How Risk And Risk Management Is Evolving At Hydro One
How Risk and Risk Management is Evolving at Hydro One
John R.S. Fraser
Senior Vice President, Internal Audit & Chief Risk Officer
Hydro One Networks Inc.
For the Mearie Group Risk Management Conference
June 24, 2011
Summary of Presentation
1.
Hydro One Background (1 – 2)
2.
ERM Concepts and Clarifications (3 - 5)
3.
Policy and Framework (6)
4.
Risk Criteria (Tolerances) (7 – 10)
5.
Corporate Risk Profile (11 – 15)
6.
Risk Workshops (16 – 21)
7.
Business Planning (22 – 25)
8.
Conclusion (26 – 30)
Background on Hydro One
• Ontario’s primary electricity
transmission & distribution company
• One of the largest Tx companies in
N.A.
• $15.8 B of assets
• $4.7 B of annual revenue
• $1.5 B annual capital and maintenance
spend
• 5,400 employees
Background on Hydro One
1
The Changing Electricity Marketplace in 2000
• Unprecedented change within the industry (Re-regulation, Commercialization,
Reorganizations)
• Ontario Hydro broken up in April 1999
• Commercial Board of Directors appointed
• Asset Management Model introduced
• Retirement of 20% of workforce in 2000
• Purchased 88 municipal electric utilities in 2000
• For 2002, an IPO and Market Opening (unbundled bills)
Background on Hydro One
2a
History of ERM at Hydro One
• Previous attempts that did not engage
• Organizational realignment with CFO led to rethink
• Can the Head of Audit be the CRO?
• January 2000 - New Beginnings
• 2000 – 2003: Full Steam Ahead
• 2004 – Present: Sustainment
• 2011 - Regeneration
Background on Hydro One
2b
Is there a need in your organization ?
•
Amount of change in the organization and/or industry
•
Amount of change in senior management
•
Appetite for:
– governance (actual and optics)
– clarity of decision making
ERM Concepts and Clarifications
3
Notice - What our ERM is not about
• Sarbanes Oxley
• Compliance
• Audits
• Regulations
• Performance Measurement
• Credit, market or operational risk in isolation
Note - The world does not need more
John R.S. Fraser
Senior Vice President, Internal Audit & Chief Risk Officer
Hydro One Networks Inc.
For the Mearie Group Risk Management Conference
June 24, 2011
Summary of Presentation
1.
Hydro One Background (1 – 2)
2.
ERM Concepts and Clarifications (3 - 5)
3.
Policy and Framework (6)
4.
Risk Criteria (Tolerances) (7 – 10)
5.
Corporate Risk Profile (11 – 15)
6.
Risk Workshops (16 – 21)
7.
Business Planning (22 – 25)
8.
Conclusion (26 – 30)
Background on Hydro One
• Ontario’s primary electricity
transmission & distribution company
• One of the largest Tx companies in
N.A.
• $15.8 B of assets
• $4.7 B of annual revenue
• $1.5 B annual capital and maintenance
spend
• 5,400 employees
Background on Hydro One
1
The Changing Electricity Marketplace in 2000
• Unprecedented change within the industry (Re-regulation, Commercialization,
Reorganizations)
• Ontario Hydro broken up in April 1999
• Commercial Board of Directors appointed
• Asset Management Model introduced
• Retirement of 20% of workforce in 2000
• Purchased 88 municipal electric utilities in 2000
• For 2002, an IPO and Market Opening (unbundled bills)
Background on Hydro One
2a
History of ERM at Hydro One
• Previous attempts that did not engage
• Organizational realignment with CFO led to rethink
• Can the Head of Audit be the CRO?
• January 2000 - New Beginnings
• 2000 – 2003: Full Steam Ahead
• 2004 – Present: Sustainment
• 2011 - Regeneration
Background on Hydro One
2b
Is there a need in your organization ?
•
Amount of change in the organization and/or industry
•
Amount of change in senior management
•
Appetite for:
– governance (actual and optics)
– clarity of decision making
ERM Concepts and Clarifications
3
Notice - What our ERM is not about
• Sarbanes Oxley
• Compliance
• Audits
• Regulations
• Performance Measurement
• Credit, market or operational risk in isolation
Note - The world does not need more