Ancillary Services

Ancillary Services are services used to help ensure the reliable operation of the power system. Ancillary Services make up a relatively small component of all power system costs but are a critical part of the overall power system.

The IESO contracts for four ancillary services: certified black start facilities, regulation service, reactive support and voltage control service, and reliability must-run.

Certified Black Start Facilities

Certified black start facilities help system reliability by being able to restart their generation facility with no outside source of power following a blackout event. In the event of a system-wide blackout, black start facilities would be called on during restoration efforts by helping to re-energize other portions of the power system.

Regulation Service

Regulation service, which is sometimes referred to as frequency regulation, acts to match total system generation to total system load (including transmission losses) and helps correct variations in power system frequency. This service corrects for short-term changes in electricity use that might affect the stability of the power system. Regulation service is currently provided by generation facilities with automatic generation control (AGC) capability, which permits them to vary their output in response to signals sent by the IESO. The IESO currently schedules a minimum of ±100 MW of regulation service at all times.

Like many jurisdictions across North America, the IESO is monitoring several factors driving the need to expand the regulation service market in Ontario including:

the inherent weather-related uncertainty in all forecasts related to variable generation;
the autonomous behaviour of embedded distributed energy resources such as controllable loads, embedded generation and storage that are not subject to IESO dispatch instructions; and
the non-linear behaviour of demand patterns between 5-minute dispatch intervals.

Reactive Support and Voltage Control Service

The IESO requires reactive support and voltage control (RSVC) service in order to maintain acceptable reactive power and voltage levels on the grid. Both active power and reactive power are required to serve loads. Active power is the power that does useful work, such as producing light or running a motor. Reactive power is the power required to move active power through the transmission and distribution system from generators to the end customer. Due to the nature of the transmission system, reactive power needs are very localized and cannot be provided over far distances.

All generating facilities that are injecting energy into the IESO-controlled grid are required to provide a certain level of reactive support and voltage control service in accordance with the market rules. The IESO contracts with some facilities to provide additional amounts of RSVC service beyond what is set out in the market rules in order to meet system needs. In order to provide this additional RSVC service, contracted facilities may be called on to provide speed-no-load or condense mode operation. When contracted to provide speed-no-load operation, a generation unit is in service, running at synchronous speed with its unit breaker closed without any appreciable load on the unit. Generation units contracted to provide condense mode operate as a synchronous condenser to create or absorb reactive power.

Reliability Must-Run

Reliability must-run (RMR) contracts are used to ensure the reliability of the IESO-controlled grid. An RMR contract allows the IESO to call on the counterparty to produce electricity if it is needed to maintain the reliability of the electricity system. RMR contracts obligate the market participant to offer into the IESO-administered markets the specified amount of energy and/or operating reserve in a commercially reasonable manner and in accordance with stated performance standards.

Costs and Quantities of Contracted Ancillary Services

Annually, the IESO publishes costs and quantities of all contracted ancillary services in accordance with Chapter 7, section 9.8 of the IESO's Market Rules.

For the period of January 1, 2023 to December 31, 2023

Ancillary Service	Facilities	Quantity of Service purchased	Annual Financial Amount (2023)	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	$1,738,941.15	No change
Regulation Service¹	7 generation facilities + 1 Alternative Technology Resources (ATR) facility	± 124.8 MW (nominal contracted Regulation capacity) with typically ±100 MW of Regulation service scheduled	$58,143,684.68	In 2024, four (4) additional hydroelectric facilities will begin supplying up to an additional ± 21.5 MW of periodic Regulation service.
Reactive Support and Voltage Control	51 generation facilities having 193 generation units	Reactive support and voltage control service as required by prevailing system conditions	$20,639,987.71	No change
Reliability Must-Run	None	None	None	None
Total amount paid for all Ancillary Services for the period January 1, 2023 to December 31, 2023			$80,522,613.54

¹ - An approximately $15 million adjustment was applied to adjust payments for the previous 2 years.

For the period of January 1, 2022 to December 31, 2022

Ancillary Service	Facilities	Quantity of Service purchased	Annual Financial Amount (2022)	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	$1,831,337.24	No change
Regulation Service	7 generation facilities + 1 Alternative Technology Resources (ATR) facility	± 224.8 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	$40,101,470.44	No change
Reactive Support and Voltage Control	51 generation facilities having 195 generation units	Reactive support and voltage control service as required by prevailing system conditions	$17,027,801.15	No change
Reliability Must-Run	None	100 MW of capacity	Due to confidentiality clauses, the IESO cannot disclose the annual cost of this RMR agreement.	The Reliability Must-Run agreement with Manitoba Hydro expired on October 31, 2022. There are currently no plans for its renewal.
Total amount paid for all Ancillary Services for the period January 1, 2022 to December 31, 2022			$58,960,608.83

For the period of January 1, 2021 to December 31, 2021

Ancillary Service	Facilities	Quantity of Service purchased	Annual Financial Amount (2021)	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	$1,607,824.36	No change
Regulation Service	7 generation facilities + 2 Alternative Technology Resources (ATR) facilities + 1 Phase 1 Energy Storage facility	± 230.76 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	$29,332,369.04	No change
Reactive Support and Voltage Control	51 generation facilities having 193 generation units + 7 Phase 1 Energy Storage facilities	Reactive support and voltage control service as required by prevailing system conditions	$37,989,213.73	No change
Reliability Must-Run	None	100 MW of capacity	Due to confidentiality clauses, the IESO cannot disclose the annual cost of this RMR agreement.	The Reliability Must-Run agreement with Manitoba Hydro will be renewed to address the persisting local capacity need in the Northwest of Ontario in September and October 2022.
Total amount paid for all Ancillary Services for the period January 1, 2021 to December 31, 2021			$68,929,407.13

For the period of January 1, 2020 to December 31, 2020

Ancillary Service	Facilities	Quantity of Service purchased	Cost	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	1,692,371.57	No change
Regulation Service	7 generation facilities + 2 Alternative Technology Resources (ATR) facilities + 2 Phase 1 Energy Storage facilities	±235.76 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	37,777,084.47	Phase 1 Energy Storage contracts and one ATR contract will expire in 2021
Reactive Support and Voltage Control	52 generation facilities having 201 generation units + 7 Phase 1 Energy Storage facilities	Reactive support and voltage control service as required by prevailing system conditions	31,997,572.06	Phase 1 Energy Storage contracts will expire in 2021
Reliability Must-Run	None	None	None	A Reliability Must-Run agreement has been executed with Manitoba Hydro to address an identified local capacity need in the northwest of Ontario in September and October 2021 due to construction delays on the east-west tie transmission circuit expansion
Total amount paid for all Ancillary Services for the period January 1, 2020 to December 31, 2020			$71,467,028.10

For the period January 1, 2019 to December 31, 2019

Ancillary Service	Facilities	Quantity of Service purchased	Cost	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	1,721,545.64	No change
Regulation Service	7 generation facilities + 2 Alternative Technology Resources (ATR) facilities + 2 Phase 1 Energy Storage facilities	± 235.76 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	51,197,490.91	No change
Reactive Support and Voltage Control	52 generation facilities having 201 generation units + 7 Phase 1 Energy Storage facilities	Reactive support and voltage control service as required by prevailing system conditions	31,729,775.13	No Change
Reliability Must-Run	None	None	None	A potential Reliability Must-Run agreement may be executed to address an identified reliability need in the northwest of Ontario due to the construction delays on the east-west tie transmission circuit expansion
Total amount paid for all Ancillary Services for the period January 1, 2019 to December 31, 2019			$84,648,811.68

For the period January 1, 2018 to December 31, 2018

Ancillary Service	Facilities	Quantity of Service purchased	Cost	Anticipated change to requirements over next 12 months
Certified Black Start	4 generation facilities	Certified Black Start Service from each facility	$1,548,629.73	No change
Regulation Service	7 generation facilities 2 ATR facilities 2 Phase 1 Energy Storage facilities	±234.81 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	$48,970,409.19	Additional facilities as per Phase 1 Energy Storage program. Potential additional capacity delivered by 2017 Regulation RFP.
Reactive Support and Voltage Control	55 generation facilities having 209 generation units 7 Phase 1 Energy Storage facilities	Reactive support and voltage control service as required by prevailing system conditions	$24,948,889.23	Additional facilities as per Phase 1 Energy Storage program.
Reliability Must-Run	None	None	None	None
Total			$75,467,928.15

For the period January 1, 2017 to December 31, 2017

Ancillary Service	Facilities	Quantity of Service purchased	Annual Financial Amount (2017)	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	$1,441,372.93	No change
Regulation Service	7 generation facilities + 2 Alternative Technologies for Regulation (ATR facilities)	± 228.8 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	$50,066,335.83	Additional facilities as per Phase 1 Energy Storage program. Potential additional capacity delivered by 2017 Regulation RFP.
Reactive Support and Voltage Control	57 generation facilities having 215 generation units	Reactive support and voltage control service as required by prevailing system conditions	$22,339,048.57	Additional facilities as per Phase 1 Energy Storage program.
Reliability Must-Run	None	None	None
Total amount paid for all Ancillary Services for the period January 1, 2017 to December 31, 2017			$73,846,757.33

For the period January 1, 2016 to December 31, 2016

Ancillary Service	Facilities	Quantity of Service purchased	Annual Financial Amount (2016)	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	$1,560,432.59	No change
Regulation Service	7 generation facilities + 3 Alternative Technologies for Regulation (ATR facilities)	±228.8 MW (nominal contracted regulation capacity) with typically ±100 MW of regulation service scheduled	$44,328,678.18	Additional facilities as per Phase 1 Energy Storage program. Potential additional capacity delivered by 2017 Regulation RFP
Reactive Support and Voltage Control	57 generation facilities having 215 generation units*	Reactive support and voltage control service as required by prevailing system conditions	$18,456,351.64	Additional facilities as per Phase 1 Energy Storage program.
Reliability Must-Run	None	None	None
Total amount paid for all Ancillary Services for the period January 1, 2016 to December 31, 2016			$64,345,462.41

*Updated August 28, 2018: The number of generation units under RSVC agreements reported in 2016 has been corrected from 209 to 215 generation units. This does not impact any financial totals reported in the 2016 disclosure.

For the period January 1, 2015 to December 31, 2015

Ancillary Service	Facilities	Quantity of Service purchased	Annual Financial Amount (2015)	Anticipated change to requirements over next 12 months
Certified Black Start Facility	4 generation facilities	Certified Black Start Service from each facility	$1,410,114.36	No change
Regulation Service	7 generation facilities + 3 Alternative Technologies for Regulation (ATR facilities)	±289.8 MW with typically ±100 MW of regulation service scheduled	$45,150,514.04	Additional facilities as rer Phase 1 Energy Storage program. See description of pending RFI.
Reactive Support and Voltage Control	59 generation facilities having 235 generation units	Reactive support and voltage control service as required by prevailing system conditions	$20,018,689.52	Additional facilities as per Phase 1 Energy Storage program.
Reliability Must-Run	None	None	None
Total amount paid for all Ancillary Services for the period January 1, 2015 to December 31, 2015			$66,579,317.92

For the period January 1, 2014 to December 31, 2014

Eight market participants were under contract to provide reactive support and voltage control service from a total of 59 generation facilities having 235 generation units.
Four generating stations were under contract to provide certified black start capacity.
Ten generating stations, two energy storage facilities and one load aggregation facility were under contract to provide regulation service. The total contracted capability was ±245 MW with typically ±100 MW of regulation service scheduled.
The amount paid by the IESO for contracted ancillary services was $64,205,856.27. The portion paid for reactive support and voltage control service was $15,688,062.11.

For the period January 1, 2013 to December 31, 2013

Seven market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start capacity.
Ten generating stations were under contract to provide regulation service. The total contracted capability was ±239 MW with typically ±100 MW of regulation service scheduled.
One generating station was under contract to provide Reliability Must-Run services.
The amount paid by the IESO for contracted ancillary services was $95,266,898.97. The portion paid for reactive support and voltage control service was $21,720,689.20.

For the period January 1, 2012 to December 31, 2012

Seven market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start capacity.
Ten generating stations were under contract to provide regulation service. The total contracted capability was ±238 MW with typically ±100 MW of regulation service scheduled.
The amount paid by the IESO for contracted ancillary services was $60,054,046.95. The portion paid for reactive support and voltage control service was $24,134,293.39.

For the period January 1, 2011 to December 31, 2011

Seven market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start capacity.
Ten generating stations were under contract to provide regulation service. The total contracted capability was ±238 MW with typically ±100 MW of regulation service scheduled.
The amount paid by the IESO for contracted ancillary services was $52,994,292.19. The portion paid for reactive support and voltage control service was $21,285,662.88.

For the period January 1, 2010 to December 31, 2010

Six market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start capacity.
Ten generating stations were under contract to provide regulation service. The total contracted capability was ±238 MW with typically ±100 MW of regulation service scheduled.
The amount paid by the IESO for contracted ancillary services was $49,959,557.33. The portion paid for reactive support and voltage control service was $23,426,682.10.

For the period May 1, 2009 to April 30, 2010

Consistent with the requirements of the Market Rules, all ancillary services contracts were for periods not exceeding 36 months.
The emergency demand reduction program ended on April 30, 2010. Until that date Nine facilities were under contract for an aggregate of 217 MW of potential emergency demand reduction. There were no payments for this service during this period.
Six market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start capacity.
Ten generating stations were under contract to provide regulation service. The total contracted capability was ±238 MW with typically ±100 MW of regulation service scheduled.
For this period, the total amount paid by the IESO for contracted ancillary services was $44,396,518. The portion paid for reactive support and voltage control service was $10,927,389.

For the period May 1, 2008 to April 30, 2009

Consistent with the requirements of the Market Rules, all ancillary services contracts were for periods not exceeding 36 months.
Nine facilities were under contract for an aggregate of 217 MW of potential emergency demand reduction, but there were no payments for this service during this period.
Six market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start capacity.
Nine generating stations were under contract to provide regulation service. The minimum regulation service to be scheduled was ±100 MW, and the maximum contracted capability was ±223 MW. Typically ±100 MW of regulation service was scheduled.
There was one reliability-must-run contract, which has now expired and is not expected to be renewed.
During this period, the total amount paid by the IESO for contracted ancillary services plus one now-expired reliability-must-run contract was $130,560,674.

For the period May 1, 2007 to April 30, 2008

The contracts for emergency demand reduction lasted until April 30, 2007. The ongoing need for the Emergency Demand Response Program was reviewed, and the program will continue. Contracts have been renewed in 2007 for three year periods.
Market participants that provide reactive support and voltage control service in response to IESO direction under the Market Rules and in doing so incur additional costs, but do not have a corresponding contract with the IESO, are entitled to reimbursement by the IESO. Accordingly they are invited to enter into contracts with the IESO.
The IESO obtained all required contracts for certified black start facilities in 2006 and early 2007, and no additional new contracts are anticipated for the year ending April 30, 2008.
The RMR contract with one facility expires on September 30, 2007. The IESO has negotiated a new 12-month RMR contract for this facility commencing October 1, 2007, which is proceeding through the approval process.

For the period May 1, 2006 to April 30, 2007

Consistent with the requirements of the market rules, all ancillary services contracts were for periods not exceeding 36 months, and reliability must run contracts were for periods not exceeding 12 months.
Eleven facilities were under contract for an aggregate of 229.8 MW of emergency demand reduction. There were no payments for this service during this period.
There were contracts with several market participants for the provision of reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
Four generating stations were under contract to provide certified black start facilities.
Five generating stations were under contract to provide regulation service. The minimum regulation service to be scheduled was ±100 MW, and the maximum contracted capability was ±200 MW. Typically ±100 MW of regulation service was scheduled.
There was one reliability must run contract.
The total amount paid by the IESO during the 12 month period ending April 30, 2007 for contracted ancillary services and reliability must run contracts was $134,823,000.
Market Rules Chapter 7 section 9.8.1.4 states: "Where the IESO obtains contracted ancillary services or reliability must run contracts in the presence of market power, as confirmed by the market surveillance panel, the IESO shall publish the relevant terms and conditions of the contracts, except for price which shall not be disclosed, in order to encourage competition."

For the period May 1, 2005 to April 30, 2006

Consistent with the requirements of the market rules, all ancillary services contracts were for periods not exceeding 18 months, and reliability must run contracts were for periods not exceeding 12 months.
Eleven facilities were under contract for an aggregate of 229.8 MW of emergency demand reduction. There were no payments for this service during this period.
There were contracts with several market participants for the provision of reactive support and voltage control service from a total of 47 generation facilities having 210 generation units.
Four generating stations were under contract to provide certified black start facilities.
Five generating stations were under contract to provide regulation service. The minimum regulation service to be scheduled was ±150 MW, and the maximum contracted capability was ±300 MW. Typically ±150 MW of regulation service was scheduled.
There was one reliability must run contract.
The total amount paid by the IESO during the 12 month period ending April 30, 2006 for contracted ancillary services and reliability must run contracts was $87,578,000
Market Rules Chapter 7 section 9.8.1.4 states: "Where the IESO obtains contracted ancillary services or reliability must run contracts in the presence of market power, as confirmed by the market surveillance panel, the IESO shall publish the relevant terms and conditions of the contracts, except for price which shall not be disclosed, in order to encourage competition."

For the period May 1, 2004 to April 30, 2005

All AS contracts were for 18 months, as permitted under the Market Rules.
Sixteen facilities were under contract for an aggregate of 417.8 MW of emergency demand reduction. There was no payment for this service during this period.
There were contracts with several market participants providing reactive support and voltage control service from a total of 47 generation facilities having 210 generation units.
Four generating stations were under contract to provide certified black start facilities.
Five generating stations were under contract to provide regulation service. The typical regulation service requirement was reduced to ±150 MW, and the maximum contracted capability was reduced to ±300 MW.
The total amount paid by the IMO during the 12 month period ending April 30, 2005 for contracted ancillary services was $53,884,000
There were no reliability must run contracts, and hence no associated payments.
Market Rules Chapter 7 section 9.8.1.4 states: "Where the IMO obtains contracted ancillary services or reliability must run contracts in the presence of market power, as confirmed by the market surveillance panel, the IMO shall publish the relevant terms and conditions of the contracts, except for price which shall not be disclosed, in order to encourage competition."

For the period May 1, 2003 to April 30, 2004

There were contracts with eleven market participants for up to an aggregate of 417.8 MW of emergency demand reduction. There was one payment for this service, resulting from an IESO request for demand reduction as part of the restoration efforts during the August 14, 2003 blackout.
There were contracts with three market participants providing reactive support and voltage control service from a total of 45 generation facilities having 202 generation units.
Three generating stations were under contract to provide certified black start facilities.
Five generating stations were under contract to provide regulation service. Until March 2004 ±200 MW around economic base-point was typically provided, with a maximum total contracted potential capability of ±500 MW around economic base-point. For March and April 2004, the typical regulation service requirement was reduced to ±150 MW, and the maximum contracted capability was reduced to ±300 MW.
The total amount paid by the IESO for the year for the emergency demand reduction service, reactive support and voltage control service, certified black start facilities, and regulation service was $55,349,842.
There were no reliability must run contracts, and hence no associated payments.
Market Rules Chapter 7 section 9.8.1.4 states: "Where the IESO obtains contracted ancillary services or reliability must run contracts in the presence of market power, as confirmed by the market surveillance panel, the IESO shall publish the relevant terms and conditions of the contracts, except for price which shall not be disclosed, in order to encourage competition."

For the period May 1, 2002 to April 30, 2003

There were contracts with seven market participants for up to an aggregate of 342 MW of emergency demand reduction. There were no payments for this service because the IMO did not request any demand reductions during the year.
There were contracts with three market participants providing reactive support and voltage control service from a total of 44 generation facilities having 202 generation units.
Two generating stations were under contract to provide certified black start facilities.
Five generating stations were under contract to provide regulation service. Typically ±200 MW around economic base-point was provided, with a maximum total contracted potential capability of ±500 MW around economic base-point.
The total amount paid by the IMO for the year for the reactive support and voltage control service, certified black start facilities, and regulation service was $38,427,253.
There were no reliability must run contracts, and hence no associated payments.
Market Rules Chapter 7 section 9.8.1.4 states: "Where the IMO obtains contracted ancillary services or reliability must run contracts in the presence of market power, as confirmed by the market surveillance panel, the IMO shall publish the relevant terms and conditions of the contracts, except for price which shall not be disclosed, in order to encourage competition."

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