The Ontario Price

The IESO has improved the way the wholesale market schedules and prices electricity to ensure we make the most cost-effective use of the province’s electricity supply every hour of every day. The result is the Ontario Electricity Market Price, or the Ontario Price for short. It has replaced the Hourly Ontario Energy Price (HOEP).

Unlike the HOEP which was posted in real time, the Ontario Price is available after the fact. The Day-Ahead Ontario Zonal Price is, however, available each afternoon and provides a good indication of what prices for the next day will be.

Who Pays the Ontario Price

The Ontario Price is charged to wholesale customers who pay for electricity through their local distribution companies as well as some large consumers who participate directly in the wholesale market. What business consumers pay for electricity through their LDC, however, remains the same and will continue to appear along with the Global Adjustment as the commodity charge on their monthly bills.

Most business customers in the province will pay the same wholesale price regardless of where they are in the province. Your LDC will calculate your organization’s electricity costs based on when and how much you consume each month.

How the Ontario Price is Calculated

This new price takes into account system conditions and the availability of transmission capacity. It also incorporates a day-ahead price that provides operational certainty for the grid ensuring supply is available to meet system needs at the lowest cost.

To calculate the Ontario Price, the IESO determines a base price that reflects the cost of supply needed to generate electricity. That base price is then adjusted depending on the transmission system’s ability to deliver electricity at numerous locations across the province.

Local prices are then averaged to create a provincial hourly day-ahead price – known as the Day-Ahead Ontario Zonal Price (OZP). The IESO then calculates an adjustment (the Load Forecast Deviation Adjustment) to account for small differences between the amount of energy that was settled in the day-ahead market and what was actually used in real-time.

Your LDC will calculate your bill by taking the Ontario Price, which is the adjusted Day-Ahead Ontario Zonal Price (OZP), and apply it against your hourly consumption. The average monthly Ontario Price is posted on the IESO web site roughly two weeks after the close of each month.

Ontario Price Infographic - the Ontario Price is the price for electricity that most businesses pay

Click here to open the infographic in a new window

Note that the commodity cost for electricity generally makes up half of your overall costs – with delivery and other charges comprising the remainder of the bill.

The Day-Ahead Ontario Zonal Price

The Day-Ahead Ontario Zonal Price is the best indication of the price of electricity for each hour and gives consumers give a reliable signal regarding the market price for the upcoming day.

Price trends from hour-to-hour and day-to-day will stay the same. The inverse relationship between the Global Adjustment and the wholesale price will also remain the same.

You can monitor the Day-Ahead Ontario Zonal Price in a graph on the Power Data page, which posts the next day’s prices each afternoon.

Chart - Ontario Zonal Price

For more information:

Understanding the Ontario Price

A primer for businesses that pay the wholesale price of electricity.

Global Adjustment | Electricity Pricing Explained

Global Adjustment covers the cost of building new infrastructure, regulated rates paid under electricity supply contracts and the costs of delivering Ontario’s energy efficiency and conservation programs.