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Changes to Capacity Auction Plans

November 27, 2019

This past summer the IESO announced plans to evolve its demand response auction into broader capacity auctions that allow additional resources to participate. The first capacity auction was to be held this December, with participation expanded to include dispatchable generators whose contracts have expired.

As a result of a decision by the Ontario Energy Board (OEB), the IESO will no longer proceed with a capacity auction this December and will instead hold another demand response auction on December 4.

The OEB’s decision grants a stay that was requested by the Association of Major Power Consumers of Ontario (AMPCO) regarding market rule amendments the IESO made to enable the first capacity auction. AMPCO has also asked the OEB to review and issue an order revoking the IESO’s market rule amendments, referring them back to the IESO for further consideration. AMPCO’s concerns relate to energy payments that can be received by generators but not demand response providers.

The stay suspends the operation of the IESO’s market rule changes pending the outcome of the OEB’s review.

The IESO remains committed to increasing competition in the electricity markets to provide new opportunities for market participants and drive down costs for consumers. The IESO is also continuing its stakeholder engagement to inform the scope of an independent study to assess whether there is a net benefit to Ontario electricity ratepayers if DR resources are compensated with energy payments.

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