Compliance

Ensuring compliance with the market rules is key to the operation of a competitive and reliable electricity market. In order to promote understanding of and compliance with the market rules, the IESO works with market participants to educate them about the application of the market rules and clarify specific issues.

Market participants who breach the rules or who have not met their financial obligations, may be subject to sanctions if the IESO considers it appropriate, given the circumstances. These sanctions could consist of a simple directive instructing them to rectify a market breach, financial penalties, suspension or termination from the market, depending on the nature of the breach or instance of non-compliance.

The Market Assessment and Compliance Division (MACD), a specially constituted business unit of the IESO, makes all determinations and exercises all authorities accorded the IESO in the market rules concerning alleged breaches, non-compliance letters and other sanctions, including financial penalties. MACD applies the same investigative procedures and equivalent remedies to the IESO as for market participants. The instrument of delegation of compliance enforcement authority and a description of the treatment of IESO non-compliance is contained in a letter from the President and CEO of the IESO (then the IMO) to the Director, Market Assessment and Compliance.

Groups or individuals who suspect that a market participant or the IESO is not compliant with the market rules, or market participants who wish to self-report their own non-compliance, can report such instances, on a confidential basis, by either:

• Contacting Customer Relations at 1-888-448-7777, or
• Submitting a Non-Compliance Event Report (NCER) to the IESO's Market Assessment and Compliance Division (MACD).

Parties that submit a Non-Compliance Event Report may receive a request from the IESO to provide more information about their submission. This information will be held in confidence at the request of the party.

MACD’s compliance program provides an overview of its current priorities. This is meant to assist market participants in developing business practices and self-monitoring to facilitate operating in compliance with the market rules.

The focus of the program is the IESO’s dual priorities of system reliability and market integrity. The listed provisions constitute areas where information suggesting a breach will in most cases lead to a formal investigation involving the ‘due process’ provisions set out in Chapter 3, section 6 of the market rules.

There are obviously many other obligations in the market rules that are not included in the list and this should not be taken to mean that participants are absolved from responsibility for compliance with them. Typically, for these other provisions, MACD will continue its established procedure of giving market participants an informal first notice in order to clarify the requirements for compliance with the particular provision or set of provisions. Some of these communications may already have taken place in which case participants should consider themselves ‘on notice’ that subsequent information suggesting non-compliance will likely lead to a formal investigation.

While the above describes MACD’s general approach to compliance, it does not preclude MACD proceeding directly to formal investigations where there is urgency or the circumstances otherwise support doing so. As always, if an investigation unfolds MACD will decide the outcome based on the facts of the individual case. Market Administration Manual 2.6 “Treatment of Compliance Issues” details the procedures followed in compliance investigations.

• Market rule breaches that impact reliable grid operations
  • Ten minute and thirty minute operating reserve activations and availability (Appendix 5.1, sections 1.2.1 to 1.2.6)
  • Communications with IESO particularly during contingency and emergencies (Chapter 5, sections 3.4.1.4, 3.4.1.5, 3.4.1.2, 3.5.1.3, 3.6.1.6, 3.7.1.2, 3.7.1.3, 3.7.1.5)
  • Reliability standard breaches (Chapter 5, sections 3.4.2, 3.5.3, 3.6.2, 3.7.2)
  • DACP - dispatch data revisions (Chapter 7, section 3.3A)
  • ELRP activations (Chapter 7, section 15.3.4)
  • Emergency Preparedness and emergency operations (Chapter 5, sections 9, 10, 11 and subsections 3.5.1.1, 3.6.1.1, 3.6.1.3, 3.7.1.1)

• Market rule breaches that impact the IESO-administered markets
  • Market signal disruptions due to failure to update dispatch data (Chapter 7, section 3.3.8)
  • Revenue gains due to intertie failure (Chapter 7 section 7.5.8A)
  • Market price impact due to various breaches for example failure to update dispatch data (Chapter 7, section 3.3.8)
  • Metering installation errors or failures which affect settlement amounts (Chapter 6, section 6 and 11)
  • Metering upgrades 2005 upgrades (Chapter 6, section 4.4)
  • Instrument transformer upgrades starting in 2006 (Chapter 6, section 1.1.2)