Enterprise Risk Management at Hydro One

Hydro One (A) was re-established from former Ontario Hydro who generated electric power and had previously been in business supplying it to several utilities in the Niagara Falls regions in 1998 (Mikes, page 1). Hydro one held 5 coal-fried, 68 hydro-electronic and 5 unclear power stations, and reached power generation and transmission capacity to 30,000 megawatts. Eventually Hydro one supplied electricity to out side of regions and even other countries (Mikes, page 1). In 1906, Ontario Hydro was founded and formed an organization that contained multiple electric divisions until the Ontario government deregulated the province’s electric power industry in 1998. Therefore, Ontario Hydro was forced to reconstruct into Hydro One and the other organizations (Mikes, page 1). The Hydro One management team shifted a strategy focusing on “ consumer-focused service” attitude contained cost cutting, enterprise risk management, performance management, and strategic planning (Mikes, page 2). As a result of new “customer –focused service” strategy, Hydro one acquired customer satisfaction from 42% in 2002 to 86% in 2006 (Mikes, page 3). Additionally, the company’s maintenance team was awarded for providing quick urgent services during severe weather (Mikes, page 3). Chief Executive Laura Formusa was committed to progress to the best safety record in the world and become one of the best transmission and distribution business in the North America (Mikes, page 3). However, transforming to “customer- focus” service attitudes caused some issues that included “ reputational risk” to the company. Their operating costs continued to be high, 18-weeks strikes, and lost essential expertise due to former CEO’s reduction plans. Formusa desired to be in the top quartile for the transmission and distribution reliability for which she developed customer satisfaction rank overall, and top quartile employee productivity, operating efficiency, and an “A” credit rating (Mikes, page 3).

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