Mark Poweska, President & CEO, Hydro One in Conversation with Rocco Rossi, President & CEO, Ontario Chamber of Commerce

November 13, 2020

The Empire Club of Canada Presents

Mark Poweska, President & CEO, Hydro One in Conversation with Rocco Rossi, President & CEO, Ontario Chamber of Commerce

Chairman: Antoinette Tummillo, President, Board of Directors, Empire Club of Canada

Moderator
Rocco Rossi, President & CEO, Ontario Chamber of Commerce

Distinguished Guest Speakers
Mark Poweska, President and CEO, Hydro One
James Scongack, Executive Vice-President, Corporate Affairs & Operational Services, Bruce Power

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, Indira 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 Antoinette Tummillo, President, Board of Directors, Empire Club of Canada
Good afternoon, fellow directors, past presidents, members, and guests. Welcome to the 117th season of the Empire Club of Canada. My name is Antoinette Tummillo. I am the President of the Empire Club of Canada, and your host for today's virtual event, featuring Mark Poweska, President and CEO of Hydro One, in conversation with Rocco Rossi, President and CEO of the Ontario Chamber of Commerce.

Before we start, I want to take a moment to recognize our sponsors, who generously support the Empire Club and make these events possible. Our Lead Event Sponsor today is Bruce Power, and our Supporting Sponsors are LiUNA and Siemens Energy. Our Season Sponsors are the Canadian Bankers Association and Waste Connections Canada. I also want to thank our Event Partner VVC, and livemeeting.ca, for webcasting today's event.

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It is now my pleasure to call this virtual meeting to order. Hydro One is Ontario's largest electricity transmission and distribution service provider. It provides electricity across Ontario to nearly 1.4 million customers, across approximately 75 percent of the geographic area of the province. As Hydro One's CEO, Mark Poweska leads with a deep passion for employee and public safety, delivering on customer expectations, and improving operational performance. His vision, mission, and strategy for Hydro One is energizing life for the people and communities across Ontario. This new vision is a promise to listen to customers and communities, be their voice in the industry, and take action to meet their needs. In the face of COVID-19, the company continues to deliver on its strategy focusing on supporting customers, employees, communities, and economic recovery.

Now, let me introduce Mark Poweska. Mark is a mechanical engineer with experience at all levels of the electricity industry, from the front line to the executive team. Prior to joining Hydro One, Mark served as Executive Vice-President, Operation at BC Hydro, where he successfully led the merger of the former transmission and distribution organization of the generation organization. Mark is the Chair of the Board of Directors of the Ontario Energy Association, and serves on the board of the Canadian Electricity Association and Western Energy Institute. He was recognized by the Ontario Energy Association as Leader of the Year for 2020 for his leadership of Hydro One's transformation. Please welcome Mark Poweska.

Mark Powerska, President & CEO, Hydro One
Thank you for that kind introduction, Antoinette. It's a pleasure to be back at the Empire Club. I was here almost exactly one year ago today, and that was just days after releasing our Five-Year Strategy. And what a year it has been! I'm sure none of us expected having to adapt our businesses to working through this pandemic—can you hear me okay, Antoinette? Great. I'm sure none of us expected to have to adapt our businesses to working through this pandemic. It is great to be here with you today in this new way of operating. One year later, I can proudly say that Hydro One has undergone a transformative change. Today, I'll speak about how far we have come since last year, and why it has been so important for us to focus on our customers right here in Ontario. I will talk about how our strategy has helped us build a strong foundation to protect our employees, while keeping the lights on, and energizing the province through this pandemic.

As you may know, and Antoinette talked a bit about this, Hydro One is Ontario's largest electricity transmission and distribution company. We operate 98 percent of Ontario's transmission grid, providing power to 42 local distribution companies. Through our transmission business, we proudly serve 40 percent of the population of Canada, an energized industry, which produces 40 percent of the Canadian GDP. Our local distribution business is the largest in Ontario, serving 1.4 million residential and business customers. We directly serve 88 Indigenous communities and have transmission assets on 23 First Nations reserves. This is a great responsibility that we do not take lightly. Our history goes back more than 100 years, to the Hydroelectric Power Commission of Ontario. The Commission had a rich history that focused on expanding the grid to energize every community. Now, our service territory spans every corner of the province, serving large city centres, as well as communities situated at the end of long power lines.

By reflecting on our past, I see that our greater purpose of energizing life is crystal clear. I am very proud of what we have accomplished over the course of the last year. We renewed our strategy, our vision, and our mission, with a focus on energizing life for our customers and communities here in Ontario. With this new vision comes a promise to always listen to our customers and communities, to be their voice, and to take action to meet their needs. We have a diverse service territory in Ontario, and the needs of our customers are unique.

When I first joined Hydro One, I embarked on a tour across the province. I heard from employees, customers, and stakeholders about what they thought of Hydro One, and what they needed from us. Large industries and local utilities depend on us for a continued supply of reliable electricity. These customers need us to act as a trusted advisor and partner, to help them manage their energy use and cost. Residential customers want us to advocate for them, help them manage their electricity use, and meet their evolving expectations. All of our customers rely on us to run an efficient company, and to look to us for ways to drive costs out of the system. We're committed to putting ourselves in the shoes of our customers, to shape our interactions and to keep supporting their needs. And now, more than ever, people need our support. During this historic time, I believe we will all be evaluated for our commitment and contribution to helping customers, members of our teams, and communities.

Guided by our new strategy, we knew our role during the pandemic was to be there for our customers, to protect our employees, and to continue to energize the province. We are doing what we can to help those in need through our Pandemic Relief Fund, which offers financial assistance and flexibility to customers experiencing hardship. We've also made a promise to keep customers connected, by extending our ban on disconnections during the second wave of the pandemic. And we are providing critical aid, food, and supplies, in communities across Ontario—and, importantly, to the Indigenous communities we serve. None of this would have been possible without every teammate at Hydro One believing in our greater purpose of energizing life for people and communities across the province.

Standing up for our customers also means advocating on their behalf. In Ontario, time-of-use pricing has been mandated for more than a decade. Using energy during peak periods costs more per kilowatt-hour than in mid-and off-peak periods. We conducted research that showed us that 64 percent of electricity customers want the choice between time-of-use and tiered pricing. We advocated for this choice on behalf of our customers, and now, for the first time ever, Ontarians can choose their pricing plan. To date, about 25,000 customers have switched to a tiered pricing plan.

On a broader scale, I believe that this is just the beginning of the choice that will be available to customers, as this sector continues to evolve. As an industry, we need to meet our customers' growing expectations around choice and customization. Utilities need to transform themselves into a business that customers want to be a part of, because one day, they may have a different choice. And if they do, I want consumers to choose Hydro One.

Companies like Shopify and Amazon are setting the bar for what customers expect from businesses, the medical field has shifted to patient-centric care, and even the taxi system has been disrupted by rideshare companies like Uber, offering fast, easy, and convenient service. We understand that change can be complementary in meeting the needs and expectations of our customers. We will continue to work with our customers to better understand their evolving needs, and be their voice to ensure our power grid can support growing local economies. We are driven by a passionate, hard-working, and dedicated team, that understands the importance of connecting families, businesses, and communities. Our teams make it a priority to ensure power is there when our customers and communities need it. As an essential service, our teams are working diligently and safely, to ensure we continue to power families, businesses, communities, and the infrastructure needed to get through this pandemic.

Since the pandemic began, we have taken several steps to support essential services in our communities, by proactively patrolling lines that power hospitals and other critical infrastructure, and by prioritizing projects that enable our food supply, such as connecting greenhouse growers and energizing food banks. We're also building lasting relationships with government, Indigenous communities, and the sector, to advocate for more flexibility, partner on projects, and advocate for more efficient policies that benefit Ontarians.

Developing and maintaining respectful and positive relationships with Indigenous communities across the province is critical to the work we do at Hydro One, and our success. It builds a stronger business and a more connected Ontario. We have assets on Traditional Territories across the province. In the Niagara area, our Niagara Reinforcement Transmission Project had been halted for more than a decade. In 2018, Hydro One signed an equity-sharing agreement with Six Nations of the Grand River Development Corporation and Mississaugas of the Credit First Nation, which paved the way to complete the project. The First Nations communities invested $23 million to obtain a 45 percent joint interest in the partnership. The Six Nations of the Grand River Development Corporation and AECON formed a joint venture, A6N, to complete the construction of the line and the electrification of this line. Not only does this deliver economic value to the people of Ontario, but it also ensures that local First Nations communities continue to benefit for years to come.

For our efforts in furthering our relationship with Indigenous businesses, Hydro One was recently recognized by the Canadian Council for Aboriginal Business with Silver Level Certification in Progressive Aboriginal Relations. This is an advancement from our Bronze Level Certification in 2017, and we're working towards Gold Level Certification. Awards like these are incredibly important, because they track our progress, they help us improve our performance, with the goal of becoming a trusted partner with Indigenous communities. It signals that Hydro One is a good business partner, a great place to work, and committed to prosperity in Indigenous communities.

Last year, we spent more than $41 million with Indigenous businesses. And one of those businesses is Cancom Security. In 2017, we met Ronald Wells, the President and CEO of Cancom, at a procurement workshop in Ramah First Nations. We worked with Ronald to get him set up with our procurement system. A few months later, through a competitive process, Cancom Security was awarded a uniform security guard contract for a region of the province. Fast forward to 2020, Cancom Security has grown from 200 guard staff to more than 1200. Ronald Wells recently said to us that his relationship with Hydro One has given his business the credibility it needed to grow throughout Ontario. This is a made-in-Ontario business solution that injects valuable dollars right back into the communities that we live, work, and operate in. And this is just one example of how we can be a reliable partner and a trusted advisor for Indigenous customers and communities. And these efforts are making us a more sustainable company.

The events of 2020 have put a spotlight on the collective responsibility that governments, companies, and individuals share in building a more sustainable world. It has also demonstrated the importance of prioritizing the social elements of sustainability to remove racism and build an inclusive culture. By building a more inclusive and diverse team, we are able to promote different ideas, perspectives, and insights. And that's why we proudly signed the Black North Initiative's pledge to end anti-Black racism in our organizations and remain steadfast in our rejection of racism.

In a recent employee forum, I reflected that we are a good company, and we do good things. We are a company of smart people, and smart teams, working together, can do good things; diverse teams, working together, can do great things. And for us to be a great company, we must be a diverse company. While much more remains in advancing diversity and inclusion at all levels of our company, we recognize that we are better off when our workforce can reflect the communities we represent across the province.

And our communities are feeling the effect of the pandemic. Many businesses are shutting down, and we are here to support them during this difficult time. We have an important role to play in restarting the economy, and we will be there for our customers every step of the way. The viability of businesses is a major concern, and we are doing our part to help them manage their energy use and costs. To help businesses with cash flow, we returned $5 million in security deposits to 4,000 business customers. To lessen the impact of a recession, we need a made-in-Ontario solution to grow the economy. We're the company delivering the power that drives Ontario's economy.

To fuel growth, power needs to be available to energize new businesses. Growing the economy also has a positive impact on rates. Like many parts of the system, the cost of the transmission and distribution system are fixed. And the more people we have connected to the system means we're spreading those costs across a broader base. Investing to attract and retain business is actually the most cost-effective way in controlling system costs. We've been working to support load growth and connect more customers to drive down costs. Right now, we're proud to be one of many players assisting the province to rebuild the economy, through infrastructure investments, and by buying local goods and services.

We are in the midst of completing hundreds of millions of dollars of system renewal investments in Hydro One's infrastructure around the Bruce Power Complex to support a safe and reliable electricity system. We have worked together to ensure that both Hydro One and Bruce Power projects are coordinated and optimized to meet the needs of the generation assets, and the transmission network, to move the power to where it is needed. Together, we are providing reliable, carbon-free power to families and businesses across the province.

In 2019, Hydro One invested approximately $1.7 billion in its transmission and distribution networks, and supported the economy, through buying approximately $1.5 billion in goods and services. We are dedicated to increasing our spending with Ontario-based suppliers, as those investments can continue to provide spin-off benefits to communities across the province. There are great things happening in this province. An example is in Barrie, SAE Inc. is producing an innovative and proprietary wood pole grounding solution. Hydro One was the first utility to approve and implement this design, and other utilities have started to use the solution. Not only is this a made-in-Ontario business, but it's also a solution that decreases our installation time and has lower material costs.

On a larger scale, we are investing in infrastructure so our growing industries in the province can continue to expand. We heard from local government and business leaders in the Chatham-Essex Region that more power was needed to support the growing greenhouse industry in that area. We worked collaboratively with the system planners at the IESO and local community leaders to understand exactly when and where the power is needed. We advocated for a new transmission line to Chatham to Lakeshore, to provide 400 additional megawatts of power, and are now working to complete this major investment. As a result, we are supporting a $1.5 billion industry, and 10,000 jobs in the region.

We are also making foundational investments that will modernize the distribution grid and allow us to leverage the benefits of new technology. The generation profile in the province continues to move away from large base load generation, and the grid needs to be ready to adapt to accommodate a diverse range of distributed energy resources, from batteries to small modular reactors. We are working with Siemens to install a battery large enough to power Aroland First Nations in Northern Ontario. We have to think with the art of the possible, and move beyond our traditional models, particularly when it comes to renewing end-of-life assets. We have to be prepared to accommodate new technology to meet customers' demand, like electric vehicles.

We've partnered with Ontario Power Generation to build the province's largest and most connected electric vehicle fast-charging network, with 73 locations across Ontario that will be on average less than 100 kilometres apart. The EV charging network uses new technology and service offerings to meet our customers' evolving needs, and it will enable travel across the province, from Manitoba to Ontario, on an interconnected charging system. While the demand for electric vehicles is slowly growing, we need to make the investments in tandem with renewing our aging system, so we can meet the demand as it grows. But we need to be cautious and invest at a pace that meets our customers' expectations and at a pace that customers can afford. It is imperative that customers' needs and preferences are at the forefront of investment planning, not an afterthought.

And as we look to the future, we need to continue to meet the changing needs of our customers. That is why we have renewed our strategy, and the industry and the market have shown they agree with our approach. Through building better relationships with our customers, communities, and stakeholders, we have brought back more than seven billion dollars of value to the company and our shareholders. Our share price speaks for itself—from a low of eighteen dollars a few years ago to a high of thirty dollars earlier this week, that result is indicative of the transformative change that this company has undertaken.

We are a new company, propelled by our deep commitment to our customers. Every one of our 8,800 teammates are aligned under a shared mission and a greater purpose of energizing life. Our transformation is being felt by our customers in every interaction that we have with them. Through the execution of our strategy, we will become the safest and most efficient utility, doing our part in keeping electricity affordable. We are now a company more focused than ever on innovation and the future. We are focused on investing in a sustainable system, and a strong economy right here in Ontario. Thank you for inviting me here today, and I look forward to continuing this discussion with Rocco and answering your questions. Thank you.

Antoinette Tummillo
Thank you, Mark. I would like to now introduce Rocco Rossi. Rocco is a successful entrepreneur and business executive, champion fundraiser, and dedicated public servant. Prior to joining the Ontario Chamber of Commerce in 2018 as President and CEO, Rocco was President and CEO of Prostate Cancer Canada, and earlier, was the CEO of the Heart and Stroke Foundation. His passion for public policy has led him to stand for election, both for the position of Mayor of Toronto, and for MPP. Rocco has also held senior positions at the Boston Consulting Group, Torstar, Labatt, Interbrew, and MGI Software. He currently serves as a member of the board and audit committee of TerraVest Industries and is a past board member of the United Way of Greater Toronto and Other Charities. In 2012, Rocco was awarded the Queen's Jubilee Medal for his philanthropic and community service.

Now, before I hand over the reins to Rocco, I just want to remind everyone on this call that this is an interactive event. So, if you have any questions, please send them in, and we reserve some time at the end for Mark to answer some questions. So, over to you, Rocco.

Rocco Rossi, President & CEO, Ontario Chamber of Commerce
Grazie, Antoinette. You—I also am very proud to be a former director of the Empire Club, so it's great to be home, and great to be here. Despite the fact that it's Friday the 13th, it is also International Friendship Day. And full disclosure, Mark and Hydro One are members and long-time friends of the Ontario Chamber of Commerce. That's not going to stop me from asking the tough questions. But I wanted people to know that. And you also heard in Mark's commentary how important the relationships are with First Nations, with our Indigenous partners. And so, while we gather in cyberspace, it's important to acknowledge that each of us, physically, is likely gathering on Traditional Territories of various First Nations. And so, out of friendship, we also honour their stewardship from time immemorial of these lands.

Mark, as you pointed out, you were here a little over a year ago announcing your strategy. And as that great American philosopher and boxer Mike Tyson once said, "Everybody's got a strategy until they get punched in the mouth." And suddenly, a couple of months later, here comes COVID. So, how has Hydro One been managing the downturn and the impact of COVID?

Mark Powerska
Yeah, great question. And I do believe our strategy and our Ontario focus has really helped us through that, Rocco. As I talked about in my presentation, really through COVID, we've had two priorities we've focused on—one being protecting our employees, and the second, keeping the lights on in Ontario. And that's really required us to adapt, as COVID has come on. During the early days, obviously, just like everybody else, we had to really change the way we were working. But we quickly adapted, actually, and figured out how to protect our employees, and get them back to work, and really to focus on our capital investments to keep the grid safe and reliable.

And we're fortunate, obviously, as a utility, being a critical service. And, you know, we have the ability to continue working. We recognize that not every business was that fortunate. So, we really do view our role as helping others through this. And we view our role through the investments we're making in the system to support other businesses in the province, and communities. And like I said, about 1.2 to 1.5 billion dollars in goods and services, and over 8,800 direct jobs with Hydro One. And a lot of that goes right back into the communities—and particularly the remote rural communities, because that's where most of our operations are. so, I do think we are very fortunate as a company that we were able to work through this. And I do take our role seriously on how we can support others through this.

Rocco Rossi
Well, I want to follow up on that theme, because quite clearly, small businesses in particular across Ontario have been hit very hard. They're the backbone of our Main Streets and our communities, and they've been struggling. Many of them had to close and are facing other restrictions now with the second wave. Power costs are a big part of their structure. So, what are you doing currently, and what do you see going forward in assisting this critical part of our economy?

Mark Powerska
Yeah, you're right, you know, I think businesses, particularly small businesses, have been hit particularly hard by COVID. And so, early on, we made the decision that we would return security deposits that we have with businesses. So, we returned about five million dollars in security deposits to our business customers, about four thousand of them, recognizing that cash flow is a big thing for small businesses, particularly in this. We've also extended our disconnection ban. Obviously, you know, we don't want to disconnect anybody through this time, it's not fair to them. And so, the government came out and—or the OEB did with their disconnection ban. But when that expired, we just extended ours on, because we don't think it's fair to look to disconnecting customers at a time that they need us most. And, you know, the recent moves by the government, actually, in their budget last week to help support commercial and industrial customers has been really helpful for our customers. And for those of you who weren't following that part of the budget that closely, the government actually took some of the costs of the global adjustment led really by the premise that policy decisions to move to renewables in this province should be borne by the taxpayer, not the ratepayer.

But what that resulted in, Rocco, is the cost for electricity in Ontario for commercial and industrial customers is now below the US average. And for industrials at eight cents a kilowatt-hour, that's 10 percent below the US average. And I really think that's going to help to make Ontario competitive on a North American scale. And as I talked about in my speech, the best way to help with rates overall and bring electricity rates down is to have more people connected to spread those fixed costs across. So, I think it was a good move by the government to stimulate the economy as well as it'll have a long-term impact of helping lower rates overall.

Rocco Rossi
Our members were watching that very closely, indeed, and quite delighted, and want to see more investment in Ontario. So, as you say, we covered the fixed cost base by having greater demand, done, obviously, in a sound and efficient way. Look, it's great to have strategy and vision and culture at the top, but of course, nothing really happens unless it's embraced by the employees and all of the team there at Hydro One. How have they embraced the vision, the strategy, as set out by you and the board?

Mark Powerska
That's a great question. You're right, you know, you have the greatest strategy in the world. If you don't have the culture, and the support of your organization and your employees, your strategy won't go anywhere. So, I've really been fortunate since I came into Hydro One about a year-and-a-half ago. When I first came in, I made it a priority for me to get out and talk to industry partners, to customers, but also with our, with our employees. That was before finalizing the new direction for the company. So, you know, I heard back from our employees. And really what I heard from them, Rocco, was that our employees are proud of Hydro One. They're proud to work for Hydro One. But they were looking for a common vision for pulling us together and getting the troops going in the same direction. And, you know, when we play back to them what we see is our greater purpose, which is energizing life here in Ontario, they really liked that, and it resonated with our employees. And it gave us a purpose to match that pride that people have in the company. So, I really do feel that the employees of Hydro One are behind us, and it's in our new vision, and our mission, and our strategy for the company. And they are out in the community, so they are our face out there. So, it's really important that they understand it, but they're also supportive of it. And I feel that we have that support of our employees.

Rocco Rossi
It's also very important to you, and to Hydro One, that when you talk about energizing life, that doesn't mean just energizing the GTA or Southwestern Ontario. That's looking at inclusive, broad, shared economic development across Ontario and all its regions. And I know we at the Chamber have been working with you quite closely on a lot of projects, with respect to regional economic development. You do it through your purchasing and your capital expenditure. Why is it important to Hydro One, and what can we see going forward, in terms of regional economic development?

Mark Powerska
Yeah, it's a great point, Rocco. So, through our transmission business, because we're 98 percent of the transmission, we do supply the entire province at the transmission level. But our distribution company is, really ,a rural distribution company. We don't have the major headquarters like Ottawa and Toronto, and the areas around that. So, we really are a regional distribution ,rural distribution company. So, we have been working, as you said, with the local chambers to help us really connect with those businesses in the regions, understand what their needs are, and sharing our plans for investment and growth in the region, so that they're able to take advantage of and participate in those investments.

We're also currently doing some market surveying with our customers across the province to really understand what the needs are of our customers. And this is really in preparation of our long-term investment plan. And what we're hearing from our customers is that they're supportive of investments in the grid. They really look to us to ensure that we're looking after the assets for their children and grandchildren, really, and making sure that we have a safe, reliable system across this province. And what we're hearing back from them ,as well ,is they want to see us investing in innovation, and look to new technologies on, on carrying our business forward, which really one helps manage the cost, but also, people are looking for choices and options, and they're looking for more information about the electricity. They're not looking to just flip the switch on anymore, and know the lights are going to come on. They actually want to understand what's going on. They want to be able to manage and control it. And we need to provide them with those technologies to help them with that.

Rocco Rossi
Well, let's follow up on this theme of innovation. A lot of questions in that area. Despite being a regulated industry, you're seeing the growth, the very rapid growth of decentralized and intermittent energy resources, so-called DERs. How is Hydro One positioning itself to manage that innovation ,and ensure that it's going to be to the benefit of Ontarians?

Mark Powerska
Yeah, grids all over the place are changing, and every jurisdiction has a different driver, and a different need, and it looks different. And I think we've got a great story to tell, here. We are investing in grid modernization, and Hydro One in innovation and new energy solutions, we're partnering with governments ,and providing new options for customers through, really through choice and flexibility. So, an example of adopting some technologies is the Aroland First Nations, which I talked about. They're on the end of a long radio line ,and experience highly number of outages ,because it's remote, and rural ,and they have one line going there. So, every time there's a storm, that line goes down. So, by investing in a battery technology at the end, it buys us the time to restore the distribution line, without the customers experiencing any outage. We are, in Ontario, actually somewhat unique to other jurisdictions in North America. And I've worked a lot on the West Coast ,with my previous employer and involved with the Western Energy Institute. So, I'm well aware of the things that are going on in California ,and other places, where there's different types of technologies being deployed to meet the needs of those states or provinces.

And why we're unique here, is because of the shift that this province made to renewables several years ago. It came with a cost. But we're in the position now where 94 percent is non-carbon emitting. If you look just south of the border, the US, over 68 percent of their electricity supply still comes from fossil fuels. And every state, and every jurisdiction ,is looking to transition off those fossil fuels. And what they're looking, a part of that solution, they're looking for distributed energy resources to do that, to really get them off the fossil fuels. For us, we've done it.

So, distributed energy resources and technology in Ontario has to really serve multiple uses in this province, not just to replace fossil fuels. And it has to improve the reliability of the grid, it has to provide voltage support, and it needs to store the excess renewable power that we have, like wind and solar, when it's not being consumed, so that it can be used at different times of the day or night. So, we're partnering with companies like Siemens, like NrStor, to really install the DERs where they make sense, and where they can help support the grid ,as well as provide these other services. So, I think in Ontario, particularly, it requires a coordinated effort between the utilities, the OEB, the IESO, and the suppliers of these distributed energy resources.

QUESTION & ANSWER

Rocco Rossi
Just want to get a little further into that, because we've got a question from Bill. You know, you make the point about storage batteries as something to protect about ,around lines going down. But you also mentioned it's important to think about that, to be able to store the energy that the renewable resources, that the wind, that the solar, would do during the day, for maybe when the times when you need it, particularly to get rid of those stories that drive that everyone insane about us, you know, selling our power, giving it away, for less than it costs to US states. Where do you see us moving, you know, in the next five years ,on storage and on these others to make ourselves a more efficient energy producer and grid?

Mark Powerska
Yeah, the more you have intermittent renewables, the more you need a storage solution to go along with them, to maximize the value of those renewables. And we in the province built out not, not Hydro One in particular, but the province built out a lot of wind and solar intermittent. And luckily, we do have storage in the way of reservoirs in the province, which are the biggest batteries you can have, quite frankly. But there is a need for more storage to help capture that intermittent renewables, so that when it's windy but the loads aren't there, you can capture that power and use it, as, as you pointed out. There's a lot of take or pay contracts for that renewable here, so there is a lot of it being wasted, quite frankly. And so, there's an opportunity to deploy battery technologies to help capture some of that, so it can be used at a later time.

Rocco Rossi
My dad constantly reminds me that it's really easy to be a leader in good times, but it's in tough times, it's in times of adversity that we earn our title, and we earn our pay. What are some of the lessons that you've been learning leading a major organization in this time of COVID? What are some of the changes that you see that were accelerations of things that you wanted to get to anyway so it's a good thing? And what are the things that are likely to change and to be dropped, when we get to the other side of this?

Mark Powerska
Yeah, I'll tell you, Rocco, when we released our strategy about a year ago, there was no way I had in my strategy that, hey, we're going to manage through a major pandemic, and the economy is going to be devastated, and people are going to be hurting. That wasn't included in the playbook. So, so you're right. It's definitely been an interesting time for everybody. We, when it really broke last March, when we realized that this pandemic is serious, and it's going to have serious health consequences, we, we took the move right away to send people home. And so, all our office workers are working from home, and have been since then. It's funny ,because we've been talking about remote work and flexible work for years, and the industry has, and everything else, and there's all kinds of excuses why that couldn't happen ,with firewalls, and technology, and all that kind of stuff. Within a few days, we had 3,500 people gone home and deployed with technology, with cyber protections and everything on it, and working, and back up and running. And so, you know what? It was amazing kind of a feat by our IT organization to enable that to happen, and we've been working that way since then.

We did stand down our crews for a short amount of time, but recognizing we're an essential service and, you know, you can't repair power lines from home, we knew we had to get our workers back out there and working. So, we put the proper protections in place. And I was really proud of the employees of Hydro One, because we didn't have the answers. Like, we've got substations that don't have wash facilities, and all the basic things you need to manage the spread of COVID. And we put all the challenges to our employees. And it was amazing, the innovations that came up. People were designing propane-powered wash stations with water and pumps that they did on the weekend, and they'd bring it in, and then we'd adopt that across the system. You really see the metal of your employees during tough times, and our employees really stepped up to the plate during this.

From an operations perspective, we had to dispatch our employees from home. We couldn't gather in a central location to dispatch our employees, obviously. So, we actually deployed new technology, and we're dispatching crews from home using iPads, and things like that, so they know where to go. And we're also using drones for inspections of power lines and leveraging that technology. So, you know, with tough times comes innovation, and I'm really proud of the things that our organization, our employees, have really come up with to help us manage through this. And to date, we've only had one case of suspected transmission in the workplace, even though we've had over 5,000 employees on the front lines working, essentially ,since the beginning of this. So, I'm really proud of the organization for that.

Rocco Rossi
You can feel that pride, and that's a very wonderful power. You've got a question from Carl, who said he recently got a survey from Hydro One that asked how, "What would you prefer: lower rates but increased outages, or higher rates that can be invested into more infrastructure?" Wanted to know, what had happened with the results of that survey?

Mark Powerska
Yeah, that's a great question. So, as you know, we're a regulated utility, so we have to get approval for investments from the Ontario Energy Board. And part of that process, as we're leading up to our next, what we call our rate application, where we go in front of the OEB to demonstrate to them what the investments we need to make in our system and why. Part of that is for us to reach out to our customers and understand what our customers' needs are, and what they value, and what they think is important. And we also test on their appetite for different levels of spend. So, we lay out different options: we can spend less, here's what the impacts on the system and reliability are, or we can spend a little bit more, and here's what it is, and here's what it would cost you.

And so, what we're doing with that information now, is we're going back to our investment plans that we've had. And these are five-to-seven-year investment plans. And we're taking that feedback from our customers, and we're building that into those investment plans, that we will then bring forward to the Ontario Energy Board for approval of those investment plans. And that's, really, the work that we are doing right now. And that survey is to prepare us for what we call our joint rate application for transmission and distribution, which we'll bring forward to the OEB late next year. And so, we'll take that feedback, we'll adjust our investment plans, we'll put it together, and we'll bring it forward to the OEB and seek their approval for making those investments.

Rocco Rossi
You mentioned the evolution, in terms of the work-from-home, and all of the objections that were there before, and the reality of your employees stepping up to the plate now. Going forward, is that going to likely have an impact on your real estate footprint?

Mark Powerska
Yeah, we're doing an overall real estate review, and we were doing that, quite frankly, before COVID. And we're looking at what is the right layout for us, and is there an opportunity to consolidate some of our regional offices. And like I said, we were doing that before COVID. We'll look at our experience, here, with people working from home, and whether that plays into that strategy overall.

We also surveyed all our employees just recently, and asked them about their experiences working from home, what was working, what wasn't working, and how we can do things differently, in light of looking down the line on what the workforce of the future looks like, and how can we provide flexibility for people to better balance their work-life balance. So, we'll use this as a learning as we go forward on our real estate strategy, as well as on our view on what does the worker of the future look like.

Rocco Rossi
We could go on, and lots more questions, but we're up against time. What a great pleasure and privilege. Thank you, Mark, and back to Antoinette.

Antoinette Tummillo
Thank you, Rocco. I'll say grazie, Rocco.

Rocco Rossi
Graziare.

Antoinette Tummillo
I'd like to now introduce James Scongack, Executive Vice-President, Corporate Affairs and Operational Services from Bruce Power, to provide the appreciation remarks. And they do it in a very cool way. So, here you go.

Note of Appreciation by James Scongack, Executive Vice-President, Corporate Affairs & Operational Services, Bruce Power
I want to thank the Empire Club on behalf of the employees here at Bruce Power for the opportunity to not only support Mark's presentation today, but to be a partner with the Empire Club. You know, the Empire Club has a long and distinguished reputation of being a convening body for so many really important conversations. You know, Hydro One is part of all of our lives every single day. We often take for granted the fact that here in Ontario, with a high degree of reliability, we transmit and distribute clean and reliable sources of electricity that are generated from all across the province of Ontario. And it's often in some of the most challenging times, around ice storms, and other serious natural events, that we are reminded of how important electricity is in our everyday lives. And Mark and his team at Hydro One, they do a fantastic job of safely and reliably delivering that role, every single day.

Mark, on behalf of the employees here at Bruce Power, and frankly as an Ontarian, I want to thank you and the employees at Hydro One for the work that you do. As a generator of over 30 percent of Ontario's electricity, we're proud to partner with Hydro One on many initiatives. We stand alongside you to continue to build a more modern, clean, and sustainable electricity system here in Ontario. Like your organization, our organization continues to be committed to doing that in the most cost-effective way possible. Also, looking ahead as we move out of the pandemic, part of our solution to economic recovery in Ontario is going to be a more sustainable economy, further decarbonization, and investment in infrastructure.

Mark, I really appreciate what you've been able to share with people today because Hydro One, along with others in the electricity sector, including Bruce Power, Ontario Power Generation, and others, are making investments in Ontario's electricity system not only provide that important service to our homes, schools, businesses, and hospitals, but they're also crucial to our economic recovery, employing Ontarians from all across Ontario. So, I want to thank you and the individuals at Hydro One for all of the work you do, and for sharing your remarks with us today.

I also want to thank Rocco Rossi, who represents the business community here in Ontario. I always call Rocco Rossi the Energizer Bunny. There's no policy file that he is not on top of, that he is not advocating for. He is not only a tremendous partner to our electricity sector in Ontario, but he's also a tremendous advocate for our business community in Ontario. He advocates for low-cost, reliable electricity, he advocates for sustainable development, and he also advocates for businesses of all sizes, whether it's larger businesses struggling with supply chains and major disruptions given COVID-19, to the small businesses that are the heart of many of our small communities. And speaking from here in rural Ontario, I want to thank Rocco for his leadership of businesses of all sizes here in Ontario.

Both of you, Mark and Rocco, in addition to sharing with us your remarks today, you play an absolutely important role in the future of Ontario. I'm proud to be one of your colleagues, and I know the employees who work with you, whether it's at the Ontario Chamber of Commerce in the case of Rocco, or the folks at Hydro One with you, Mark, are all proud to work for leaders who have that dedication and that commitment to seeing a stronger and better Ontario. Thanks very much for your time today, and I wish everybody a safe and productive day.

Concluding Remarks by Antoinette Tummillo
Now, that was very cool, wasn't it? I don't know if I can add much more to James' comments. You covered a wide breadth here. I thought it was just going to be about Hydro One and what you're doing, but you've covered diversity, sustainability, how important the customer is, what you're doing with the Indigenous communities, and real estate—my passion in life. What are you going to do, what's going to happen to your footprint? Thank you both. It was a very engaging conversation. I'm sure everybody enjoyed it.

I want to take a moment to share some of our upcoming events. We've got Dr. Tedros coming to speak to us—and this whole platform is allowing us to do amazing things—he's the Director-General of the World Health Organization, so I'm sure we're all going to want to hear what he's got to say on November 17th. On November 19th, we've got Minister Sarkaria, which fits in well with some of the things you've been talking about today. He's the Ontario Associate Minister of Small Business—and I love his title—and Red Tape Reduction. And on November 20th, we've got Blake Hutcheson, President and CEO of OMERS. And we also have our signature Nation Builder Award coming up on December 10th, and this year, the award is going to frontline workers. So, I hope you plan on joining us. We have a great event planned with VIP celebrities. I encourage you all to take the time to submit a testimonial for a frontline worker at #NationBuilderHero of your choice. This can be you, if you're a frontline worker, or someone you know. Submit by November 25th to have a chance to win five thousand dollars. Registration for all these events is free, so I hope to see you at our live virtual events. This meeting is now adjourned. Thank you.