Intertie Transactions Role in Setting Real-Time Price (SE-18)

The market clearing price for energy and operating reserve in the IESO-administered market was established by the original market design to be the marginal resource cost based on the offers and bids submitted. Since imports and exports are scheduled an hour in advance and fixed for the entire dispatch hour, they cannot be dispatched on a 5-minute basis and are as a result not a marginal resource in real-time. Therefore, under this original market design premise, intertie transactions are not able to set the market clearing price (MCP) in the real-time market. However, imports and exports can be scheduled/dispatched within the timeframe of the pre-dispatch sequence and therefore can set the pre-dispatch price. This discrepancy in price determination raises concern over whether the prices are being calculated appropriately and fairly.

At the December 3rd, 2005 IESO Board meeting, consistent with recommendations received from stakeholders, the Board directed IESO staff to focus attention to resuming and advancing work with stakeholders on whether intertie transactions should be considered in the calculation of the Ontario Market Clearing Price

Stakeholder Engagement Plan
Stakeholder Engagement Plan (Revision 1, February 6, 2007)

For more information on this stakeholder initiative or to participate in the next meeting, email stakeholder.engagement@ieso.ca.

Date Agenda/Minutes	Supporting Material
To Be Determined	This stakeholder plan is on hold pending the outcome of the Day Ahead Market evolution stakeholder initiative SE 21 …more
November 1, 2006	Presentation to the Advisory Committee for advice to the IESO Board. • Stakeholder Advisory Committee update
October 2006	Web postings to provide the opportunity for all interested stakeholders to offer feedback on the recommendation.
October 6, 2006	MPWG to receive feedback on IESO recommendation. • Agenda and presentations
September 5, 2006	Open stakeholder session to solicit feedback on pricing impacts of alternative solutions and implications. • Agenda and presentations
August 4 & September 1, 2006	MPWG meeting to discuss alternative solutions and implications. Present data and simulation results on the ability of intertie transactions to set price. This feedback will form the basis of a final recommendation. • Agenda and presentations
April 7, 2006	Market Pricing Working Group (MPWG) meeting to introduce item and educate group. Information provided on the ability of intertie transactions to set the real time market clearing price. Determine which (if any) data and/or simulations are needed for the June meeting. • Agenda and presentations