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CEO apologizes for B.C. Hydro's misleading testimony

B.C. Hydro CEO Jessica McDonald said Monday she is sorry her Crown power agency gave inaccurate testimony to the B.C. Utilities Commission in 2008 about the software it had chosen for a technology project.

B.C. Hydro is apologizing to the province’s independent power regulator for misleading testimony it provided on a multi-million-dollar computer

Hydro CEO Jessica McDonald said Monday she is sorry her Crown power agency gave inaccurate testimony to the B.C. Utilities Commission in 2008 about the software it had chosen for a technology project. It also failed to produce an IT planning document the commission had requested, and then did not correct the record from its mistakes, she said.

“We did not provide the best possible document in response to the commission’s request for our IT plan,” said McDonald. “In fact, I found some of the statements misleading around the status of the different options that were being reviewed at the time.”

The dispute is now almost eight years old, but concerns a key software choice Hydro made that has since led to problems, delays and cost overruns on IT projects. The NDP alleges that Hydro is behind on a $400-million IT plan. Hydro says it has no $400-million IT plan, and has spent only $142 million on projects involving the disputed software.

Hydro fired its chief information officer last year, and Energy Minister Bill Bennett admitted in the legislature that mistakes had occurred in Hydro’s IT plans.

Hydro’s apology is contained within a 635-page filing to the BCUC, which it was forced to submit after NDP critic Adrian Dix accused the Crown corporation of lying to the commission and breaking up its IT projects into small pieces to avoid scrutiny from the regulator.

McDonald denied Hydro tried to deliberately sidestep oversight, and said Dix “grasps at a range of unsupportable allegations.”

The IT issue dates back to early 2008, when Hydro told the BCUC it was upgrading its financial software using a PeopleSoft Financials system instead of rival SAP software, because SAP was too costly and inappropriate for Hydro’s purposes.

Three months later, in May 2008, a committee of Hydro’s board endorsed the SAP software as the “default solution” for future IT projects, where appropriate, said McDonald.

By August and September, Hydro had spent more than $1 million on SAP software licenses.

But when Hydro’s then-chief information officer testified to the BCUC in October 2008, and was asked about IT issues, a transcript of his comments show he continued to point to PeopleSoft as still being considered for the financial project when it was not, said McDonald.

When a commissioner asked Hydro to provide IT documents from its May executive meeting — which would have shown Hydro’s decision to make SAP its default vendor — Hydro instead provided a 2007 document that described only a high-level IT strategy.

McDonald said Hydro made a “strategic decision” in May to shift to SAP whenever possible. But it didn’t formally approve the change to the financial software until July 2009, at which point it then informed the BCUC. It already had a pre-existing vendor agreement with SAP to buy licenses, she said. Other documents show the now-fired Hydro official who testified at the BCUC had been briefed to explain the SAP issue, but for some reason didn’t do so, said McDonald.

Hydro’s explanation is “absurd,” said Dix. Its defence is an “attempt to admit some failings, because they simply can’t get around the fact they mislead the commission, so they try to minimize that,” he said.

“They are trying to parse it out to protect their legal position, but what’s evident is they were incompetent.”

The BCUC would not comment Monday. It could charge Hydro with violating the Utilities Commission Act.

McDonald said Hydro is open to a special hearing on its IT projects, as well as changes on how it discloses project costs to the BCUC in the future.

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