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Enforcement Sanctions

The IESO's Market Assessment and Compliance Division (MACD) monitors the operation of Ontario's electricity grid and market, investigating potential non-compliance with the Ontario market rules and North American reliability standards. Market participants who are found in breach of the market rules or reliability standards may be subject to enforcement sanctions if MACD considers it appropriate. Such possible enforcement sanctions range from non-compliance letters to financial penalties. Persistent breaches may result in de-registration, suspension or termination of the right to participate in the market.

A key goal of enforcement is to encourage compliance which benefits the reliability of the IESO-controlled grid and operations of the IESO-administered markets. In considering the appropriate sanction, Chapter 3, section 6.2.7 of the market rules requires MACD to consider a range of factors such as: actual or potential impacts on the market, other participants and reliability; “the presence and quality” of the market participant’s compliance program; and other factors. Market participants who have developed effective Internal Compliance Programs (ICPs) reduce the likelihood of committing breaches and being subject to enforcement actions.

Below is a list of enforcement sanctions that have been applied by MACD over the past four years.


  1. Resolute FP Canada Inc. ("Resolute"): On August 22, 2016, pursuant to Chapter 3 of the market rules, the IESO issued a non-compliance letter to Resolute FP Canada Inc. (“Resolute”) for breach of the requirements of the following provisions of the market rules:

    1. Chapter 7, section 3.3.8;
    2. Chapter 7, section 3.5.6; and
    3. Chapter 7, section 7.5.1.

    The IESO’s determination relates to Resolute’s operation of its dispatchable pulp and paper facilities located in Fort Frances and Thunder Bay, during the period October, 2004 to September, 2013, as applicable. In this regard, the IESO has determined that on certain occasions during the relevant period, Resolute engaged in the following conduct:

    1. submitted bid quantities to the IESO in excess of the facility’s ability to withdraw energy from the IESO-controlled grid;
    2. failed to update dispatch data to be consistent with the reasonable expectations of the quantity of energy to be delivered or withdrawn by the facility; and
    3. deviated from the IESO’s dispatch instructions.

    The non-compliance letter was issued as part of a settlement between the IESO and Resolute. Without acknowledging or admitting any breach of the market rules, Resolute has accepted, without contest, the IESO’s determinations and has agreed to voluntarily repay the amount of $8,750,000.00. This payment is in addition to an earlier voluntary repayment by Resolute in the amount of $1,825,010.03.

    Going forward, Resolute has also agreed to develop and implement an Internal Compliance Program (“ICP”) in order to ensure that potential breaches of the market rules are detected and corrected. In doing so, Resolute will take into account relevant IESO guidance, including the Statement of Approach published December 19, 2013 (see: http://ieso.ca/Pages/Participate/Market-Oversight/Internal-Compliance-Programs.aspx).  Resolute will implement the ICP within one year of the date of the settlement with the IESO.

  2. Goreway Station Partnership ("Goreway"):  On December 15, 2015, pursuant to Chapter 3 of the market rules, the IESO issued a non-compliance letter and financial penalty in the amount of $10,000,000 to Goreway, for breach of the requirements of Chapter 1, section 11.2.1 and section 11.3.1 of the market rules in relation to cost submissions made by Goreway under generation cost guarantee program(s) during the period June 10, 2009 to March 31, 2013.

    The methodology or methodologies Goreway used to calculate its short-term operating and maintenance costs for the purpose of its cost submissions during the period created monthly differences between submitted costs and actual costs, resulting in $12,000,000 in overpayment for such costs during the period, which Goreway has agreed to remedy by repayment in full of that amount, in addition to the financial penalty imposed.

    In this regard, the IESO has determined that the information that Goreway included in its submissions was not true, correct and complete to the best of its knowledge based upon the information available to it at the time of the cost submission(s). The IESO has further determined that, due to its failure to exercise sufficient due diligence regarding its cost submissions during the period, Goreway failed to correct the untrue, incorrect or incomplete information that it had submitted to the IESO as quickly as it reasonably could and ought to have done, and failed to provided true, correct and complete information on a timely basis.

    Without acknowledging or admitting any breach of the market rules, Goreway has accepted, without contest, the IESO's determinations.

  3. Independent Electricity System Operator (IESO): On December 19, 2014, the IESO was sanctioned for failing to comply with four North American Electric Reliability Corporation (NERC) reliability standards on two separate dates. The four standards – TOP-002-2b R6, TOP-002-2b R10, IRO-005- 3a R1.3 and TOP-002-2b R19 – relate to the IESO’s functions as Transmission Operator, Balancing Authority and Reliability Coordinator.

    The IESO self-reported that on March 26, 2012 they failed to account for all potential contingencies – or unplanned system events – involving power system elements in the Bruce area when they developed and implemented an operating plan. The error occurred as the IESO prepared for a planned transmission outage. As a result of this oversight, the IESO failed to recognize and prepare for a post- contingency system configuration that might have compromised reliability of the bulk power system, if the contingency had occurred. Although these breaches did not have an impact on reliability in real time, they exposed the power system to increased risk.

    The IESO also self-reported that on April 27, 2012 they failed to maintain accurate computer models utilized for analyzing and planning system operations. Specifically, a contingency that should have been modelled was not included in the IESO’s Security Analysis program as required by the standard. This omission resulted in the IESO not preparing for the generation loss associated with the most severe single contingency that could affect the system. This failure had no actual impact on reliability as contingency conditions did not materialize in real time.

    MACD’s assessed sanction for these two events was reduced to a $16,000 penalty after consideration of all relevant penalty factors. The main mitigating factor was the IESO's proactive self-report in these matters. In addition, MACD considered the significant costs incurred by the IESO in respect of the voluntary implementation of mitigation plans and other additional compliance measures following these events. Spending on these measures totalled more than $800,000. The measures are intended to reduce the likelihood of similar events and strengthen the controls used by the IESO to manage Bruce-area outages. In keeping with MACD’s primary objective of fostering reliability via compliance with the market rules, these investments serve as the most effective vehicle.

  4. ​Hydro One Networks Inc. ("Hydro One"): In the period from 2005 to 2008, Hydro One failed to sufficiently complete the testing of critical components for its key facilities in accordance with the Northeast Power Coordinating Council criteria and the market rules. The test failure rates for testing critical components associated with key facilities varied between 1.5% and 29%. Hydro One was issued a suspended order to pay a financial penalty of $90,000 for the four years of non-compliance, taking into account that Hydro One became fully compliant before the conclusion of the investigation. During the course of these investigations, MACD and Hydro One discussed the benefits of Hydro One improving its compliance with reliability standards and the market rules through enhancements to Hydro One's Internal Compliance Program, and Hydro One voluntarily committed to doing so.

    Given the importance of Hydro One's role and function as a key owner and operator of transmission systems in Ontario, MACD and Hydro One jointly developed criteria and measures designed to enhance the quality of Hydro One's Internal Compliance Program.

    In order to allow Hydro One time to improve its ICP in accordance with all the measures, payment of the financial penalty was suspended until April 30, 2014. Hydro One has since taken steps to successfully improve its Internal Compliance Program in accordance with most of the measures to the satisfaction of MACD, resulting in a $65,000 reduction of the original $90,000 financial penalty.

  5. Ontario Power Generation was sanctioned $21,500 for failing to comply with dispatch instructions for operating reserve activations on 5 occasions over the period July 2010 to December 2010. The breaches were in relation to generation facilities at Beck 2 PGS, Holden GS, Lennox GS and Madawaska River Aggregate. Final breach determinations were established by and sanctions were agreed to pursuant to settlement discussions, subsequent initiation of a dispute by OPG.

  6. Ontario Power Generation Inc. (OPG) paid the sum of $550,000 to the IESO for its failure, on a timely basis, to remove its offers for Lambton G4 in HE19 on October 15, 2010 as required by Chapter 7, Section 3.3.8 of the Market Rules. The payment addresses financial benefit inadvertently received by OPG, impact to the market and other factors. Along with a lack of intent to breach the rule, MACD notes in particular the timely self-report and other cooperation by OPG regarding the matter.

  7. Brookfield Energy Marketing LP was sanctioned $47,500 for failing to comply with dispatch instructions for operating reserve activations on 14 occasions over the period July 2010 to June 2011. The breaches were in relation to generation facilities at Red Rock GS and Aubrey GS, and at generation facilities associated with the Mississagi River and the Montreal River. In levying the sanction amount, MACD took into account the fact that Brookfield Energy Marketing LP's failures were not deliberate, Brookfield Energy Marketing LP cooperated in MACD's investigation and Brookfield Energy Marketing LP has put remedial measures in place to improve its compliance with dispatch instructions for operating reserve activations.

  8. Hydro One Networks Inc.: In the period from January 2004 to February 2010, Hydro One was found in breach of Chapter 4, section 7.7.3 (subsections 7.7.3.1 and 7.7.3.2) of the Market Rules for the Ontario Electricity Market ("the Market Rules"). Hydro One failed to restore the operational status and analog telemetering points to a fully operational state within time frames required by the Market Rules. No financial penalty was assessed for the breach for several reasons, primarily because of the limited actual and potential impact on reliability and the market; process improvements for communicating failed telemetry events; and completed repairs of the concerned operational status and analog telemetering points.

  9. Hydro One Networks Inc. ("Hydro One"): In the period from 2005 to 2008, Hydro One failed to sufficiently complete the testing of critical components for its key facilities in accordance with the Northeast Power Coordinating Council criteria and the market rules. The test failure rates for testing critical components associated with key facilities varied between 1.5% and 29%. Hydro One was issued a suspended order to pay a financial penalty of $90,000 for the four years of non-compliance, taking into account that Hydro One became fully compliant before the conclusion of the investigation. During the course of these investigations, MACD and Hydro One discussed the benefits of Hydro One improving its compliance with reliability standards and the market rules through enhancements to Hydro One's Internal Compliance Program, and Hydro One voluntarily committed to doing so.
    MACD encourages the development and implementation of comprehensive and effective internal compliance programs by all market participants and views these programs as paramount to the reliability of Ontario's interconnected power system through creating greater awareness of detection and prevention methods, and ensuring potential or actual breaches of reliability obligations are prevented or detected and corrected through the use of internal controls. Given the importance of Hydro One's role and function as a key owner and operator of transmission systems in Ontario, MACD and Hydro One have jointly developed criteria and measures designed to enhance the quality of Hydro One's Internal Compliance Program.
    In order to allow Hydro One time to develop and implement its Internal Compliance Program in accordance with all of the measures, payment of the financial penalty will be suspended until April 30, 2014. If Hydro One improves its Internal Compliance Program in accordance with the measures to the satisfaction of MACD, the order to pay the financial penalty shall be reduced by an amount that corresponds to the number of implemented measures. If all measures are met, the order to pay a financial penalty will be revoked entirely.

  10. Independent Electricity System Operator: On December 17, 2010 the IESO reached a settlement agreement with the Market Assessment and Compliance Division ("MACD"), in relation to a MACD finding that the IESO violated North American Electric Reliability Corporation reliability standards and associated Northeast Power Coordinating Council criteria, and thereby breached the market rules. The agreement stipulated that the IESO agreed to pay a penalty in the amount of $130,000, with $100,000 to be suspended pending MACD's evaluation of agreed improvements to the IESO's internal compliance program. MACD judged that those improvements would be of more value to the shared goal of reliability than a financial penalty, in this circumstance. That evaluation is now complete and the IESO has made the requisite improvements to its compliance program. The corresponding component of the penalty is now removed.

  11. GenSet Resource Management Inc.: In June 2013, GenSet Resource Management Inc. was sanctioned $13,500 for failure to comply with dispatch instructions for operating reserve activation on nine (9) separate occasions. These breaches were in relation to GenSet's Kingsville and Lauzon generation facilities. The breaches occurred between July 2010 and June 2011.

  12. Greenfield Energy Centre LP: In May 2013, Greenfield Energy Centre LP was sanctioned $19,000 for failure to comply with dispatch instructions for operating reserve activation on three (3) separate occasions. These breaches were in relation to Greenfield Energy Centre LP's Greenfield Energy Centre CGS facility (G1 to G4). The breaches occurred between July 2010 and June 2011.

  13. TransAlta Cogeneration LP: In January 2013, TransAlta Cogeneration LP was sanctioned $24,000 for failure to comply with dispatch instructions for operating reserve activation on six separate occasions. These breaches were in relation to TransAlta Cogeneration LP's Windsor facility. The breaches occurred between July 2010 and June 2011. TransAlta Cogeneration LP has also been ordered to provide evidence of the implementation and efficacy of certain mitigation measures by May 1, 2013.

  14. PowerStream Inc.: In October, 2012, a letter of non-compliance was issued to PowerStream Inc. for failure to upgrade two metering installations. The breaches commenced in January 2010 and continued through to September 2011.

  15. TransAlta Generation Partnership: In September 2012, TransAlta Generation Partnership was sanctioned a total of $15,000 for failure to comply with dispatch instructions for operating reserve activations. The breaches were in relation to the Sarnia generating facility. The breaches occurred between July 2010 and June 2011.

  16. TransAlta Generation Partnership: In August, 2012, TransAlta Generation Partnership was sanctioned $31,000 for failure to comply with various NERC Critical Infrastructure Protection reliability standards. The breaches occurred between January 2010 and November 2010 and related to the failure to implement processes and have the required documentation necessary for a Critical Infrastructure Protection Program.

  17. Atomic Energy of Canada Limited: In July, 2012, Atomic Energy of Canada Limited was sanctioned $12,000 for failure to upgrade six metering installations. The breaches commenced in January 2008 and are ongoing. AECL has been ordered to bring the metering installations into compliance with the market rules on or before September 30, 2012. AECL has been further ordered to provide a status update on the upgrades to MACD by September 1, 2012 and confirmation of completion of the upgrades by October 15, 2012.

  18. Hydro One Brampton Networks Inc: In July, 2012, a letter of non-compliance was issued to Hydro One Brampton Networks Inc. for failure to upgrade two metering installations. The breaches commenced in January 2009 and continued through to September 2011.

  19. Hydro One Networks Inc.: In July, 2012, Hydro One Networks Inc. was sanctioned $6,000 for failure to upgrade one metering installation and issued a letter of non-compliance for failure to upgrade another metering installation. The breaches commenced in January 2008 and continued through to November 2009 and November 2010, respectively.

  20. London Hydro Inc.: In July, 2012, London Hydro Inc. was sanctioned $12,000 for failure to upgrade two metering installations. The breaches commenced in January 2009 and continued through to May 2011 and June 2011, respectively.

  21. Niagara Peninsula Energy Inc.: In July, 2012, Niagara Peninsula Energy Inc. was sanctioned $6,000 for failure to upgrade a metering installation. The breach commenced in January 2009 and is ongoing. Niagara Peninsula Energy Inc. has been ordered to bring the metering installation into compliance with the market rules on or before December 31, 2013. Niagara Peninsula Energy Inc. has been further ordered to provide status updates to MACD on or before December 31, 2012 and June 30, 2013, and confirmation of completion of the upgrades by December 31, 2013.

  22. Norfolk Power Distribution Inc.: In July, 2012, Norfolk Power Distribution Inc. was sanctioned $7,000 for failure to upgrade two metering installations, and for failure to ensure that each meter has been tested or verified for accuracy and sealed or re-sealed in accordance with all federal metering requirements. The breaches commenced in January 2008 and are ongoing. Norfolk Power Distribution Inc. has been ordered to bring the metering installations into compliance with the market rules on or before October 31, 2012. Norfolk Power Distribution Inc. has been further ordered to provide a status update to MACD on or before October 1, 2012 and with confirmation of completion of the upgrades by November 15, 2012.

  23. PowerStream Inc.: In July, 2012, a letter of non-compliance was issued to PowerStream Inc. for failure to upgrade three metering installations. The breaches commenced in January 2008 and January 2009 and continued through to April 2010 and December 2011, respectively.

  24. Red Rock Mill Inc.: In July, 2012, Red Rock Mill Inc. was sanctioned $3,000 for failure to upgrade a metering installation. The breach commenced in January 2008 and is ongoing. Red Rock Mill Inc. has been ordered to bring the metering installation into compliance with the market rules on or before December 31, 2013. Red Rock Mill Inc. has been further ordered to provide status updates to MACD on or before December 31, 2012 and June 30, 2013 and confirmation of completion of the upgrades by December 31, 2013.

  25. Tembec Enterprises Inc.: In July, 2012, Tembec Enterprises Inc. was sanctioned $3,000 for failure to upgrade a metering installation. The breach commenced in January 2008 and continued through to September 2010.

  26. Canadian Hydro Developers Inc.: In March 2012, Canadian Hydro Developers Inc. was sanctioned $5,000 for failure to comply with an operational instruction received from the IESO for a reliability purpose. The breach was in relation to the Amaranth wind generating facility. In addition, Canadian Hydro Developers Inc. is required to provide MACD by August 31, 2012, with proof that the mitigation measures cited in Appendix A are in place and are having the desired effect. The breach occurred in May 2011.

  27. Suncor Energy Products Inc. - Ripley.: In March 2012, Suncor Energy Products Inc. - Ripley was sanctioned $3,000 for failure to comply with an operational instruction received from the IESO for a reliability purpose. The breach was in relation to the Ripley wind generating facility. In addition, Suncor Energy Products Inc. - Ripley has also been ordered to provide sufficient evidence of the implementation and efficacy of certain mitigation measures to MACD by August 31st, 2012. The breach occurred in April 2011.

  28. CP Renewable Energy (Kingsbridge) LP.: In March 2012, CP Renewable Energy (Kingsbridge) LP was sanctioned $3,500 for failure to promptly notify the IESO of a change in status to their facility and for failure to comply with an operational instruction received from the IESO for a reliability purpose. The breach was in relation to the Kingsbridge wind generating facility. Kingsbridge has also been ordered to provide sufficient evidence of the implementation and efficacy of certain mitigation measures to MACD by August 31st 2012. The breaches occurred in April and May of 2011.

For a list of market participants against whom sanctions have been applied more than 48 months ago see ​Previous Sanctions.