Financial markets do not involve the transfer of energy — they involve the transfer of funds only and allow market participants to reduce price risks associated with transmission congestion and price volatility. The transmission rights market is the only financial market.
Transmission Rights Auction
Prices in Ontario may differ from prices in other jurisdictions due to congestion at an intertie. The use of transmission rights (TRs) allows importers and exporters of electricity to reduce price risk associated with trading between Ontario and other jurisdictions. TRs are sold for specific intertie paths through an auction process accessible through the IESO's web portal. Both short-term (one month) and long-term (one year) TR ownership are available. A price differential is paid to TR owners when the intertie zone price is different from the Ontario market clearing price.
See 2016 Transmission Rights Auction Schedule for key activities and dates associated with the TR Market.