Energy Payments for Economic Activation of Demand Response Resources

Energy payments (or utilization payments) for the economic dispatch of demand response (DR) resources has been an ongoing topic of discussion at the Demand Response Working Group (DRWG).  Stakeholder interest in energy payments was renewed as a result of proposed market rule amendments to enable off-contract, non-regulated dispatchable generators to participate in the capacity auction along with dispatchable loads and hourly demand response resources.

To date, DRWG has been the forum for discussions with stakeholders on energy payments for DR resources – for both economic dispatch and out-of-market activations.  However, given that energy payments for economic dispatch of DR resources is a complex issue and would be a substantive change to Ontario’s energy market, the IESO has determined that a broader stakeholder engagement is needed to advise on this issue.  Energy payments for out of market activations will continue to be discussed through DRWG with the intent to implement the proposal by the December 2019 capacity auction.

Through this engagement, the IESO will seek feedback from stakeholders on:

  • The inputs and outputs of the research and analysis required to determine whether there is a net benefit to electricity ratepayers if DR resources are compensated with energy payments for economic activations. The IESO will commission a third party consultant to support the research and analysis.
  • The IESO’s decision and rationale on whether demand response resources will be compensated with energy payments for economic activations

Additional details on the IESO’s plans to engage with stakeholders can be found in the engagement plan (updated October 10, 2019). All comments and enquiries on this engagement can be directed to

Anticipated timing for this engagement is presented below.

Schedule of Activities



Expected Actions

June 11, 2020

Stakeholder feedback on materials presented at May 21st webinar.


May 21, 2020


This session will close out the initial scope with the final Brattle study results, and begin discussing cost-recovery for shut-down costs related to Demand Response activations.

Recorded Presentation

This webinar is being presented during the IESO's May stakeholder engagement meetings. See agenda for more information

April 15, 2020

Update on Energy Payments for Economic Activation of DR Resources Stakeholder Engagement


March 6, 2020

Stakeholder feedback on materials presented at February 13th meeting


February 13, 2020


Meeting Notes




Q1 2020

Post final research findings and analysis


Q1 2020

Present draft research findings and/or analysis for stakeholder review


January 24, 2020


December 20, 2019

Stakeholder feedback on materials presented at December 11th meeting


December 11, 2019




November 2019

Present final study scope and study plan


October 25, 2019


Stakeholder feedback on materials presented at October 10th meeting


October 10, 2019


Meeting Notes

Meeting to review engagement plan and objectives, draft scope of research and analysis for stakeholder feedback

Required reading material:

Other relevant reading material:


September 11, 2019

Stakeholder Feedback


August 22, 2019

Engagement launched – stakeholders to provide feedback on engagement plan (updated October 10, 2019)