The Ontario electricity market involves many different players each with a specific purpose and role in the market. All working diligently and seamlessly, to ensure the electricity market and system is always ready to meet the highest expected demand for electricity.
Independent Electricity System Operator (IESO)
See a list of all participants in the Ontario electricity market.
The Independent Electricity System Operator (IESO) is at the centre of it all, directing the flow of power across the province ensuring that there is enough energy to meet demand 24 hours a day, 7 days a week. On a daily basis, the IESO forecasts the demand for electricity and makes this information available. Based on that, generators and some large consumers send in offers to supply or reduce energy. Every five minutes, the IESO chooses from their offers according to the lowest bid and instructs those resources to adjust their output or consumption.
Ontario's grid is interconnected with Quebec, New York State and other neighbouring jurisdictions. The interconnectedness allows Ontario to import or export power whenever needed.
Ontario has a very diverse power sector. Nuclear and large hydroelectric facilities typically run 24 hours a day, providing Ontario with its baseload level of generation. Natural gas generators generally run in the daytime and increase their output during peak periods of demand as needed. Some hydroelectric facilities have the capability to store water until it is needed to generate electricity during peak periods as well. Although their output is variable in nature, wind and solar generators are highly flexible and can be called upon to decrease or increase their output in response to system conditions.
There are over 30,000 kilometres of transmission lines criss-crossing the province, carrying electricity to large-volume consumers, as well as to utilities for distributing to homes and smaller businesses. The IESO directs the flow of electricity over these lines, while the transmission companies are responsible for their operation and maintenance.
Industries that are directly connected to the IESO-controlled grid also participate in the market. As they pay the wholesale market price, participating in the market allows them to derive benefits from cutting consumption when prices are high. A large-volume user can offer into the market to be on-call to cut consumption if demand unexpectedly increases.
Local Distribution Companies
See a map and list of all Ontario LDCs.
Once power is delivered to local distribution companies (LDCs), the voltage of the power is reduced and sent along distribution lines to homes and businesses. Its customers include those who pay the wholesale rate (businesses consuming more than 250,000 kWh of electricity/year) and customers who pay time-of-use rates such as homeowners, small businesses, schools and hospitals.
Electricity consumers have the option of signing a contract with an energy retailer to pay a fixed charge for electricity. These retailers purchase electricity in the market and through contracts with generators.
Overseeing Ontario's Electricity Sector
The IESO works in partnership with other entities in Ontario's electricity sector, these include:
Ministry of Energy
The Ontario Ministry of Energy establishes energy policy for the province, working to ensure that Ontario's electricity system functions at the highest level of reliability and productivity.
Ontario Energy Board (OEB)
The Ontario Energy Board regulates rates for the delivery of electricity through transmission and distribution wires, as well as for some of Ontario Power Generation's plants. They also set the regulated price plan and time-of-use rates for all small volume customers in the province.
Ontario Power Authority
The Ontario Power Authority (OPA) holds the responsibility for medium and long-term planning and ensuring an adequate supply of electricity and demand response in Ontario.