.

Shelley Babin
Yeah. Thanks, Heather. I mean, the thing about gas generation is that there is no like-for-like replacement of that technology in the system today. So, even if we did all the things that Heather is talking about, so, if we do this massive overbuild—and I think the IESO numbers from a couple of years ago are: we need to double the existing wind, 175 percent increase in solar, we need firm, year-round imports from Québec that are significant, we need three times the amount of storage. And you still don't have a fully reliable system, even if you do that, because you simply don't have that flexible, stable, reliable generation that the system needs. And so, huge costs associated with that, a lot of land is associated with that, and you're left with a system that simply may not be able to attract the economic development, may not be able to support the electrification that the system needs to provide economy-wide emission reductions that we know need to happen through electrification, if you don't have that reliable power.

So, yes, we see gas as being a needed fuel in the system for a period of time that, that is transitionary, hopefully. But I think the other thing is, not only do we need the existing gas in the system, but we also need more gas. And that's part of what the IESO recent procurement has done, is to add some incremental gas into the system, to really shore up that reliability, while all these other things happen. We're going to refurbish nuclear, we're going to investigate large new nuclear or SMRs, you know, hydro development, all of these things. And gas really needs to be there, to sort of be that, that supporting...

The Hon. Lisa Raitt
Yeah.

Shelley Babin
... baseline for those peaking needs that we're going to have.

The Hon. Lisa Raitt
Indrani, or Jennifer, yeah. On affordability.

Jennifer Edey
I think we also need to look at the overall economic impact that this is going to have. And that, that gives, that gives the province different levers to keep the price low for the consumer. So, if you look at the refurbishment of the nuclear plants between OPG and Bruce Power over the period of a decade, that's dozens of billions of dollars, and more than 90 percent of it went into the Ontario economy. And so, that gives government more levers for keeping the price down.

The Hon. Lisa Raitt
Yeah. Indrani, any, any comments on affordability?

Indrani Butany
Well, the challenge is that not only are we the last mile, but we are also the ones who send out the bill—so, the buck ends up stopping, literally, with us. I appreciate my peers so much, and yet, the alphabet soup of energy still stops with: who is your bill provider? And so, I think there, there's a due recognition in the sector that we need this to be affordable and we need it to be paced, but we also need to be our own marketers. I, we're talking amongst ourselves, and we are not talking to the populace. We aren't talking to the people who are voting, we aren’t talking to our ratepayers—taxpayers and ratepayers, voters, end up being the same humans. So, on affordability, we need to help people understand what this is going to mean for their lifestyle. So, if I pick up on one of Heather's remarks, it's going to cost a lot of money. How big is the gagillions of money?—I don’t even know how many zeros are behind gagillions; I made up that word—but it’s a big number.

That being said, if, if we tell people, and help them understand what it means for their life, that is part of the outcome, that is part of getting social permission on the bill. And it's, as Heather said, this isn't, this is no longer about your electricity bill is this; your natural gas bill is this; your fuel for your vehicle is this; your energy bill that has gone down, and it’s now, whatever. And so, affordability to me is not only about, we have so many things to spend on, and we have to make the investments, we have to pace the investments. We simply can’t do it all at once, in any event. But we also need to create the dialogue that is happening more broadly outside of the sector, so that we get the social permission, so that governments don't shy away from yes, the bill is going up, but we're good with it, because here's what it means for you, Ontarians.

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
And so, affordability, while a major issue, I too do not have that magic pill that says: here’s how we’ll solve it.

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
But a paced outcome, as well as knowledge sharing so that people understand the why, will get us far further. And I've said it previously, people would never have thought about the hundreds of dollars they now pay a month on a cell phone bill...

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
...ten years ago. But you show them value, and you show them the meaning in their life, and that’s where you get the social permission. Because you’ve created a lifestyle shift. We need to create the lifestyle shift.

The Hon. Lisa Raitt
But we still complain about our cell phone bills.

Indrani Butany
And yet we still pay it...

The Hon. Lisa Raitt
I know.

Indrani Butany
...and go in for more...

The Hon. Lisa Raitt
Yeah.

Indrani Butany
...and then call our providers, and sit on the phone for an hour-and-a-half—and while we gripe about it, we still pay the bills, and we still have those providers.

The Hon. Lisa Raitt
Yeah, indeed. But do governments have a role to play here, in terms of affordability? Not about, not about sending a check to the end user, but in terms of maybe mitigating the cost on the investment side. Do you think that governments are doing enough in the space that they’re in? Anyone?

Heather Ferguson
Well, I think it's fair to say, you know, at the federal level, we have seen some, some stepping up, there, which has been helpful, both in terms of the investment side of things—so whether it's the ITCs, or CIB, CGF, we've seen that. What we need to see is that brought to conclusion. Some things are still very much in the midst, on the ITC front, in particular. And then also, I mean, the other part of the affordability isn’t just the dollars in, but it’s how quickly you can actually execute your processes. And some commitments have been made around the regulatory processes, regulatory efficiency, Impact Assessment Act—getting that down to a manageable time frame will be so critical for the nuclear sector, in particular. So, how are we going to do that, is sort of—so we're, we’re partway there, they've stepped up, but we need to get that over the finish line. And industry needs to step up, to, to show how we can do that.

The Hon. Lisa Raitt
And Jennifer, Bruce Power actually has a partnership with, or has been funded by the federal government to do partnership with CNSC, to try to figure out how to streamline this, this kind of process bog-down.

Jennifer Edey
Yeah. So, I would say, from a new nuclear perspective on the Impact Assessment, we're, we're first out of the gate working with the IAC on this. And I, you know, there's a lot of commitment from the federal government, both financial commitment from Enercan, and also through the commitment to streamline the Impact Assessment Act. And I think we'll see how that works, but it’s definitely very challenging, because there are a lot of requirements to get there. So, you know, there’s a commitment to say, how can you do it in three years—but if you sort of walk through the process, there’s a, there's an awful lot that has to change for it even to be possible. And when you look at things like ITCs, again, ITCs, very, very progressive for us. However, there’s a 10-year duration on them, and if you look at the sort of 10 to 15 years that it takes to build a nuclear plant, then those ITCs expire, and don’t, don't become that useful, so.

The Hon. Lisa Raitt
Indrani?

Indrani Butany
I would say that it's interesting that there’s so much money available, and yet, so hard to access...

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
...at least for distribution. And obviously, I come to this—I, I applaud my peers in nuclear, that have had access to a chunk of the dollars. I'm excited at the prospects that our provincial government has set out with the Ontario Infrastructure Bank—I mean, that work is still under development, but there is a recognition that more money needs to flow into the system, more money needs to flow in in Ontario. And certainly, the OIB was set up for exactly that purpose—or at least, that's amongst one of the purposes for which it was set up. So, I'm excited at the prospect of being able to access that funding, because it’s clear that this can't be on the back of ratepayers. We’re not making investments that are tweaking along the fringe anymore; these are massive investments, and therefore, the dollars that need to be put into the system are significant. That being said, we have a, the government has other mechanisms that it currently uses, that make the electricity bill more affordable. When we consider a holistic approach to what people’s energy costs are going to be in totality, there’s an opportunity to take some of the subsidy—prospectively, to take some of that subsidy —and revisit it. Seven billion dollars, now, invested in the electricity system every year, which is great fortitude by our government, in terms of helping Ontarians with affordability. But I look—we are very proud to have worked with Minister Smith over the past several years, and we look forward to working with Minister Lecce, as well as the Assistant Minister—Associate Minister, excuse me, as Lesley referenced, in looking at these other opportunities. Because there are some, it's just a question of how do you access them, when, and, frankly, how quickly.

The Hon. Lisa Raitt
Yeah. How about you, Shelley?

Shelley Babin
Yeah. Maybe I'll, I'll speak to it from the perspective of the hydrogen sector, and that's one of the, the aspects of the sector that Atura is really committed to, and, and hoping to be able to unlock. And one of the real keys to that is going to be through these federal incentives. And they're, they're there, they're out there, they exist—but, as Heather said, it's sort of getting them to the finish line in a way that is understandable to the sector, that allows capital to come in in a meaningful way. And, and there are other policies and incentives out there, as well, that are really gonna support this, because hydrogen will offer decarbonization opportunities beyond just the electricity sector. But it really is going to take electricity, in order for us to get there, through hydrogen production. And so, I think that's an area where we need to see, you know, federal incentives and policies really coming together in a way that's going to allow us to move it forward more quickly.

The Hon. Lisa Raitt
So, in the great transition, not only do we need the investment dollars to do the building; we kind of have to have the people to build these things, too. So, who wants to chime in on what a great situation we're in right now, in terms of having skilled labour, and ability to do the building?

Jennifer Edey
Well, I could start on the...

Heather Ferguson
You go.

Jennifer Edey
...I'll, why don't I start on the positive side? Because I think there are a lot of, there's obviously a lot of future challenges—but I think on the, on the positive side, through the work that's happening right now through nuclear refurbishments, as we’ve established strong supply chains in Ontario, we've developed a skilled workforce; strong knowledge base. So, from that perspective, we're in a pretty good position to start looking at new generation.

Heather Ferguson
Yeah, I mean, same, same sort of idea. I think we're doing a good job at looking at the future of that. So, we've secured the supply chains, a, a good path on many of the technologies, lots of work is being done with colleges, universities, skilled trades—also starting much younger, building the pipeline, STEM careers for youth, and, and getting people attracted to all that. I think all of that is going. It's a little worrisome what are we going do between now and then. So, I mean, we're doing great on the refurbishments right now, we're doing great with what we kind of have now—but in the next five years, ten years, this is gonna grow exponentially, and we're not quite there with the colleges and the universities, or the younger.

So then you sort of say, well, where is your untapped labour market? Where can you find these people that you've not been able to attract? Because you're going to need them sooner than, than you might be able to produce them. And so, that's where you've gotta look at untapped markets for, I don't know—like, the Indigenous population is the fastest-growing population, so how can you attract more of them into the sector? What are we doing that is not attracting people to the sector that are ready to work and able to work now. I don’t know, have certain portions of the, the female population checked out, for various reasons? Are there folks that have left the sector, that we can re-attract? I don't have the answers. But these are the sort of creative things we're going to need to probably think about, in, you know, sort of the five-to-seven-year timeframe. And then beyond that, build it out with the, with the programs.

Jennifer Edey
And, and I would say, we're, we're, we work on it very hard, every single day. And on a small scale, like even if you think about the collaboration that we have in planning out all of these refurbishments between OPG, Bruce Power, and, and the IESO, the sequencing is going to be so important, because we all can’t build...

The Hon. Lisa Raitt
Yeah.

Jennifer Edey
...at the same time. Between transmission and generation, there just isn’t enough workforce. So, that has to all be factored in to the planning, and, and sequencing of, of how we're gonna build this out.

The Hon. Lisa Raitt
I don’t think it’s negative. I don't think, I don't—am I on?

Shelley Babin
There you go.

The Hon. Lisa Raitt
I don't think—actually, I could shout enough, so people can hear me, but—I don't think to acknowledge the big challenge we have in terms of skilled labour. Indrani, you were going to mention something?

Indrani Butany
I was going to say that it’s interesting because, several years ago, I would speak about energy, or I spoke about energy to my daughter who was—my daughter’s class, who was, she was, I think, 11 at the time; she's 17 now. Recently, I spoke to my son’s class, same grade level. And where my daughter's class was like, "Snore. Who is this woman? Thank God she brought swag," my son's class was, peppered me with questions, was interested—still thankful for the swag—but was absolutely dialled in to the energy transition, what electrification means, what it's going to mean for them. And so, I think part of it is, yes, tapping into existing sources of labour, I do think that we have to go as young as we possibly can, I really hope that your baby can hear us. Thank you for growing another human, other people, if you'd like to join in—kidding. But we need, we need as many people to understand what the sector means. And the difference between—and this is where I think, and I say this over and over again, at least in distribution, because we're terrible marketers...

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
...but we really do need to sell the sector. Sell it in terms of, this is a job or a career for the next 30 years. There is stability in your career, but there's also diversity...

The Hon. Lisa Raitt
Yeah.

Indrani Butany
...in your career, because there will so many things that we need to do. And they're not the same thing over the next 30 years. Like, this is not an end date of 2035. This is a—we talk about 2050; this is going to go well beyond 2050. So, I think, in terms of what should we be doing, we should be marketing, we should be selling the diversity of the jobs or the roles, we should be selling the opportunity to grow, as we grow and change. And not dissimilar from technology roles, where we say, you know, we don't know exactly what you're going to be doing in 5 years or 10 years, or if we tell you, "Yeah, it's a job in AI," we can tell you, you have a job in AI today, but we don't know what that looks like. Why aren't we saying that?

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
I know what your job looks like today, and maybe for the next three years, but do I know what your job looks like for the next five years? Here's your opportunity to help define your job, because you're helping define our sector, and you're helping our sector grow. And I think the last piece is, we see this great transition out of other skilled workforces like healthcare...

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
...why aren't we picking up those folks? They're smart people, they're committed, they're educated. We just need to help manage—"just," it's easy for me to say, sitting up here—we need to help manage that transition. So, I think the Indigenous partnerships, tapping into communities that we wouldn't have normally tapped into—or traditionally tapped into, as well as the other items that I've cited.

The Hon. Lisa Raitt
Yeah. And as a CEO, Shelley, this is something you think about?

Shelley Babin
Oh yeah, absolutely. And I think, I, Indrani, I like the way that you're positioning it, because this is such an exciting time to be in the sector. We have an incredibly enthusiastic workforce, who are great ambassadors for that sort of external-facing hiring, but also, retaining the really incredibly smart people that we have. And we are really, we are creative and innovative, in the way that we are attacking these problems of the day, and it is a lot of fun. And so, I think it, it just creates a lot of excitement and energy around what we're doing. And it, yes, it is about skilled trades, and about overlapping complex work programs. Scott and I were talking over lunch about it, it is also about project managers, it's about engineers, it's going to be about just about everybody that you can think of is going to be needed, to help us get where we need to go. So. Yeah, I think it's, we've gotta, we have to really run with this momentum that we are building and, and the excitement that people outside of the sector are starting to have for what we're doing.

The Hon. Lisa Raitt
Okay, two last topics, kind of on the same theme. First one is something you said, Indrani, which is AI.

Indrani Butany
M'hm (affirmative).

The Hon. Lisa Raitt
Who wants to tell us about the good stuff coming with AI, and how we're going to use it in the great transition/electrification?

Heather Ferguson
I'll start, and then I can stop talking after I tell you about the very little I know. It's, so AI, so you know, data centres or big AI, I, I mean, I think this is something that the province and the IESO are probably considering what, like what does that mean to the electricity system? What does that look like, these massive loads siting themselves, you know, what, you know, how do you manage that? And maybe there's opportunities they, you know, can provide some flexibility. Maybe they're a good way to help manage load. I don't, don't know for sure. But not all AI, I think, is created equal. I think there's some AI opportunities, data centres, opportunities with tech companies, where you can draw in broader economic development growth. So, you know, you're siting a data centre, or you know, what does that mean? Is there going to be adjacent co-locating of academic institutions, training—and it can be part of a, a, you know, a little hub, a little AI hub, and that could have great value to, to the municipality, to the province, and could be something that we're building out, in addition to just being a, part of the, you know, the system drain. But then, there are others that aren't like that. And so, it, it's something that I'm sure is going to require some further look at in very near term.

The Hon. Lisa Raitt
I betcha there's some folks in the room who would love to talk to you about that. I'm sure. Jennifer, how about you?

Jennifer Edey
I'll just switch gears a little bit...

The Hon. Lisa Raitt
Yeah.

Jennifer Edey
...like, away from data centre, because that's sort of on the, on the demand side. But if I think about AI in this sector, there's such an opportunity. We're so data-rich, and we don't know what to do with that data.

The Hon. Lisa Raitt
M'hm (affirmative).

Jennifer Edey
And all of a sudden, AI gives us the opportunity to start to leverage that data. By no means is this going to replace people, but it's going to change the way we work. And so, you think of it almost like an assistant, and all of a sudden, we have answers faster, and we have answers that are pulling in from more datasets than we ever could, could imagine. And with that, like the opportunity is, as we just talked about the labour shortage...

The Hon. Lisa Raitt
Yeah.

Jennifer Edey
...and all of a sudden, if you can start to do your work far more efficiently, you can do these projects with fewer people.

The Hon. Lisa Raitt
Yeah.

Jennifer Edey
And I don't mean less people than we have now. I mean...

The Hon. Lisa Raitt
Yeah.

Jennifer Edey
...that the challenge in the future to build out becomes smaller.

The Hon. Lisa Raitt
Yeah. Yeah. Indrani?

Indrani Butany
I would say that—and I was going to go the same bent, in terms of how you use, or can leverage AI. For years, we have—and if you cringe, or think I'm out to lunch, trust me when I say, so much of the work in this sector still happens on spreadsheets. It is cringe-worthy. But the ability to churn through data, and now, liberate people to use their brains to work smarter, not necessarily harder. And it's not that, it doesn't have to be that trade-off. But it also—again, if I take you back to marketing—it creates an entrepreneurial spirit of, hey, now I have all of this information; what does that tell me about my customers? What does that tell me about my siting? What does that tell me about the next data centre that's going to come in? It's an opportunity for us to get ahead of what's coming at us. Generally as a sector, we have been highly reactive, because we haven't had the tools, and we haven't been, we haven't had the ability to grind through the data. We actually haven't had access to the data; then we had the data, but we didn't have the, the capability to grind through the data. Now, we have the data, tools that we can use to leverage the data, that give us insight, that then allow us to be proactive. Which, when you're going through this massive transition, anything that you can do to get ahead will likely serve us better for the future.

The Hon. Lisa Raitt
Yeah. Shelley.

Shelley Babin
It's hard, it's hard to be last. So, I....

The Hon. Lisa Raitt
You'll go first next time.

Shelley Babin
Okay, great. But I guess maybe what I'll say is I think, in a lot of ways, we're already using AI. And so, we think of it as this big sort of panacea that's going to solve a lot of, of problems, that's gonna alleviate a lot of pinch points. I think in a lot of ways, as organizations—and certainly, at Atura, and I know at OPG—it's already built into a lot of the way that we get things done. And so, it's about how do we refine the way that we're using it, to really maximize it? How do we demystify it a little bit for our staff? How do we make sure that our employees don't feel afraid that this means that they aren't going to have a job? And, and really just sort of continue to integrate it into the way that we get things done.

The Hon. Lisa Raitt
And final question: As we go through the great transition, and we depend upon the grid far more for everything, we have to recognize that all four of you operate critical infrastructure in this country—serious, critical infrastructure. And you also have to recognize that geopolitically, we're in a different world these days. And oftentimes, you have a lot of outside actors, who would love to be able to come in and disrupt our critical infrastructure. So, how are you all thinking about that side of resilience and security, when it comes to the operations? And I'm going to start with you, Shelley.

Shelley Babin
Okay, sure. Great.

The Hon. Lisa Raitt
I know. Tough one last, I know. God love you.

Heather Ferguson
Thank God.

Indrani Butany
Good thing you got the easy question.

Shelley Babin
Yeah, exactly. No problem. Yeah. I mean, for sure, we operate critical assets. No question. There absolutely are critical things that we need to be thinking about, and that we are required to be thinking about from a regulatory perspective, to protect our assets from cyber threats, from other types of attacks. And those things are, are real, and we need to be constantly monitoring what's happening out in—not just what's happening in the sector, or what's happening within Canada, but what's happening all around the world. And, you know, OPG, in particular, has a very sophisticated CIO team, cyber team, that is managing these things. And as a subsidiary, we get to benefit from all of that, that important information. That helps us make decisions about, you know, how we want to make sure that—and we test these things too, right? So, how do you make sure that you've got the right systems in place, that your people understand the importance, that if there is an incident, that you know how to respond? So, we don't take any of that for granted. Absolutely. We understand the critical nature of our role.

The Hon. Lisa Raitt
Yeah.

Indrani Butany
What's the question again?

The Hon. Lisa Raitt
You operate a critical infrastructure...

Indrani Butany
Yeah.

The Hon. Lisa Raitt
...you are in a different geopolitical world right now...

Indrani Butany
Yeah.

The Hon. Lisa Raitt
...and you are probably more susceptible to incoming attempts of mischief—we'll put it that way, to be nice.

Indrani Butany
You know, it's interesting, because we, we certainly invest quite heavily in cyber security, cyber training, there is no end—like, it's a bottomless pit, in terms of how much you could invest...

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
...and you'd likely never, as a CEO, feel like you've done enough. What we're balancing, though, are the outside threats, as well as the inside threats.

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
So, yes, there are nefarious actors, absolutely. And when I look at our IT statistics, of number of emails in, number that are legitimate, like, it is staggering that it is three-or-four-times the, the illegitimate emails, versus ones that are actually real. But the greatest, the greatest threat, frankly, are our own employees. So, we are, we doubled down on education between phishing, and now, have you heard of "Quishing"? So, the QR code is now the latest attempt on phishing, so phishing, but with a Q—I didn't come up with the word. Anyway, quishing, so we're teaching our staff, so that when they see it, they think twice. We are teaching our younger staff to pick up the phone and make a phone call to double-check. It's sort of basic stuff. But it is so much about managing the humans. Because the nefarious actors, like, you, you can put up as many firewalls, you can [indiscernible]-test all you want. If they want to get in, ultimately, it's not a matter of whether or not they will, it's just a matter of when.

The Hon. Lisa Raitt
M'hm (affirmative).

Indrani Butany
But the piece that is far more manageable are the humans internal to your organization, and education, testing, and constantly doubling-down on the messaging is critical.

The Hon. Lisa Raitt
Yeah.

Jennifer Edey
Yeah, I'll just add that, you know, the electricity sector has been very good, from a resiliency perspective. If you go back 20 years, where we lost grid power in North America, it was the, it was the, actually the Bruce units that were able to stay at power, and black-start the rest of the system. So, we sort of take for granted that we have a fairly resilient system. But we talked about cyber, we talked about climate change. Lisa and I were talking about now, we hear about tornadoes every single week in Ontario—and tornadoes taking out a large transmission system is a real, is a real possibility. So, resiliency is a team sport. And so, when we look at critical infrastructure, we have to look at everything from distribution all the way to generation, because the expectation of the population is that when you turn the lights on, they turn on.

The Hon. Lisa Raitt
Yeah. Yeah.

Jennifer Edey
So, it's a big, big focus, not just within our, our generating assets, but across the, across the electricity sector.

The Hon. Lisa Raitt
For you to wrap it up, or you can answer a different question, if you like.

Heather Ferguson
No, I, I—well, I’m prone to doing that. I’ll just—I'm probably the last person in the world that should make any comments on cybersecurity. I mean, obviously, operating nuclear assets, operating an electricity fleet, really, really, important. The only thing that really resonates with me on this is we’ve now adopted, I don’t know, is it like a 20-digit sort of passcode to get into our emails every, like, to get your thing—like, I can barely remember—but that is how, you know, it's, it's the phrase, but then with the number, with an exclamation mark. And that’s every single time. Because we’re having to get smarter and smarter, and figure our ways around this. Because you’re right, Indrani, like it’s, the people are cracking this, it’s going to get through, it's going to keep coming. And on the phishing front, I mean, on a, practically a weekly basis, we discuss this—you know, and, and, you know, okay, who, who failed phishing this week? And all you do is hope it’s not your group, because then you’re just basically, you're getting ridiculed. And you're like, ugh, I don’t know what to do here. And so...

The Hon. Lisa Raitt
But it's a serious matter. So, in...

Heather Ferguson
Yeah.

The Hon. Lisa Raitt
...the great transition that we talked about today, how prepared, how optimistic are you, individually, as to how well we're going to do in Ontario? Shelley, I'm going to start with you—and it doesn't have to be a long answer...

Shelley Babin
Yeah, no, I'm...

The Hon. Lisa Raitt
...are you optimistic?

Shelley Babin
...totally optimistic.

The Hon. Lisa Raitt
Okay.

Shelley Babin
I think we can do it.

The Hon. Lisa Raitt
Indrani?

Indrani Butany
Love it. And I'm glad the Empire Club had, had us talking about it. It's...

The Hon. Lisa Raitt
Okay.

Indrani Butany
...wonderful.

The Hon. Lisa Raitt
Perfect. Jennifer?

Jennifer Edey
Yeah, echo that. I think the opportunity is enormous.

The Hon. Lisa Raitt
And Heather?

Heather Ferguson
Entirely optimistic...

The Hon. Lisa Raitt
Excellent.

Heather Ferguson
...and excited.

The Hon. Lisa Raitt
Five optimists up here on the panel. So, congratulations for that. Thank you, everybody, for your attention. Over to you, Sal.

Note of Appreciation and Concluding Remarks by Sal Rabbani
Thank you Lisa, Shelley, Indrani, Jennifer, and Heather, and thanks again to all our sponsors for their support, and everyone joining us today in person, or online. As a club of record, All Empire Club of Canada events are available to watch and listen to on demand on our website. A recording of this event will be available shortly, and everyone registered will receive an e-mail with the link.

Tomorrow, Thursday, June 13th, join us for "Building Ontario, the Province's Manufacturing Renaissance," with the Honourable Vic Fideli, the Minister of Economic Development, Job Creation, and Trade for the Government of Ontario, where he'll share his insights into how the province has been supporting the revival of Ontario's auto manufacturing sector. Save the date for September 18th, where we will welcome Eric Chassard, the incoming President and CEO of Bruce Power.

Thank you for your participation and support. Have a good afternoon. This meeting is now adjourned.