1. Understanding Ontario’s Electricity System
Presentation by
Robert Doyle, Communications Advisor, IESO
September 13, 2010

2. Who We Are and What We Do
The IESO is a not-for-profit entity established in 1998 under the Electricity Act to manage Ontario’s power grid
The IESO:
Directs the flow of electricity across the transmission system to meet the province’s power needs
Balances demand for electricity against available supply through the wholesale market
Manages the financial operations of the $10-billion wholesale market
Oversees emergency preparedness activities for Ontario’s power system
Sends real-time price-signals to trigger demand response

3. The IESO’s Role
There are a number of different entities but all have their own set of accountabilities and defined responsibilities

4. Ontario’s Electricity Market: The Dispatch of Energy
Offers/ Schedules
Consumers
Suppliers
Bids
Local Distribution Companies
Generators and Traders
Dispatch
Dispatch
Wholesale Consumers
Transmitters
Electricity

5. Ontario at a Glance (as at August 2010)
Installed Capacity
35,781 MW
Record Summer Peak
27,005 MW (August 1, 2006)
Record Winter Peak
24,979 MW (December 20, 2004)
Total Annual Energy Consumed
139 TWh (2009)
Customers
4.5 million
Ontario Import Capability
4,600 MW
Transmission Lines
30,000 km
(18,600 miles)
Average Price plus Adjustments
6.77¢/kWh
The IESO is the reliability coordinator for Ontario and works closely with other jurisdictions to ensure energy adequacy across North America.

6. Impacts on Demand – Winter
Ice: can cause damage and interfere with restoration and repairs
Cloud Cover/Snowfall: contributes to increased lighting load by as much as 750 MW
Temperature: each degree below 10°C incrementally raises demand by 50 MW to as much as 250 MW a degree at -20°C (furnace load)
Wind: a 30 km/h wind on a cold day (-10°C) can increase demand by 800 MW
Lighting influences demand peaks in winter with late sunrise and early sunset

7. Impacts on Demand

8. Demand for Electricity

9. Green Energy Act (GEA) Standard offer program for renewable generation
Conservation targets for local utilities
Streamlined processes
Foundation for a Smart Grid

10. Output by Fuel Type – Then and Now

11. Future Supply
3,400 MW of new and refurbished supply is scheduled to come into service over the next 18 months
Nuclear, Gas and Wind, Water and Biomass
Decisions on future of existing nuclear stations
5,000 MW of renewable generation announced
includes wind, solar, hydro, biomass, biogas and landfill gas
Coal phase out well underway with four units to be shut down this fall

12. Wind Integration
Wind generation is playing an increasingly important role in meeting Ontario’s electricity needs
Ontario leads the country with almost 1,100 MW of installed wind energy capacity on the grid
Wind’s variability can be managed
The IESO developing a centralized wind forecasting service

13. How Customers Pay for Electricity
Local
Distribution
Company
Market
Price
(Business/
Industry)
Hourly Price
(Interval Meter)
Weighted Average Price
(Conventional Meter)
IESO
Market
Price
RPP
Tiered Prices
Time of Use (Smart Meter)
At any time a consumer can enter into a retail contract, regardless of the rate structure or the meter. 13 13

14. Post November 2009
Since November 1, 2009, the public sector has been moved from the RPP to market pricing
Pricing structure depends on whether or not the facility has an interval meter
With an interval meter, the time at which you consume electricity will impact your bill
Most items on your bill are the same except for the commodity charge which is now split into two line items (provincial benefit and commodity charge) which were bundled together in the RPP price

15. What is the Provincial Benefit?
The Provincial Benefit ensures reliability by providing adequate generation capacity for Ontario
It reflects the difference between the market price and:
The regulated rate paid to Ontario Power Generation baseload generating stations (nuclear, large hydro)
Gas-fired facilities, wind farms, and other contracted projects through the Ontario Power Authority
Rates paid to generators who signed contracts with Ontario Hydro
The rate changes monthly and is set on the first business day of the month
It is charged to all large customers that are on a retail contract or pay market prices
It is included in the RPP charged to houses and small businesses

16. Why is the provincial benefit rising?
The market price declined significantly in 2009:
Lower demand
Increased supply
Lower fuel costs
Regional trade
Changing supply mix
Low prices mean reduced market revenues for generators which increases the need to recover costs guaranteed in their contracts through the provincial benefit

17. Global Adjustment - Provincial Benefit
Renewable Energy
Standard Offer
Program
Contributions to the Global Adjustment
OPG
Nuclear
&
Hydro
Base Load
Ontario
Hydro Contracts
OPA
Contracted
Generation
Conservation and Demand Management

18. Recent Electricity Prices

19. Electricity Pricing Trends
6.77
6.07
5.49
5.35
5.00

20. Evaluating a Retail Contract

21. Daily Demand vs. Price

22. Demand vs. Price cont.

23. Ontario Reliability Outlook
Ontario’s electricity system is becoming more participatory, distributed and sustainable – challenging the industry to respond and innovate
Priority Areas:
Resource Adequacy
Integration
Transmission
Consumer Engagement

24. Consumer Engagement
Load control has the potential to provide added flexibility
The stage is being set:
Three million smart meters installed; time-of-use prices being rolling out
Technologies – smart appliances, home energy systems, PHEV’s, coming on to the market
More meaningful price signals are needed to increase responsiveness

25. IESO Resources Visit www.ieso.ca/publicsector to read:
Research reports
Description of incentive programs
A guide to electricity charges
Profiles and publications to help you manage electricity costs
Contact IESO Customer Relations at or