Markets and Related Programs

In 2016, the IESO determined the need for an additional 50 MW of regulation service. This 50 MW is incremental to the 100 MW of regulation service that the IESO typically schedules every hour, increasing the scheduled regulation capacity from 100 MW to a range between 150 MW to 200 MW for each hour. The IESO further seeks to develop sufficient market depth to between 250 MW to 300 MW of regulation capacity on an as-needed basis by 2020.

The 2017 RFP for Incremental Regulation Capacity was aimed at obtaining incremental regulation capacity from all manner of technologies, including those that are existing and currently registered in the IESO-administered markets and those that have the ability to register in the IESO-administered markets at a later date.

Through the Regulation RFP process, the IESO offered two contracts, representing ±55 MW of regulation capacity across two new energy storage facilities in Ontario. Further details about the successful facilities are available here.

The Regulation RFP received 42 submissions, representing approximately 350 MW of regulation capacity from a variety of existing and new build facilities, including energy storage and waterpower facilities.

To ensure value for Ontario ratepayers, the Regulation RFP included both an individual project cost cap and an overall procurement cost cap. These caps were $725,000 per megawatt per year and $33,750,000 per year, respectively. The IESO is pleased to note that the weighted average price of all evaluated submissions was less than $350,000 per megawatt per year and the weighted average price of the successful facilities was less than $200,000 per megawatt per year, which is less than 30 percent of the individual project cost cap. This pricing represents one of the largest reductions in per-unit regulation costs since Ontario’s electricity market opened.

The Regulation RFP process was administered by the IESO and overseen by an external fairness advisor. In the fairness advisor’s opinion, robust and transparent public procurement practices were followed throughout the process, and each proposal was carefully reviewed against a list of specific mandatory requirements and evaluated for both technical and pricing components.

Read the news release.

RFP Resources

The following section provides interested parties with the procurement materials. Draft versions of procurement documents are denoted as such, as are any addenda.

• Request for Proposals for Incremental Regulation Capacity Addendum No. 1 (September 13, 2017)
• Blacklined Request for Proposal June 29, 2017 to Addendum No. 1 (September 13, 2017)

• Form of Agreement for the Provision of Regulation Service Addendum No. 1 (September 13, 2017)
• Blacklined Form of Agreement June 29, 2017 to Addendum No. 1 (September 13, 2017)
• Regulation RFP Addenda Summary Document (September 13, 2017)

The following Prescribed Forms are attached as appendices to the RFP.

• Prescribed Form: Proponent Information and Declarations (June 29, 2017)

• Prescribed Form: Withdrawal Request Form (June 29, 2017)

• Prescribed Form: Pricing Proposal Spreadsheet (June 29, 2017)

• Prescribed Form: Technical Requirements Spreadsheet (June 29, 2017)

Additional program resources are available to assist interested parties in preparing their Proposals and further understand the procurement process.

• LRP II TAT Tables
• Feedback on Draft Procurement Documents and IESO Responses
• Frequently Asked Questions (FAQ) document (Updated September 26, 2017)
• September 2016 RFI, December 2016 draft RFP, and June 2017 Final RFP are available in the Past Activities section below

The following section outlines the timelines related to the Question and Comment Period.

• Questions and Comments

The following section provides interested parties with materials related to the results of the Regulation RFP.

• Regulation RFP Selected Proponent List
• Regulation RFP Fairness Report (Updated January 19, 2018 to include overview of the debriefing process)